Asia Stocks Gain as Yen, Dollar Slide on Stimulus

Asian stocks rose, with the region’s benchmark index set for its biggest two-day rally in a month, as Citigroup Inc. raised global profit estimates and Japan’s shrinking economy lifted chances for more stimulus. The yen and dollar fell against the euro for a fourth day. Silver rallied.

The MSCI Asia Pacific Index added 0.4 percent at 12:33 p.m. in Tokyo, extending yesterday’s 0.9 percent jump. Standard & Poor’s 500 Index futures advanced 0.1 percent. Japan’s currency fell to 116.57 per euro from 116.37 yesterday, while the Dollar Index lost 0.3 percent. The Singapore dollar and Malaysian ringgit both advanced 0.5 percent versus the greenback. S&P’s GSCI Index of 24 raw materials gained 0.2 percent, with silver surging 1.2 percent and oil climbing 0.3 percent in New York.

The Bank of Japan may face increased pressure to add stimulus after the economy shrank more than estimated following the March 11 temblor, while Federal Reserve Bank of St. Louis President James Bullard said the U.S. central bank may keep its monetary-policy unchanged until late this year. Singapore raised its growth forecast for 2011, while Citigroup predicted global per-share earnings may rise 18 percent this year.

“People are increasingly reassured that there’s plenty of liquidity to support markets,” John Praveen, the Newark, New Jersey-based chief investment strategist at Prudential International Investments Advisors, said in a Bloomberg Television interview. “The U.S. economy is going to rebound in the second quarter and interest rates are going to remain low. Reconstruction is going to be funded by public spending and the Bank of Japan’s additional stimulus.”

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BRICS Urge More Commodity Market, Capital Flow Supervision

(L-R) India's Prime Minister Manmohan Singh, Russia's President Dmitry Medvedev, China's President Hu Jintao, Brazil's President Dilma Rousseff and South African President Jacob Zuma attend a joint news conference at the BRICS Leaders Meeting in Sanya

SANYA, China (Dow Jones)--Brazil, Russia, India, China and South Africa, collectively known as BRICS, Thursday called for greater supervision of commodity markets and international capital flows, as the countries look to boost their influence in debates about how the world's major economies should address such issues.

BRICS officials have warned that developing countries face risks from capital inflows caused by loose monetary policies in developed nations. BRICS trade officials on Wednesday said they still face economic overheating issues like inflationary pressures and asset bubbles, and agreed they need to boost coordination in the Group of 20 industrial and developing nations, and in areas like climate change negotiations, to ensure the interests of developing countries, according to Chinese Commerce Minister Chen Deming.

"We call for more attention to the risks of massive cross-border capital flows now faced by the emerging economies," the five countries said in a joint statement Thursday after their leaders met in China's southern island province of Hainan.

"Excessive volatility in commodity prices, particularly those for food and energy, poses new risks for the ongoing recovery of the world economy," the statement said. "The regulation of the derivatives market for commodities should be accordingly strengthened to prevent activities capable of destabilizing markets."

The five nations also said they support reform of the international monetary system leading to "a broad-based international reserve currency system providing stability and certainty," an apparent reference to a diminished role for the U.S. dollar as the world's primary reserve currency.

The state development banks of the five countries Thursday agreed to open credit lines in their national currencies to each other, the latest concrete step by developing nations to reduce their reliance on the U.S. dollar. The framework credit-line agreement was signed by Russia's Vnesheconombank, Brazil's Banco Nacional de Desenvolvimento Economico e Social, China Development Bank Corp., Eximbank of India, and the Development Bank of South Africa. However, details and regulations, as well as the projects eligible for such financing are yet to be defined in the framework deal.

China Development Bank plans to issue around CNY10 billion of yuan-denominated loans this year to other BRICS nations, CDB Chairman Chen Yuan said at a news briefing, adding most of these loans will fund oil and gas projects.

CDB is in talks with Brazilian state-owned Petroleo Brasileiro SA (PETR4.BR), or Petrobras, regarding further loans for the oil company, Chen said.

"Both parties expressed interest in continuing cooperation and we are in talks regarding the next step of cooperation," Chen said, without elaborating on the size of potential loans.

China and Brazil reached a $10 billion oil-for-loan deal in 2009, under which Petrobras agreed to supply crude oil to China Petrochemical Corp. for 10 years in exchange for funding from China Development Bank.

Russia's Vnesheconombank is also in talks with CDB to borrow about US$1.5 billion worth of yuan for a currency swap between the two lenders, VEB's Chief Executive Vladimir Dmitriev said on the sidelines of the summit. He added that the BRICS countries are moving towards mutually trading each others' currencies, following Russia's launch of yuan trading in Moscow at the end of 2010.

The BRICS countries also said they welcome current discussions about elevating the role of Special Drawing Rights, a kind of synthetic reserve currency created by the International Monetary Fund, and discussions on changing its composition. Including the Chinese yuan in the basket of currencies that makes up the SDR is a reform currently being considered, although this wasn't specifically referred to in the BRICS countries' statement.

The five countries' leaders--Chinese President Hu Jintao, Indian Prime Minister Manmohan Singh, Russian President Dmitry Medvedev, South African President Jacob Zuma and Brazilian President Dilma Rousseff--on Thursday also discussed expanding the BRICS grouping's membership and agreed they should all support a country before it can join, Chinese Assistant Foreign Minister Wu Hailong said at a news briefing. Wu reiterated other countries have expressed interest in joining BRICS, but didn't name any countries.

When asked if the leaders discussed the yuan's exchange rate, Wu only said the topic wasn't on the meeting's agenda. Developing countries like Brazil in recent months have begun following developed countries like the U.S. and France in expressing concerns about China's undervalued currency.

The BRICS summit Thursday was the first if its kind to include South Africa. A shared position among the BRICS members on economic issues like how to address commodity price fluctuations could boost their joint heft in talks at the G-20, an increasingly influential forum for global economic policy debate and setting.

South African Trade and Industry Minister Rob Davies on Wednesday said capital inflows from developed countries have fueled a rise in South Africa's currency, the rand, and that the BRICS countries are likely to take their concerns about currencies and global economic instability to the G-20.

The statement Thursday also said nuclear energy "will continue to be an important element in future energy mix of BRICS countries." International cooperation is needed, however, to ensure nuclear energy is developed in strict observance of relevant safety standards.

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A Nation of Dropouts Shakes Europe

LISBON—Isabel Fernandes, a cheery 22-year-old with a constellation of stars tattooed around her right eye, isn't sure how many times she repeated fifth grade. Two, she says with a laugh. Or maybe three. She redid seventh grade as well. She quit school with an eighth-grade education at age 20.

Ms. Fernandes lives in a poor suburb near the airport. She doesn't work. Employers, she says, "are asking for higher education." Even cleaning jobs are hard to find.

Portugal is the poorest country in Western Europe. It is also the least educated, and that has emerged as a painful liability in its gathering economic crisis.

Wednesday night, the economic crisis became a political crisis. Portugal's parliament rejected Prime Minister José Sócrates's plan for spending cuts and tax increases. Mr. Sócrates handed in his resignation. He will hang on as a caretaker until a new government is formed.

Without the budget cuts, Portugal is almost certain to need an international bailout. It will run out of money this year without fresh cash, and markets are charging punitive rates for borrowing. Two firms downgraded Portugal's credit rating Thursday.

Its dire situation thrust a possible Portuguese rescue onto the agenda of European Union leaders who gathered in Brussels Thursday for a previously scheduled meeting, where they were agreeing on a new bailout fund. Portugal would be the third country in the euro zone to require a bailout, after Greece and Ireland.

The state of Portuguese education says a lot about why a rescue is likely to be needed, and why one would be costly and difficult. Put simply, Portugal must generate enough long-term economic growth to pay off its large debts. An unskilled work force makes that hard.

Cheap rote labor that once sustained Portugal's textile industry has vanished to Asia. The former Eastern Bloc countries that joined the European Union en masse in 2004 offer lower wages and workers with more schooling. They have sucked skilled jobs away.

Just 28% of the Portuguese population between 25 and 64 has completed high school. The figure is 85% in Germany, 91% in the Czech Republic and 89% in the U.S.

"I don't see how it is going to grow without educating its work force," says Pedro Carneiro, an economist at University College London who left Portugal to do his postgraduate studies in the U.S.

The education woes in Portugal show the extent of Europe's challenge as it tries to right itself amid the sovereign-debt crisis.

Rapid and painful budget-cutting, which is being enforced across the Continent, is the first step. But the second is far harder and will take far longer. The 17 countries linked via the euro have vastly differing levels of economic performance. Unless the gulf is narrowed, the pressures that caused the weaker among them to pile up huge volumes of debt, and have trouble repaying it, will doubtless re-emerge.

Better schooling in Portugal won't come quickly. Sharp cuts in its education spending make the task harder. And even if there are improvements, reaping their benefits could take years.

Greece and Ireland, the two EU countries that got bailouts, reached the brink relatively rapidly: Greece came undone after revelations it had grossly underestimated the government's parlous fiscal state; Ireland self-immolated in an orgy of property speculation.

Portugal's crisis, by contrast, has come to a boil slowly. For a decade, Portugal's growth trailed the euro-zone average. Traditional industries like cork harvesting and shoe stitching couldn't energize the entire country. The tech boom of the mid-2000s largely passed Portugal by.

The Portuguese spent nonetheless. The economy—government and private sector together—has run cumulative deficits with the rest of the world of more than €130 billion over the past decade. The state hasn't had a balanced budget, let alone a surplus, for more than 30 years.

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$5 a gallon? Get ready, oil experts say

If gasoline prices approaching $4 a gallon are draining your wallet, brace yourself. Oil industry experts say gas prices could hit $5 a gallon — possibly before summer.

Blame the war in Libya and continuing unrest in other parts of the Middle East and North Africa, experts say.

The region produces 27 percent of the world’s oil.

Libya, which sits on the largest oil reserves in Africa, has almost totally stopped petroleum shipments as rebels battle troops loyal to Col. Moammar Gadhafi. The addition of international forces, including the U.S., could mean that the country will be embroiled in a protracted conflict that could keep oil fields offline much longer than previously expected, energy experts said.

In Yemen, embattled President Ali Abdullah Saleh pledged to step down more than a year early, but his refusal to leave immediately infuriated tens of thousands of demonstrators. Yemen is an important transfer point for global oil supplies.

“It’s creating a situation where we could see the price of oil go up to $150 a barrel and gasoline toward $5 a barrel,” said Phil Flynn, an oil industry analyst with Chicago-based PFGBest.

Prices are likely to be steeper in the city than other regions, Flynn said.

“In Chicago, the odds are higher because the summertime blends of gasoline are more expensive,’’ he said. “Our taxes are higher. So it is more likely that it’s going to happen here before it happens in other parts of the country.”

“Expect $5 a gallon gas by Memorial Day,” said Bob van der Valk, fuel price analyst with 4Refuel Inc., a Canadian fuel management firm.

When you also factor in the earthquake and tsunami in Japan, you have “the perfect storm” that will push prices up, he said.

The average price of unleaded regular gasoline in Chicago was $3.75 a gallon Tuesday, up 69 cents from a year earlier, according to AAA, Wight Express and the Oil Price Information Service. It’s 38 cents a gallon higher than a month ago. At some locations in the city, prices already are above $4 a gallon, according to Gasbuddy.com.

Nationally, the average price is $3.55 a gallon — and rising.

“It’s going to be $4, the average price, within the next two weeks with everything that’s going on in Libya,” van der Valk said.

U.S. pump prices will eventually hit record highs, he predicted.

According to AAA, $4 gas prices haven’t been seen since 2008. Alaska holds the record for an average high of $4.69 reached July 24, 2008, according to the auto club.

Oil prices, which have spiked in the last month, pushed as high as $105.18 a barrel Tuesday. At the close of the day, crude settled at $104.97 a barrel, up $1.88.

Van der Valk noted that crude is up about $6 a barrel from Friday. For every $1 increase in the price of crude oil, drivers can expect a 2œ- cent increase in the price of gasoline and diesel fuel, he said. The increases in crude oil prices over the past weekend have not yet been passed along to consumers at the pump, he said.

The spike in oil prices is making it more costly to travel by air. United and Continental airlines are raising fares on many U.S. routes $10 per round trip, a spokesman for the airlines confirmed Monday.

U.S. airlines have raised fares at least six times this year as they try to offset rising jet fuel costs. The last attempt failed when other airlines decided not to follow American Airlines when it raised prices earlier this month, also by $10 per round trip. Cheap seats will be harder to find this year, said Rick Seaney, chief executive officer of travel website FareCompare.com.

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Bank of Japan injects record $182 bn on quake fears

TOKYO: Japan's central bank injected a record 15 trillion yen ($182 billion) into the short-term money market Monday, in an attempt to build confidence after a devastating earthquake and tsunami.

"We will take every possible measure, including providing liquidity, to ensure the stability of financial markets and smooth settlements (of business deals)," a bank spokesman said. The bank will provide an additional 3 trillion yen Wednesday.

The priority of the central bank is to ensure financial institutions in disaster-hit regions do not run out of funds. Over the weekend it provided them with 55 billion yen to ease the pressure.

Monday's move was the first time since May, when European sovereign-debt fears pushed up the yen steeply and weighed on Tokyo shares, that the central bank injected same-day funds to boost confidence.

The BoJ said it stands by to do whatever necessary to keep stability in the markets and financial system.

Its two-day policy board meeting previously scheduled for Monday and Tuesday would now be cut short and conclude on Monday, seen as a sign it may quickly implement further measures.

Prime Minister Naoto Kan has warned that Japan is ready to take firm action against speculative trade, signalling his authorities may intervene in currency markets to bolster the yen if needed.

The yen briefly touched a four-month high before easing against the dollar on the massive liquidity injection Monday as markets responded to the natural disaster.

It briefly surged to 80.60 against the dollar, the highest since November 9, before retreating to 82.15 and held relatively steady despite a fresh explosion at the Fukushima nuclear plant Monday.

The government expects a "considerable" economic impact from the huge earthquake and devastating tsunami that plunged the nation into what Kan called its worst crisis since the Second World War.

It faces a huge challenge in financing the mammoth rebuilding task that will be required in the aftermath of a disaster whose economic impact is widely expected to be at least as bad as that from the 1995 Kobe earthquake.

Japan's public debt is the industrialised world's biggest at around 200 percent of GDP, and the nation's credit rating was recently downgraded on concerns that not enough is being done to address it.

Yet the disaster is seen to place yet more pressure on the debt-pile.

Stocks saw a post-quake sell-off with carmakers, banks and electronics firms taking a hit on fears for the economy as power shortages prompted rolling blackouts and plants remained closed in quake hit areas, hitting production.

Engineers are battling against the risk of meltdown at a stricken nuclear power station, while the death toll from the quake and the resulting wall of water that tore into parts of the northeastern seaboard is expected to surpass 10,000.

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China promises sweeping economic change

China is promising an economic overhaul that would raise the status of consumers and entrepreneurs. But it has given no sign how it will tackle its politically volatile reforms.

Premier Wen Jiabao says Beijing wants to nurture self-sustaining growth driven by consumption and service industries. He made the comments in a weekend speech outlining this year's goals.

Achieving those goals will require cutting subsidies for state companies and other changes that might trigger a backlash within the Communist Party.

The changes could drive China's evolution from low-cost factory into a major consumer market. That might help to narrow a yawning wealth gap and ease tensions over China's trade surplus by boosting consumer demand for imports.

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Japan eclipsed by China as world's second economy

TOKYO — Japan surrendered its 42-year ranking as the world's second-biggest economy to China in 2010, after data Monday showed a fourth-quarter contraction caused by weaker consumer spending and a strong yen.

While Japan was expected to fall behind a surging China in the year, the data underlined the weak state of a Japanese economy burdened by deflation, soft domestic demand and pressured by the industrialised world's biggest debt.

"It is difficult for the deflation-plagued Japanese economy to achieve self-sustained growth," said Naoki Murakami, chief economist at Monex Securities.

While China's leap forward reflects a shift in economic power as the country transforms itself from poverty-hit communist state to global heavyweight, it highlights the need for Japan to re-energise its economy, analysts said.

Its post-war "economic miracle" put it at number two behind the United States for 42 years, but stagnation after its property bubble burst in the 1990s helped put booming China on course to supplant it this year.

However, Japan remains around 10 times richer on a per-capita basis, according to the International Monetary Fund.

Japan's real gross domestic product slipped by an annualised 1.1 percent in the October-December quarter as the expiration of auto subsidies hit car sales, a new tobacco tax sapped cigarette demand and a strong yen hurt exports.

While the first contraction in five quarters was not as severe as analyst expectations of a 2.4 percent slide, according to a Dow Jones Newswires poll of economists, Japanese GDP data is subject to constant revision.

The economy grew 3.9 percent in 2010, government data showed -- its first annual growth in three years. But this was not enough to keep it ahead of surging China.

Nominal GDP of $5.474 trillion in 2010 put it behind China's $5.879 trillion, the data showed.

Despite Japan crawling out of a severe year-long recession in 2009, its recovery remains fragile with deflation, high public debt, weak domestic demand and a strong yen all concerns for policymakers.

Last month Standard & Poor's cut Japan's credit rating one notch to "AA-" from "AA", saying the government lacked a "coherent strategy" to ease a debt running near 200 percent of GDP, the highest of any developed nation.

Nearly a third of government spending is being swallowed up by a social security system catering to a rapidly greying society, Standard & Poor's warned, with that ratio set to rise without reforms as Japan continues to age.

Prime Minister Naoto Kan's centre-left government has prioritised social security reform and a tax system overhaul, but has seen his approval ratings tumble and the opposition has so far refused to begin talks on the issue.

Private consumption, accounting for about 60 percent of Japan's GDP, slid by 0.7 percent on-quarter in Oct-Dec as subsidies for green car purchases expired and as cigarette sales were dented by Japan's biggest ever tobacco tax hike.

Exports slipped in the quarter as the Japanese yen surged to 15-year highs against the dollar, making Japanese goods more expensive overseas and eroding repatriated profits.

But many analysts expect the economy to rebound in the January-March quarter as the rising tide of global recovery lifts Japan, amid a recent pick up in corporate spending and exports.

"The contraction will not last long," said Murakami. "Companies' manufacturing activities are recovering rapidly in January-March this year from their bottom in October 2010."

The government said Japan's economy would be helped by recovery elsewhere and could reap the benefits of its huge neighbour China, the world's number-one export market.

"We welcome, as a neighboring nation, that China's economy is advancing rapidly," said Kaoru Yosano, minister for fiscal policy.


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U.N. group warns of potential 'food price shock'

LONDON - The Food and Agricultural Organization said Wednesday that the world faces a "food price shock" after the agency's benchmark index of farm commodities prices shot up last month, exceeding the levels of the 2007-08 food crisis.

The warning from the U.N. body comes as inflation is becoming an increasing economic and political challenge in developing countries, including China and India, and is starting to emerge as a potential problem in developed nations.

Abdolreza Abbassian, a senior economist at the FAO in Rome, said that the increase was "alarming" but that the situation was not yet a crisis similar to 2007-08, when food riots affected more than 30 poor countries, including Haiti, Bangladesh and Egypt.

"The world faces a food price shock," he said, adding that a prolonged spike could lead to a food crisis.

The FAO said that its food price index - a basket tracking the wholesale cost of commodities such as wheat, corn, rice, vegetable oils, dairy products, sugar and meat - jumped to 214.7 points, exceeding the peak of 213.5 set in June 2008.

Abbassian said that agricultural commodities prices would probably rise further. "It will be foolish to assume this is the peak," he said.

But the FAO and food aid agencies noted the relatively stable prices for rice, one of the two most important agricultural commodities for global food security.

But the cost of wheat, the other critical staple, is rising quickly after poor harvests last year in Russia, Ukraine and elsewhere. Corn, meat and poultry prices are also increasing.


Agricultural officials and traders are worried that agricultural commodities prices could rise further as the weather phenomenon la Nina intensifies. The pattern usually brings dryness to key growing areas of the United States, Argentina and Brazil.

The Australian Bureau of Meteorology said that the current la Nina system would last at least three more months.

Neil Plummer, a climatologist for the bureau in Melbourne, said that the latest phenomenon looked set to be the most powerful since the mid-1970s, when droughts ravaged crops and pushed the world into the most extreme food crisis since World War II.


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Speculators Are Eager to Bet on Madoff Claims

The lawsuits filed by the trustee seeking money for Bernard L. Madoff’s fraud victims may be a blow for the defendants — but they are catnip for an obscure breed of Wall Streettraders speculating on the outcome of the enormous ..

In recent months, hedge funds and other investment firms have been quietly contacting Madoff victims whose loss claims have been approved by the trustee, Irving H. Picard. These funds — specialists in beaten-down assets known as distressed securities — are offering to buy those claims immediately for cash, but at a sharp discount from their face value.

With the latest round of big-ticket lawsuits, however, that quiet market has started to sizzle.

“Virtually every sophisticated distressed investor is looking at the Madoff situation,” said Thomas T. Janover, a lawyer at Kramer Levin Naftalis & Frankel who has represented clients who are considering buying claims. “The uncertainty of the payout from the bankruptcy process creates an opportunity and potentially big returns.”

The chances that the trustee will be able to collect more than the $2 billion he has gathered to date have increased in recent days with the filing of lawsuits against deep-pocketed banks like JPMorgan Chase, UBS and HSBC, among others. But bankruptcy lawyers expect those legal fights will take years to resolve, with no guarantee of that any of the billions being sought will be recovered.

Bankruptcy claims have traded on Wall Street for generations, and active markets have developed around other financial calamities like Enron and Lehman Brothers. The explosion in hedge funds and their pursuit of unusual investment strategies has expanded that traditional market in recent years.

For small investors who were caught in the Madoff fraud and cannot afford to wait years for a recovery, the speculative buyers offer them cash now. Even larger investors may decide that it is prudent to take less cash upfront rather than hope for a bigger payoff in the future.

The distressed investors, however, are betting that the bankruptcy claims will be settled for more than what they appear to be worth now. And they are hoping that Madoff investors will allow them to take that bet.

One Madoff investor, who declined to be identified to protect his privacy, reported receiving letters from no fewer than six companies in the last two months. He provided copies of those letters, which offered to pay 20 to 34.5 cents for every dollar in claims. The firms making those bids included Contrarian Capital Management, a large Greenwich, Conn., hedge fund; Fulcrum Credit Partners of Austin, Tex.; and the Hain Capital Group of Rutherford, N.J.

Another Madoff investor, Burt Ross of Englewood, N.J., said that 30 cents on the dollar was the highest offer he had received in recent months. “People need to understand that people who are offering 30 cents are savvy professionals who fully expect to get 50 to 60 cents when the claims are finally paid,” Mr. Ross said. “They’re not offering 30 cents because they expect to get 35.”

And it is not just individual Madoff investors who are willing to cut deals with the speculators.

A large hedge fund recently paid about 30 cents on the dollar to buy a claim of roughly $50 million from a family that had invested with Mr. Madoff, according to a person with knowledge of the trade who was not authorized to speak about it.

Several prominent hedge funds have become involved in the Madoff claims trading process, including the Fortress Investment Group, Perry Capital, Silver Point Capital, the Baupost Group and Farallon Capital Management. It is unclear whether any of these funds have bought claims, but all are actively exploring the market.

Other prominent distressed investors have decided not to participate in the market for Madoff claims, no matter how compelling the potential returns.

David M. Barse, president and chief executive of Third Avenue Management, an active investor in distressed bankruptcy claims, said in recent months his analysts had advanced the idea of buying Madoff claims.

When the investment idea was discussed in October, claims were trading at about 25 cents on the dollar, and an analysis showed potential recoveries in the range of 40 to 80 cents.

But after discussing the idea with his senior management, Mr. Barse said he had decided that even though the trade sounded promising, Third Avenue would not participate.

“The fraud is just so despicable that we felt that, from a moral perspective, it just didn’t make sense for us,” Mr. Barse said. “There are plenty of other ways to make money in this business.”

JPMorgan, which actively trades bankruptcy claims, has also shied away from being involved. The bank, which served as Mr. Madoff’s primary banker for many years, was among the several large global banks sued by the trustee. JPMorgan has denied the trustee’s claims that it ignored clear signs that Mr. Madoff had been operating a fraud.

Mr. Picard, the trustee, has estimated that the total cash losses in the fraud are roughly $20 billion. So far, he has collected about $2 billion in cash and approved claims totaling more than $5.9 billion, representing cash losses by investors who took less out of their Madoff accounts than they put in. Many of those investors have already received up to $500,000 from the Securities Investor Protection Corporation, an industry-financed compensation fund.

None of the $2 billion in cash has been distributed to eligible investors yet. Mr. Picard has said that he expected several large settlements to be announced soon, which would allow him to make a partial distribution to investors early next year.

Some investors say they are not inclined to trade their claims because they believe they will recover more through the court process. Mr. Ross, one investor, says he has not been tempted to sell his approved claim because he noticed that Mr. Picard has already been successful in settling several cases for substantial amounts of money. Two were settled just last week, for a total of more than $1 billion, he added.

“Every time I read that there’s been a settlement, there is more hope,” he said. “And hope is a good thing to have — we need it.”

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Asian Stocks, Dollar, Copper Climb as China Refrains From Increasing Rates

Asian stocks and commodities advanced while the dollar strengthened for a sixth day after China refrained from raising interest rates and as optimism increased that the U.S. economic recovery is gathering steam.

The MSCI Asia Pacific Index climbed 0.3 percent to 133.42 as of 12:10 p.m. in Tokyo. Futures on the Standard & Poor’s 500 Index were little changed after the gauge advanced for a fourth day on Dec. 10. Copper rallied as much as 1.1 percent in London and rubber rose to a record. The Dollar Index, which tracks the currency against six major peers, added 0.2 percent, and was set for its longest stretch of gains since June.

China on Dec. 10 ordered banks to set aside larger reserves and didn’t announce an interest-rate increase, even as data released the following day showed the inflation rate reached 5.1 percent in November while industrial-output growth and retail sales grew. As Federal Reserve policy makers meet tomorrow, a U.S. Commerce Department report will likely show retail sales climbed for a fifth straight month, adding to data that showed consumer confidence increased in December to a six-month high.

“A rate increase would produce a greater impact on the wider economy, so their cautious measure is positive for the market” said Lam Chee Mun, a fund manager at TA Investment Management in Kuala Lumpur.

Almost two stocks rose for every one that fell on the MSCI Asian index, which has climbed 11 percent this year. The Shanghai Composite rose 1.2 percent, trimming its 2010 loss to 12 percent, still the steepest drop among Asian markets this year. China Vanke Co., the nation’s largest developer by value, rose 1.2 percent.

‘More Effective’

Consumer prices rose a more-than-forecast 5.1 percent from a year earlier, a statistics bureau report showed in Beijing over the weekend. Producer-price inflation was 6.1 percent, higher than any of 28 economists surveyed by Bloomberg News had estimated. The central bank boosted reserve requirements by 50 basis points starting Dec. 20, the third increase in five weeks, instead of raising borrowing costs.

“The government seems to be using reserve requirements at the moment as a more effective tool,” Hugh Simon, co-manager of the Dreyfus Greater China Fund, said in a Bloomberg Television interview. “They need to have some relief about inflation. Inflation this time, rather than 2008, is coming from the demand side as people are getting paid more.”

Westpac Banking Corp. paced a rally in Australia’s four largest lenders after analysts including Jarrod Martin of Credit Suisse Group AG said the companies may emerge as victors from Treasurer Wayne Swan’s package to promote banking competition. Westpac, Commonwealth Bank of Australia, National Australia Bank Ltd. and Australia & New Zealand Banking Group Ltd. rose at least 1.1 percent each after Swan’s 13-point plan stopped short of investors’ most pessimistic expectations.

Copper, Rubber

Copper for three-month delivery on the London Metal Exchange rose to as high as $9,087 a metric ton, near the record $9,091 reached on Dec. 9. Zinc gained 2.4 percent while nickel rose 0.6 percent. Rubber futures in Tokyo advanced to an all- time high of 390.3 yen per kilogram following rains in Thailand, the largest exporter.

The dollar rose against most of its 16 major counterparts and traded at $1.3188 per euro from $1.3226 in New York on Dec. 10. Retail sales climbed 0.6 percent in November after advancing 1.2 percent in October, according to the median estimate of economists in a Bloomberg News survey before tomorrow’s figures. Confidence among U.S. consumers increased in December to a six- month high, the Thomson Reuters/University of Michigan preliminary index of consumer sentiment showed on Dec. 10.

Treasuries fell before the release of the data, sending yields on the 10-year note higher by two basis points to 3.34 percent. Fed policy makers may signal this week they will contemplate boosting purchases of government debt to support job growth. Chairman Ben S. Bernanke said earlier this month purchases of government securities may be increased beyond the $600 billion already announced under the Fed’s so-called quantitative easing program.

Euro’s Survival

The euro retreated against all 16 major peers before a Dec. 16 and 17 European Union meeting, where leaders will discuss the creation of a permanent mechanism to shore up over-indebted countries. Against the yen, the shared currency traded at 110.82 from 111.04 in New York.

The currency’s survival is “non-negotiable,” requiring budget vigilance and closer economic cooperation to overcome “structural weaknesses” within the euro region, German Chancellor Angela Merkel and French President Nicolas Sarkozy said Dec. 10. Splits between EU governments on how to contain the debt crisis have emerged, with Germany opposed to euro-area bonds that Italy, Belgium and Luxembourg favor.

“Europe’s large nations may find it hard to provide further aid when they think about their own domestic factors,” said Masahide Tanaka, a senior strategist in Tokyo at Mizuho Trust & Banking Co., a unit of Japan’s second-largest bank. “The euro is struggling to rise, as the dollar is regaining strength.”

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http://www.bloomberg.com/news/2010-12-13/asian-stocks-dollar-copper-climb-as-china-refrains-from-increasing-rates.html

Chinese inflation spikes on food costs

NEW YORK -- Higher food prices continue to be the main driver of inflation in China, raising the likelihood of an imminent interest rate hike as the country tries to reel in its red-hot economy.

Consumer prices rose 5.1% for the 12 months ended Nov. 30, according to government data released early Saturday in China. That comes on the heels of a 4.4% jump in October. And once again, a surge in food costs is the culprit. Food prices rose 11.7% during the period.

Excluding food prices, China's CPI edged up only 1.9%.

Compare that with the United States, where the CPI has been sluggish for months. In October, the U.S. CPI increased a modest 1.2%, according to the Bureau of Labor Statistics. Excluding the volatility of food prices, the U.S. CPI rose 0.6%.

The U.S. trade balance narrowed to a more-than-expected $38.7 billion, bringing the U.S. trade deficit to a 9-month low.

China tries to stave off inflation

But China is a different story.

China said its trade surplus narrowed to $22.9 billion in November -- a 16% decrease over October's $27.2 billion surplus. China's exports jumped 34.9%, while the country's imports rose 37.7%.

Fears of runaway inflation have led to rising speculation that the People's Bank of China will move to raise interest rates as early as this weekend.
0:00 /6:50The myth of China's building boom

Just one week ago, China said it would be more "prudent" about its monetary policy in 2011. And on Friday, the People's Bank of China raised the reserve requirement ratio for its banks by a half-percentage point for the third time in a month.

Month by month: CPI rose 1.1% in November, on a monthly basis. The increase was largely due to higher food prices. Meanwhile, core CPI was up a more modest 0.6%.

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http://money.cnn.com/2010/12/10/news/international/china_cpi_inflation/

Retirees Expect to Live on $190 a Month of Retirement?

Retirement Funds of $190 a Month?

In a survey done by Wells Fargo, 2,000 Americans aged 20 – 60 were asked how much they’re expecting to live on every month for their retirement. On average, it was found out that they’ll only have a budget of $190 per month.

This survey revealed a few things that should be a cause of concern. First, it was found out that Americans don’t have enough money in their savings for retirement and they may end up working even after they’re retired from their original jobs. Secondly, they’re underestimating the funds needed to live off of their retirement savings.

The figure was gotten on the respondents’ prediction that they’ll have $300,000 to spend for the 19 years of their retirement. For people in their 50’s, they only have savings of $29,000 on average which leads to $190 a month for 20 years if there’s a 5% return rate.

“$190 a month is not going to cut it,” said Laurie Nordquist. “This reinforces the huge gap in terms of what people are going to need and what people have. They have a little time to add to that nest egg, but it’s a huge shortfall to recover,” she followed. Nordquist is the co-head of Wells Fargo Institutional Retirement and Trust.

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http://www.allabouttopnews.com/retirees-expect-to-live-on-190-a-month-of-retirement/851376/

In hopeful sign, number of job openings up

WASHINGTON — Employers posted a sharp increase in job openings in October, raising hopes that hiring could pick up in the coming months.

Businesses and government advertised nearly 3.4 million jobs at the end of October, up about 12 percent from the previous month, the Labor Department said yesterday. That reverses two months of declines and is the highest total since August 2008, just before the financial crisis intensified.

Overall, the number of advertised jobs has increased by about 1 million, or 44 percent, since the low point of July 2009, a month after the recession ended. But openings are still far below the 4.4 million advertised in December in 2007, when the recession began.

The latest job openings data follows last week’s disappointing employment report for November. That showed the economy added a net total of only 39,000 jobs, a steep drop from the previous month, and the unemployment rate rose to 9.8 percent from 9.6 percent.

But some economists consider yesterday’s report, known as the Job Openings and Labor Turnover survey, to be a signal of how much hiring might take place one to three months after the period covered by the survey.

Jonathan Basile, an economist at Credit Suisse, said the JOLTS report echoes other recent data showing that the economy is improving. That improvement will likely translate into more hiring soon, he said.

Last week’s employment report “should turn out to be just a bump in the jobs recovery road,’’ Basile said.

Separately yesterday, the Federal Reserve reported that consumer borrowing rose in October by the largest amount in more than two years, led by a big rise in the category that includes student loans.

The Fed said consumer credit rose at an annual rate of $3.4 billion in October, the largest increase since a $5.7 billion gain in July 2008. Consumer credit was also up in September.

But the strength in both September and October is being heavily influenced as the result of a recently enacted law that makes the government the primary lender to students.

The increase of $3.4 billion in overall credit surpassed the flat reading that economists had expected. The gain translated into a 1.7 percent rise and followed a 0.6 percent increase in September. Those were the first back-to-back monthly gains since mid-2008.

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http://www.boston.com/business/articles/2010/12/08/in_hopeful_sign_number_of_job_openings_up/

GLOBAL MARKETS: European Stocks Seen Tentatively Higher

European stocks are expected to open higher Tuesday as investors take heart from U.S. President Barack Obama's extension of the Bush-era tax credits and the potential for further quantitative easing in the world's largest economy. However, gains are likely to be limited by ongoing European sovereign-debt concerns and fears of further policy tightening in China.

"The euro-zone debt issue continues to linger. Although there's a lid on this for the time being, the debate continues as to how best to manage the future and the fractures in the monetary union that are appearing," said Chris Weston at IG Markets.

Weston called London's FTSE 100 index to open 16 points higher at 5786, Germany's DAX index up 18 points at 6972 and Paris's CAC-40 index eight points higher at 3757.

The issue of euro-zone sovereign debt will continue to be at the forefront of investors' minds as Ireland prepares to vote on its austerity budget Tuesday. "The vote for the budget is crucial since it is a prerequisite to the activation of the EU/IMF assistance mechanism," said ING. "While today's vote might appease markets somewhat, the jury is still out on whether Ireland will be able to consolidate its public finances without having to undergo a debt restructuring in the coming years," it added.

Investors will also keep an eye on Brussels as the second day of meetings of European finance ministers gets under way. Following weeks of turmoil in the European debt markets and amid calls to increase the size of the bailout fund, euro-zone ministers said Monday that the European Financial Stability Facility does not need more money to cope with the current sovereign-debt crisis.

Meanwhile, investors in Europe will get their first chance to react to a report in the state-run China Securities Journal, saying that the People's Bank of China may hike interest rates this weekend, before the release of inflation data for November on Monday. The front-page report, which cited analysts, also said the upcoming Central Economic Work Conference increases the chance of a rate hike soon.

On the economic calendar, U.K. industrial output and German factory orders data are due at 0930 GMT and 1100 GMT, respectively. Credit Agricole Corporate and Investment Bank said both sets of data are likely to be positive and show bigger-than-expected rises.

On Wall Street Monday, stocks paused following last week's run up and after Federal Reserve Chairman Ben Bernanke's tepid assessment of the U.S. economic recovery. The Dow Jones Industrial Average fell 0.2% to 11,362.19, the Nasdaq Composite edged up 0.1% to 2594.92 and the Standard & Poor's 500-stock index edged down 0.1% at 1223.12.

"Given the strength in the market last week, there's nothing wrong with sideways right now," said Jim Meyer, chief investment officer at Tower Bridge Advisors. "Over the past month or so, there's been a clear inflection point in terms of economic growth, excluding Friday's unemployment report which, like everybody else, leaves me scratching my head."

Some investors were sobered by the tone of the Fed chairman's economic outlook in a Sunday interview on CBS News's "60 Minutes."

Bernanke warned the economic recovery "may not be" self-sustaining. Still, he said he doesn't think a double-dip recession in the U.S. is likely. The central banker also said the Fed could commit more money to boost the economy after last month announcing $600 billion of asset purchases.

In Asia, stock markets were mixed Tuesday as the mild Wall Street losses on Monday crimped demand, while the Shanghai market was down on the media report that the Chinese central bank may hike rates around the weekend.

Japan's Nikkei Stock Average was off 0.3%, Australia's S&P/ASX 200 was up 1.0%, South Korea's Kospi Composite rose 0.3%, China's Shanghai Composite Index fell 0.3%, Hong Kong's Hang Seng Index was up 0.5% and India's Sensex was down 0.5%.

While the Chinese report may not reflect official views in Beijing, traders noted that China has a history of announcing tightening measures outside market hours. China announced an interest rate hike, the first in nearly two years, on the evening of Oct. 19, two days before the release of the inflation data for September.

The Australian market extended morning gains with the benchmark S&P/ASX 200 index rising to a three-week high of 4727.2 after the country's central bank held rates steady at 4.75% and adopted a benign stance on policy.

In the European foreign exchanges, the euro gained slightly against most other currencies Tuesday as investors remained focus on the meetings of European ministers in Brussels. By 0720 GMT, the euro was trading at $1.3334, up from $1.3308 late Monday in New York, and at Y110.16, up from Y110.04. The dollar was trading at Y82.59, down from Y82.66.

Among commodities, spot gold was at $1422.05 per troy ounce, down $1.55 from New York, after setting a new high Monday at $1427.20. January Nymex crude oil futures were down nine cents at $89.29 per barrel.

In the bond markets the December bund futures contract was down 0.07 at 126.50.

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http://online.wsj.com/article/BT-CO-20101207-701541.html

U.S. dollar, stocks poised to gain on jobs recovery

The U.S. dollar was steady on Friday ahead of payrolls data for November that could show more evidence of a strengthening recovery and give investors a reason to push benchmark U.S. Treasury yields above 3 percent and put more money in equities.

The euro slipped against the dollar after two days of gains, supported overnight by talk that the European Central Bank of was buying bonds of peripheral countries such as Ireland and Portugal, even though no new policy was formally announced.

With the euro little changed this week at $1.3211 and holding above its 200-day moving average despite the euro zone fiscal crisis, investors ahead of the U.S. payrolls report put cash to work in stock markets, lifting Japan's Nikkei share average to its highest since May.

"It is clear that the labor situation is improving and with consumption demand -- the final demand that drives all else -- strengthening by the day, hiring should continue to improve," economists at DBS Group in Singapore said in a note.

The Nikkei rose 0.6 percent .N225, driven higher mainly on buying of technology stocks.

For a second day, the technology sector also outperformed in the MSCI index of Asia Pacific stocks outside Japan .MIAPJ0000PUS. The index was up 0.5 percent and extended a 3.5 percent gain in the week, on track to exceed weekly returns of Japanese stocks for the first time in three weeks.

MACRO OUTLOOK

The U.S. economy is forecast to have generated 140,000 new jobs in November, with signs of a sustained recovery in private sector hiring combined with solid auto sales and continued industrial growth boding well for the macro outlook.

The improving U.S. economic picture has been a factor lifting the entire U.S. government bond yield curve higher.

The benchmark 10-year U.S. Treasury yield edged down to 2.98 percent compared with a four-month high of 3.03 percent reached on Thursday. Since Monday, the yield has risen 16 basis points, half of the entire rise since November.

Though the U.S. labor market report will be center stage on Friday, investors will also been watching for follow-through on Thursday's unexpected narrowing in the spread of higher risk European government bond yields over German bond yields.

Market chatter about the European Central Bank stepping into the market to buy bonds of at-risk countries such Spain and Portugal caused the Spain/Germany 10-year yield spread to narrow to 230 basis points, the least in two weeks.

The Portugal/Germany 10-year yield spread was at 344 basis points, the narrowest since Oct 28.

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http://www.reuters.com/article/idUSTRE69K04L20101203

A December to remember? Why time may be ripe for stock gains

Performance of the Standard & Poor's 500 index over the past twelve months.

Stocks soared on the first day of December, raising hopes that the final month of the year will live up to its reputation as the best month for stock performance.

Investors drove the Dow Jones industrials up 250 points, and the broad market jumped 1.6%. Fueling the rally: a one-two punch of bullish news on jobs at home and manufacturing in the U.S. and China.

The improving tone on the economy, coupled with rising hopes that the European Central Bank will announce new measures to stem contagion caused by debt problems in Ireland and other eurozone countries, gave investors the green light to pile back into risky assets such as stocks.

December has been the No. 1 month for stock returns for the Standard & Poor's 500 index since 1950, according to the 2011 edition of the Stock Trader's Almanac. The large-company stock index has posted average gains of 1.65% in December.

The consistency of the gains in December is also impressive, with gains 77% of the time since World War II, vs. 59% for all 12 months, S&P says.

The market's ability to consistently fare well in December is due in part to the tendency of investors to stop viewing the market with a short-term lens, but instead using the end of the year to look at opportunities in stocks over a longer time period, says Sam Stovall, chief investment officer at S&P.

"By extending the forecasting time frame, it allows more time for investors' optimistic forecasts to come true," Stovall says.

The fact the winning pattern has been consistent feeds on itself, and investors buy stocks so as not to miss out on the rally. "It tends to be self-fulfilling," adds Jeff Kleintop, chief market strategist at LPL Financial.

The odds of the rally continuing are good if economic data continue to come in better-than-expected, Kleintop adds. The reason: It puts a big dent in fears of an economic relapse. The ADP Employer Services report Wednesday, for example, said private companies added 93,000 jobs in November, which suggests employment trends are improving. China's report of strong manufacturing last month reassures investors "that the major driver of global growth remains intact," Kleintop says.

The improving economic data in the U.S. have overshadowed debt problems in Europe and geopolitical risks around the globe. The better data also mean investors could soon be hearing more positive outlooks from corporate CEOs, adds Kate Warne, market strategist at Edward Jones.

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http://www.usatoday.com/money/markets/2010-12-02-mart02_ST_N.htm

Before Business Leaders, Bernanke Discusses Unemployment’s Toll on Americans

Ben Bernanke, right, the Fed chairman, with I.B.M.'s chief executive, Samuel Palmisano, in Ohio.

COLUMBUS, Ohio — The Federal Reserve chairman, Ben S. Bernanke, found some respite on Tuesday from the second-guessing the central bank has faced since it announced a $600 billion effort to stimulate the slow recovery.

During a 75-minute discussion here with five business leaders, including the chief executives of I.B.M. and Ford Motor as well as the founder of a local chain of ice cream stores, inflation and monetary policy were not even mentioned, much less debated.

Mr. Bernanke did, however, emphasize the toll high unemployment was taking on families and on the share of the unemployed — more than 40 percent — who have been jobless for at least six months.

“At the pace of growth that we’re seeing now, we’re not growing fast enough to materially reduce the unemployment rate,” he said. The economy needs to grow at an annualized rate of 2 to 2.5 percent just to accommodate new workers coming into the labor force, he said. Mr. Bernanke has made this point repeatedly this year.

At 9.6 percent, the unemployment rate is about where it was when the recession officially ended in June 2009, Mr. Bernanke said, and only about a million of the 8.5 million jobs lost since the peak of the last economic expansion have been restored.

“Part of the barrier to faster growth and recovery is confidence in households that they will be financially secure and that they can make purchases and take chances in changing careers and changing locations,” Mr. Bernanke said. “With unemployment so high, that confidence is hard to come by.”

The discussion, organized by the Federal Reserve Bank of Cleveland and held at the Fisher College of Business at Ohio State University, was part of an effort by Mr. Bernanke to reach out more.

“We spend a lot of time, of course, looking at data, sitting in Washington, looking at the screen, but there’s only so much you can learn from that,” he said.

Sandra Pianalto, the president of the Cleveland Fed, who moderated the discussion, referred obliquely to the firestorm the Fed has faced in recent weeks. “Through my interactions with Ben, I’ve learned that extreme circumstances often require very creative and aggressive policy responses, and that the right decisions sometimes aren’t the most popular decisions,” she said.

While none of the executives criticized the Fed, Samuel J. Palmisano, the chief executive of I.B.M., said that uncertainty, particularly over regulations, was holding back businesses, not financial constraints.

“Clearly, there’s tons of liquidity, as you know,” he told Mr. Bernanke, who was seated to his left. “There’s probably more than we could consume. It’s not a credit issue. It’s not the financial system or a banking issue. I think at the end of the day it’s clarity.”

But two of the three local business owners on the panel said financial conditions were still tight. “Credit is much more tight today than it was in past years,” said Dwight E. Smith, founder of Sophisticated Systems, a provider of information technology services.

Curtis J. Moody, co-founder of Moody Nolan Architects, said, “The lines of credits are more difficult to get, and they’re lower.”

The business leaders agreed that the partisan climate in Washington was not helping matters. “Exports aren’t partisan, competitive tax policies aren’t partisan,” Mr. Palmisano said. “Economic expansion, job creation, isn’t political at the end of the day.”

Alan R. Mulally, the chief executive of Ford, said the government needed “a laser focus on creating an environment where businesses can grow.” He said that “currencies need to be set by the market” and “not manipulated,” and added, “We need to have trade agreements that actually allow us to export.”

That appeared to be a reference to a free trade agreement with South Korea that was negotiated by the Bush administration and is opposed by Ford. The Obama administration wants to complete the deal and submit it to Congress, but negotiations with South Korea have become stuck over restrictions on American auto and beef exports.

Mr. Bernanke said he took away from the discussion the need for clarity on regulatory, trade and fiscal matters. He also emphasized the importance of government support for technological innovation and the need to improve public education, community colleges and work force training.

Several M.B.A. students in the audience said that they had hoped Mr. Bernanke would discuss the Fed’s decision to buy bonds to reduce long-term interest rates, a topic they had debated in class. The students were generally skeptical about the strategy’s effectiveness.

“If you inflate the economy without doing anything about growth, you’re just printing money,” said one of the students, Jyotisko Sinha, 27.

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http://www.nytimes.com/2010/12/01/business/economy/01fed.html?partner=rss&emc=rss

German Unemployment Falls to Lowest in 18 Years

A jobseeker uses a computer to search for a job at an unemployment office in Berlin.

German unemployment fell for a 17th month in November as business optimism improved, underscoring the gulf between Europe’s biggest economy and peripheral nations struggling to cut debt.

The number of people out of work declined a seasonally adjusted 9,000 to 3.14 million, the lowest since December 1992, the Nuremberg-based Federal Labor Agency said today. Economists forecast a decrease of 20,000, according to the median of 31 estimates in a Bloomberg News survey. The adjusted jobless rate remained at 7.5 percent.

Rising payrolls help bolster domestic demand in Europe’s most populous country, lessening German reliance on exports and shoring up slower-growth economies in Greece, Ireland, Portugal and Spain. German retailers are enjoying a “dream start” to the Christmas shopping season, the HDE industry federation said yesterday, as the European Union said a bigger-than-expected “spillover” from Germany may be coming to Europe’s aid.

“The German economy stands at the eve of a virtuous circle for domestic demand,” said Carsten Brzeski, an economist at ING in Brussels. “Combined with a general-feel-good factor, German consumers seem set to finally spend their way out of the recession during the Christmas shopping season.”

The euro fell against the dollar today on concern that the debt crisis in Ireland will spread to other euro nations. The currency was at $1.2987 as of 10:05 a.m. in London from $1.3125 yesterday.

Porsche Engineers

German business confidence unexpectedly surged to a record in November as domestic spending increased, the Ifo institute said on Nov. 24. Ifo’s gauge of executives’ expectations also rose to a record.

Porsche SE will hire more than 100 engineers in the coming weeks and increase capacity at a center in Weissach, Germany, it said Nov. 18. Bayerische Motoren Werke AG will add 500 workers to its engines plant in Munich, Focus magazine reported this week, citing works council head Manfred Schoch.

The Berlin-based DIW institute said yesterday that the German economy will maintain its pace of recovery in the current quarter, forecasting expansion of 0.7 percent. Consumer spending is increasingly becoming an “engine of growth,” it said.

The revival of domestic demand may boost manufacturing across the euro region, helping recoveries in so-called peripheral nations including Ireland and Portugal, whose governments are struggling to reduce budget deficits.

Spillover

“The spillover from the pick-up in activity in Germany to other member states may materialize to a greater extent than currently envisaged,” European Union Economic and Monetary Affairs Commissioner Olli Rehn said in Brussels yesterday.

The European Commission, the EU’s executive body, forecast 2.2 percent economic growth in Germany in 2011 after 3.7 percent this year, the fastest pace since the reunification of East and West Germany in 1990.

The recovery in the euro-area economy is “uneven” across member states, Rehn said. An index of export orders at German manufacturers rose in November, while similar gauges for Spain and Greece declined, according to commission figures.

A separate report today from the EU statistics office in Luxembourg showed that the euro-area jobless rate increased to 10.1 percent in October, the highest since July 1998, from 10 percent in September. Spain had the highest rate, at 20.7 percent.

Pay Boost

With German economic recovery showing few signs of cooling, workers may benefit from earlier pay increases. MAN SE will bring forward a 2011 raise, saying on Nov. 24 it will increase salaries in Germany by 2.7 percent as early as February.

Retail sales were higher than expected last weekend, the first of advent, and retailers are forecasting a further sales increase in the weeks leading up to Christmas, the HDE retail federation said yesterday. The Ifo institute’s German retail trade gauge rose in November to the highest level since the series started in January 2003.

Average German unemployment will drop to 2.96 million in 2011 from 3.24 million this year, the Labor Agency’s IAB research institute has forecast. That’s based on a prediction of 3 percent economic growth this year and 1.75 percent in 2011.

According to OECD data, Germany’s jobless rate was 6.7 percent in September. The equivalent rate in France was 10 percent, the U.S. rate was 9.6 percent and the Group of Seven average was 8.1 percent.


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http://www.bloomberg.com/news/2010-11-30/unemployment-in-germany-declined-to-lowest-level-in-18-years-in-november.html

Pope Benedict Calls for ‘Profound Reform’ of World Economy

Pope Benedict XVI is calling for "profound reform" of the world economy following last week's G20 summit in Seoul and the APEC Summit in Japan that proposed a Free Trade Area of the Asia Pacific.

The pontiff says he is concerned the current economic crisis will tempt richer nations to forge alliances at the expense of poorer ones. Addressing the faithful from his study window overlooking Saint Peter's Square, he spoke of what he believes is wrong with the world's economy and how nations might emerge from the crisis.

The pope said the current economic crisis, addressed by the meeting of the G20, has to be taken with great seriousness. He added that the crisis has numerous causes, sending a strong call for a profound reform of the global economic development model.

The pope also called for a revival of farming to help the victims of the global economic crisis. He said a strategic revival of agriculture appears crucial. He added that the moment has come for a re-evaluation of agriculture, not in a nostalgic sense, but as an indispensable resource for the future.

Pope Benedict also warned that despite the economic crisis, long-industrialized countries are promoting lifestyles that are dominated by unsustainable consumerism.

The leader of the Roman Catholic Church called for a new equilibrium between agriculture, industry and services so that development can be sustainable.

Pope Benedict also called on the international community to send more aid to Haiti. The pope said his thoughts are with the people of Haiti, who because of a terrible earthquake in January are now suffering from a cholera epidemic. He appealed to the international community to generously help those affected.

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http://www.voanews.com/english/news/europe/Pope-Benedict-Calls-for-Profound-Reform-of-World-Economy-107975624.html