Ireland may merge two of its biggest lenders as part of a raft of measures aimed at drawing a line under Europe’s worst banking crisis.
The government is considering folding EBS Building Society, the fifth-largest, into Allied Irish Banks Plc (ALBK), the second- largest, according to two people with knowledge of the situation. An announcement may come today after the central bank publishes the results of bank stress tests at 4:30 p.m. in Dublin, said the people, who declined to be identified because the matter isn’t yet public.
The country is taking “the first step in making changes to the financial system that are long overdue,” Phil Hogan, Ireland’s environment minister, told national broadcaster RTE Radio today. Finance Minister Michael Noonan will later in parliament announce “important decisions,” Hogan said.
Ireland is trying to show investors, its taxpayers and the rest of the euro region that the nation has plugged all the holes in the banking system, whose collapse so far cost 46.3 billion euros ($65.8 billion) in capital and crippled what was once Europe’s most dynamic economy.
The third round of stress tests covers Bank of Ireland Plc, whose shares have dropped 65 percent over the last six months, Allied Irish, EBS and Irish Life & Permanent Plc. Noonan will set out how more money the banks need from a 35 billion-euro bailout fund set aside for them.
“There is no overnight solution here,” said Gavin Blessing, a bond analyst at Collins Stewart Plc (CLST) in Dublin. “It’s going to be quarters or even years before these banks can raise debt at attractive levels and fund themselves independently again in the wholesale market.”
Bailout Fund
Ireland’s banks were reliant on the European Central Bank for 88.7 billion euros of funding at the end of last month, the Irish central bank said today. They may have borrowed as much as an additional 70.1 billion euros in exceptional liquidity from the Irish central bank, according to figures on March 11.
The government may have to inject 27.5 billion euros extra into the banks in total, according to a survey of 10 analysts and economists by Bloomberg News.
This would exhaust about 80 percent of the bank fund set up last year as part of Ireland’s bailout by the European Union and International Monetary Fund. The fund includes 17.5 billion euros from Ireland’s own resources.
“A realistic number would be 40 billion euros,” said Brian Lucey, associate professor of finance at Trinity College, Dublin. “They will come in between 25 billion euros to 30 billion euros. Anything more will be a difficult sell.”
Bank of Ireland
Bank of Ireland, the largest lender, will seek as much as 5 billion euros, said two people with knowledge of the matter. Irish Life will require more than 3 billion euros, while EBS will need about 1 billion euros, three people with knowledge of the banks said credit report. The people declined to be identified because the figures aren’t yet public.
The government controls four of the six domestic lenders, including Anglo Irish Bank Corp., which epitomized Ireland’s building boom and collapsed with the bursting of the property bubble and 15 percent decline in gross domestic product. Anglo Irish said today its final pretax loss was 17.7 billion euros for 2010, a record for an Irish company.
A fifth bank, Irish Life, yesterday suspended its shares until tomorrow on speculation the state will have to take majority control. The stock fell 45 percent on March 29. The company is weighing the sale of its profitable life assurance and investment management units to shore up its bank business, three people with knowledge of the talks said yesterday.
Announcements
Noonan decided yesterday to scrap the sale of state-owned EBS to a group including U.S. billionaire Wilbur Ross’s leveraged-buyout firm and Dublin-based Cardinal Capital Group. The state said in December is was acquiring 93 percent of Allied Irish, while it seized full control of EBS in May.
After central bank Governor Patrick Honohan, 61, publishes the results of the stress tests, Noonan, 67, who worked with Honohan in government in the 1980s, will address parliament shortly afterwards.
The main focus of this year’s assessment is on home loan portfolios after lenders were forced to sell 72.3 billion euros of risky commercial real-estate loans to the state last year at an average discount of 58 percent.
Deposits by Irish residents fell 9.8 percent in February from a year earlier, the central bank said today in Dublin. The decline was 1.8 billion euros over the month, it said.
The ECB expects Ireland to stand ready with a “backstop facility” for Irish banks, Lorenzo Bini Smaghi, an ECB executive board member, said yesterday.
Russian Car
Armed with the stress tests results, Ireland’s month-old Fine Gael-led government will seek to reopen the terms of the country’s 85 billion-euro bailout inked in November. Noonan will bring the results to a meeting of European finance ministers in Budapest starting on April 8 as he pushes for a reduction in the 5.8 percent interest rate on the loans.
The government also said it wants the ECB to provide longer-term financing for the banking system, and is seeking permission to share losses with senior bank bondholders. European policy makers are opposed to imposing losses on bank bondholders, on concern that it may reignite a banking crisis across the euro region.
Irish authorities also want fellow euro members to take direct stakes in the banks or provide insurance against losses for them as it tries to find buyers for lenders.
“It would be great if we could sell Bank of Ireland and Allied Irish for a euro to an overseas buyer, but that’s not going to happen,” said Jim Power, chief economist at Friends First in Dublin, who likened Irish banks to Soviet-era cars. “I compare it to trying to sell a 20-year-old Lada.”
International leaders were gathering in London on Tuesday seeking to plot out an endgame for Moammar Gadhafi’s tottering regime and to strike agreement on plans for Libya’s future.
U.N. Secretary-General Ban Ki-Moon, U.S. Secretary of State Hillary Rodham Clinton, the Arab League and as many as 40 global foreign ministers were joining the talks _ seeking to ratchet up pressure on Gadhafi to quit.
Italy’s Foreign Minister Franco Frattini said several nations planned to table a joint deal aimed at swiftly ending the conflict, setting out proposals for a cease-fire, exile for Gadhafi and a framework for talks on Libya’s future between tribal leaders and opposition figures.
Britain and the United States signaled ahead of the talks that they could accept a plan under which Gadhafi quickly leaves Libya and in return escapes a war crimes trial, despite a previous insistence that he must face the International Criminal Court.
“There are some African countries that could offer him hospitality. I hope that the African Union can come up with a valid proposal,” Frattini said Monday.
African Union chairman Jean Ping will attend the talks at London’s Lancaster House alongside delegates who include Qatar’s emir Sheik Hamad bin Khalifa Al-Thani and foreign ministers from Morocco, the UAE, Jordan and Iraq.
Gadhafi “must understand that it would be a gesture of courage on his part to say `I am leaving’,” Frattini said.
Turkey, which has offered to attempt to mediate a permanent cease-fire, also said the talks would gauge international support for scenarios under which Gadhafi could retreat into exile.
Britain’s Foreign Secretary William Hague, who was hosting the summit, said Tuesday that _ while the U.K. hoped Gadhafi would face international justice _ it was down to Libyans to decide his fate.
“Of course where he goes, if he goes, is up to him and the people of Libya to determine and we will not necessarily be in control of that,” Hague told BBC radio.
International allies were “not going to choose Col. Gadhafi’s retirement home,” he added.
Hague and Clinton met Tuesday with Libyan opposition envoy Mahmoud Jibril _ who was holding talks in London, but not attending the main conference.
“We discussed the current political and humanitarian situation in Libya. We agreed on the absolute importance of protecting and safeguarding civilians in Libya,” Hague said following his talks with Jibril.
He said he had asked Jibril for his “assessment of the humanitarian needs in Libya and priorities for international assistance.”
A senior U.S. administration official said the U.S. would also soon send diplomat Chris Stevens to Benghazi to meet with rebel leaders.
In a joint statement, British Prime Minister David Cameron and French President Nicolas Sarkozy said Jibril’s Interim National Transitional Council could play a key role in deciding Libya’s future following Gadhafi’s potential ouster payday loans with no fax.
The leaders said that the transitional council and “civil society leaders, as well as all those prepared to join the process of transition to democracy,” should begin work to decide how Libya moves toward democratic elections. They said Gadhafi loyalists were facing a final chance to ditch support for the dictator and side with those seeking political reform.
Sarkozy and Cameron discussed the meeting late Monday in a video conference with President Barack Obama and German Chancellor Angela Merkel.
In a speech Monday night at the National Defense University at Fort McNair, Obama said the London talks would decide on what political effort would be needed _ alongside military action _ to increase pressure on Gadhafi.
“While our military mission is narrowly focused on saving lives, we continue to pursue the broader goal of a Libya that belongs not to a dictator, but to its people,” Obama said.
Libya’s deputy foreign minister Khaled Kaim told a news conference in Tripoli that foreign leaders had no right to attempt to impose a new political system on the country.
“Libya is an independent country with full sovereignty,” he told reporters. “The Libyan people are the only ones that have the right decide the country’s future, and planting division of Libya or imposing a foreign political system is not accepted.”
Kaim called on nations attending the London talks to agree on a peace deal.
“We call upon Obama and the Western leaders to be peacemakers not war mongers, and not to push Libyans towards a civil war and more death and destruction,” he said.
The London meeting _ which will also be attended by NATO secretary-general Anders Fogh Rasmussen _ was also expected to discuss disputes over the scope of NATO-led coalition airstrikes, and to more clearly define the extent of cooperation between Libya’s rebel groups and international military commanders.
Russian foreign minister Sergey Lavrov _ who will not attend the talks _ has said the international air campaign which began March 19 has breached the terms of the U.N. resolution which authorized the enforcement of a no-fly zone over Libya.
Cameron insisted that the coalition had not gone beyond its remit, but acknowledged the impact had been to force Gadhafi’s military into a retreat from a number of key towns.
“We should do everything we can to protect people and actually _ as a result _ that is actually driving back the Gadhafi regime,” Cameron said.
Sarkozy and Cameron said in their joint statement that the military action would end only when civilians were free from the threat of attack.
___
Hadeel al-Shalchi, in Tripoli, Bradley Klapper in London and Ciaran Giles in Madrid contributed to this report
Crows cawed overhead as tsunami survivors in devastated towns along Japan’s northeast coast buried their dead in makeshift graves en masse Wednesday as workers at Fukushima’s overheated nuclear plant struggled to cool down the crippled facility.
With supplies of fuel and ice dwindling, officials have abandoned cremation in favor of quick, simple burials in a show of pragmatism over tradition. Some are buried in bare plywood caskets and others in blue plastic tarps, with no time to build proper coffins. The bodies will be dug up and cremated once crematoriums catch up with the glut, officials assured the families.
In Higashimatsushima in Miyagi prefecture, about 200 miles (320 kilometers) northeast of Tokyo, soldiers lowered bare plywood coffins into the ground, saluting each casket, as families watched from a distance and helicopters occasionally clattered overhead.
Some relatives placed flowers on the graves. Most remained stoic, folding hands in prayer. Two young girls wept inconsolably, hugged tightly by their father.
“I hope their spirits will rest in peace here at this temporary place,” said Katsuko Oguni, 42, a relative of the dead.
In Fukushima, the struggle to stabilize the plant suffered another setback Wednesday after a spike in radiation levels forced officials to pull workers and suspend restoring power to the Unit 2 reactor, a Nuclear and Industrial Safety Agency official said in Tokyo.
The setback showed how tenuous the situation remains nearly two weeks after the March 11 earthquake and tsunami knocked out power to the Fukushima complex, allowing radiation leaks that have seeped into vegetables, raw milk, the water supply and even seawater.
Broccoli was added early Wednesday to a list of tainted vegetables that already includes spinach, canola and chrysanthemum greens.
The nuclear crisis has complicated the government’s response to the catastrophic earthquake and tsunami that swallowed up villages along the coast. The number of bodies collected stood at more than 9,400, with more than 14,700 people listed as missing. Those tallies may overlap.
Hundreds of thousands remain homeless. Schools, gymnasiums and other community buildings in the northeast are still packed with survivors, many of them elderly suffering after days without heat, medicine and hot meals.
In Fukushima, relief after the lights went on late Tuesday in the control room of Unit 3 made way hours later for concern over radiation levels in Unit 2, putting on hold plans to try restarting the plant’s crucial cooling system. The sprawling nuclear complex has six units.
In the first five days after the disasters struck, the Fukushima complex saw explosions and fires in four of the plant’s six reactors, and the leaking of radioactive steam into the air. Since then, progress continued intermittently as efforts to splash seawater on the reactors and rewire the complex were disrupted by rises in radiation, elevated pressure in reactors and overheated storage pools.
Missions to dump seawater into one storage pool holding spent nuclear fuel went well, and firefighters continue to spray water on spent fuel pools in two other units, NISA said. Temperature at a seventh, joint spent fuel pool have stabilized, they said Wednesday.
Two workers were slightly injured trying to restore electric cables, neither from radiation, Tokyo Electric Power Co. spokesman Kaoru Yoshida said Wednesday.
Tokyo Electric warned that time is needed to replace damaged equipment and vent any volatile gas to make sure the restored electricity does not spark an explosion.
“You’re going to get fires now as they energize equipment,” said Arnold Gundersen, the chief engineer at the U.S.-based environmental consulting company Fairewinds Associates. “It’s going to be a long slog.”
Radiation continues to leak from the site, though the main barriers appear intact, the U.S. Nuclear Regulatory Commission said.
The operator suspects some damage to an inner containment structure at Unit 2 as a result of an earlier explosion there. Also, spent fuel pools in damaged buildings could be releasing some radioactivity into the air.
“I think we have enough information to determine that there’s not large holes or excessive releases from those containments, but we continue to see radiation coming from the site … and the question is where exactly is that coming from,” nuclear safety expert James Lyons said at a briefing Tuesday by the International Atomic Energy Agency.
The Health Ministry ordered officials in the area of the stricken plant to increase monitoring of seawater and seafood after elevated levels of radioactive iodine and cesium were found in ocean water near the complex. Education Ministry official Shigeharu Kato said a research vessel had been dispatched to collect and analyze samples.
Doses detected so far are low and not a threat to human health unless the tainted products are consumed in abnormally excessive quantities, government officials and health experts said.
Radiation levels in the air in Tokyo have been well below the global average for naturally occurring background radiation.
The Bank of Japan’s reluctance to fund government borrowing is set to be tested by the economy’s need for stimulus in the aftermath of the March 11 earthquake.
Prime Minister Naoto Kan’s bill for clearing wreckage and rebuilding roads, housing and utilities is forecast at 5 trillion yen ($62 billion) or higher by Nomura Holdings Inc., Morgan Stanley and Barclays Capital. With debt issuance poised to rise, BOJ Governor Masaaki Shirakawa warned last week the bank must avoid underwriting debt to retain its credibility.
The BOJ’s reluctance is an echo of the European Central Bank’s initial decision to refrain from buying government bonds as the euro-region’s sovereign-debt crisis spread a year ago, before it agreed to do so in May. As the scale of the efforts needed to restart an economy already shrinking at the end of 2010 becomes clear, Shirakawa and his colleagues may step up.
“This is something the BOJ should have done even before the earthquake,” said Takeo Hoshi, an economics professor at the University of California, San Diego and author of “Corporate Financing and Governance in Japan: The Road to the Future,” winner of Nikkei’s 2002 prize for best economics book. “It’s even more important for the Bank of Japan to support the recovery” in the aftermath of the earthquake, he said.
Yen Impact
Additional monetary stimulus would help combat an appreciating yen, by increasing its supply. The nation’s currency climbed to a post-war high against the dollar on March 17, prompting Finance Minister Yoshihiko Noda the next day to request that the Group of Seven mount its first coordinated intervention in the foreign-exchange market since 2000.
The yen fell for a second day today, to 80.94 as of 10:30 a.m. in Singapore, compared with the high of 76.25 last week. The currency’s March 18 drop offered a fillip to equities, with the Nikkei 225 (NKY) Stock Average advancing 2.7 percent, limiting its loss since the temblor to 12 percent. The Tokyo market is closed today for a holiday.
“The need to counter yen strength amid deflation will oblige the Bank of Japan to monetize the fiscal deficits needed to fund reconstruction,” Prasenjit Basu, an economist at Daiwa Capital Markets in Singapore, wrote in a March 17 note.
Policy makers cut the main interest rate to a range of zero to 0.1 percent last year to help bring an end to prolonged deflation, leaving asset purchases at their main instrument.
Asset Purchases
Shirakawa and his fellow board members last week expanded a fund used to buy items including Japanese government bonds, known as JGBs, exchange-traded funds and real-estate investment trusts by 5 trillion yen, to 10 trillion yen. He told reporters that the BOJ by law cannot underwrite JGBs.
The BOJ kept a separate program of monthly JGB purchases at 1.8 trillion yen. The central bank, which can legally buy the bonds in the secondary market, has a rule of keeping its holdings at less than the value of banknotes outstanding. It also has a 3 trillion-yen venture-capital type facility designed to channel capital to growth industries.
“There are too many uncertainties yet” for the central bank to decide whether and how it will add stimulus, said Chiwoong Lee, a senior economist at Goldman Sachs Group Inc. in Tokyo. Should it take additional steps, they could range from increasing asset purchases to boosting the venture-capital program by defining companies that invest in the devastated northeast as fresh sources of growth, he said.
Power Critical
The key determinant for the magnitude of the hit to Japan’s economy will be the duration of power outages, which threaten to disrupt production, according to Lee.
Yesterday, the government said efforts to stabilize the Fukushima Dai-Ichi nuclear plant, crippled from the tsunami after the magnitude-9 temblor and discharging radiation, had some success, while a quick resolution is unlikely.
Tokyo Electric Power Co., owner of the 40-year-old power plant, has imposed rolling blackouts extending to Tokyo.
Stringer’s Optimism
Sony Chairman Howard Stringer said that recovery efforts may jump-start the country’s lagging economy as the country uses savings to rebuild. Japan last year fell behind China as the world’s second-largest economy, and the legacy of a burst asset bubble and financial crisis in the late 1990s has left it with persistent deflation and a record debt load.
Noda said last week that the government will compile a supplementary budget to pay for the recovery, which it will take beyond the end of the month to complete.
Barclays Capital analysts estimated the reconstruction budget at 5 trillion yen to 7 trillion yen in a March 18 research note. Nomura assumed 6 trillion yen in new spending during the fiscal year starting April 1. Morgan Stanley economist Takehiro Sato predicted “10 trillion yen or so,” noting it will take time to gauge the scope of what’s needed.
Tax Cuts
Japan is considering tax cuts to help companies damaged by the disaster, including refunding corporate taxes and not levying fixed-asset taxes from companies and individuals who are unable to rebuild factories and homes, the Nikkei newspaper reported today, without saying where it got the information.
World Bank staff today said in a report that it may take five years for Japan to rebuild, citing private estimates of damage from the disaster at $122 billion to $235 billion.
With Japan’s public debt already at about twice the size of its GDP, Moody’s Investors Service said last week that the disaster may push forward Japan’s “tipping point” for investors to lose confidence in the nation’s credit quality.
“The unsustainable sovereign debt position suggests that the BOJ will have to bear a bigger funding burden,” BNP Paribas SA strategists wrote in a March 18 note.
The financial crisis of 2007-2009 and Europe’s sovereign- debt turmoil that began in 2009 have pressed central bankers into uncharted territory. The Federal Reserve accumulated assets such as junk-rated debt as it sought to forestall a depression. More recently, the Fed pursued a $600 billion initiative to buy Treasuries in its effort to bring down the unemployment rate.
ECB’s Reversal
As the Greek debt crisis threatened to spread in May 2010, ECB President Jean-Claude Trichet oversaw a policy meeting where he said the bank hadn’t discussed the option of buying government bonds. He instead called for “decisive actions by governments” to curb borrowing. Days later, the ECB said it would intervene to buy sovereign debt.
The BOJ, too, may want Kan’s government to spell out how it will pay for additional spending and provide assurance that debt will be reined in over time, some analysts said.
“The government spent a lot and sold a lot of bonds after the Lehman shock occurred, and Japan greatly stepped back from the fiscal rehabilitation,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. “The BOJ is basically reluctant to rush in expanding its balance sheet.”
Deflation Continues
At the same time, a lack of inflationary pressure undermines the argument that BOJ debt purchases run the risk of spurring inflation. A government report this week is forecast to show consumer prices, excluding fresh food, fell 0.3 percent in February from a year before.
“Eventually what’s going to happen is the Bank of Japan has to be a buyer of last resort for JGBs,” said Julian Jessop, an economist at Capital Economics Ltd. in London. “The economic recovery will be more muted so the Bank of Japan will be forced to do more.”
The New York Times announced "digital subscriptions" on Thursday, revealing the long-awaited details of its paywall plan. Starting March 28, non-subscribers will be able to read only 20 online articles for free each month.
Home delivery subscribers can continue to access online and app content for free. Non-subscribers can choose from three packages: $15 every four weeks for Web access and smartphone content; $20 for Web plus access to the Times iPad app; and $35 for Web, tablet and smartphone access.
There’s still some room for free, though: Readers who reach online Times articles through links from search engines, blogs and social media will be able to access those individual articles, even if they have reached the 20-article monthly limit.
But for some search engines, users will have a daily limit of free links. The New York Times’ press release on its plan did not specify which search engines will be affected, but a Times article on the plan said there will be a five-link limit through Google (GOOG, Fortune 500).
The homepage at NYTimes.com and all section fronts will remain free to browse at all times. The "Top News" section will remain free on the Times’ smartphone and tablet applications.
"Free links from social and search is a key point," said Sree Sreenivasan, the dean of students at Columbia Journalism School. "This will keep the visitor numbers from falling too much. And their core paying audience is not going to change."
The Times says its homepage receives 30 million unique readers per month. Figures from The Nielsen Company, however, said NYTimes.com had 15.5 million unique visitors in January. ComScore data said New York Times Digital, which includes properties like About.com, overall had 71.9 million unique visitors in January.
Sreenivasan said he considered the plan pricing to be fair, though the company should "make payments as easy as iTunes" to increase readers’ willingness to fork over cash.
The Times’ digital subscription plan is rolling out in Canada starting Thursday, "in order to fine-tune the customer experience" before the service rolls out to the rest of the world.
New York Times Co personal business card. (NYT) stock ended 0.3% higher at $8.89 a share, though it had risen as high as $9.35 earlier in the session following the announcement.
In a prepared statement, Times publisher and chairman Arthur Sulzberger, Jr., said the move "will result in another source of revenue, strengthening our ability to continue to invest in … journalism and digital innovation."
The cost of free: Determining the paid vs. free balance has been difficult for media companies, and they’ve been making big bets on digital publications as print sales dwindle. Most employ a "freemium" model — some content free, some paid — in an effort to keep as many readers as possible.
News Corp. (NWS, Fortune 500) has been at the forefront of charging for content. While some of its The Wall Street Journal content can be accessed for free, a sizable portion is behind a paywall.
And last month, News Corp. unveiled an iPad-only publication called The Daily. CEO Rupert Murdoch committed around 100 staffers and an investment of $30 million to get it launched, and will spend $26 million a year to keep it running. The Daily costs 99 cents a week, or $40 for a yearly subscription — though News Corp. has extended a free trial for several weeks.
The price point for digital content is a sticky decision for media companies, as the proliferation of blogs often means readers can get similar content for free elsewhere.
And going digital can be expensive. To take The Daily as an example: To break even on its operating costs from subscriber revenue alone, The Daily would have to sell more than 650,000 subscriptions — and that’s without accounting for the cut Apple (AAPL, Fortune 500) takes for selling The Daily through its App Store.
Apple unveiled a new subscriptions model last month, in which the company will take 30% of all sales generated through its platform — and publishers cannot include links in their apps to let customers buy content outside of the app.
The Times said its apps will be in compliance with the Apple subscription model by June 30.
Witnesses say tanks rolled into an Abidjan neighborhood hours after a mortar attack that left up to 30 people dead.
Soldiers burned shops and cars in the Abobo neighborhood, which is under the control of fights loyal to internationally recognized president Alassane Ouattara.
There were no known casualties in the early Friday incursion by soldiers loyal to his rival, Laurent Gbagbo, who refuses to leave the presidency months after the election.
Abidjan, Ivory Coast’s biggest city, has seen daily battles for weeks now between the supporters of each man claiming to be president.
On Thursday, the U.N. said Gbagbo’s forces fired on and around a market, killing up to 30 people and wounding as many as 60 others.
A nearly completed new power line could restore electric cooling systems in Japan’s tsunami-crippled nuclear plant, its operator said Thursday, raising hopes of easing the crisis that has threatened a meltdown.
Tokyo Electric Power Co. spokesman Naoki Tsunoda said the new power line to Fukushima Dai-ichi is almost complete. Officials plan to try it “as soon as possible” but he could not say when.
Meanwhile, conditions at the plant appeared to worsen Wednesday, with white smoke pouring from the reactor complex and a dangerous surge in radiation levels forcing workers to retreat for hours from their struggle to cool the overheating reactors.
The chief of the International Atomic Energy Agency said he would go to Japan as soon as possible to assess the danger. He called the situation serious and urged the Japanese government to provide better information to the agency.
The new line would revive electric-powered pumps, allowing the company to maintain a steady water supply to troubled reactors and spent fuel storage ponds, keeping them cool. The company is also trying to repair its existing disabled power line.
The word came as international concern mounted over the deteriorating situation at the Fukushima Dai-ichi plant, where the danger from the reactors has nearly overshadowed the human tragedy of last week’s magnitude 9.0 earthquake and subsequent tsunami that pulverized Japan’s northeastern coast and is feared to have killed more than 10,000 people.
The 180 emergency workers have been working in shifts to manually pump seawater into the reactors because last week’s earthquake and tsunami disabled main and backup power for electric-powered cooling pumps.
The yen fell against the dollar, ending a two-day gain, as the Bank of Japan pumped more money into financial markets after the nation’s biggest earthquake, damping demand for its assets.
Japan’s currency declined against 14 its 16 most-traded counterparts after Tokyo Electric Power Co. confirmed a third explosion occurred at a nuclear plant damaged in the temblor. The dollar rose versus most of its peers before reports this week forecast to show an expansion in industrial production. The euro gained for a second day against the yen amid speculation demand for the region’s debt will increase after European Union leaders agreed on a retooled bailout plan.
“The BOJ has made bold moves and clearly pledged to keep doing so,” said Misato Nakashima, a currency analyst at Himawari Securities Inc. in Tokyo. “The yen will be under downward pressure in the mid- to long-term as the central bank has no choice but to maintain monetary easing for a long time.”
The yen fell to 81.83 per dollar as of 10:22 a.m. in Tokyo from 81.63 in New York yesterday, when it rose as much as 1.5 percent to 80.62, the strongest since Nov. 9. The Japanese currency declined to 114.40 per euro from 114.22. The dollar was at $1.3980 per euro from $1.3992.
The BOJ added 5 trillion yen ($61 billion) to the financial system in a one-day operation today. BOJ Governor Masaaki Shirakawa has pledged to keep pumping cash into the economy to stabilize markets after a magnitude 9 quake struck Japan’s northern coastline on March 11, triggering a deadly tsunami. The central bank injected 15 trillion yen yesterday and doubled its asset-purchase program to 10 trillion yen.
The containment chamber of the No. 2 reactor at Tokyo Electric’s Fukushima Dai-Ichi nuclear plant may be damaged after today’s blast and radiation leakage is possible, company spokesman Kaoru Yoshida said. It was the third explosion at the site since March 12.
U.S. Growth
The U.S. dollar strengthened before a report today likely to show manufacturing in the region covered by the Fed Bank of New York expanded this month at the fastest pace since June. Separate Fed figures to be released March 17 are predicted to show output at factories, mines and utilities climbed 0.6 percent in February after a 0.1 percent contraction in January, according to a Bloomberg News survey guaranteed personal loan approval.
The greenback also was supported on speculation the Federal Reserve, meeting today, may acknowledge the labor market is improving.
“We only need some hawkish news out of the U.S., or some positive sentiment, for the dollar to turn around,” said Matthew Brady, executive director for foreign exchange at JPMorgan Chase & Co. in Sydney. “In the medium-term, I am positive for the U.S. dollar.”
‘Positive Outlook’
The Federal Open Market Committee will likely repeat its commitment to “exceptionally low levels” for the benchmark rate, analysts led by Hans-Guenter Redeker, London-based global head of foreign-exchange strategy at BNP Paribas SA, wrote in a note. Policy makers may also acknowledge recent improvements in employment data, according to the analysts.
“A more positive outlook on the labor market from the FOMC would likely be a small U.S. dollar positive,” they wrote.
The U.S. unemployment rate declined to 8.9 percent in February, the lowest in almost two years, the Labor Department said March 4. The Fed has held its benchmark between zero to 0.25 percent since December 2008.
The euro rose against the yen before a March 17 sale of Spanish bonds maturing in 2021 and 2041. That follows an agreement by EU leaders last weekend to widen the scope of a rescue fund aimed at resolving the region’s debt crisis.
‘Holding Firm’
“Overall, the euro-zone is looking ahead and getting positive news, such as an agreement to increase the rescue fund,” said Tsutomu Soma, a bond and currency dealer at Okasan Securities Co. in Tokyo. “The euro is holding firm.”
Yields on 10-year Spanish debt slid 16 basis points to 5.27 percent yesterday. Investors bid for 1.54 times the 10-year securities on offer at a sale of the debt in February, the lowest bid-to-cover ratio for the securities since September 2008, according to data compiled by Bloomberg.
Portugal will continue tapping the bond markets without falling back on official European aid, Finance Minister Fernando Teixeira dos Santos told reporters in Brussels yesterday.
If you are getting the iPad 2, are you confused about what data plan is right for you?
You’re not alone. Trying to figure out how much you’ll pay doesn’t require a degree in advanced mathematics, but it could help. That’s because there are a total of eight different AT&T (T, Fortune 500) and Verizon (VZ, Fortune 500) plans that you can choose from, each with a different set of data caps and overage charges.
You’ll probably save money with AT&T if you use a little data each month, and you’ll save money with Verizon if you use a lot of data. But it’s not that simple.
Determining how much you’ll pay depends heavily on how much data you think you’ll use. Go over that limit, and you could be shelling out a lot, depending on your plan. (For a comprehensive view of how much you’ll pay per quarter-gigabyte, click here to open a spreadsheet we’ve compiled.)
The trouble is that determining how much data you’ll need is an inexact science. A data plan with a 250 megabyte cap gets you about 1,300 Web pages, 400 photo downloads, 60 songs, 14 YouTube videos, or about an hour of Netflix videos. A 1 gigabyte plan gets you 6,500 Web pages, 2,000 photos, 300 songs, 65 YouTube videos or between three and six hours of Netflix viewing.
But how often will you be using the network and how often will you be on Wi-Fi, which doesn’t count against your data usage? Who counts how many Web pages they visit each month?
Okay, take a deep breath, and we’ll try to help you sort through this mess.
What are the plans? Unlike the original iPad, the iPad 2 with 3G will be available on either AT&T or Verizon.
AT&T offers two different kinds of plans: prepaid and postpaid. Both plans charge $15 for each 250 megabytes you use per month, or $25 for the first 2 gigabytes.
With the prepaid plan, AT&T makes you shell out money before the start of each month, and the network simply charges your credit card anew each month or each time you go over your data limit. So 251 megabytes costs $30 and 2.1 gigabytes costs $50.
The postpaid plan charges you once a month, and AT&T assesses a $10-a-gigabyte overage charge in excess of 2 GB. So 251 megabytes still costs $30 but 2.1 gigabytes costs just $35.
Verizon’s plan is simpler at first blush. It doesn’t offer a pre-paid plan. It offers postpaid plans in four different tiers: 1 GB for $20, 3 GB for $35, 5 GB for $50 and 10 GB for $80. A Verizon spokesperson said that as a customer gets close the upper end of the range in their plan, they get an alert that allows you to sign up for more service.(See correction below.)
What’s the bottom line? If you know exactly how much data you’ll be using, here are the cheapest plans:
For 250 MB of data a month or less, AT&T offers the cheapest plans by $5 a month. Between 250 MB and 1 GB, Verizon’s plan will save you $5 a month over AT&T. From 1 GB to 2 GB, AT&T’s plans are $10 a month cheaper than Verizon.
Between 2 GB and 4 GB is where it starts to get a little tricky: AT&T’s postpaid plan and Verizon’s plan cost the same for that range. But AT&T’s prepaid plan will cost a lot more. If you go with AT&T, the postpaid plan could save you $15 a month over the prepaid plan.
Here’s where it gets easy though. Anything over 4 GB is clearly Verizon’s territory. If you’re enough of a data hog that you’re using 10 GB a month, Verizon will save you at least $25 a month.
Now, if you are unsure of how much you’ll be using and reluctant to pay up if you go over your limits, it’s a whole different ball game. A Verizon customer with a 1 GB plan who accidentally uses 1.1 GB of data would pay $15 a month more than an AT&T customer. Similarly, a 250 MB AT&T customer that uses 251 MB would pay $10 a month more than a Verizon customer.
Thoroughly confused? The good news is that Apple (AAPL, Fortune 500) doesn’t make you enter into a contract with Verizon or AT&T. So if your plan isn’t working out, you can always cancel it or switch your plan (within the same carrier of course) each month.
House Republicans proposed a stopgap budget measure to fund the government until April 8 while lawmakers try to work out their differences on spending for the rest of the fiscal year.
The bill would cut about $6 billion in spending, in part by ending or reducing funds for 25 programs. Most of those changes have been endorsed by President Barack Obama or Senate Democrats. About $2.6 billion of the reduction would be made by rescinding unspent funds for lawmakers’ pet projects.
“While short-term funding measures are not the preferable way to fund the government, we must maintain critical programs and services for the American people until Congress comes to a final, long-term agreement,” said House Appropriations Committee Chairman Hal Rogers, a Kentucky Republican. “A government shutdown is not an option.”
The bill, to be put to a vote next week, would replace the current funding measure that expires March 18. It would be the sixth stopgap measure since the fiscal year began Oct. 1. By cutting $2 billion per week, it would keep Republicans on track to cut $61 billion this year.
Democrats and Republicans remain far apart on how to fund the government through September. Lawmakers are arguing over which side should make the next move after a House-approved plan to cut $61 billion and a Democratic alternative were defeated this week in the Senate.
Democrats said it’s up to House Republicans to show flexibility after the Senate made clear their plan wasn’t viable in that chamber.
“We’re looking for a counteroffer,” Representative Steny Hoyer of Maryland, the second-ranking Democrat, said today.
‘Prepared to Move?’
“Are you prepared to move?” Hoyer asked Majority Leader Eric Cantor on the House floor. “I’m asking you and I can’t get an answer and you apparently are not going to make a counteroffer.”
Cantor said it’s up to Senate Democrats to produce a budget-cutting plan that can clear the chamber that could provide the basis of negotiations with the House.
“There is really no offer on the table that is valid because it can’t pass the Senate,” said Cantor of Virginia. “What is the Democratic Senate’s offer?”
Obama today urged lawmakers to work out a deal, saying the public expects them to “stop with the political bickering.” He said, “We can’t keep on running the government on two-week extensions. That’s irresponsible.”
“The notion that we can’t get resolved last year’s budget in a sensible way with serious but prudent spending cuts, I think, defies common sense,” Obama said. “It shouldn’t be that complicated.”
Senator John McCain, an Arizona Republican, said he will attempt to amend the new short-term proposal to fund the Pentagon for the rest of the year.
“We can’t subject our nation’s national security to a two week-by-two week process,” McCain said. “It is not the way the Defense Department can function and this nation can defend itself and its vital security interests.”
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