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Nov 15 2010

The market can stay irrational longer than you can stay solvent

Monday Business Edition

One of the emergent stories this weekend has been the question of whether Ireland is going to accept a bailout from the EU or the IMF.  The proximate problem is that interest rates on Irish debt (bonds) and the price of insuring it against defaults (Credit Default Swaps) rose quite sharply on Thursday and Friday.

No holding back the tide

By David Clerkin, Markets Correspondent, The Sunday Business Post

14 November 2010

The rate attached to Irish ten-year bonds, which days earlier had touched the already eye-watering level of 7.8 per cent, quickly eclipsed 8 per cent on Monday and smashed through 9 per cent on Thursday.



To put this spiral into context, it is worth noting that the rate stood at 6.8 per cent less than two weeks ago. It was 6.5 per cent a month ago. It was 4.7 per cent a year ago.



Some bond traders zeroed in on the market for credit default swaps (CDSs) – the insurance policies on offer to protect investors from a borrower becoming unable to repay their money. The CDS market, though thinner than the market in government bonds, exhibited equally grim characteristics last week. The CDS premiums on AIB debt – insurance against AIB defaulting – exceeded 10 per cent, and those on debt issued by other Irish banks continued their unwelcome rise.

As the market fate of the Irish government has been intertwined with those of the banks it guaranteed since September 2008, some traders spoke of a vicious circle. As Irish banks fell increasingly out of favour, fears over the Irish government’s creditworthiness intensified.

Andrea Merkel made some remarks at the G20 Summit (which was so unproductive for Obama, but that’s another story) about using the European Financial Stability Fund for another bailout that the Irish government is objecting to strenuously.

The Irish people?  Maybe not so much.

German solution seems irresistible to Irish people but not to the State

JOHN McMANUS, The Irish Times

Monday, November 15, 2010

Why is the Government against accessing the European Financial Stability Fund?

(Ireland, we) are led to believe, is a source of endless fascination, no little bafflement and some affection for the Germans. Right now they must be wondering why their chancellor, Angela Merkel, is being blamed for our latest crisis by the Taoiseach when she appears far more in tune with the Irish national mood than he does.

At a very fundamental level, all the German chancellor wants to do is change the rules of global finance so that the investors who lend money to feckless governments and banks must share the cost when things go wrong and thus be incentivised to act more responsibly. It’s a sentiment that pretty much everyone in Ireland would support.

Her proposals have an added populist attraction in Ireland as, inter alia, they would involve the burning of bank bondholders, the cause célèbre of much of the economic commentariat. This is because it is hard to see how Ireland could restructure its own debt – the nub of Merkel’s plan – without also restructuring the debts of the almost completely nationalised banking system.



From this point of view, the European Financial Stability Fund is starting to look irresistible. Not only do you get to burn the bond holders, you may even be able to help people out of negative equity! “What’s not for these Irish to like?” Merkel can legitimately ask. “Nothing” is the answer most of us would give.

So why is it then that we have a situation where the German chancellor and most Irish people seem to want one thing and our Government and the financial establishment want the other?

The answer is that, unfortunately, we must live with the immediate consequences of what is a laudable effort to reverse the balance of power between the financial system and sovereign governments. It is admirable – and indeed necessary – because the overriding lesson of the global financial crisis has been that governments have found themselves servants of the financial markets rather than the other way around. But while we would all like to get to the sun-lit uplands envisioned by Merkel, Ireland unfortunately might not survive the journey.

What does Merkel get out of it?  The Euro is teetering on the brink and a lot of people are heavily invested in it, financially and politically.

Ireland and Greece should ditch the euro

By Peter Oborne, The Daily Telegraph

November 15th, 2010

This is what the Spanish prime minister, Jose Zapetero, declared in an interview with the Wall Street Journal as recently as September 22: “I believe that the debt crisis affecting Spain, and the eurozone in general, has passed.”

Or let’s listen to Patrick Honohan , governor of the Central Bank of Ireland, who soberly informed the markets last week that surging yields on Irish government debt would soon be back to normal levels. Both men are deluding themselves – and us. From time to time, events take a turn which is too grave, unsettling and unfathomable for politicians to cope with. They enter a state of denial. We are now living through one of those times.

The European Single Currency cannot be saved. Yet the euro elite are unable to bring themselves to acknowledge the magnitude of this disaster. They have convinced themselves that all is well. The pattern is familiar and indeed we in Britain experienced something very similar in the months leading up to Black Wednesday and the eviction of sterling from the Exchange Rate Mechanism in September 1992.



The euro elite is utterly ruthless. In its mission to save the euro, it is ready to throw tens of millions out of work and in the process destroy businesses, lives and whole economies. Consider the terrifying facts. The Irish economy has gone through recession and entered what economists call a depression. Its output contracted by an extraordinary 10 per cent last year, and may well do so again over the next 12 months.

In Spain, unemployment stands at 20 per cent, and youth unemployment a horrifying and tragic 40 per cent. The depths of misery lying behind these statistics cannot be exaggerated. A friend of mine who lives in the Spanish province of Andalusia tells me that some children in his village cannot go to school. This is because their parents cannot afford to buy them shoes. Effectively large parts of Europe are de-industrialising. In Greece, the economy may contract by 15 per cent over the next two years as a result of massive cuts in state spending.

For Greece and Ireland, there is an absurdly easy way back to economic growth: return to the drachma and the punt. Such a move would enable national currencies to fall back to levels where they can be internationally competitive – which in the case of hapless Greece would be approximately one third of where it stands today.

Assertions by the big bankers and eurocrats that such a move is technically impossible are self-serving and false. It would of course be very messy in the short term, but there are many examples of countries pulling out of currency unions with no lasting ill-effect.

The peripheral eurozone nations are being prevented from taking this sensible move by a cynical alliance between the big banks and the Brussels elite. The banks cannot countenance any contraction of the eurozone because once Greece, Ireland, Portugal and Spain pull out, they will have no choice but to default on their debts. Such a move would bankrupt almost all European banks. Between them these four countries have a combined sovereign debt of well over £1 trillion. A very large part of this debt is owned by the major European banks. The Bank of International Settlements estimates, for example, that French financial institutions have lent the equivalent of 37 per cent of total French GDP to these failing countries.

However there are also hugely powerful political considerations. The collapse of the euro project will come as a shattering blow from which the European project cannot recover. That is why key members of the Euro elite are so determined to use this moment to press forward with their plans for political and economic integration.

More about Ireland-

Business News below.  Now with 51 Stories.

From Yahoo News Business

1 Ireland admits to debt talks, denies EU bailout plea

by Andrew Bushe, AFP

22 mins ago

DUBLIN (AFP) – Ireland admitted Monday it is in contact with “international colleagues” over its debt crisis but denied seeking a bailout, as the EU warned that Dublin’s woes are a concern for the whole euro area.

Brussels and Dublin both insisted there were no formal talks despite persistent reports that Ireland faced pressure to seek assistance from a special EU system set up after the Greek debt crisis six months ago.

But with concern also deepening over public finances in fellow eurozone members Greece and Portugal, Ireland said for the first time that it was in contact with international partners over its problems.

2 Greek deficit and debt figures shoot up

AFP

2 hrs 47 mins ago

BRUSSELS (AFP) – Greek public deficit and debt figures for the four years to 2009 shot up markedly Monday, days after Prime Minister George Papandreou said a delay in bailout repayments may be necessary.

Following detailed Brussels audits of Athens’ books, the European Union released massively revised national figures that saw the headline deficit for 2009 rise to 15.4 percent of gross domestic product, a big jump from the 13.6 percent announced in April.

The rise was reflected in each of the previous three years also — with the numbers jumping from 3.6 to 5.7 percent for 2006, 5.1 to 6.4 percent in 2007 and 7.7 to 9.4 percent throughout 2008 — showing the rapid degradation of Greek government finances in the run-up to its calling in EU and International Monetary Fund aid.

3 Euro, stocks drop on Irish bailout, contagion fears

AFP

1 hr 10 mins ago

LONDON (AFP) – The euro and European stocks fell on Monday amid speculation and denials that Ireland faces a Greek-style economic bailout, while analysts warned that the turmoil risks spreading across the eurozone.

“Markets are starting off on the back foot once again as the woes of Europe rear their head once more,” said Simon Denham, head of trading group Capital Spreads.

The euro dropped to 1.3635 dollars in London trade from 1.3693 dollars late in New York on Friday. The dollar rose to 82.85 yen from 82.52 yen on Friday.

4 Irish bailout talk reaches fever pitch

by Sophie Estienne, AFP

Sun Nov 14, 10:31 am ET

BRUSSELS (AFP) – Key figures involved in European Union action to safeguard the stability of the euro insisted Sunday that reports of partners pressuring Ireland to seek bailout assistance were premature.

Contacted again on Sunday, the Eurogroup of currency partners, the European Commission that supervises EU states’ budgetary planning, and separate diplomats — not to mention Dublin itself — each rejected persistent international media reports claiming that organisational talks were already under way on a rescue running to some 70 billion euros (95.8 billion dollars).

Nevertheless, rumours have reached fever pitch two days before a monthly meeting of euro finance ministers in Brussels at which mounting fear over Ireland’s financial health is the single most important item, now formally placed on their agenda.

5 Japan’s MUFG to buy £3.8 bln of RBS assets

by David Watkins, AFP

2 hrs 22 mins ago

TOKYO (AFP) – A subsidiary of Japan’s Mitsubishi UFJ Financial Group said Monday it would buy a 3.8 billion pound portfolio of project-finance loans from the Royal Bank of Scotland, helping expand its global reach.

The Bank of Tokyo-Mitsubishi UFJ said it had agreed on key terms with RBS for the proposed deal to acquire the loan portfolio worth around 3.8 billion pounds.

Through the purchase — mainly of loans for natural resource and power infrastructure projects in Europe, the Middle East and Africa — the Japanese group aims to gain a foothold in emerging markets and become a sector leader.

6 Gunmen attack Nigerian Exxon Mobil facility

AFP

1 hr 7 mins ago

LAGOS (AFP) – Gunmen attacked an offshore facility operated by US oil giant Exxon Mobil off the coast of southern Nigeria at the weekend, the company said Monday.

The Nigerian subsidiary of Exxon Mobil said one of its offshore facilities “was boarded by unknown armed persons in the evening of Sunday,” but gave no further details.

The raid is the latest on oil facilities in Akwa Ibom state, one of Nigeria’s main oil producing states.

7 Japan’s economy expands in Q3, but risks ahead

by David Watkins, AFP

Mon Nov 15, 2:36 am ET

TOKYO (AFP) – Japan’s economy expanded in the third quarter as car buyers rushed to make the most of expiring subsidies and smokers stocked up ahead of a tax hike, data showed Monday, but analysts warned of risks ahead.

The hottest summer on record also drove sales of items such as air conditioners during the period, helping to drive growth.

But there were warnings of a looming payback in the fourth quarter in the absence of such one-off factors, amid growing fears Japan could face a slide back towards recession and doubt over the impact of planned stimulus measures.

8 US and Asia Pacific nations plan trade pact by 2012

by Frank Zeller, AFP

Sun Nov 14, 6:29 am ET

YOKOHAMA, Japan (AFP) – The United States and eight other Pacific Rim nations aim to forge a free-trade pact before President Barack Obama hosts an APEC summit in Hawaii in a year, Chile’s president said Sunday.

Leaders of the nine nations met for the first time Sunday at a summit in Japan to discuss the so-called Trans-Pacific Partnership (TPP) pact which would oblige members to scrap tariffs and other trade barriers.

The group did not include China — the world’s number-two economy and biggest exporter — which favours negotiating trade reforms in alternative forums that include only Asian economies and not the United States.

9 China rebuffs US pressure at Asian economic summit

by Frank Zeller, AFP

Sat Nov 13, 10:44 am ET

YOKOHAMA, Japan (AFP) – US President Barack Obama on Saturday used a Pacific Rim summit to press China on its flood of exports aided by a cheap yuan, but President Hu Jintao said Beijing would make reforms at its own pace.

The competing visions of the two economic giants were laid out a day after the Group of 20 knocked back US proposals for binding targets to address global trade imbalances and curbs on currency manipulation — proposals effectively aimed at China.

Obama also made an appeal to tear down trade barriers as the 21 members of the Asia Pacific Economic Cooperation (APEC) forum kicked off a summit in Japan, clouded by tensions between its biggest economies.

10 IMF chief says US pushed too fast at G20

by Patrice Novotny, AFP

Sat Nov 13, 2:48 pm ET

YOKOHAMA, Japan (AFP) – The United States, which was dealt a trade policy slap-down at a G20 summit, pushed its ideas too fast at a time when the mood for cooperation has waned, the IMF chief told AFP Saturday.

The Group of 20 summit knocked back US proposals for binding targets to address global trade imbalances, and on Friday produced a watered-down statement that put no pressure on China to adjust the value of the yuan.

“The United States tried to push an idea too fast, at a time when the foundation for cooperation is not as strong as it was during the crisis” that shook the world economy in 2008-09, said IMF chief Dominique Strauss-Kahn.

11 Australia’s AMP makes fresh bid for AXA Asia Pacific

by Madeleine Coorey, AFP

Mon Nov 15, 2:38 am ET

SYDNEY (AFP) – Australian wealth manager AMP made a new bid Monday for AXA Asia Pacific worth at least 13 billion dollars, saying the deal could create a major new player in the country’s financial services landscape.

The announcement comes two months after National Australia Bank (NAB), one of Australia’s four big banks, ditched its offer for AXA Asia Pacific after it was blocked by competition regulators.

AMP said it was teaming up with AXA Asia Pacific’s French parent, AXA SA, reviving a partnership that had been trumped by NAB’s higher offer.

12 Ireland faces debt crisis talks, may seek bank aid

By Padraic Halpin and Michael Winfrey, Reuters

1 hr 9 mins ago

DUBLIN/VIENNA (Reuters) – Aid would be available for Ireland’s banking sector or the state itself, a top European policymaker said on Monday after a report suggested Dublin could seek money for its stricken banks from an EU emergency fund.

Dublin reiterated that it will not need a bailout from the European Union or the International Monetary Fund although EU sources have said talks on a possible bailout are under way and it is unlikely to hold out without assistance.

The Irish Independent newspaper said Dublin was considering asking for money for its banks, an option that could be less risky politically than asking for a bailout of the state.

13 Stocks fall, dollar rises on Irish debt worries

By Ian Chua, Reuters

Mon Nov 15, 3:28 am ET

SYDNEY (Reuters) – Stocks in Asia and Europe fell on Monday on fears that Ireland may be forced to seek a financial rescue package, while a jump in U.S. Treasury yields helped drive the dollar higher.

The FTSEurofirst 300 index of leading European shares (.FTEU3) shed 0.6 percent in early trade, following most Asian equity markets lower, as worries about eurozone debt problems intensified.

Irish officials have not ruled out the possibility it may have to turn to Europe for help in dealing with its debt crisis, but said no application had been made for assistance yet.

14 Greek loan repayment extension on the table: PM

Reuters

Sat Nov 13, 3:55 pm ET

ATHENS (Reuters) – Greece’s prime minister said in an interview that the possibility of extending repayment of its EU/IMF loan was on the table, but an ECB policymaker said any talk of renegotiation could harm the country’s credibility.

Greece has cut public wages and pensions and raised taxes to help plug its budget shortfall as part of a 110 billion euro EU/IMF bailout that saved it from bankruptcy in May.

But officials say it will miss this year’s deficit target because of a revision of 2009 fiscal data and weak revenue growth, and the government has said it is ready to make extra spending cuts if necessary.

15 Greece must focus on debt targets: ECB’s Bini Smaghi

By Ingrid Melander, Reuters

Sat Nov 13, 2:34 pm ET

ATHENS (Reuters) – Greece must focus on meeting targets to cut its budget deficit, ECB policymaker Lorenzo Bini Smaghi said in an interview, warning that any renegotiation of the terms of EU/IMF loans would harm its credibility.

The debt-choked nation is set to miss a target to reduce its deficit to 7.8 percent of gross domestic product this year due to weak revenue growth and the upward revision of last year’s deficit, a Greek government official told Reuters this week.

“Greece has to achieve its objectives in order to regain credibility. We must now focus on 2011,” Executive Board member Bini Smaghi said in an interview to be published on Sunday by Greek newspaper Kathimerini.

16 BHP kills Potash Corp bid, revives $4.2 billion buyback

By Sonali Paul, Reuters

Mon Nov 15, 5:16 am ET

MELBOURNE (Reuters) – Top global miner BHP Billiton scrapped its $39 billion bid for Canada’s Potash Corp, the world’s biggest deal this year, after rejection by regulators and bowed to calls from investors to return cash.

BHP, conceding defeat for the third straight time on a major proposed merger or acquisition, signaled with its revived $4.2 billion share buyback that it had limited opportunities for other big buys.

Shareholders will be eager to hear what further growth prospects the company will chase with its cash pile when BHP Chief Executive Marius Kloppers fronts the group’s annual meeting in Australia on Tuesday.

17 AMP, AXA SA launch $13.1 billion bid for AXA Asia Pacific

By Sonali Paul and Narayanan Somasundaram, Reuters

Sun Nov 14, 11:51 pm ET

MELBOURNE/SYDNEY (Reuters) – Australian wealth manager AMP (AMP.AX) and French insurer AXA SA (AXAF.PA) launched a new $13.1 billion-plus bid for AXA Asia Pacific, a move set to challenge banks’ domination of the world’s fourth-largest wealth market down under.

A deal would put AMP at the top of Australia’s $1.2 trillion wealth management market, and end one of Asia’s largest takeovers that has dragged on for a year.

It would also allow AXA SA to exit Australia and help it to focus on its stated goal of growing in Asia, where businesses in eight countries contributed 60 percent of its operating earnings in the first half of 2010.

18 MUFG raises profit forecast, to buy RBS project book

By Taiga Uranaka, Reuters

Mon Nov 15, 4:26 am ET

TOKYO (Reuters) – MUFG raised its full-year profit forecast by a quarter and said it is buying project-finance assets from Royal Bank of Scotland worth 3.8 billion pounds ($6.1 billion), expanding its overseas reach as loan demand remains tepid in Japan.

Mitsubishi UFJ Financial Group (MUFG), Japan’s biggest bank by assets, joined smaller rivals Mizuho Financial Group and Sumitomo Mitsui Financial Group in raising its forecast, after bond trading gains and lower credit costs helped its second-quarter net profit nearly triple.

But Japan’s top three banks are struggling to boost their core lending operations as a murky economic outlook prompts companies to curb business investment, underlining the need to diversify revenue sources and seek growth abroad.

19 SAIC agrees to take GM stake in IPO: sources

By Kevin Krolicki, Soyoung Kim and Clare Baldwin, Reuters

Sun Nov 14, 10:57 pm ET

DETROIT/NEW YORK (Reuters) – China’s SAIC Motor Corp Ltd (600104.SS) has agreed to take a stake in General Motors Co (GM.UL) if Chinese regulators approve a deal to deepen an existing alliance between the two automakers, four people familiar with the matter said.

The potential investment from SAIC is part of a surge in investor interest in GM that is expected to push the pricing of its shares to $29 or above in the U.S. automaker’s initial public offering, one of the sources said.

Another source said SAIC, GM’s partner in China, would take a stake of around 1 percent in the automaker, majority owned by the U.S. Treasury after a bailout last year.

20 Japan manages Q3 growth spurt but soft patch looms

By Leika Kihara and Rie Ishiguro, Reuters

Sun Nov 14, 11:35 pm ET

TOKYO (Reuters) – Japan’s economic growth accelerated in the third quarter as expiring government stimulus steps gave consumption a last-minute boost, marking an upward blip in a moderate slowdown that is leading the economy to a standstill.

Many analysts expect the economy to stall, or even contract slightly, in the next two quarters as the strong yen’s damage to exports becomes more evident and factory output slumps after stimulus measures for low-emission cars expired in September.

While few expect Japan to slip back into recession, policymakers remain alert for risks to the fragile economy.

21 Taxes, inflation data to dominate week

By Rodrigo Campos, Reuters

Sun Nov 14, 12:08 pm ET

NEW YORK (Reuters) – Without a boost from Washington policymakers or data showing budding strength in the economy, Wall Street’s rally may be running out of fuel as the S&P 500 eases off its 2010 high.

A data-heavy week could give investors hard evidence to justify a rally that lifted the S&P 500 16.8 percent from its August 31 close to the 2010 closing high hit November 5.

But the index has been unable to move above 1,228, a key resistance level, and its chart is brewing a double-top formation, a very bearish signal.

22 Wal-Mart investors set low bar for U.S. sales

By Brad Dorfman, Reuters

Sun Nov 14, 10:06 am ET

CHICAGO (Reuters) – Wal-Mart Stores Inc (WMT.N) has a low bar to clear when it reports third-quarter financial results this week: just show that sales at existing U.S. stores fell only a little bit.

But that will not be good enough for the market going forward. Analysts expect the world’s largest retailer to confirm that sales at U.S. stores open at least a year will improve in the current fourth quarter, which includes the holiday season.

The world’s largest retailer has seen sales fall for five consecutive quarters at stores open at least a year. Investors are not expecting much out of the third quarter from steps the company took to lift that measure.

23 Lenders face lawmaker wrath over foreclosures

By Dave Clarke and Joe Rauch, Reuters

Sun Nov 14, 11:20 am ET

WASHINGTON/CHARLOTTE, North Carolina (Reuters) – Banks under fire over their foreclosure practices face twin hearings in Congress this week, at which they will come under renewed pressure to find ways to keep borrowers in their homes.

The hearings on Tuesday and Thursday will include the first appearances by executives from major lenders like Bank of America (BAC.N) and JPMorgan Chase (JPM.N) since the furor over sloppy foreclosure paperwork erupted in September.

Banks are accused of having used “robo-signers” to sign hundreds of foreclosure documents a day, a fiasco that has reignited public anger with banks that received billions of dollars in taxpayer aid during the financial crisis.

24 China’s Hu says to seek domestic growth, FX reform

By Chris Buckley, Reuters

Sat Nov 13, 12:58 am ET

YOKOHAMA, Japan (Reuters) – China will seek to expand domestic demand and remains committed to reforming its exchange rate, President Hu Jintao said, following months of friction over Beijing’s currency policy and large trade surplus.

Hu told a regional business forum in Japan on Saturday that China “will make vigorous efforts to establish lastingly effective means for expanding domestic demand, especially consumer demand.”

China’s rapid growth has helped to shore up the global economy and spur on Asia while the United States and Europe have struggled with high unemployment and financial woes.

25 Obama taps NC official to regulate Fannie and Freddie

By Kevin Drawbaugh, Reuters

Fri Nov 12, 3:30 pm ET

WASHINGTON (Reuters) – President Barack Obama will nominate a state bank regulator to be director of the U.S. agency that oversees mortgage giants Fannie Mae (FNMA.OB) and Freddie Mac (FMCC.OB), the White House said on Friday.

At a time of crisis and growing calls for change to America’s broken housing finance system, Obama intends to tap North Carolina Commissioner of Banks Joseph Smith to head the Federal Housing Finance Agency, the administration said.

“Mr. Smith brings to this position both tremendous expertise and a deep commitment to strengthening our housing finance system for the American people,” Obama said.

26 Irish debt crisis stalks Europe’s markets

By PAN PYLAS, AP Business Writer

Mon Nov 15, 6:25 am ET

LONDON – Europe’s stock markets mostly fell Monday while the euro was battered again amid mounting fears that Ireland will end up having to look for outside financial help to get a handle on its mounting debt burden.

The FTSE 100 index of leading British shares was down 18.85 points, or 0.3 percent, at 5,778.02 while the CAC-40 in France fell 12.47 points, or 0.3 percent, to 3,816.65. Germany’s DAX was up just over a point at 6,735.76.



Investors are jittery at the moment amid reports that the Irish government is in talks with the European officials to discuss the country’s debt position. All eyes are likely to shift towards Brussels Tuesday when the finance ministers of the 16 countries of the eurozone meet, with Ireland more than likely to top the agenda.

27 Greece sees higher deficit after EU revises data

By ELENA BECATOROS and GABRIELE STEINHAUSER, Associated Press

29 mins ago

ATHENS, Greece – Greece expects the budget deficit in 2010 will be larger than initially targeted after the EU’s statistics agency said Monday the country’s debt last year was actually much higher than projected.

But the country, which has been struggling with a severe financial crisis for the past year and is receiving a euro110 billion ($150 billion) in rescue loans to keep it from defaulting on its debts, insisted it was still on track for an “unprecedented” 6 percentage point deficit reduction.

Eurostat said Greece’s 2009 budget deficit reached 15.4 percent of gross domestic product, significantly above its previous projection of 13.6 percent.

28 Comedians feast on Ireland’s whopping debt crisis

By SHAWN POGATCHNIK, Associated Press

Sun Nov 14, 2:36 pm ET

KILKENNY, Ireland – When comedians feast on Ireland’s terrifying debt situation, it’s time to laugh – or cry. Hard, cold truths will emerge in either case.

“Ireland needs a new credit rating agency. Moody & Poor,” says Colm O’Regan, an IT consultant turned comedian.

Another declares that since central banks print money anyway, they’re built to be defaulted on. “They’re just like my dad,” quips Joe Rooney.

29 BHP Billiton withdraws bid for Potash Corp.

By ROB GILLIES, Associated Press

Sun Nov 14, 7:36 pm ET

TORONTO – BHP Billiton on Sunday withdrew its hostile takeover bid for Potash Corp. of Saskatchewan, saying it cannot convince Canada’s federal government to approve the deal.

Ottawa announced earlier this month that it would block the deal because it wasn’t a net benefit to Canada. BHP had 30 days to appeal, but said Sunday in a statement that it cannot satisfy the net benefit requirements outlined by the government.

“We have not been able to obtain clearance under the Investment Canada Act and have accordingly decided to withdraw the Offer,” BHP Billiton CEO Marius Kloppers said in a statement.

30 Coke smugglers buy old jets to fly across Atlantic

By CHRIS HAWLEY, Associated Press

1 hr 4 mins ago

NEW YORK – Federal investigators are piecing together details of an audacious new trend in drug smuggling: South American gangs are buying old jets, stuffing them full of cocaine and flying them across the Atlantic to feed Europe’s growing coke habit.

At least three gangs have struck deals to fly drugs to West Africa and from there to Europe, according to U.S. indictments. One trafficker claimed he already had six aircraft flying. Another said he was managing five airplanes. Because there is no radar coverage over the ocean, big planes can cross the Atlantic virtually undetected.

“The sky’s the limit,” one Sierra Leone trafficker boasted to a Drug Enforcement Administration informant, according to court documents.

31 Japan economy losing pace despite solid 3Q growth

By TOMOKO A. HOSAKA, Associated Press

Mon Nov 15, 1:11 am ET

TOKYO – Japan’s growth accelerated in the July-September quarter thanks to robust consumer spending, offering a rare piece of positive economic news that is likely to prove fleeting.

All signs indicate that the uptick is temporary, and momentum will almost certainly fade as slowing exports and a persistently strong yen take their toll on the world’s No. 3 economy. Japan will be lucky if it can eke out growth in the fourth quarter.

First, the good news.

32 Japan is test case for Pac Rim free trade zone

By MALCOLM FOSTER and TOMOKO A. HOSAKA, Associated Press

Mon Nov 15, 1:27 am ET

YOKOHAMA, Japan – Although Asia-Pacific leaders have committed themselves to achieving a Pacific-wide free trade zone following an annual summit, host Japan may prove a key test case for how realistic that vision is.

Acknowledging that Japan’s economic power is declining, Prime Minister Naoto Kan declared his country must open up its markets and embrace free trade – or risk getting left further behind other regional rivals.

“Japan is determined to reopen itself,” Kan said at a press conference Sunday that wound up the Asia-Pacific Economic Cooperation forum, alluding to the historic role that Yokohama, which hosted the summit, played more than 150 years ago as one of the first Japanese ports to open up to the West.

33 Studies: Drug, device help treat heart failure

By MARILYNN MARCHIONE, AP Medical Writer

Sun Nov 14, 1:10 pm ET

CHICAGO – Millions of people with mild or moderate heart failure got good news Sunday, with studies showing a Pfizer drug and a device from Medtronic can boost survival and cut trips to the hospital by patients having trouble breathing.

But another drug that’s been used for nearly a decade – Johnson & Johnson’s Natrecor – did little to help those with severe heart failure in a big study aimed at settling whether the drug raised the risk of death or kidney problems.

“They resolved the safety issue but in the meantime showed it was not very effective,” and it’s hard to tell now which patients should get the pricey medicine, said Dr. Alfred Bove, a Temple University heart specialist and past president of the American College of Cardiology.

34 Study: Women with high job stress face heart risks

By MARILYNN MARCHIONE, AP Medical Writer

Sun Nov 14, 7:14 pm ET

CHICAGO – Working women are equal to men in a way they’ll wish they weren’t. Female workers with stressful jobs were more likely than women with less job strain to suffer a heart attack or a stroke or to have clogged arteries, a big federally funded study found.

Worrying about losing a job can raise heart risks, too, researchers found.

The results seem sure to resonate in a weak economy with plenty of stress about jobs – or lack of them. The mere fact this study was done is a sign of the times: Past studies focused on men, the traditional breadwinners, and found that higher job stress raised heart risks. This is the longest major one to look at stress in women, who now make up nearly half of the workforce.

35 Socialists win 2 largest cities in Greek poll

Associated Press

Sun Nov 14, 6:59 pm ET

ATHENS, Greece – Greece’s governing Socialists have won mayoral races in Greece’s two largest cities for the first time in 24 years, extending gains in local government elections.

Socialist-backed mayoral candidates Giorgos Kaminis and Yiannis Boutaris won in the capital Athens and the northern city of Thessaloniki, interrupting a streak of conservative victories dating back to 1986.

Prime Minister George Papandreou praised Sunday’s result as a vote of confidence in his austerity program ahead of an inspection by EU and IMF officials on the implementation of a rescue loan agreement worth euro110 billion ($150 billion).

36 White House, GOP look for middle ground on taxes

By JIM KUHNHENN, Associated Press

Sun Nov 14, 6:13 pm ET

WASHINGTON – The White House and Republican lawmakers set the terms for a looming tax debate Sunday, coalescing around a possible temporary extension of existing income tax rates that would protect middle class and wealthy Americans from sharp tax increases next year.

President Barack Obama reiterated his opposition to a permanent extension of current tax rates for individuals making more than $200,000 a year and married couples making more than $250,000.

“It won’t significantly boost the economy, and it’s hugely expensive,” he told reporters aboard Air Force One as he returned to Washington from an Asia trip. “So we can’t afford it.”

37 Obama’s Asian trip shows limits on global stage

By BEN FELLER and ERICA WERNER, Associated Press

Mon Nov 15, 1:07 am ET

WASHINGTON – President Barack Obama left Asia with a greater foothold in the emerging nations that could help shape the American economy for years. But his failure to deliver on his own high expectations on key economic issues served notice that the global stage is not nearly his for the taking.

The president returned to Washington on Sunday with mixed results to show from his longest foreign trip abroad as president, an exhausting 10-day tour through India, Indonesia, South Korea and Japan.

His first two stops yielded dramatic diplomatic successes and memorable images in two booming Asian democracies that will only become more important strategically to the U.S.

38 Hobbled Dems, eager GOP back for lame-duck session

By JIM ABRAMS, Associated Press

Sun Nov 14, 6:52 pm ET

WASHINGTON – Seven weeks ahead of the GOP House takeover, hobbled Democrats and invigorated Republicans return Monday to a testy tax dispute and a lengthy to-do list for a postelection session of Congress unlikely to achieve any landmark legislation.

With change clearly in the air, more than 100 mainly Republican freshmen arrive on Capitol Hill to be schooled on the jobs they’ll assume when the next Congress convenes in January. For Democrats, it’s another sad note as one of their most venerable members goes on trial on ethics charges.

Lame-duck sessions are usually unpopular and unproductive. Nothing suggests otherwise this year.

39 INSIDE WASHINGTON: Farm subsidies’ staying power

By MARY CLARE JALONICK, Associated Press

Sun Nov 14, 11:02 am ET

WASHINGTON – Many Republicans who swept rural Democrats from office are now confronting the reality of a promise to reduce spending: Should it cover the farm subsidies that have brought money and jobs to their districts – and directly benefited some GOP lawmakers or their families?

At least 13 Democrats on the House Agriculture Committee lost on Nov. 2, and most of then helped steer generous farm support back home. Many of their replacements avoided the issue of farm payments during the campaign as they focused on broader themes of lowering federal spending and changing Washington.

They’ll have to face it soon enough. Congress is expected to begin work on the next five-year farm bill before the 2012 election.

40 China to play role in General Motors IPO

By SHARON SILKE CARTY, AP Auto Writer

Sat Nov 13, 3:39 pm ET

DETROIT – Among the banks helping General Motors with its initial public stock offering next week are two identified by initials only: ICBC and CICC.

Americans uncomfortable with U.S. government ownership of General Motors may want to hear more: One of those banks is the Industrial and Commercial Bank of China, one of China’s four big central government banks. The other, China International Capital Corp., is a joint venture run primarily by Central Huijin Investment Ltd., an arm of the state, and Morgan Stanley.

This is the first time Chinese government banks have participated in a major U.S.-issued IPO, according to IPO tracking firm Dealogic. The banks are listed as co-managers in the offering, meaning they will sell a portion of the new shares.

41 GOP lawmakers take tough stand on Bush tax cuts

By STEPHEN OHLEMACHER, Associated Press

Sat Nov 13, 9:18 pm ET

WASHINGTON – Fresh off big victories on Election Day, Republicans in Congress feel empowered in their fight to extend tax cuts that expire in January, including those for the wealthy.

President Barack Obama has said he wants to compromise with Republicans to ensure that tax cuts for middle-income families continue, suggesting he’s open to extending all the tax breaks for a year or two. Republican leaders say it’s a nice gesture by the president, but some key GOP lawmakers want more.

“It should be permanent,” said Sen. Judd Gregg, R-N.H. “We’ve got to get this economy to pick up and if you raise taxes you’re going to stifle the economy significantly. I’m sure that somebody’s explained that to the president.”

42 Obama says START treaty remains ‘top priority’

By BEN FELLER, AP White House Correspondent

Sun Nov 14, 3:26 am ET

YOKOHAMA, Japan – President Barack Obama, capping a far-flung Asian trip of mixed results, assured Russian President Dmitry Medvedev on Sunday that getting the Senate to ratify the START nuclear weapons treaty is a “top priority” of his administration.

“I reiterated my commitment to getting the START treaty done during the lame-duck session,” Obama said, noting that Congress returns next week for its postelection session.

In talks with Medvedev on the sidelines of the summit of the Asian-Pacific Economic Cooperation (APEC), Obama also reiterated his support for bringing Russia into the World Trade Organization, calling Russia “an excellent partner.”

43 Merkel acknowledges disappointment with gov’t

By GEIR MOULSON, Associated Press

18 mins ago

BERLIN – Chancellor Angela Merkel acknowledged disappointment at her center-right government’s rocky first year, but insisted Monday that unpopular decisions will pay off and took credit for Germany’s strong economic rebound.

Merkel told a conference of her conservative Christian Democratic Union that she is proud of the country’s sinking unemployment and won’t let Germany be “beaten up” for being a leading exporter.

Merkel’s party and the pro-business Free Democrats won a hoped-for majority in last year’s election after the chancellor presided for four years over a middle-of-the-road “grand coalition” with her main rivals on the left.

44 Food production a bright spot in gloomy economy

By DINESH RAMDE, Associated Press

2 mins ago

MILWAUKEE – While the recession took a toll on manufacturing and other industries, one part of the economy has remained a bright spot over the past few years: food production.

Across the nation, food producers are seeing enough growth that many are expanding and investing in new equipment.

For cheesemakers, dairy farmers and vegetable growers, the slow economy has brought opportunities to expand while construction costs are low. Food makers have also benefited from having products that consumers still buy in hard times and from ongoing efforts to open up new markets overseas.

45 Is the Fed’s rally already over?

By DAVID K. RANDALL and MATTHEW CRAFT, Associated Press Business Writers

Mon Nov 15, 12:01 am ET

NEW YORK – The Fed Rally is over.

The Federal Reserve took the first step in a $600 billion plan to boost the economy Friday. The same day, the Standard & Poor’s 500 index tumbled to its worst weekly loss in three months. It wasn’t just a coincidence.

Stock markets are forward looking. Once the Fed began signaling in late August that it had a stimulus plan in the works, investors started to push stock prices higher. But over the past five days, ominous signs emerged about the global economy:

46 Stuy Town residents could get NYC grail: Ownership

By SAMANTHA GROSS, Associated Press

Sun Nov 14, 7:57 am ET

NEW YORK – The things people do for a good Manhattan real estate deal.

For Ellen Cassels it’s living with her husband and two sons in a one-bedroom apartment. Every night, she and her husband climb into a custom-made Murphy bed in the living room, while their boys bunk in the master bedroom. For their sacrifice, they pay just under $1,500 a month. And she’s not going anywhere: She even hopes to buy the apartment one day.

The tenants at the 11,000-unit complex known as Stuyvesant Town and Peter Cooper Village – which was bought for $5.4 billion before collapsing to an estimated value of less than $2 billion – all want something different as they navigate out of what’s known as the largest failed residential real estate deal of all time.

47 Redfish, new fish? Industry seeks revived market

By JAY LINDSAY, Associated Press

Sun Nov 14, 7:53 am ET

BOSTON – It’s been a worry-free couple of decades for the Acadian redfish.

The reddish-orange schooling fish have been worth so little to fishermen that they’ve rarely had to flee from the tightening mesh of a net. But life for the redfish may soon be changing – if the fishing industry can get people to bite.

Redfish is one of the few populations of New England groundfish considered completely healthy. Regulators have allotted fishermen 15 million pounds to catch this year, the third-most of any Northeast species. The big question is, who’s going to buy it?

48 For hundreds, lawsuit over coal slurry unresolved

By VICKI SMITH, Associated Press

Sat Nov 13, 12:49 pm ET

MORGANTOWN, W.Va. – Eighteen months ago, Christina Doyle packed up her two kids for an eight-hour journey to a West Virginia courthouse, hoping for some resolution to a lawsuit over water pollution she believes caused her daughter’s learning disabilities and slow growth.

This weekend, the 32-year-old who now lives in South Carolina is doing it again. And so will hundreds of others who believe Virginia-based Massey Energy Co. and subsidiary Rawl Sales & Processing have poisoned their water wells with 1.4 billion gallons of toxic coal slurry.

The company has denied wrongdoing, though residents say the proof flows from their faucets as red, orange or black water. They say the chemicals in slurry have left them and their children with developmental disabilities, cancers and other maladies.

49 Resolution elusive in debate over NY cigarette tax

By CAROLYN THOMPSON, Associated Press

Sat Nov 13, 12:19 pm ET

BUFFALO, N.Y. – New York’s latest attempt to tax lucrative Native American smokeshop sales to non-Indian customers has generated mountains of legal briefs, hours of argument and a seemingly constant flurry of court decisions.

What it hasn’t generated is any of the roughly half-million dollars per day in projected state revenue.

Collections were to start Sept. 1, but legal challenges by five of New York’s Indian nations have indefinitely delayed them.

50 Largest solar power plant in Mass. about to start

By STEPHEN SINGER, AP Business Writer

Sat Nov 13, 11:15 am ET

PITTSFIELD, Mass. – On land poisoned by toxins from a long-gone manufacturing era, more than 6,500 solar panels face the south sky, capturing the sunlight of a late autumn day in the Berkshire Mountains.

They’re ready to deliver power to New England.

The Western Massachusetts Electric Co. site in Pittsfield, New England’s largest solar project, promises to produce enough electricity for about 300 homes starting later this month. That’s a tiny fraction of what the region needs to run computers, lights, TVs and everything else utility customers take for granted.

51 Red ink for post office: $8.5B lost last year

By RANDOLPH E. SCHMID, Associated Press

Fri Nov 12, 8:12 pm ET

WASHINGTON – The Postal Service said Friday it lost $8.5 billion last year despite deep cuts of more than 100,000 jobs and other reductions in recent years. The post office had estimated it would lose $6 billion to $7 billion, but a sharp decline in mail took a toll. Increased use of the Internet and the recession, which cut advertising and other business mail, meant less money for the agency.

For the year ending Sept. 30, the post office had income of $67.1 billion, down $1 billion from the previous fiscal year. Expenses totaled $70 billion, a decline of about $400 million. The post office also was required to make a $5.5 billion payment for future retiree health benefits.

“Over the last two years, the Postal Service realized more than $9 billion in cost savings, primarily by eliminating about 105,000 full-time equivalent positions – more than any other organization, anywhere,” chief financial officer Joe Corbett said in a statement. “We will continue our relentless efforts to innovate and improve efficiency. However, the need for changes to legislation, regulations and labor contracts has never been more obvious.”

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