Regulators on Friday shut down banks in Florida, Georgia and Michigan, a total of five closures that lifted the number of U.S. bank failures this year to 39.
The pace of closures has slowed, however, as the economy improves and banks work their way through piles of bad debt. By this time last year, regulators had closed 64 banks.
The Federal Deposit Insurance Corp. seized First National Bank of Central Florida, based in Winter Park, Fla., with $352 million in assets, and Cortez Community Bank of Brooksville, Fla., with $70.9 million in assets.
The agency also took over First Choice Community Bank of Dallas, Ga., with $308.5 million in assets; Park Avenue Bank, based in Valdosta, Ga., with $953.3 million in assets; and Community Central Bank in Mount Clemens, Mich., with $476.3 million in assets.
Miami-based Premier American Bank agreed to assume the assets and deposits of First National Bank of Central Florida and Cortez Community Bank. Bank of the Ozarks, based in Little Rock, Ark., is acquiring the assets and deposits of First Choice Community Bank and Park Avenue Bank. Talmer Bank & Trust, based in Troy, Mich., agreed to assume the assets and deposits of Community Central Bank.
In addition, the FDIC and Premier American Bank agreed to share losses on $270 million of First National Bank of Central Florida’s loans and other assets, and on $51.3 million of Cortez Community Bank’s assets.
The agency and Bank of the Ozarks are sharing losses on $260.7 million of First Choice Community Bank’s assets and $514.1 million of Park Avenue Bank’s assets. Talmer Bank & Trust is sharing with the FDIC $362.4 million of Community Central Bank’s assets.
The failure of First National Bank of Central Florida is expected to cost the deposit insurance fund $42.9 million. The failure of Cortez Community Bank is expected to cost $18.6 million; that of First Choice Community Bank $92.4 million; Park Avenue Bank, $306.1 million; and Community Central Bank, $183.2 million.
Florida and Georgia have been the hardest-hit states for bank failures. Twenty-nine banks were shuttered in Florida last year and 16 in Georgia. The four shutdowns in those states on Friday brought to four and 10 the number of bank failures in Florida and Georgia, respectively this year.
California and Illinois also have seen large numbers of bank failures.
In 2010, authorities seized 157 banks that succumbed to mounting soured loans and the hobbled economy. It was the most in a year since the savings-and-loan crisis two decades ago.
The FDIC has said that 2010 likely would mark the peak for bank failures.
There were 140 bank failures in 2009, costing the insurance fund about $36 billion. The failures last year cost around $21 billion, a lower price tag because the banks that failed in 2010 were smaller on average. Twenty-five banks failed in 2008, the year the financial crisis struck with force; only three were closed in 2007.
From 2008, the year the financial crisis struck, through 2010, bank failures cost the fund $76.8 billion. The deposit insurance fund fell into the red in 2009, and its deficit stood at $7.4 billion as of Dec. 31.
The FDIC expects the cost of resolving failed banks to total around $52 billion from 2010 through 2014.
Depositors’ money _ insured up to $250,000 per account _ is not at risk, with the FDIC backed by the government. That insurance cap was made permanent in the financial overhaul law enacted in July.
The number of banks on the FDIC’s confidential “problem” list rose to 884 in the final quarter of last year from 860 three months earlier. The 884 troubled banks is the highest number since 1993, during the savings-and-loan crisis.
Wall Street is watching Washington’s debt ceiling debate with great interest. But it’s keeping its powder dry as far as lobbying is concerned, for fear of getting entangled in the potentially ugly fight over budget cuts.
The Treasury estimates U.S. borrowing will hit the debt ceiling by May 16. The amount of debt subject to the limit can fluctuate on a daily basis, and there are steps the department can take to stave off the day of reckoning. But Treasury Secretary Tim Geithner, in a letter to Congress on April 4, said such measures could only buy roughly eight weeks — which would be sometime in the first part of July.
Republicans in Congress don’t want to raise the amount that the nation can borrow unless they can tie such bigger borrowing to other drastic budget cuts.
Wall Street is paying attention, with CEOs such as JPMorgan Chase (JPM, Fortune 500)’s Jamie Dimon warning of dire consequences should the nation default on its debt, ranging from credit crunches to spiking interest rates.
However, the financial community isn’t applying big bucks or pressure on the issue. Firms aren’t hiring legions of lobbyists and they’re not pressing affiliated business groups on the debt ceiling issue — especially compared to other issues they care about, such as debit card fees and the government-owned mortgage loan companies Freddie Mac and Fannie Mae.
It’s not that the big banks aren’t concerned. It’s just that they don’t want to get pulled into the accompanying debate over what programs and services might be chopped from the budget, said several banking lobbyists who asked not to be named.
The U.S. Chamber of Commerce is talking with some lawmakers about the economic implications of a debt default, said spokeswoman Blair Latoff. The Chamber has always written lawmakers pressing them to raise the debt ceiling when such votes are needed, and Latoff said they’re working on releasing a similar letter now paperless payday loans.
"The Chamber has consistently conveyed our belief that the debt limit should not become a political football," she said. "The consequences are great if we don’t increase the limit and given where we are today, there is no other option."
That said, the chamber is not among the handful of groups or companies that reported lobbying on the debt ceiling in the first quarter of 2011.
And many of those who did report lobbying on the debt ceiling say they’re equally focused on the linked debate over the budget and spending cuts.
Those include the retiree group AARP, union groups such as AFL-CIO and the American Federation of State, County and Municipal Employees, conservative think tank the Heritage Foundation, the National Association of Manufacturers, and the manufacturing firm Emerson Electric (EMR, Fortune 500).
"Our main concern right now is the way some of our programs are being entwined with this debate on the debt limit, especially Social Security and Medicare," said AARP spokeswoman Mary Liz Burns.
Richard Trumka of the AFL-CIO said last week that his group is pushing to raise the debt ceiling while preventing Republicans from giving "outrageous tax cuts to people who don’t need it."
The lack of intense lobbying hasn’t stopped Democratic leaders such as Rep. Peter Welch of Vermont from pressing lawmakers to talk to Wall Street if they want to know the worst of the worst implications of not raising the debt ceiling.
Yemen’s opposition parties said Tuesday they will soon sign a deal mediated by neighboring Gulf countries for the embattled president to step down, possibly defusing months of deadly government protests across this impoverished Arab nation.
President Ali Abdullah Saleh, who has ruled for 32 years, has already agreed to the proposal that would create a national unity government and have him transfer power to his vice president within 30 days of the deal being signed. In exchange, Saleh and his family would received immunity from prosecution.
But the proposal, put forward by the six-nation Gulf Cooperation Council, appears to have opened a serious rift between opposition parties and the hundreds of thousands of protesters who have taken to the streets daily since February to demand Saleh’s immediate resignation.
The coalition of youth groups behind the two-month-old uprising rejected the deal, and in a statement called for nationwide civil disobedience between 8 a.m. and noon on Wednesday. The groups vowed to repeat this action every Saturday and Wednesday until Saleh steps down.
“We will march to the presidential palaces, the government headquarters and parliament and occupy them peacefully,” said Abdul-Malek al-Youssefi, an activist and protest organizer. “Our demands are that the regime leave along with the opposition leaders who are old and no longer reflect the aspirations of the street.”
Mohammed Salem Bassindwa, head of the opposition’s national dialogue council, told The Associated Press on Tuesday that he expected to soon sign the initiative by the GCC, which is led by regional heavyweight Saudi Arabia.
“We have approved the Gulf Arab initiative and the signing of the agreement will take place in the next 24 hours,” he said.
However, a senior opposition figure said the GCC proposals were accepted under pressure from the United States and Saudi Arabia, which wields immense influence in Yemen. The officials spoke on condition of anonymity because of the sensitivity of the subject.
Washington has poured millions of dollars into Yemen in recent years to help its security forces fight al-Qaida militants who have taken refuge in some of Yemen’s remote or mountainous areas.
While the deal has been approved by the opposition coalition, several dissenting voices have emerged within the movement.
Mohammed al-Sabri, spokesman of the opposition parties, criticized the acceptance of the GCC initiative. He noted that he was speaking for himself and not in his capacity as the movement’s spokesman.
“The opposition has betrayed its members and the Yemen street,” he said. “How can we speak about the corruption of the government and at the same time share a national unity government with it?”
Tawakul Karman, a senior member of the main opposition party, Islah, also rejected the proposals.
“We will not accept them and will continue our protests harder,” she said at Change Square near Sanaa University where thousands of protesters have camped for weeks.
In the country’s second largest city, Taiz, security forces opened fire on tens of thousands of protesters, killing one demonstrator and wounding at least 14 were wounded, activist Nouh al-Wafi told AP.
Security forces also wounded at least eight protesters in the western city of Hodeida, and three in the southern port city of Aden.
The protesters were demanding Saleh’s immediate resignation and rejecting the GCC proposals.
More than 130 people have been killed by security forces and Saleh supporters since the unrest erupted in early February. At least 40 were killed in a single attack on March 18 by rooftop snipers overlooking protesters in Sanaa.
Rising oil prices and anticipation that China might tighten monetary policy yet again to combat inflation kept Asian stock markets in check on Monday.
Oil prices rose to near $113 a barrel after Libyan rebels in control of key oil producing areas in the OPEC nation said they won’t produce crude for at least a month as they repair fields damaged in fighting.
Japan’s Nikkei 225 index was slightly lower at 9,689.96, vacillating between positive and negative territory. Toyota Motor Corp., the world’s No. 1 auto producer, was down 0.5 percent after the company announced its car production in Japan plummeted nearly 63 percent in March.
Japan’s powerhouse auto industry has struggled to regain its footing since an earthquake on March 11. The quake spawned a huge tsunami that crashed into the country’s northeastern coast, home to a vast network of auto parts suppliers. Those smaller companies were wiped out, leaving Toyota and many other Japanese industry behemoths scrambling for alternatives.
Japan has now begun to turn its attention to reconstruction, with the government proposing last week a special $50 billion budget to help finance reconstruction efforts and plans to build 100,000 temporary homes for survivors.
That helped lift shares of companies expected to play a major role in the rebuilding effort. Mitsubishi Heavy Industries Ltd. rose 1.3 percent, and Nishimatsu Construction Co. Inc. was up 0.8 percent. Komatsu Ltd., one of the world’s leading equipment makers, was 0.3 percent higher.
Stock, bond and commodities markets were closed in the U.S. on Friday for the Easter holiday and many markets were also shut in Europe and Asia. Markets in Australia, New Zealand and Hong Kong remained closed Monday.
South Korea’s Kospi rose 0.7 percent to 2,213.28, with a Yonhap news report Monday showing the volume of cargo handled at South Korea seaports grew more than 7 percent during the first quarter of 2011, fueled by improving economic and trade conditions. Hyundai Heavy Industries Co., South Korea’s leading shipbuilder, rose 2.1 percent. Other transport shares were up, including Korean Air, by 3.7 percent.
On the downside, mainland China’s Shanghai Composite Index dropped 0 same day payday loans.7 percent to 2,989.55 and the smaller Shenzhen Composite Index was down 1.1 percent to 1,261.25.
News reports on Sunday quoted China’s national planning agency as saying inflation will be about 5 percent in the second quarter. Wang Ren, an analyst at Ping’an Securities, in Shenzhen said the estimate was not out of line with expectations. Still, inflation is regarded as a chief threat to the global economic recovery, and central banks were expected to use the means at their disposal to try to tame it. That could reduce liquidity that has been supporting share prices.
“What we can see over the next three months is that equity markets are probably going to trade sideways at best, and probably on the downside,” said Tey Tze Ming, a trader at Saxo Capital Markets in Singapore. “Inflation is going to play a very big role.” Central banks in emerging markets “will be forced to increase borrowing costs.”
China’s central bank has raised the reserve requirement ratio for commercial banks four times and benchmark interest rates twice since the beginning of this year to mop up excess liquidity.
Some investors stayed on the sidelines in anticipation of several key events later this week, including earnings reports of some major Japanese companies and the Federal Reserve meeting on April 26-27.
Benchmark crude for June delivery was up 32 cents at $112.61 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. Oil markets were closed Friday for the Easter holiday. The June contract last settled up 84 cents at $112.29 on Thursday.
OPEC-member Libya sits atop Africa’s largest proven oil reserves. But Libyan exports have largely disappeared from the international market since an uprising to oust Moammar Gadhafi began, helping drive oil prices to their highest levels in more than two years.
The dollar strengthened to 82.11 yen from 81.90 yen late Friday in New York. The euro rose to $1.4572 from $1.4550. It had risen to a 16-month high of $1.4648 during Thursday’s trading.
In my work as a financial journalist, I speak with a lot of advisors and just as many individual investors. Lately I
have an element of inflation protection because they can raise prices.
You own shares of all three?
Yes. So if their costs go up, they can raise prices. I also say Coca-Cola (KO, Fortune 500). I don’t know this for a fact, but I would assume Coca-Cola still makes money in Zimbabwe. If you’d had Zimbabwe bonds, you’d have been wiped out.
You’ve described your investment in AIG as one of your biggest mistakes and one that reduced your fund returns during the crisis by 6%. You sold all your shares. Now that the stock is down around 98% from its peak, do you find value in AIG?
One of the most important single considerations in investing in a complex financial institution is that the CEO has to serve as chief risk officer and to understand the nature of the risks being taken. It is very hard for somebody who came into AIG (AIG, Fortune 500) two or three years ago to really have a deep handle on procedure, the reserves, nature and risks to take. And it’s a very complex company. A lot of insurers are down so we spend a lot of time looking at AIG, but our fundamental concern is with the quality of the ongoing insurance business, and we are having a very hard time getting our arms around that which we wouldn’t have had trouble with 10 years ago.
You cut back your position on J.P. Morgan substantially recently. So what’s changed at J.P. Morgan?
We are huge admirers of that entire management team. You know people talk about Jamie Dimon, and Jamie Dimon is one of the best managers I’ve ever met. We’ve had some redemptions so we had to raise money. And in my view, J.P. Morgan (JPM, Fortune 500) had a relatively fuller value than some of the other financials we owned.
The second reason [we sold shares] was the unanimity opinion about the quality of the company. Our feeling was that there is always the risk of the change in perception when everybody thinks it’s great.
The third thing is that J.P. Morgan’s balance sheet is way more complicated than the nature of what makes up Wells Fargo’s balance sheet, or what makes up American Express’s balance sheet.
Okay, so what are you absolutely avoiding now?
That is a big question. I don’t know. I study the way ETFs have exploded, where there are a lot of people that are making a lot of money on ETFs. To me index funds for long-term investors are going to add real value. ETFs where you trade them intraday, or you can rotate sectors — I think these are very dangerous. Even though that doesn’t directly affect the investments that we look at.
A “shift in rhetoric” indicates that China may be on the verge of allowing faster gains by the yuan to damp import costs that may fuel inflation, Capital Economics Ltd. said.
“Several senior policymakers have signaled in the last few days that China will allow the renminbi to strengthen in order to dampen imported price pressures,” said London-based economist Mark Williams, a former adviser on China to the U.K. Treasury. “This would be a significant departure — the exchange rate is usually viewed narrowly as an instrument of trade policy rather than as a monetary policy tool.”
His comments were in an e-mailed note dated yesterday. Renminbi is another term for the currency.
Increased flexibility in the yuan may “ease imported inflation pressures,” Hu Xiaolian, a deputy governor of the central bank, said in a speech transcript released yesterday. The yuan, which touched a 17-year high of 6.5276 against the dollar on April 18, is described by the U.S. as substantially undervalued and a factor in global economic imbalances that could lead to another financial crisis.
“China appears to be on the verge of allowing faster currency appreciation in response to inflation,” Williams said. “ This may not last long if inflation drops back in the second half of the year, as we expect.”
Consumer prices rose 5.4 percent in March from a year earlier, the most in almost three years.
Bets on Appreciation
Yuan forwards strengthened yesterday after a central bank adviser said China will not rule out a one-off revaluation of the currency.
Xia Bin said that while the yuan should appreciate gradually in the long term, and current conditions aren’t conducive to overly fast gains, a one-off revaluation “can’t be ruled out.” His comments were in an online interview on Sina.com.
Twelve-month non-deliverable forwards gained 0.17 percent to 6.3745 per dollar as of 6:27 p.m. in Hong Kong, reflecting bets the yuan will strengthen 2.4 percent in a year from the onshore spot rate, according to data compiled by Bloomberg.
–Paul Panckhurst. Editors: Paul Panckhurst, Ken McCallum.
To contact Bloomberg News staff for this story: Paul Panckhurst at +852-2977-6603 or ppanckhurst@bloomberg.net
With tears welling in her eyes, the 16-year-old recounted how both her brothers were killed by troops fighting for strongman Laurent Gbagbo. Then rage contorted her face as she ranted against the arrested former president: “They must kill him. He’s a savage.”
Gbagbo was finally arrested and forced from power on April 11, more than four months after he lost elections. Calls for reconciliation and healing have come from all sides since then.
“We beg forgiveness for the bad things that have happened. But nothing can be gained by seeking vengeance,” said warlord Ibrahim “IB” Coulibaly, who had thrown his forces against Gbagbo. “Hatred and vengeance are our weaknesses.”
President Alassane Ouattara himself has called for reconciliation. He also has said he wants Gbagbo tried by national and international courts.
But despite calls for healing in Ivory Coast, some say they cannot forgive.
Justice Minister Jeannot Ahoussou said he is drawing up a list of ministers, generals and journalists to be charged with blood crimes, corruption and hate speech.
At an Abidjan church where Gbagbo partisans have sought refuge, people still were talking of the need for the West African nation to be run by “real Ivorians” _ a reference to Gbagbo’s divisionist tactic of questioning the nationality even of Ouattara, who was born in Ivory Coast but whose father is from neighboring Burkina Faso. Gbagbo also attempted to raise Western opposition to Ouattara by harping on his Muslim religion and suggesting he would turn Ivory Coast into a refuge for Islamist radicals.
Gbagbo, who came to power in 2000 promising to unite the country, had resorted to inciting old tribal and religious rivalries to create dissension and prolong his stay in power.
Coulibaly, whose “Invisible Commando” began the fight in the commercial city of Abidjan to wrest power from Gbagbo troops who fired mortars and rockets at civilians, said Ivory Coast needs reconciliation and pointed to South Africa as an example. But Coulibaly himself has been a divisive force among those fighting for Ouattara, raising fears that old rivalries put aside while different armed groups joined forces to topple Gbagbo could now re-emerge.
Coulibaly has denied there was infighting between his fighters and other pro-Ouattara forces. But witnesses said there was, costing lives and delaying Gbagbo’s capture for 10 days. The witnesses said Coulibaly wanted to announce on TV that he was heading a new transitional military government. Coulibaly denies it.
Another possible obstacle is Gbagbo’s rabble-rousing youth minister Charles Ble Goude, who is in hiding. He is wanted by the Ivory Coast government for crimes including inciting his Young Patriot thugs to attack foreigners and people from tribes loyal to Ouattara. He also allegedly used them as a human shield around the presidential residence where Gbagbo had sheltered in a fortified underground bunker.
Before Gbagbo was finally ousted, there were barbarities on both sides.
Gbagbo fighters slaughtered at least four Muslim imams during the fighting in Abidjan and set ablaze at least 10 mosques.
Pro-Ouattara fighters attacked the Catholic cathedral in the southwestern cocoa port of San Pedro, firing into 5,000 residents from tribes opposed to Gbagbo who had sought refuge there. One man was killed and many wounded.
On Saturday, Gbagbo party leader Pascal Affi N’Guessan urged die-hard militants to lay down their arms and called for national reconciliation. “The war has ended,” he said, urging Ivorians to “give a chance to the restoration of peace” and halt the “revenge killings, the looting.”
He expressed the party’s sympathies to the families of all those who died.
But that is not enough for Fatoumata Zhama Diaby, the 16-year-old. She was at a weekend march, dancing and singing along with other women and shouting their support for Ouattara. After she lashed out at Gbagbo, a reporter asked if she heard Ouattara’s call for reconciliation.
“They killed both of my brothers. We are six left now, only girls. My brothers were very dear to me,” she said, putting a hand over her heart.
She said Fohmad Diaby, 24, and Comaba Blo Diaby, 17, died the day of the election, Nov. 28, when soldiers attacked people protesting Gbagbo’s refusal to step down. The elder brother was hit by a grenade she said, showing shrapnel wounds on her arms from the same blast. The younger brother was disabled and could not run with others. He was shot.
“I can never, never forgive them,” Diaby said. “Gbagbo is inhuman. If I saw him today, I wouldn’t just kill him, I would cut him into pieces.”
The euro fell the most since November against the yen and dropped from a 15-month high versus the dollar on concern a bailout for Greece may fail to prevent the first default by a country in the 17-nation currency region.
New Zealand’s dollar surged this week to a three-year high versus the greenback on speculation accelerating inflation won’t hamper the economy. The U.S. currency touched the lowest level this month versus the yen on bets the Federal Reserve will reaffirm after its April 26-27 meeting its plan to keep borrowing costs low to support the economic growth.
“The risk premium in the periphery has re-emerged,” said Mark McCormick, a currency strategist at Brown Brothers Harriman & Co. in New York. “People are becoming concerned with the probability of countries like Greece and Ireland having to potentially restructure their debt.”
The euro fell 2.3 percent to 119.96 yen yesterday, from 122.76 on April 8, in the biggest weekly decrease since a 2.5 percent drop in the five days ended Nov. 26. The euro depreciated 0.4 percent to $1.4430, from $1.4483, after rising above $1.45 for the first time since January 2010.
The dollar dropped 1.9 percent to 83.13 yen, from 84.76, after touching 82.96 this week, the lowest level since March 31.
Sweden’s krona advanced to a two-week high against the euro on speculation the Riksbank will increase its target lending rate by a quarter-percentage point to 1.75 percent on April 20. The krona appreciated 0.7 percent to 8.9243 versus the euro after touching 8.9241 yesterday, the strongest since April 1. The currency gained 0.3 percent to 6.1848 versus the dollar.
Canadian Dollar
The Canadian dollar slid from a three-year high versus the greenback, dropping for the first time since the week ended March 18. The Bank of Canada held its target lending rate at 1 percent at its meeting April 12 and said currency appreciation “could create even greater headwinds” for the economy.
The loonie slid 0.4 percent to 95.92 cents versus the greenback after touching 95.27 on April 8, the strongest level since November 2007.
The New Zealand dollar rallied as Finance Minister Bill English said yesterday in a Bloomberg Television interview that the nation’s accelerating inflation won’t hamper the economy. Reserve Bank Governor Alan Bollard said this week the economy will get a boost from higher farm export prices, which will underpin the nation’s currency and may stir inflation.
The kiwi appreciated 2.1 percent to 79.95 cents after touching 79.97 yesterday, the highest level since April 2008. The New Zealand dollar was little changed at 66.46 yen.
Greece’s Yield Spread
The extra yield investors demand to hold Greek 10-year debt instead of equivalent German securities widened to 10 percentage points, the most since before the euro’s debut in 1999. Greece’s 10-year yield climbed to a record high of 13.84 percent.
Germany’s Zeit newspaper reported April 14 that a restructuring of Greek sovereign debt may involve imposing losses of 50 to 70 percent on investors. Ireland’s credit rating was cut two levels by Moody’s Investors Service to the lowest investment grade as the government struggles to lower the budget deficit and restore economic growth.
“Increased worries about defaults in the periphery are weighing yet again on the euro,” said David Mann, New York- based head of research in the Americas at Standard Chartered.
Finland’s anti-euro bloc is set to win record support at tomorrow’s election, forcing the country’s biggest parties to take a tougher stance on bailouts as they try to woo voters tired of rescuing fiscal failures.
True Finns
Support for political groups opposed to euro-area rescues was 47.3 percent in the latest poll by Helsingin Sanomat, published April 12. The True Finns, whose leader Timo Soini said taxpayers in the Nordic country shouldn’t have helped bail out Greece or Ireland, has seen its support soar to 16.9 percent from 6.9 percent a year ago.
The Dollar Index, which IntercontinentalExchange Inc. uses to track the greenback versus the currencies of six major U.S. trading partners, fell 0.3 percent to 74.820 after touching 74.617, the lowest level since December 2007.
Fed Vice Chairman Janet Yellen said this week in New York that an increase in food and fuel costs will have only a temporary impact on inflation and consumer spending and warrants no reversal of record monetary stimulus.
The Fed will hold the target lending rate at zero to 0.25 percent at its meeting ending April 27, according to all of the economists in a Bloomberg News survey.
The yen rallied 2.3 percent to 86.67 versus the Canadian dollar on reduced demand for assets related to economic growth as China said inflation reached the fastest pace in more than two years, reviving speculation the world’s second-largest economy will cool growth.
“Chinese inflation backs expectations the People’s Bank of China is likely to tighten policy in the months ahead so that could mean slower global growth, which tends to unsettle investor appetite for risk and inspire demand for safety and the yen,” said Joe Manimbo, a market analyst in Washington at Travelex Global Business Payments, a currency-exchange network.
Drugmakers Merck and Johnson & Johnson say they’ve reached a deal to end a multibillion dollar arbitration dispute over rights to two lucrative drugs for immune disorders.
Merck will pay J&J $500 million, and the companies will divide distribution rights for Remicade and Simponi, which treat chronic inflammatory diseases like rheumatoid arthritis.
J&J receives exclusive marketing rights for the drugs in Canada, Central and South America, the Middle East, Africa and Asia Pacific territories. Merck retains rights through Europe, Russia and Turkey and will divide the profit from those territories with J&J.
The drugs generate combined sales of several billion dollars annually, and Schering-Plough had split revenue with J&J before Merck bought Schering-Plough in 2009.
J&J had started an arbitration bid to gain all global revenue from the drugs.
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