Australia’s economy probably shrank last quarter for the first time since 2008 as floods inundated coal mines and farmland, a contraction the central bank sees as temporary before growth rebounds in the second half of the year.
First-quarter gross domestic product fell 0.3 percent from the October-December period, when it rose 0.7 percent, according to the median of 25 estimates in a Bloomberg News survey. The Bureau of Statistics releases the report at 11:30 a.m. in Sydney tomorrow, six days before the Reserve Bank of Australia decides on interest rates.
RBA Governor Glenn Stevens has pledged to look past data distorted by natural disasters and said interest rates will rise “at some point” to contain inflation. The local currency has risen 26 percent in the past 12 months as companies including BHP Billiton Ltd. (BHP) increase hiring to meet Chinese and Indian demand for iron ore and coal, pushing unemployment below 5 percent.
“The outlook for the economy should remain supportive of a near-term increase in interest rates,” said Joshua Williamson, a senior economist in Sydney at Citigroup Inc., who forecast a 0.3 percent GDP decline and a rate increase in August. “The exceptional strength of planned investment in mining illustrates the significant challenges the RBA faces in trying to ensure that the boom can be accommodated without leading to a significant overshooting of its inflation target.”
Compared with a year earlier, Australia’s economy probably expanded 1.8 percent in the first quarter, after gaining 2.7 percent from a year earlier in the previous period, the survey of economists showed.
Driving growth is mining investment the government estimates will be A$76 billion ($81 billion) next fiscal year. BHP Billiton, the world’s biggest mining company, is expanding its iron ore operations in Western Australia state’s Pilbara region. Energy companies are also considering new developments.
ConocoPhillips (COP) and Origin Energy Ltd. (ORG) say they plan to approve a liquefied natural gas venture in the middle of this year and begin exports in 2015. The proposal, in Queensland state, follows Santos Ltd. (STO) and BG Group Plc developments and may cost more than A$20 billion, according to Citigroup.
“Some areas of the economy are expected to be very strong, while conditions will be quite difficult in others due to the appreciation of the exchange rate and subdued consumer spending,” the central bank said in a quarterly review in Sydney on May 6.
Household spending accounts for 54 percent of Australia’s economy, and a government report this month showed retail sales unexpectedly fell 0.5 percent in March, the first decline in five months. Sales adjusted to remove inflation stagnated in the three months through March from the previous quarter.
The local dollar surpassed $1.10 on May 2, the highest level since it was freely floated in 1983. The currency’s strength is hurting exporters including Henderson, Western Australia-based shipbuilder cash advance loan no fax.bloomberg.com/austal-ltd/” href=”http://www.bloomberg.com/apps/quote?ticker=ASB:AU” density=”sparse” title=”Get Quote” ticker=”ASB:AU” class=”web_ticker”>Austal Ltd. (ASB)
The RBA’s benchmark interest rate of 4.75 percent is the developed world’s highest, raising debt payments for homeowners. Myer Holdings Ltd. (MYR) and David Jones Ltd. (DJS), Australia’s biggest department store chains, reported declines in quarterly sales on May 11.
In a quarterly outlook released May 6, the RBA forecast growth will be 4.25 percent this year, unchanged from its February estimate. Consumer prices will rise 3.25 percent over the period, from a previous prediction of 3 percent, and core inflation will quicken to 3 percent from 2.75 percent, it said.
“Australia’s terms of trade are likely to rise further in the June quarter, to be above the level assumed a few months ago — and at their highest level in at least 140 years — boosted in particular by high prices for iron ore and coal,” the RBA said, referring to a measure of income earned from exports.
Disrupting trade were floods in Queensland state in January that Prime Minister Julia Gillard called the nation’s most expensive natural disaster. Queensland produces 80 percent of steel-making coal exports from Australia, the world’s biggest supplier, and grows more than 30 percent of the country’s fruit and vegetables.
An area the size of Egypt was declared a disaster zone, including parts of the state capital, Brisbane, and helped push Australia’s trade balance into deficit in February for the first time in almost a year.
Slower Job Growth
Expanding resource projects helped Australia post record employment growth last year before hiring cooled in the first four months of the year. Employers shed 22,100 jobs in April, bringing to 26,300 the number of net new positions created in the first four months of the year, the weakest start to a year since 1999.
Still, the number of unemployed Australians in April fell to the lowest level since January 2009.
The April jobs report showed employment rose 22,900 in Queensland and Western Australia, states that are the biggest participants in what the government calls the largest mining- investment boom in the country’s history. The number of jobs in New South Wales and Victoria, home to Australia’s two most populous cities, dropped by 56,200.
“Most leading indicators point to further growth in employment over the months ahead, although at a slower pace than in 2010,” the Reserve Bank said May 6. It also predicted the jobless rate would fall to 4.25 percent by December 2013.
The Australian dollar’s strength is driving consumers to purchase cheaper goods over the Internet, hurting domestic retailers, Patrick Elliott, chairman of JB Hi-Fi Ltd. said April 3. The advance in the household savings rate, which reached 9.7 percent at the end of last year from 1.5 percent three years earlier, is further crimping profits.
Further weighing on consumers, the government said this month it will end 23 years of spending growth to help ease inflation pressure and support the return to a budget surplus. Gillard’s administration is trying to ease the need for higher borrowing costs for consumers and businesses.
Demand by institutional and asset management firms for exchange-traded funds has climbed as investors use the products more for “active” investing strategies, Greenwich Associates said.
About 48 percent of asset management firms and one-third of institutional funds plan to increase their allocations to ETFs in the next two years, according to a report published Friday by Greenwich. That compares with another study by the Stamford, Conn.-based firm in late 2010, which found that 15 percent of U.S. institutional funds used ETFs. No asset managers said they expect to cut their ETF allocation by 2013, the study said.
“The perception of ETFs as a retail product is clearly out of date,” the report said. “They are currently being used in institutional portfolios for a variety of strategic and tactical purposes and as a means of obtaining both passive and tactical active exposures instant payday loan.”
Global ETF assets surged to $1.37 trillion as of February, from $74.3 billion in 2000, according to BlackRock Inc. The Greenwich study is based on interviews with 45 institutional funds, including pensions, endowments and foundations, as well as 25 U.S. asset management firms.
Many respondents said they use ETFs for “active” purposes to implement investment strategies, according to Greenwich. ETFs, which trade like stocks, originally were conceived to mimic gauges such as the S&P’s 500 index. Because ETFs usually track an index, they are typically considered passive investments.
Stocks are rising in midday trading after a gauge of consumer confidence unexpectedly jumped.
The Thomson Reuters/University of Michigan Consumer Sentiment index rose to 74.3 in May, above analysts’ estimates of 70. Concerns about higher gas prices and inflation knocked the gauge down to 69.8 in April.
Prices for gas have come down this month after hitting nearly $4 in April.
In a separate report, the government said personal income and spending rose 0 on line pay day loans.4 percent in April. However most of the increase was due to higher food and gas prices.
The Dow Jones industrial average is up 67 points, or 0.5 percent, to 12,470. The S&P 500 index is up 7 points, or 0.5 percent, to 1,332. The Nasdaq composite is up 15 points, or 0.5 percent, to 2,798.
U.S. home prices dropped 5.5 percent in the first quarter from a year earlier, the biggest decline in almost two years, as sales of discounted foreclosures undermined real estate values.
Prices fell 2.5 percent from the fourth quarter, the Washington-based Federal Housing Finance Agency said today in a report. Economists projected a 1.2 percent drop from the previous three months, according to the median of five estimates in a Bloomberg survey.
The FHFA’s measure, based on properties with loans backed by mortgage financiers Fannie Mae or Freddie Mac, has fallen for 15 straight quarters as lenders seize homes and sell them at cut-rate prices that drag down overall values. Foreclosures and short sales, in which banks agree to let properties sell for less than their loan balances, have accounted for about 38 percent of transactions this year, based on the monthly average of data from the National Association of Realtors.
“Dumping foreclosures on the market and selling them at distressed prices affects the whole real estate market,” said Richard DeKaser, an economist at Parthenon Group in Boston. “It puts downward pressure on prices, even for homes that aren’t in foreclosure.”
Foreclosures typically sell at a 28 percent discount to non-distressed properties, according to Zillow Inc., a Seattle- based real estate company.
Idaho had the biggest drop in prices during the first quarter from a year earlier, at 16 percent, the FHFA said. Arizona prices tumbled 12 percent, and Oregon and Georgia were down 10 percent.
New Jersey home prices decreased 5.1 percent from a year earlier, and New York’s fell 3.1 percent. Massachusetts and Connecticut had 4 percent declines.
Only three states had price gains, led by Alaska, at 2.7 percent. West Virginia followed, at 2.2 percent, and prices in North Dakota were up 1.1 percent, according to the report.
Fannie, Freddie Loans
The FHFA measures changes in home values using repeat-sales data on single-family properties with loans backed by Fannie Mae or Freddie Mac. The report leaves out properties sold in all- cash transactions that are common in foreclosure deals, though it does register the erosion of home values in the general market caused by foreclosure discounts.
About 6.4 million mortgages were either delinquent or in foreclosure in April, according to Lender Processing Services Inc., a Jacksonville, Florida-based mortgage-transaction and data firm. Sales of previously owned homes fell 0.8 percent to a 5.05 million annual pace in April, the National Association of Realtors said last week.
Today’s FHFA report doesn’t include a dollar value for homes. The U.S. median price for a single-family home was $158,700 in the first quarter, according to the Realtors.
The Greek government endorsed an accelerated asset-sale plan and 6 billion euros ($8.4 billion) of budget cuts to win extra aid and stem a market slide that threatens to swamp debt-laden euro-area nations.
Belgium had the outlook on its AA+ investment-grade credit rating lowered to negative by Fitch Ratings yesterday as the cost to insure Greek debt against default rose to a record and the yield on its 10-year bonds increased to a euro-era high.
Europe’s debt crisis has deepened as euro political leaders clashed with central bankers after floating the prospect of extending maturities on Greek bonds. That “soft” restructuring may also be accompanied by more loans to Greece, which received a 110 billion-euro bailout last year, now that the government has delivered the additional budget cuts and pledged to speed asset sales.
“There may be slipping, sliding into some sort of re- profiling of Greek debt,” Simon Johnson, an economist at the Massachusetts Institute of Technology, told Bloomberg Television’s In the Loop yesterday. “They may be about to face their own special European Lehman moment.”
To avert that possibility, Greek Prime Minister George Papandreou’s Cabinet agreed yesterday to sell stakes in Hellenic Telecommunications Organization SA (HTO) by the end of next month, as well as Public Power Corp SA (PPC), Hellenic Postbank SA, and the country’s ports.
The state’s stakes in those three companies currently have a market value of 2.1 billion euros. The government also said it would create a fund comprising assets to accelerate the sales, intended to raise 50 billion euros by 2015. The bulk of that will come from selling 35 billion euros of real estate.
Greek 10-year yields were little changed at a record 17 percent, while yields on two-year notes slipped 18 basis points to 26.07 percent. Contracts on Greek default insurance jumped 27 basis points to a record 1,400.
The government plans to complete the sale of Postbank by the end of the year, and to sell 75 percent stakes in Piraeus Port Authority and Thessaloniki Port Authority SA. It also intends to extend the concession for Athens International Airport this year.
Greece owns 20 percent of Hellenic Telecommunications, or OTE, which has a market value of 3.2 billion euros. It has the right to sell a 10 percent stake to Deutsche Telekom AG, which already holds 30 percent. The government is seeking financial advisers to exercise the put option, and for the sale of a further 6 percent of the company, the finance ministry said.
The Cabinet also announced the additional budget cuts worth about 2.8 percent of gross domestic product needed to reach a 7.5 percent deficit target for 2011 even as its economy contracts for a third year, Finance Minister George Papaconstantinou said.
“With an economy still in recession, it’s very difficult to keep piling on larger amounts of fiscal tightening,” said David Mackie, London-based chief European economist at JPMorgan Chase & Co. on a conference call yesterday. “I think instead we are moving to an environment where asset sales are going to be used as the key means of signaling Greece’s commitment here.”
Greece has a “refinancing hole” of 30 billion euros for both 2012 and 2013 each, according to economist Nouriel Roubini. The nation could restructure by issuing debt with lower interest payments and extend maturities as it’s unlikely the nation will “regain market access for the next five to 10 years,” he said in an interview last week.
The European Commission on May 13 said that the deficit would be 9.5 percent of GDP this year, more than three times the EU limit, without the additional budget cuts approved yesterday. Debt, already the euro area’s biggest relative to economic output, may reach 158 percent of GDP this year and peak at 166 percent next year.
Investment-grade Belgium also took a hit as Fitch followed Standard & Poor’s in saying that political deadlock complicates efforts to cut the euro area’s third-highest debt load.
Fitch may cut Belgium’s grade, the second-highest rating, should the country fail to adhere to its deficit targets, according to a statement. Belgium needs to reduce its shortfall to less than 3 percent of GDP next year and balance its books by 2015, as agreed with the European Commission.
A caretaker administration has ruled Belgium since elections last June as tensions in the linguistically divided nation led to the longest postwar political stalemate in Western Europe. A strengthening economic recovery has helped shrink the deficit to an estimated 3.6 percent of GDP this year from 5.9 percent in 2009, though reducing the debt will require political resolve, Fitch said.
Under pressure from protesters and regional allies, Yemen’s president said Saturday he will sign a deal to step down after 32 years in power. Still, he condemned the proposal as “a coup” and warned the U.S. and Europe that his departure will open the door for al-Qaida to seize control of the fragile nation on the edge of Arabia.
The mixed signals from Yemen’s embattled president, Ali Abdullah Saleh, followed two earlier promises by him to sign the proposal. Both times he backed away at the last minute, adding to the opposition’s deep mistrust of a leader known for the adept political maneuvering that has kept in power for decades.
In a sign that he may be ready to sign this time, the coalition of opposition political parties involved in the talks with Gulf Arab mediators was persuaded to sign the deal on Saturday, a day ahead of Saleh, based on what it said were guarantees that the president would follow through.
“We accept the initiative to stop bloodshed,” Saleh said in a televised speech, and an official statement earlier in the day said he would sign the deal on Sunday.
The proposal, mediated by a six-nation regional bloc called the Gulf Cooperation Council, grants him immunity from prosecution if he leaves office within 30 days. It is far from certain, however, whether it would satisfy all of the many different groups protesting his rule in the streets.
Saleh has managed to cling to power in the face of near daily protests by hundreds of thousands of Yemenis fed up with corruption and poverty. Like other anti-government movements sweeping the Arab world, they took inspiration from the popular uprisings in Tunisia and Egypt.
The president has swung between offering concessions, taking them back and executing a violent crackdown that has killed more than 150 people, according to the opposition, which says it compiled the tally from lists of the dead at hospitals around the nation.
The bloodshed triggered a wave of defections by ruling party members, lawmakers, Cabinet ministers and senior diplomats. Saleh’s own tribe has joined those demanding his ouster. Most importantly, several top army commanders, including a longtime confidant who heads a powerful armored division, joined the opposition and deployed their tanks in the streets of the capital, Sanaa, to protect the protesters.
Saleh has been able to survive thanks to the loyalty of Yemen’s most highly trained and best-equipped military units, which are led by close family members.
That has raised concerns the political crisis could turn into an armed clash between the rival military forces if a deal is further delayed.
Seeking to win some support in the West for his continued rule, Saleh has warned several times that without him, al-Qaida would take control of the country.
“To the Americans and Europeans, al-Qaida is coming and it will take control,” he said Saturday in his televised address to members of the security forces. “The future will be worse than the present.”
The United States, which had supported Saleh with financial aid and military equipment to fight the country’s dangerous al-Qaida branch, has backed away from the embattled leader.
Secretary of State Hillary Rodham Clinton said Saturday Yemenis have been suppressed throughout the country and innocent civilians have died.
“President Saleh needs to follow through on his commitment to transfer power,” she said in a statement. “The government of Yemen must address the legitimate will of the people.”
Al-Qaida in the Arabian Peninsula has an estimated 300 fighters in Yemen and has been behind several nearly successful attacks on U.S. targets, including one in which they got a would-be suicide bomber on board a Detroit-bound flight in December 2009. The explosive device, sewn into his underwear, failed to detonate properly.
Opposition member Mohammed Ghalib Ahmed dismissed the president’s warnings about al-Qaida.
“He is terrorizing the Americans and the West,” Ahmed said.
The proposal _ first put forward in March by Saudi Arabia, Qatar, Kuwait, Oman, Bahrain and the United Arab Emirates _ gives a clear timetable for a transfer of power.
One week after Saleh signs, the opposition takes leadership of a national unity government that will include representatives of Saleh’s party. Parliament will then pass a law granting him legal immunity and a day later _ 30 days after the deal is signed _ he is to step down and transfer power to his deputy.
A month after that, presidential elections are to be held.
A Foreign Ministry official said representatives of the opposition signed the agreement Saturday in the presence of U.S. and European Union ambassadors, along with the chief mediator, the Gulf council’s secretary-general, Abdullatif bin Rashid al-Zayani. The official spoke on condition of anonymity because he wasn’t authorized to speak to the press.
Mohammed al-Sabri, the opposition coalition spokesman, said they received assurances from Gulf and Western countries that Saleh would also sign.
In an indication of the lingering mistrust, the opposition refrained from making an official announcement until he does so.
A big question hanging over the proposal is whether it would end the street protests by youth movements and others who say the opposition parties taking part in the talks to end the crisis do not represent them.
They object to Saleh being shielded from prosecution and want to see him brought to trial on charges of corruption and ordering the killings of demonstrators.
They also want more sweeping changes to upend Yemen’s political scene, said Abdel Hadi al-Azazi, one of the protest organizers in the capital.
“We will keep on escalating our protests to topple the regime,” he said. “The initiative doesn’t mean anything to us. We can’t comment on it because we have nothing to do with the signing or the initiative.”
“Transfer of power, for us, doesn’t only mean exclusion of the head of the regime but it means toppling the regime and all centers of power and its tools.”
The Energy Department has cleared the way for a terminal in southwestern Louisiana to export a portion of the U.S.’s burgeoning supply of natural gas.
The terminal was originally built to import natural gas during shortages, before supplies skyrocketed because of vast discoveries in shale rock formations.
The Energy Department said this marks the first time an exporter has been allowed to send natural gas from the lower 48 states as LNG to all U.S. trading partners.
Houston-based Chenerie Energy Partners LP said Friday it will be allowed to export up to 803 billion cubic feet of gas annually from its Sabine Pass LNG terminal. The gas will be transported on tankers after being chilled by super-low temperatures to liquefied natural gas.
Exports are expected to begin in 2015.
Conflicting signs about the economic recovery erased early gains in the stock market Thursday, overshadowing the largest Internet stock debut since Google began trading in 2004.
Before the market opened, the Department of Labor reported that applications for unemployment dropped 29,000 last week, more than expected, to 409,000. Bond yields initially rose to 3.24 percent from 3.18 percent, suggesting that bond traders viewed the report as a healthy sign for the economy.
But bond yields dipped back down to 3.20 percent after other reports released at mid-morning raised doubts about the strength of the housing recovery and the overall direction of U.S. growth.
The National Association of Realtors said fewer people purchased previously occupied homes in April. The number of homes sold in foreclosure also declined. And the Conference Board reported that expectations for future economic activity decreased, based on its index of leading indicators. The private research group said the index fell 0.3 percent in April, the first decline since June 2010. The Philadelphia Federal Reserve also reported that its measure of manufacturing activity slumped to its lowest reading since October.
The Dow Jones industrial average lost 11 points, or 0.1 percent, to 12,549 in morning trading cash advance. The Standard & Poor’s 500 index fell 3, or 0.2 percent, to 1,338. The Nasdaq composite index dipped 8, or 0.3 percent, to 2,807.
Stock indexes posted their first gains in three days Wednesday thanks to widespread gains in energy and materials companies. The stock market has stalled lately because of growing concerns that the U.S. economy is not growing as quickly as originally thought.
Despite the economic concerns, shares of social-networking company LinkedIn Corp. jumped 81 percent to $81.76 on their first day of trading. It is the largest U.S. Internet IPO since Google Inc.
In a sign that the U.S. consumer recovery remains uneven, Big Lots Inc. fell 9 percent to $34.31 after news reports that it decided not to sell itself. The Wall Street Journal said late Wednesday that the company received bids from two private-equity groups that were lower than it had hoped.
Sears Holding Corp. reported softer sales at its Kmart and Sears stores, causing a first-quarter loss of $1.58 per share, worse than analysts expected. The stock fell 3.2 percent to $73.31.
Bank of Korea Governor Kim Choong Soo said that the central bank will manage monetary policy carefully in order to avoid creating incentives for excessive borrowing by households or companies.
The nation’s growing inflation expectations will likely push up consumer prices over time and core inflation, which excludes food and energy items, is expected to accelerate further, Kim said in prepared remarks to be delivered today at a seminar in Seoul.
He also said the expected end of the second round of quantitative easing in the U.S. makes the outlook for other major economies more uncertain, adding to concerns over volatile oil prices, Europe’s fiscal crisis, and the aftermath of the March 11 earthquake in Japan.
House Speaker John Boehner said “it’s clear” the U.S. must raise its debt limit, responding to President Barack Obama’s efforts to secure backing to extend the government’s borrowing authority.
“At some point it’s clear to me that we have to increase the debt ceiling,” Boehner, an Ohio Republican, said yesterday on CBS’s “Face the Nation.” “And as we do, we’re going to do it in a way that addresses America’s long-term fiscal challenges.”
Republicans are seeking spending cuts and no tax increases in exchange for supporting a higher debt limit. The government projected this month that the $14.3 trillion debt ceiling will be reached today. Treasury Secretary Timothy Geithner has said that while he can juggle accounts for a time, he will run out of options for avoiding default by early August.
In an April 13 speech, Obama proposed a long-term deficit- reduction package of about $4 trillion over 12 years. It would include $2 trillion in spending cuts, $1 trillion in tax increases and $1 trillion in reduced interest payments.
Failure to increase the debt limit might disrupt the global financial system and plunge the nation into another recession, Obama said on “Face the Nation” in a segment taped May 11 in Washington for broadcast yesterday.
If investors “around the world thought the full faith and credit of the U.S. was not being backed up, if they thought we might renege on our IOUs, it could unravel the entire financial system,” Obama said. “We could have a worse recession than we’ve already had.”
Boehner, who in a May 9 speech demanded spending cuts greater than the amount of any debt-ceiling increase, told CBS yesterday that he understood “what the president was saying about jeopardizing the full faith and credit of the United States.”
“Our obligation is to raise the debt ceiling,” he said. “But to raise the debt ceiling without dealing with the underlying problem is totally irresponsible.”
Last month Obama appointed Vice President Joe Biden to lead negotiations with a small bipartisan group of congressional leaders to try to strike a deal on reducing the debt and deficits. The negotiators have met three times with Biden; the president held separate talks with Senate Democrats and Republicans May 11 and May 12.
“I’ve said, ‘Get them in a room, hammer out a deal, and make sure that we don’t even get close’” to defaulting on the nation’s debt, Obama said on CBS yesterday.
Senator Jon Kyl, an Arizona Republican who is among the lawmakers meeting with Biden, said the negotiators have found bipartisan agreement on “a couple hundred billion dollars” when about $2 trillion in savings is needed payday advance.
“It’s pretty small-ball compared to the overall job that we’re going to have to do,” Kyl, the second-ranking member in the Senate Republican leadership, said on “Fox News Sunday.”
Senator Richard Durbin of Illinois, the chamber’s No. 2 Democrat, said on the same program that the priority should be addressing the budget deficit by, among other things, reducing spending, “responsibly” changing entitlement programs and cutting tax breaks received by the five largest oil companies.
“We better be careful,” Durbin said. “It’s about the reputation of the United States and the economy. If we play games with it or play politics with it, and default on our national debt, we could plunge this country back in a recession with even deeper unemployment.”
Amid debate about the deficit in Washington, bond market yields in the U.S. are lower now than when the government was running a budget surplus a decade ago. The yield on the benchmark 10-year note closed at 3.17 percent on May 13, according to Bloomberg Bond Trader prices — well below the average of 5.48 percent in 1998 through 2001, the last time the U.S. had a budget surplus.
Senate Minority Leader Mitch McConnell, a Kentucky Republican, appearing yesterday on CNN’s “State of the Union,” said he wants the extension of the debt limit coupled with broad fiscal reforms.
Obama told CBS that debt reduction must be “balanced” and include tax increases.
“Are we going to make sure no single group — not seniors, not poor folks, not any single group — is carrying the whole burden? Let’s make sure the burden is shared,” he said.
Obama said he would resist cuts in such areas as medical research; infrastructure such as roads, bridges or railroads; or college loans for needy students.
Boehner said that “for quite a while” he has privately discussed with Obama his idea for making drastic spending cuts and changes in entitlements like Medicare and other programs in tandem with raising the debt ceiling.
The speaker said he told Obama, “‘Let’s lock arms and jump out of the boat together.’ I am serious about dealing with this. And I hope he is just as serious.”
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