TORONTO
Samsung Electronics Co. and Hyundai Motor Co. (005380), South Korea
The U.S. Treasury again shied away from labeling China a currency manipulator on Tuesday, but it rapped the country for not moving quickly enough on exchange rate reforms.
The United States also chided Japan for stepping into the currency market to stem the yen’s rise, and urged South Korea to use such interventions sparingly.
Some U.S. politicians have argued that China has gained an unfair competitive edge in global markets by keeping the yuan artificially low to boost exports, and pressure has mounted in Congress for President Barack Obama to punish China.
But the administration prefers to tread softly and use diplomacy. The U.S. Treasury, in a semi-annual report, as usual said that statutes covering a designation of currency manipulator “have not been met with respect to China.”
It repeated its standard line that appreciation in the yuan has been too slow, calling it “insufficient.”
“Treasury will closely monitor the pace of appreciation and press for policy changes that yield greater exchange rate flexibility, a level playing field, and a sustained shift to domestic demand-led growth,” it said in the report to Congress on international economic and exchange rate policies.
The value of the yuan, which Beijing manages closely, has risen 4 percent against the dollar this year and 7.7 percent since China dropped a firm peg against the greenback in June 2010. The Peterson Institute for International Economics recently estimated the yuan was undervalued by 24 percent against the dollar, down from 28 percent earlier in the year. It attributed the change to both Beijing’s policy of gradual currency appreciation and higher Chinese inflation.
At the heart of the friction between the two countries is a U.S. trade deficit with China that swelled in 2010 to a record $273.1 billion from about $226.9 billion in 2009. The cumulative Jan-Oct deficit with China is on track to top that this year, running at around $245.5 billion.
The U.S. Senate this year for the first time passed a bill that would require the administration to slap penalties on Chinese imports if it fails to adopt market-based exchange rates. While the measure has made no progress in the lower chamber and is unlikely to become law, it shows the mounting U.S. frustration with its vital trade partner.
President Obama at the November APEC meetings, in his toughest words yet, told President Hu Jintao that China must play by global trade rules and act like “a grown-up.”
Beijing has warned the United States not to “politicize” the currency issue, and some economists have pointed out that nations such as Japan and Switzerland have intervened in currency markets without drawing Washington’s ire.
TARGETING TOKYO
The report did point the finger at Japan this time, criticizing Tokyo for its solo yen-selling interventions in August and October that followed a joint Group of 7 action in the aftermath of the March 11 earthquake.
“The unilateral Japanese interventions were undertaken when exchange market conditions appeared to be operating in an orderly manner and volatility in the yen-dollar exchange rate was lower than, for example, the euro-dollar market,” the report said.
“In contrast to the post-earthquake joint G7 intervention in March, the United States did not support these interventions,” the Treasury said, adding that Tokyo should pursue reforms to revive its domestic economy rather than try to influence the exchange rate.
A senior Japanese government official said the report did not change Tokyo’s position that its currency policy was in line with G7 agreements.
“This report does not make it more difficult for Japan to intervene,” said the official, who spoke on condition of anonymity due to the sensitivity of the topic. “We are committed to doing whatever is necessary.”
Japanese exporters have complained that the ultra-strong yen puts them at a competitive disadvantage. The yen was trading at just under 78 to the U.S. dollar on Wednesday morning, about 3 percent weaker than it was on October 31, when Tokyo aggressively intervened to cap the rise.
The report also noted that South Korean authorities “should limit their FX interventions to exceptional circumstances of disorderly market conditions and adopt a greater degree of exchange rate flexibility.”
MORE OF THE SAME
Treasury Secretary Timothy Geithner has said the law on the FX report, which requires the administration to determine whether U.S. trade partners are deliberately undervaluing their currencies, is a poor tool to push Beijing on the yuan.
Instead, the United States prefers to argue for change at regular closed-door meetings with Chinese officials. It also uses international economic forums, such as the Group of 20 leading nations and the International Monetary Fund, to ramp up public pressure on Beijing to move more quickly to a more-flexible currency.
China is the biggest foreign holder of U.S. Treasuries, with about $1.1 trillion, a position that gives it leverage in international economic negotiations. Foreign exchange traders had not expected a change of U.S. tactics.
“It’s not very surprising. It’s sort of sliding it in under the radar. They’re (Treasury) really not in a position to make any major moves at this point,” said Sean Incremona, an economist at 4Cast in New York.
The Treasury Department has not labeled a country a currency manipulator since July 1994, when it cited China. A designation would require the United States to step up negotiations with Beijing on the yuan’s value.
The yuan slipped on Tuesday as strong dollar demand from corporations offset a record high mid-point fixed by the People’s Bank of China. The central bank set an all-time high dollar/yuan mid-point in an apparent move to let the yuan rise a little more at the end of 2011 so as to make the yuan’s full-year nominal appreciation look bigger, traders said.
Some U.S. manufacturers, which have been hit hardest by competition from China and other emerging economies, would still prefer the U.S. government to take a harder line.
“China’s currency is still enormously undervalued,” said Scott Paul, executive director of the Alliance for American Manufacturing, an industry lobby for hard-hit textile, steel and labor groups.
“I’m disappointed that President Obama has now formally refused six times to cite China for its currency manipulation, a practice which has contributed to the loss of hundreds of thousands of American manufacturing jobs.”
The worldwide popularity of loyalty programs has created a headache for the companies that offer then. There are trillions of banked miles and travel reward points out there that they
What is an effective way to protect a job site from copper thieves and other intruders?
Builders have a dilemma in trying to protect their construction sites. Until there is electrical power to the site, providing easy or cost-effective security protection is difficult. This challenge often leaves job sites with large amounts of copper and supplies unattended, making them easy targets for overnight thefts and vandalism.
Available are wireless, portable and battery-operated alarm systems that operate around the clock. They detect a trespasser on a construction site and are designed to react quickly enough to help catch a vandal in the act because the property owner gets visual verification from a monitoring station.
Ideal to protect vacant property, construction sites, air-conditioning units, storage yards and substations, battery-powered monitoring systems have a motion viewer with a camera that sends a video clip over the cell network to a central station. The video is downloaded and viewed by a trained operator. Operators who detect potential suspicious activity notify police. Officers can be sent to a video-verified event in progress.
These systems help eliminate false alarms caused by traditional security systems. At subdivision construction sites, owners can move the system from home to home as each residence is secured with doors and windows. Battery-powered security systems work much like a typical home system with an alarm code or key fob. The user can keep the system silent to increase the chance of apprehension or have an alarm siren triggered to deter trespassers. The result is fewer false alarms and an increase in apprehension success.
Olympus Corp. faces a deadline to report revised earnings Wednesday to avoid being removed from the Tokyo stock market after a whistle-blower questioned fees and acquisitions that turned out to be part of a deception to hide $1.5 billion in investment losses.
Former President and Chief Executive Michael Woodford, who has been in the limelight for first raising questions about exorbitant fees and acquisitions, is back in Tokyo to meet investors and legislators, and to try to lead a turnaround at the camera and medical equipment maker.
Woodford, a 51-year-old Briton and a rare foreigner to lead a major Japanese company, was fired in October after going public with his doubts about massive consulting fees on the acquisition of British medical equipment maker Gyrus Group in 2008 and other spending.
He was in Japan last month to meet police and other investigative authorities. He has said he wants to fix Olympus and has expressed hopes shareholders will back him.
Olympus President Shuichi Takayama has said Woodford lacks the right teamwork style to lead the company, although now acknowledges the positive side of Woodford’s whistleblowing. Olympus initially denied any wrongdoing and lambasted Woodford.
No one has been charged in the scandal. But Olympus management has said several top company men were involved in the scheme and has promised to investigate 70 officials, including former and current executives and auditors, to pursue possible criminal charges.
Meeting the Wednesday deadline for a revised earnings report is a must for Olympus to stay on the stock exchange, but it could still be delisted if seriously dubious accounting is found fast cash.
A third-party panel set up by Olympus, including a former Japanese Supreme Court judge, released the findings of an investigation earlier this month, which said top executives who were “rotten to the core” had orchestrated the accounting cover-up spanning three decades.
As of 2003, Olympus had racked up 117.7 billion yen ($1.5 billion) in investment losses dating back to the 1990s, according to the company.
The overpriced fees for financial advice and overvalued acquisitions were part of an elaborate deception utilizing overseas banks and several funds to keep the massive losses off the company’s books, Olympus says.
Japanese magazine Facta was first to report the dubious money.
Tsuyoshi Kikukawa, who was behind Woodford’s appointment as chief executive and later his firing, has since resigned as chairman. He is among several executives suspected of knowing about the scheme.
Last month, Olympus dismissed Executive Vice President Hisashi Mori, saying he was involved in the cover-up along with Kikukawa. A company auditor also resigned.
Olympus stock plunged after the scandal broke but has since recouped some of those losses on optimism it might not be booted off the Tokyo Stock Exchange.
Two telecommunications giants now control the Toronto Maple Leafs, the biggest prize in Canadian sport.
The Ontario Teachers’ Pension Plan announced on Friday that will sell its 79.5 per cent stake in Maple Leaf Sports and Entertainment, owners of the iconic Leafs, to Rogers Communications and BCE for $1.32 billion.
The companies made the announcement in a morning news conference at the Air Canada Centre to confirm the blockbuster deal.
“MLSE is truly a world-class organization with some of the most iconic brands and popular sports teams across North America,” said Nadir Mohamed, Rogers president and CEO in a statement.
“This investment fits squarely into our strategy of securing premium content and making it accessible to Canadians when, where and how they want it.”
“Sports content is king. Let’s face it nobody wants to watch a game two days later,” Mohammed said during the announcement Friday morning. “Between the two organizations I can’t think of anybody that can bring live sports to Canadians wherever they are without missing a second.”
MLSE also owns the Raptors of the NBA, Toronto FC of Major League Soccer, the Marlies of the American Hockey League, the Air Canada Centre, two specialty television channels and Maple Leaf Square, a condominium development adjacent to the arena.
Under the agreement, Rogers and Bell Canada will divide their 75 per cent share of MLSE evenly. And Larry Tanenbaum whose firm, Kilmer Sports, owned 21 cash till payday.47 per cent of MLSE increases its ownership to 25 per cent.
“I am excited to welcome our new partners Bell and Rogers,” said Tanenbaum, who remains as chairman of MLSE, in a statement. “I am proud this is a made-in-Canada deal that will bring resources and expertise to help us win on and off the ice, court and pitch.”
“It really means we’re moving for those championship teams, the Stanley Cup, that NBA championship,” Tanenbaum said
There were provisions in the existing shareholders agreement that gave Tanenbaum key rights that would make it difficult for any owner with telecommunications properties to take advantage of MLSE’s rich broadcast assets without his approval.
Reports surfaced two weeks ago that Rogers and BCE had been working on an alliance to share control of MLSE, which also owns other sports properties and lucrative broadcast interests.
At that time, Teachers, one of the country’s biggest pension plans with assets of more than $107.5 billion, indicated it was pulling its stake off the market after an extensive search that formally started earlier this year. Teachers’ noted that several parties had made offers.
The Star reported a year ago that Teachers had been quietly talking to possible suitors including Rogers about selling its stake. Teachers’ played down the story but four months later announced that it would formally explore a sale.
Brazil’s second largest airline says it has agreed to sell a minority stake in the company to Delta Air Lines.
GOL Linhas Aereas Inteligentes SA says in a regulatory filing with the Brazilian Securities and Exchange Commission on Wednesday that Delta Air Lines Inc. will pay $100 million for a “strategic minority interest” of GOL’s preferred shares.
Gol says the investment will be in the form of American Depositary Shares.
In February, Atlanta-based Delta and Gol entered into a code-sharing agreement that enable Delta to sell seats on 56 GOL flights between Rio de Janeiro or Brasilia and 15 Brazilian destinations.
(This version CORRECTS airline as Delta Air Lines)
Globalization and technology are intensifying the growing income gap between the rich and poor in Canada, economists say.
And government policies aren
Libya’s transitional government was sworn in Thursday before the country’s interim leader, another step in the oil-rich country’s roadmap to elections next year.
Starting with Prime Minister Prime Minister Abdurrahim el-Keib, each minister faced the transitional council’s leader, Mustafa Abdel-Jalil, placed his hand on a Quran and swore to “remain loyal to the goals” of the revolution that overthrew longtime leader Moammar Gadhafi.
Each shook Abdel-Jalil’s hand as he stood in front of two national flags, and some also embraced him.
The country faces huge challenges now, but el-Keib said he and his ministers were “upbeat” and optimistic about leading Libya toward elections by next June.
“We are looking forward to having an exciting seven months ahead of us, with lots of things to do and hopefully good results,” el-Keib said.
The lineup of relative unknowns, almost all of them older men, will confront daunting challenges, like establishing control over the fractured nation after the ousting of Gadhafi’s 42-year regime, along with building up state institutions practically from scratch.
El-Keib pledged to represent the interests of all Libyans.
“I am a son of all Libyans,” he said. “I will represent everyone and share wealth with everyone.”
The transitional Cabinet includes 24 ministers, though several, including the defense minister, were missing from Thursday’s ceremony. The prime minister explained that they were out of Tripoli, some of them attending to personal preparations in their hometowns before taking up their new posts.
Among the institutions that must be built is a justice system that will be able to put on trial two key members of the Gadhafi regime _ Seif al-Islam Gadhafi, the dictator’s recently captured son and one-time heir-apparent, and the ex-intelligence chief Abdullah al-Senoussi.
The International Criminal Court has charged them both with crimes against humanity for alleged atrocities committed during the recent civil war.
Libyan authorities insist the be tried in Libya, and not at the court in The Hague, Netherlands, a decision aimed at asserting their national authority. However, they have promised to work with the ICC and with the United Nations in investigating the alleged crimes.
ICC prosecutor Luis Moreno-Ocampo told The Associated Press on Thursday that the court received the formal pledge of cooperation in a letter from Abdul-Jalil, the NTC chairman.
Moreno-Ocampo said he was satisfied with that move, which appeared to settle a dispute between the international court and Libyan authorities over which body should try Seif al-Islam Gadhafi.
Moreno-Ocampo said the most important thing is for “face of the old regime” to face justice.
It “is very important for the world and for Libya to understand what happened here, how they attacked these people, how they killed these people,” Moreno-Ocampo said.
He said investigations are under way into the alleged crimes committed by Gadhafi’s son and that he believed it would be ready for trial “in a few months.”
Seif al-Islam was captured on Saturday and is being held by fighters from the Libyan town of Zintan, who flew him there after his arrest in the south. He appeared to be in good health despite a hand injury, according to the International Committee of the Red Cross, which visited him Tuesday.
Officials with the NTC have reported that al-Senoussi, the former intelligence chief, has also been captured. But some later cast doubt on that assertion, and his whereabouts are not known.
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