NEWS,23.09.2013

Obama unlikely to name new Fed head soon

President Barack Obama is unlikely to unveil his pick to succeed Ben Bernanke as chairperson of the Federal Reserve this week, and the current Fed No. 2, Janet Yellen, remains the leading contender, a source familiar with the process said on Monday.
Bernanke's second four-year term at the helm of the US central bank comes to a close in January, and speculation has swirled around Obama's plans for the replacement.
Former Treasury Secretary Lawrence Summers, considered the president's preference, withdrew his name from consideration a week ago, saying his confirmation would incite acrimony.
Besides Summers, Yellen and former vice chairperson Donald Kohn are among those Obama said he has been considering for the job. Yellen is still the top prospect, the source said.
The Senate needs to hold hearings and confirm the nominee, and with a compressed legislative schedule before the end of the year, time is growing tighter.
Lawmakers are currently preoccupied with measures to keep government funding going beyond Oct. 1 to keep the government from shutting down and to raise the nation's debt ceiling ahead of a mid-October date, or face the risk of default.
Yellen had been scheduled to speak to the Economic Club of New York on Oct. 1, but her speech has been postponed.

Lithuania urges push on EU farm reform

Lithuania, which currently holds the rotating EU presidency, on Monday urged a final push on a major reform of the bloc's generous farm subsidy programme that is held up in talks with European lawmakers.
A reform of EU farm subsidies agreed by member states in June after three months of marathon talks favours young farmers and smallholders over big business and has been called a "paradigm shift" for Europe.
"This is the challenge we must meet," said Lithuanian Agriculture Minister Vigilijus Juknawho as he met fellow European Union ministers in Brussels.
The ministers are locked in a row with European lawmakers, who want the reforms to go further.
If a compromise is not found before the end of the month, the European Commission could choose to suspend payments to farmers.
The main sticking point is how the reform affects large-scale farmers, with lawmakers pushing for more redistribution of farm aid to small holdings and ministers maintaining the reform has gone far enough.
EU ministers were to discuss the matter further Monday with another session of talks with the Commission and lawmakers set for the evening.
Irish Agriculture Minister Simon Coveney, who spearheaded the reform during the Irish EU presidency earlier this year, said there remained little room for more compromise from states.
But he said he was confident the Lithuanian presidency could find a deal in the coming weeks.
If approved, the CAP reform is due to be implemented starting in 2014.
Under the current rules, 80 percent of CAP payments go to the top 20 percent of intensive farm businesses since several countries still link the subsidies to production levels.
As the reform stands, member states would have to ensure that by 2019 each farmer receives at least 60 percent of the average national or regional subsidy per hectare. This would remove the advantage written into the current system for the more productive industrial farms.
The deal also states that 30 percent of EU members' farm payments will also be spent on "green" measures such as crop diversification.
The CAP accounts for about 38 percent of the EU's budget.

Spain heads for record tourism year

Sunseekers spurning unrest in Egypt and Turkey flocked to Spain in record numbers last month, setting the country up for its best-ever year for visitors and giving a boost to the ailing economy.
"It is very likely that 2013 will be the best year historically for tourism," Industry Minister Jose Manuel Soria told a news conference on Monday, adding that estimates for the fourth quarter were positive.
Tourism contributed over 5% of Spain's economy or GDP in 2012 and provided around 900 000 jobs, according to Euromonitor, in a country where one in four is out of work, meaning a boost to tourist figures should be good news as other sectors flag.
The number of international tourist arrivals in August rose to 8.3 million, figures from the tourism ministry showed, lifting the total for January through August by 4.5% on the year before to 42.3 million.
Those visitors spent a total of €40.4bn ($54.6bn), up 7% from 2012.
Political upheaval in other destinations has also benefited other Mediterranean countries, such as Greece.
But not everyone in Spain is celebrating the increase. Domestic travel fell by 6.9% between January and July, hitting destinations off the main tourist trail, so businesses and hotels reliant on city tourism suffered.
Two ends of the travel spectrum in particular are cashing in on the influx of international visitors - homeowners taking advantage of a growing preference for low-cost rents, and luxury stores whose clients are shielded from the worst of the economy's woes.
Many tourists have been choosing to rent private homes advertised on the Internet. And despite government efforts to tighten regulation around private renting, the trend is becoming more ingrained, with the number of rentals by tourists up 15% in August year-on-year to 1.3 million properties.
The unregulated rental industry has its risks since landlords and renters have little recourse if things go wrong, but it is worth it for homeowners who rent out year-round.
"What's happening ... because of the economic crisis is that people are preferring smaller airlines, smaller hotels and they are paying less," said Dimitrios Buhalis, a professor and director of the e-tourism lab at Bournemouth University.
Kept afloat
Spain's economy has been highly dependent on tourism since beach destinations took off in the 1960s. While Britain, France and Germany continue to send the most visitors, there has been a huge leap in the number of Russian visitors.
Some of the main beneficiaries are luxury retailers, as big spenders splash out at high-end accessory and jewellery stores. Department store El Corte Ingles for instance has offered a 10% discount to foreign shoppers since 2012 and has employed Chinese-speaking personal shoppers in a nod towards an important group of rich clients.
Value Retail, which has luxury outlets in Madrid and Barcelona, reported an increase in non-European visitors, especially Russian and Chinese, last year.
"Without a doubt, Spain's luxury sector is being kept afloat thanks to tourism," said Ana Franco, editor of Spanish luxury portal Deluxes.
Boosted by luxury, average spending by tourists rose by 2% in the first seven months of the year, from the same period of 2012, to 103 euros per day.
Regions attracting the most visitors are coastal Catalonia, the Balearic islands and southern Andalusia, home to the Costa del Sol. But Madrid saw a 22% fall in foreign visitors in August to 290 494, hit by a collapse in business travel and a decline in Italian and Latin American travelers.
There is little respite in sight for hotels operating in cities unless the domestic economy picks up, according to Ramon Estalella, secretary general of the Spanish Hotels Association (CEHAT).
NH Hoteles, which is focused mainly on city hotels, said in half-year results that Spain was its worst performing market. And Melia Hotels International reported a decline in prices and occupancy in Spanish cities in the first half, even though revenue from resort locations rose.
"There has been a strong fall in demand in Madrid because Iberia has cut flights and low-cost airlines have disappeared because of an increase in airport taxes," a Melia spokesperson said.
Spain's loss-making flag carrier Iberia, part of International Airlines Group (IAG), is undergoing a major restructuring, with dozens of routes canceled and thousands of staff being laid off.

Sudan almost doubles fuel, gas prices

Sudan almost doubled prices for fuel and cooking gas on Monday, struggling to bring its budget under control in an economic crisis that is stirring widespread discontent.

President Omar Hassan al-Bashir went on television for two hours to announce the plan. He has avoided an "Arab spring" uprising of the sort that has unseated other rulers in the region, but many in Sudan complain about soaring food prices, corruption, violent conflicts and high unemployment.

"We've been just notified of the prices increases," said a petrol station worker, asking not to be named "It's huge leap and we worry that people will be angry."

The Arab African country lost three-quarters of its oil reserves - its main source of revenues and of dollars for food imports - when South Sudan became independent in 2011.

Petrol stations in the capital Khartoum raised the price of a gallon (3.8 litres) of petrol on Monday to almost $3 based on black market prices.

"The government...has no idea of what people are going through. I am ready to join any protest against the lifting," said 41-year old Ahmed Iassan, an unemployed worker.

The government started reducing some fuel subsidies in July 2012. Several weeks of small protests ended with a security crackdown.

It had hoped to sustain the remaining support by boosting gold exports to replace oil revenues, but was thwarted by the recent fall in global gold prices.

A gallon of gasoline now costs £14, up from £8.5, petrol station staff said. The prices for a cylinder of cooking gas rose to £25 from £15.

In a televised news conference, Bashir said late on Sunday Sudan was no longer able to afford the subsidies which he said cost the treasury $15.5bn every year based on the official exchange rate.

Sudan produces too little to feed its 32 million people. Even basic food imports arrive by ship in Port Sudan, before they get trucked for days across the vast country, spurring food price inflation.

The Sudanese pound is worth barely a third of its value against the dollar on the black market at the time of the south's succession.

Opposition activists have criticised the move to cut fuel subsidies but the weak opposition has yet to stir mass protest.

Singapore tightens rules for hiring foreigners

Singapore will require many companies operating in the city-state to consider Singaporeans for skilled job vacancies before turning to candidates from abroad, bowing to public pressure over a surge in foreigners over the past decade.

"The measures might mean more hassle and paperwork for companies, and it might even lower the long-term economic growth rate," said Michael Wan, an economist with Credit Suisse in Singapore.

"But I don't think this will necessarily lower Singapore's attractiveness to companies because there are other factors that they take into account -- such as tax incentives, political stability and access to the Asean region."

Starting next August, firms with more than 25 employees must advertise a vacancy for professional or managerial jobs paying less than S$12 000 ($9 600) a month on a new jobs bank administered by the Singapore Workforce Development Agency for at least 14 days, the Ministry of Manpower said in a statement.

Only after that period can the company apply for an employment pass to bring in a foreign national.

Singapore will also raise the qualifying salaries for employment pass holders to at least S$3 300 a month, up from the current S$3 000, starting in January 2014, reducing the competition for entry-level jobs that typically require tertiary education.

Singapore, a global financial centre and the Asian base for many banks and multinationals, is one of the world's most open economies. Foreigners account for about 40% of the island's 5.3 million population and take up many senior and mid-level positions as well as most of the low-paying jobs that locals shun.

The Association of Banks in Singapore, which represents financial institutions operating in the city-state, said banks will need to adjust their hiring processes to comply with the new rules.

"We need to assess the impact these rules will have," a spokesman for the association added.

Discrimination

Singapore, Asia's main centre for private banking as well as commodities trading, has seen a sharp increase in foreigners over the past decade, triggering a backlash from Singaporeans unhappy about congestion on roads and trains as well as competition for jobs.

There have also been complaints about foreign managers who prefer to hire their fellow countrymen rather than employ Singaporeans.

Earlier this year, several banks admitted to "hot spots" within their organisations "where clusters of employees from the same country appeared to have developed over time", according to advertisements taken up by an organisation backed by the manpower ministry.

The ministry said it will scrutinise all companies, including smaller firms, for signs of discriminatory hiring practices. Firms that fall into this category include those that "have a disproportionately low concentration of Singaporeans" in professional or management positions compared with others in the industry.

"Even as we remain open to foreign manpower to complement our local workforce, all firms must make an effort to consider Singaporeans fairly," Acting Manpower Minister Tan Chuan Jin said in a statement.

"Singaporeans must still prove themselves able and competitive to take on the higher jobs that they aspire to," Tan added, as officials took pains to stress that the new framework is not aimed at forcing firms to hire Singaporeans first.

Singapore has already been making it harder for employers to recruit cheap workers from abroad in a bid to push up the pay of low-income Singaporeans. The measures include lowering the ratio of foreigners a firm can hire relative to the number of local employees and raising the levy firms must pay to hire lesser-skilled foreigners.

Bangladesh pay protests force factory closures

More than 100 Bangladeshi garment factories were forced to shut on Monday as thousands of workers protested to demand a $100 a month minimum wage and about 50 people were injured in clashes, police and witnesses said.
Garments are a vital sector for Bangladesh and its low wages and duty-free access to Western markets have helped make it the world's second-largest apparel exporter after China.
But the $20bn industry, which supplies many Western brands, has been under a spotlight after a series of deadly incidents including the collapse of a building housing factories in April that killed more than 1 130 people.
Workers took to the streets for a third day on Monday, blocking major roads and attacking some vehicles in the Gazipur and Savar industrial zones on the outskirts of the capital, Dhaka.
At least 50 people - including some policemen - were injured, witnesses and police said, as police fired teargas and rubber bullets, and workers responded by throwing broken bricks.
Some workers also vandalised factories, witnesses said.
"We had to take harsh actions to restore order as the defiant workers would not stop the violence," an Gazipur police officer said.
The monthly minimum wage in Bangladesh is $38, half what Cambodian garment workers earn.
The government is in talks with unions and factory owners on a new minimum wage.
Bangladesh last increased its minimum garment-worker pay in late 2010 in response to months of street protests, almost doubling the lowest pay.
Recently, factory owners offered a 20% pay rise which workers refused, calling it "inhuman and humiliating".
"We work to survive but we can't even cover our basic needs," said a protesting woman worker.
The recent string of accidents has put the government, industrialists and the global brands that use the factories under pressure to reform an industry that employs 4 million and generates 80% of Bangladesh's export earnings.
The April 24 collapse of Rana Plaza, a factory built on swampy ground outside Dhaka with several illegal floors, ranks among the world's worst industrial accidents and has galvanised brands to look more closely at their suppliers.
This month, a group of retailers and clothing brands failed to establish compensation funds for the victims of Bangladesh factory disasters, as many companies that sourced clothes from the buildings decided not to take part in the process.
Very low labour costs and, critics say, shortcuts on safety, makes the country of 160 million the cheapest place to make large quantities of clothing, with 60% of clothes going to Europe and 23% to the United States.

UK wants to ease sanctions on gas field

Britain could be close to agreeing a deal to ease sanctions that have stopped gas production from the North Sea's Rhum field, jointly owned by BP and the National Iranian Oil Company, the Mail on Sunday newspaper said.

Production from the field, which once supplied 5 percent of Britain's gas output, has been suspended since 2010 as a result of international sanctions against Iran.

But with signs of a thaw in relations between Iran and the West, the government now hopes to win agreement from the European Union and the United States for a sanctions waiver in the near future, the newspaper said, citing people close to the talks.

One stumbling block to a deal, however, could be concerns from companies involved in financing and servicing the field that any exemption for the producers would not fully protect them from legal action, it added.

A Department of Energy and Climate Change spokesman said: "We are working to ensure the long-term security of the Rhum gas field but no decision has been made at this time on a solution."

A spokesman for BP declined to comment on the possibility of a waiver being granted.

"As operator of the field our priorities are two-fold - to ensure the field remains safe and that we remain compliant with the law," he said. "It is up to the government to decide on the longer-term options."

Sudan to host German business conference

Sudan will host a business conference with German firms to boost economic ties with Europe's largest economy, state media said on Sunday, the second such event between Berlin and the isolated African country this year.

Sudan is trying to attract more investment to overcome an economic crisis after losing most oil reserves with South Sudan's secession in 2011. Most Western firms shun the country due to a U.S. trade embargo over Sudan's human rights record.

The Khartoum conference, from October 28 to 31, is likely to irk human rights activists who criticized Berlin for inviting top Sudanese officials to a similar forum in January.

The Berlin event had been open to South Sudan, but Juba only sent its ambassador in Berlin to avoid contact with arch foe Sudan at time of bilateral tensions, diplomats said. Sudan had sent a high-level delegation to Berlin.

The conference is organized by German and Sudanese business groups with support from both governments, according to the German-African Business Association.

While foreign investors in Sudan often complain of a massive dollar scarcity and shrinking state infrastructure projects, the Berlin-based association painted a much brighter picture.

"Sudan's economic perspectives have developed positively recently. ... The economy has been recovering since southern secession," the German-African Business Association said on its website. It cited opportunities for German firms as Sudan planned to expand its oil, gas and mining sectors.

Most Western countries have only limited ties to Sudan. President Omar Hassan al-Bashir faces charges of war crimes in Darfur at the International Criminal Court.

NEWS,20. AND 21.08.2013

Tepid US growth fuel part-time hiring

US businesses are hiring at a robust rate. The only problem is that three out of four of the nearly 1 million hires this year are part-time and many of the jobs are low-paid.
Faltering economic growth at home and abroad and concern that President Barack Obama's signature health care law will drive up business costs are behind the wariness about taking on full-time staff, executives at staffing and payroll firms say.
Employers said part-timers offer them flexibility. If the economy picks up, they can quickly offer full-time work. If orders dry up, they know costs are under control. It also helps them to curb costs they might face under the Affordable Care Act, also known as Obamacare.
This can all become a less-than-virtuous cycle as new employees, who are mainly in lower wage businesses such as retail and food services, do not have the disposable income to drive demand for goods and services.
Some economists, however, say the surge in reliance on part-time workers will fade as the economy strengthens and businesses gain more certainty over how they will be impacted by Obamacare.
Executives at several staffing firms told Reuters that the law, which requires employers with 50 or more full-time workers to provide healthcare coverage or incur penalties, was a frequently cited factor in requests for part-time workers. A decision to delay the mandate until 2015 has not made much of a difference in hiring decisions, they added.
"Us and other people are hiring part-time because we don't know what the costs are going to be to hire full-time," said Steven Raz, founder of Cornerstone Search Group, a staffing firm in Parsippany, New Jersey. "We are being cautious."
Raz said his company started seeing a rise in part-time positions in late 2012 and the trend gathered steam early this year. He estimates his firm has seen an increase of between 10% and 15% compared with last year.
Other staffing firms have also noted a shift.
"They have put some of the full-time positions on hold and are hiring part-time employees so they won't have to pay out the benefits," said Client Staffing Solutions' Darin Hovendick. "There is so much uncertainty. It's really tough to design a budget when you don't know the final cost involved."
Cautious strategy
The delay in the Obamacare employer mandate "confused people even further," said Bill Peppler, managing partner at Kavaliro, a technology staffing firm in Orlando, Florida. "When we talk to customers, I still don't think anyone has a handle on this."
Obamacare appears to be having the most impact on hiring decisions by small- and medium-sized businesses. Although small businesses account for a smaller share of the jobs in the economy, they are an important source of new employment.
Some businesses are holding their headcount below 50 and others are cutting back the work week to under 30 hours to avoid providing health insurance for employees, according to the staffing and payroll executives.
Under Obamacare, any employee working 30 hours or more is considered full-time. An effort to trim hours might have helped push the average work week down to a six-month low in July.
"As organizations and companies reduce the hours of part-time workers, they still have to replace the capacity, so they go out and hire additional part-time workers," said Philip Noftsinger, president of CBIZ Payroll in Roanoke, Virginia, which manages payroll for more than 5 000 small businesses.
Some large companies are also leaning more heavily on part-timers.
Walmart has been hiring more part-time workers, although it says the move is to ensure proper staffing when stores are busiest and is not an effort to cut costs.
Spokesperson Kory Lundberg said the world's largest retailer promotes about 75000 people from part time to full time work each year and is on track to do so again in 2013.
Similarly, a memo that leaked out from teen and young adult retailer Forever 21 last week showed it was reducing a number of full-time staff to positions where they will work no more than 29.5 hours a week, just under the Obamacare threshold.
In a statement, the company said the move will affect fewer than 1% of its US store employees, and was taken to better align staffing with sales expectations - not to lower costs under the Affordable Care Act.
Some public school boards and local governments, including the city of Long Beach in California, are also cutting hours.
"The difference between 30 and 40 hours can be the difference between being able to make ends meet month-to-month," said Heidi Shierholz, a senior economist at the Economic Policy Institute in Washington.
"That contributes to reduced living standards for American families and translates into having less income to spend on goods and services, which holds back the economy."
Weak economy not helping
Obamacare is only one factor. The surge in part-time employment also reflects an economy that has struggled to maintain decent growth.
That has left business owners such as Jason Holstine, who owns a building supply store in Baltimore, Maryland, reluctant to take on full-time staff.
Holstine said he was more concerned about budget policy in Washington than about Obamacare, given that federal government furloughs tied to across-the-board spending cuts led some of his clients to put home renovations on hold.
"We are still working in an environment that is very hard to forecast the near future and remains very cash-constrained," said Holstine. "We were always nimble, but we had to become more reactive. Using part-timers gives us more flexibility."
In a paper published last month, the San Francisco Federal Reserve Bank said uncertainty over fiscal and regulatory policy had left the US unemployment rate 1.3 percentage points higher at the end of last year than it otherwise would have been. The jobless rate stood at 7.8% in December; it has since fallen to 7.4%.
"That's about 2 million jobs below where we should have been in 2012 because of policy uncertainty," said Keith Hall, a senior research fellow at George Mason University's Mercatus Center in Arlington, Virginia.
Economists and staffing companies are cautiously optimistic that part-time hiring and the low wages environment will fade away as the economy regains momentum, starting in the second half of this year and through 2014.
But businesses, accustomed to functioning with fewer workers, might not be in a hurry to change course. A study by financial analysis firm Sageworks found that profit per employee at privately held companies jumped to more than $18 000 in 2012 from about $14 000 in 2009.
"Private employers are either able to make more money with fewer employees or have been able to make more money without hiring additional employees," said Sageworks analyst Libby Bierman. "The lesson learned for businesses during the recession was to have lean operations."

 

Disasters cost insurers $20bn

Catastrophes cost global insurers more than $20bn (€15bn) in just the first six months of 2013, including $17bn for natural disasters alone, Switzerland-based reinsurance giant Swiss Re said on Wednesday.
While the insurance bill is huge, it is below the average for the past decade.
And it covers less than half of the estimated $56bn in global economic losses suffered during the first six months of the year owing to man-made and natural disasters, Swiss Re said in a statement.
About 7 000 lives were lost because of such catastrophes during the same period, it pointed out.
Flooding was responsible for $8.0bn of the disaster-related insurance claims during the first half of the year, according to a Swiss Re survey called sigma.
This noted that massive June floods in Central and Eastern Europe alone cost insurers $4bn and killed 22 people, while floods in Alberta, Canada left insurers with a $2bn bill.
At least 1 150 people meanwhile died in India because of floods in June, while Australia, Southern Africa, Indonesia and Argentina also experienced cyclones and heavy rains that sparked large-scale flooding.
"As a result, 2013 is already the second most expensive calendar year in terms of insured flood losses on sigma records," Swiss Re said, pointing out though that in 2011, flooding in Thailand caused record flood losses of more than $16bn.
Other natural disasters during the first half of the year included deadly tornadoes in the Midwestern United States, which left 28 people dead and slapped insurers with $1.8bn in claims.
"Though 2013 has so far been a below-average loss year, the severity of the ongoing North Atlantic hurricane season, and other disasters such as winter storms in Europe, could still increase insured losses for 2013 substantially," Swiss Re chief economist Kurt Karl warned in the statement.

UK govt criticised for tax cut

Britain's government has come under fire for abolishing a tax on top earners after data released on Tuesday showed companies delayed paying employees £1.7bn ($2.66bn) in bonuses until the tax cut took effect.
Bonuses are traditionally paid between December and March, the so-called "bonus season", but an Office of National Statistics (ONS) report revealed that a number of companies deferred payouts until April, after the top income tax rate was reduced from 50 percent to 45%.
Bonuses paid to Britain's workers were £2.9bn in April 2013 compared to £1.9bn in April 2012, according to the ONS. In the finance and insurance industry, which pays more than a third of all bonuses, bonuses in April totalled £1.3bn, more than double the figure a year earlier.
The data show almost 30% of companies in the finance and insurance sector deferred bonus payments until April.
Chris Leslie, from the opposition Labour party which introduced the tax in 2010 and the shadow financial secretary to the Treasury, said on Tuesday the data showed the government was putting the richest before ordinary Britons.
"While ordinary families on low and middle incomes are seeing their living standards fall, those at the top are reaping the benefits of David Cameron's tax cut for millionaires," he said in a statement, adding that millions of pounds of revenue will have been lost as a result.
The issue of bankers' bonuses has triggered public anger in Britain, where despite signs of an economic recovery, ordinary citizens' incomes remain stuck at some of their lowest levels in a decade.
In January, US investment bank Goldman Sachs scrapped plans to delay paying bonuses to its Britain-based bankers after the then Bank of England Governor Mervyn King criticised the idea.
A spokesman for The Robin Hood Tax Campaign, which is lobbying for financial transaction taxes to help the government fund welfare programmes and reduce poverty, attacked the government's tax cut on top earners.
"The Government's manipulation of the tax code to benefit the super-rich has made a bad situation worse. It should put substance to its phrase that 'we are all in this together' and ensure the City pays its dues," a statement said.
A spokeswoman for the Treasury said the bonus figures were in line with forecasts in finance minister George Osborne's budget and said bankers' bonuses were well below their peak before the financial crisis.
The ONS figures show bonuses across the UK economy stood at £37bn in the 2012/2013 financial year (April to March), up 1% from the year earlier. Workers in finance and insurance got the largest bonuses, taking home on average an £11 900 bonus, nearly twice the next highest payment of £6 700 paid to those working in mining and quarrying.

Risky crisis derivatives return

Collateralised debt obligations, the complex financial instruments that cratered disastrously in the financial crisis, are back.
The market for the instruments, which were based on subprime mortgages, shrank from $520bn in 2006 to just $4.3bn in 2009 after the housing bust. Warren Buffett once called CDOs "financial weapons of mass destruction" because of their riskiness.
This time around, the investment has shifted from a mortgage-based CDO into a "collateralised loan obligation," a cash-generating asset structured similarly to CDOs, but consisting of loans to businesses.
Financial institutions have issued $50bn in CLOs in the US in 2013, estimates the Loan Syndication and Trading Association, a trade group. The LSTA estimates the industry will issue $7bn worth in the US overall in 2013 and $100bn worldwide.
Goldman Sachs, Morgan Stanley, Barclays and Citigroup are among the banks most active in structuring CLOs in 2013. Citigroup alone has sold about 20 of the instruments this year.
"There really isn't a CDO market anymore," but "the CLO market has been quite active" for a couple of quarters, said an executive at a major Wall Street bank, who asked not to be named.
Still, observers note the comeback is only partial.
"There's an uptick, but it's still small compared with the pre-crisis peak," said Campbell Harvey, a finance professor at Duke University.
CLOs are structured financial products in which financial institutions pool loans of varying risk and market the securities to investors.
The securities can be sliced into tranches of different underlying loan risk levels. The riskiest "junior" or "equity" tranches - which were at the heart of the financial crisis of 2008 - remain popular with speculative funds because they pay higher yields.
"With interest rates still very low and borrowing costs so cheap, some investors are searching for risk," said Ruben Marciano, a trader at Societe Generale.
Tranches packed with loans of moderate risk are known as "mezzanine" loans, while "senior" tranches are the safest.
Before the financial crisis, many CDO slices that were categorised "senior" and rated highly by credit ratings agencies were actually high-risk and contained many subprime mortgages that ended up in default.
Moreover, because all of the loans packaged in the same derivative products were in the same sector - housing - the instrument itself was vulnerable when the housing market collapsed.
An analyst who specialises in CDOs for a large British bank said the investments are better bets when they contain loans from different sectors.
Buyers of the current batch of CLOs have hired independent specialists to analyse the instruments and no longer rely on credit-rating agencies, said the analyst.
Even as new CDO issues have vanished, Marciano said there remains an active secondary market since the crisis.
"There are investors out there who have made a lot of money from buying low-quality CDOs at very low prices," Marciano said.

EU set for big wheat crop

The European Union's main wheat producers have gathered a bumper harvest despite worries the long winter and hot summer would damage crops, traders and analysts said on Tuesday.
"It looks as though wheat came through the long winter and scorching start to the summer better than feared," one German trader said. "EU wheat supply for export and domestic use will be better than expected only a few weeks ago and the problems in Britain have not spoiled the overall good picture."
In France, the EU's largest wheat producer, harvesting is almost over and a bumper crop is expected.
Analyst Agritel estimates France's 2013 soft wheat crop at 37.0 million tonnes, up 4 percent on 2012 and the largest in nine years.
"There were fears at first but the good weather at the end of the growth cycle helped yields," a French trader said.
Harvesting is 90% complete in France, but some producers said harvesting could last until mid-September in the far north of the country.
The French crop's specific weight and Hagberg values, two essential criteria for bread-making, are good but protein levels differed, sometimes below the 11 percent threshold for export in large producing regions such as Poitou-Charentes, analyst Strategie Grains said.
In the EU's second largest producer Germany, harvesting is in its final stages. Germany's Farm Cooperatives Association forecasts Germany will harvest 24.35 million tonnes of wheat in 2013, up 8.8% from 2012.
"Overall quality is satisfactory and the crop size good," a German trader said. "The extreme weather we had this year has led to some regional variations in quality but overall the crop is reaching a decent quality standard and I think there will be ample supplies of bread-quality wheat for German exports in the coming year."
In the UK, the third largest producer, harvesting is now in full swing, with traders forecasting a crop of around 12 million tonnes, down from 13.3 million tonnes last year and the smallest crop in over a decade.
ODA UK consultant Jake French estimates around 28% of the crop has now been collected. He said yields were better than expected, pegging the estimated average yield at 7.26 tonnes per hectare, close to the five year average of 7.7 tonnes.
He said quality is generally good but better quality wheat may be harvested first so early cuttings may not indicate the end result.
The wheat area in England fell to a 30-year low this season after wet autumn weather ruined sowings.
In the EU's number four wheat producer Poland, the harvest should rise to 9.03 million tonnes from 8.6 million tonnes last year, said ODA Polska director Regis Miola.
"Wheat has been harvested from over 80% of the sown area but there have been delays, especially in north Poland due to recent rain," Miola said.
"Yields are good and grain quality good until now, but we have to be careful about making overall judgements because recent showers may have impacted quality parameters."
Better weather is expected at the end of this week and 3-4 days without rain should see the harvest complete, Miola said.
Harvesting of wheat in Italy, a major grain importer, has ended, and the smaller crop was gathered after earlier heavy rains delayed and reduced plantings.
"The qualities are good," said Paolo Abballe, crop analyst at farmers group Coldiretti.
Soft wheat output is seen at 2.99 million tonnes, down from 3.41 million tonnes last year. The durum wheat crop, used for making pasta, is forecast at 3.71 million tonnes from 4.18 million tonnes.

NEWS,14. AND 15.08.2013

China probe could target oil firms, banks

China's powerful price regulator could target the petroleum, telecommunications, banking and auto sectors next in its investigations into violations of the country's anti-trust laws, state media quoted a senior official as saying.
The National Development and Reform Commission (NDRC) would look at industries that have an impact on the lives of ordinary Chinese, China Central Television (CCTV) quoted Xu Kunlin, head of the anti-monopoly bureau at the NDRC, as saying on one of its programmes.
The NDRC has launched nearly 20 pricing-related probes into domestic and foreign firms in the last three years, according to official media reports and research published by law firms.
But the scope of its investigations in the world's second-biggest economy have gathered pace in recent months and coincide with criticism in official media about the price of goods such as milk powder, medicine, luxury cars and jewellery.
"When you look at activities around the world, regulators tend to investigate sectors where their investigations can have a direct impact on consumers and that will look good," said Sebastien Evrard, Beijing-based partner at law firm Jones Day, which specialises in anti-trust law.
Last week the NDRC fined six milk powder firms for anti-competitive behaviour. It is also investigating 60 foreign and local pharmaceutical companies over pricing and costs.
Companies in the petroleum, telecommunications, banking and auto sectors were on the NDRC's radar for future investigations, CCTV's official blog quoted Xu as saying.
Xu gave a hypothetical example, saying that if banks fixed deposit or lending rates if and when China liberalised its interest rate regime, such behaviour could prompt an investigation.
CCTV gave no other details and NDRC officials could not be reached for comment.
China has been taking incremental steps towards liberalising interest rates. Last month the central bank removed controls on bank lending rates, giving commercial banks the freedom to compete for borrowers.
Evrard said that while telecoms companies and fuel prices were often the target of regulators around the world, they would not be obvious choices in China because of the involvement of state-owned companies.
State-owned majors PetroChina , Sinopec Corp and CNOOC Ltd dominate China's oil and gas industry, both upstream and downstream.
Domestic fuel prices are also set by the NDRC.
The country's three biggest telecom firms  China Unicom Ltd , China Mobile Ltd and China Telecom Corp Ltd are state-owned.
Similarly, the top four banks are controlled by the state.
The China Automobile Dealers Association told earlier this week that its officials were collecting data on the price of all foreign cars sold in the country for the NDRC.
The State Administration for Industry and Commerce (SAIC), a regulator in charge of market supervision, kicked off a separate three-month investigation into bribery in the pharmaceutical and medical services sector on Thursday.
Foreign executives and bankers in China say the various investigations are a hot topic of discussion but many are still puzzled by the motivation behind the probes and whether they will impact their business.

Europe online sales seen doubling - poll

Online retail sales in Europe are seen doubling by 2018 to €323bn  ($428.51bn) with Amazon.com expected to grow even faster than that, market research firm Mintel said.
In a survey of 19 markets in Europe made exclusively available, Mintel predicted that online sales would grow to €188bn in 2013 from €166bn in 2012.
Mintel said Germany, Britain and France would remain by far the biggest markets for online retail by 2018, although the Netherlands, Spain and Poland should grow at a faster rate and Norway and Sweden have the highest online per-capita spend.
"There is a big North-South divide in e-commerce in Europe," said Mintel European retail analyst John Mercer, noting French participation levels lag Britain and Germany by five years and Spain, Greece, Portugal and Italy are even further behind.
Mintel said Amazon is extending its lead on the continent, growing market share to 9.8% in 2012 from 9.2% in 2011, while Germany's Otto, its next closest rival, saw its share slip to 3.3% from 3.9%.
Mintel predicted Amazon could double its Europe-wide market share in the next three to four years despite negative publicity in Britain over its low tax bills and in Germany prompted by strikes at its distribution centres.
Mercer said Amazon was performing strongly despite having only five dedicated country websites in Europe - in Britain, Germany, France, Spain and Italy.
"Italy is a tiny market. Perhaps it would be more worthwhile to have launched dedicated sites for the Nordics," he said. "In terms of spend per capita, the Nordics are much higher."
Mintel said it would still be 2021 before Amazon overtook Germany's Schwarz group, owner of Lidl discount stores, as Europe's biggest retailer, assuming current trends continue.
Amazon last month forecast disappointing income and revenue as it grapples with a weaker international market, overshadowing improving profitability and economic conditions in the United States.
British grocers are also well represented in Mintel's European top 10, with Tesco holding its market share steady at 2.3% and Walmart-owned Asda and Sainsbury on 1.1% and 0.9% respectively, reflecting the popularity of online grocery shopping in Britain.
"In mainland Europe, online shopping is largely non-grocery," Mercer said. "That is not going to change fast."
The Mintel report said Britain and France have the strongest demand for buying online and collecting in-store, a trend yet to take off for Germans, who prefer their goods to be delivered.

Solar tax angers Spaniards

Two weeks after Spain's government slapped a series of levies on green energy, Inaki Alonso hired two workmen to remove the solar panels he had put on his roof only six months earlier.
Alonso, an architect who specialises in ecological projects, calculated the cost of generating his own power under a new energy law and decided the numbers no longer added up.
Neither was it possible to leave the panels on his Madrid home without connecting them to the electricity grid; that would have risked an astronomical fine of between €6m and €30m ($8m to $40m).
"The new law makes it unviable to produce my own clean energy," Alonso said.
Spain's conservative government announced a reform of the energy system last month, including the "support levy" on solar power in a country blessed with abundant sunlight.
Imposed by decree, the reform aims to raise money for tackling a €26bn debt to power producers which the state has built up over the years in regulating energy costs and prices. The solar levy was fixed at 6 euro cents per kilowatt-hour.
Under the constitution, the government can impose emergency measures by decree and has done so repeatedly since it came into office in late 2011.
With Spain in economic crisis, power consumption is falling but the energy debt will continue growing by €4bn to €5bn a year unless the government takes action.
Utilities such as Iberdrola, Endesa and Gas Natural have attacked other revenue-raising measures in the reform.
However, Spaniards who have generated power independently for their own homes under a system known as "autoconsumo" are among the hardest hit by policies which they say punish, rather than encourage, energy efficiency.
Industry Minister Jose Manuel Soria accepts the measures are painful but says they are needed to plug the energy deficit.
"I support 'autoconsumo' ... but the power system has infrastructure, grids that the rest of us Spaniards who are in the system have to pay for. And we pay for it through our electricity bill," said Soria.
As a decree law, the measures are unlikely to undergo much scrutiny in parliament where the ruling People's Party has an outright majority, meaning the opposition cannot force a debate.
Green savings crack-down
Spain imports over 80% of its energy needs, spending more than €40bn - or about 4.5% of gross domestic product - a year.
Supporters of solar power says the government ought to be supporting the industry to cut this bill and achieve renewable energy targets set by the European Union.
Soria announced the measures just as home-produced solar power had become increasingly attractive compared with electricity supplied over the grid by traditional utilities.
In the past, the high cost of solar panels discouraged many consumers from taking the plunge, but prices have more than halved in the last three years.
A 240-watt solar panel kit, enough to power household appliances, is now available on the Internet for as little as 500 euros.
Under the old regime, Spanish consumers could recover a typical €1 600 to €2 100 investment in solar panels through savings on their utility bills in about five years.
According to FENIE, an association for solar panel installations, this will jump to 17 years when the levies are imposed under the new law.
Moreover, the law does not allow homeowners to sell electricity they do not need back to the grid, a common practice in other countries such as Germany.
Spain's climate offers huge potential for solar power. In Germany, a four-person household can cut its consumption of power from the grid by 30% by using panels.
In Spain, which has among the highest electricity prices in Europe, the figure is three times that - offering big savings for consumers hit by the recession and 26% unemployment.
Solar rebels
In the end, Alonso moved his solar panels to a friend's house deep in the Spanish countryside. This was far enough from the nearest mains supply to be exempt from the stipulation that panels must be hitched up to the grid.
Apart from people in isolated communities, Spaniards must connect their panels to the grid within two months. This allows their solar power production to be metered remotely - and taxed.
However, some panel owners plan to rebel by ignoring the government's deadline, confident the courts would hesitate to uphold the huge fines. These were laid down in an old 1997 energy law and, while possibly appropriate for a large corporation, no private individual could ever pay them.
"If I spend €600 to install solar panels and get fined €6m, let the judge decide," said Sergio Pomar, chief executive of energy-efficient installation firm INEL.
Courts already expect a series of legal challenges to other elements of the reforms, which investors in renewable energy says renege on the terms of their investment.
Teresa Ribera, senior adviser to the Paris-based Institute for Sustainable Development and International Relations (IDDRI), said the law could provoke civil disobedience.
"This law is illogical in terms of energy efficiency and costs ... and is a serious invitation by the government for citizens to become anti-system," she said.
She dismissed the idea that independent solar power producers should pay for costs such as running the grid and subsidising other energy forms. "It's like asking cyclists to pay a levy to keep open the petrol stations they don't use," said Ribera, who served as secretary of state for the environment under the former Socialist administration.
Backtracking on renewables
Ribera said the law is a setback for Spain in the competitive renewable energy industry, where it was once a frontrunner.
It also threatens to prevent Spain from meeting an EU goal of producing 20% of its energy from renewable sources by 2020.
"If we continue burning more coal and stop installing renewables capacity, the targets are at risk," said renewable energy advocate Mario Sanchez.
Javier Garcia Breva, chairman of Spain's renewable energy foundation, said the country had to cut its energy import bill. "Failing to support energy efficiency will only make these costs go up," he said.

China targets many sectors in price probe

China's powerful price regulator could target the petroleum, telecommunications, banking and auto sectors next in its investigations into violations of the country's anti-trust laws, state media quoted a senior official as saying.
The National Development and Reform Commission (NDRC) would look at industries that have an impact on the lives of ordinary Chinese, China Central Television (CCTV) quoted Xu Kunlin, head of the anti-monopoly bureau at the NDRC, as saying on one of its programmes.
The NDRC has launched nearly 20 pricing-related probes into domestic and foreign firms in the last three years, according to official media reports and research published by law firms.
But the scope of its investigations in the world's second biggest economy have gathered pace in recent months and coincide with criticism in official media about the price of goods such as milk powder, medicine, luxury cars and jewellery.
"When you look at activities around the world, regulators tend to investigate sectors where their investigations can have a direct impact on consumers, and that will look good," said Sebastien Evrard, Beijing-based partner at law firm Jones Day, which specialises in anti-trust law.
Last week the NDRC fined six milk powder firms for anti-competitive behaviour. It is also investigating 60 foreign and local pharmaceutical companies over pricing and costs.
Companies in the petroleum, telecommunications, banking and auto sectors were on the NDRC's radar for future investigations, CCTV's official blog quoted Xu as saying.
Xu gave a hypothetical example, saying that if banks fixed deposit or lending rates if and when China liberalised its interest rate regime, such behaviour could prompt an investigation.
CCTV gave no other details and NDRC officials could not be reached for comment.
China has been taking incremental steps towards liberalising interest rates. Last month the central bank removed controls on bank lending rates, giving commercial banks the freedom to compete for borrowers.
Evrard said that while telecoms companies and fuel prices were often the target of regulators around the world, they would not be obvious choices in China because of the involvement of state-owned companies.
The country's three biggest telecom firms China Unicom Ltd , China Mobile and China Telecom  are state owned.
Similarly, the top four banks are controlled by the state. And the price of oil in China is set by the government.
The China Automobile Dealers Association told earlier this week that its officials were collecting data on the price of all foreign cars sold in the country for the NDRC.
The State Administration for Industry and Commerce (SAIC), a regulator in charge of market supervision, kicked off a separate three-month investigation into bribery in the pharmaceutical and medical services sector on Thursday.
Foreign executives and bankers in China say the various investigations are a hot topic of discussion but many are still puzzled by the motivation behind the probes and whether they will impact their business.

Smartphones top mobile sales - poll

Smartphones took a majority of mobile phone sales worldwide for the first time in the April-June quarter, a survey showed on Wednesday.
The report by the research firm Gartner found smartphone sales totaled 225 million in the second quarter, or 51.8% of all mobile phones sold in the period.
It was the first time smartphone sales exceeded those of feature phones, which are more basic phones with limited or no access to the Internet and applications.
The survey found Samsung remained the leading vendor of smartphones and all mobile phones, and that the Google Android system solidified its position with a 79% share of smartphones sold.
Gartner said Windows Phone, the mobile operating system from Microsoft, moved into third place with a 3.3% share, ahead of troubled BlackBerry, whose share slid to 2.7%.
"While Microsoft has managed to increase share and volume in the quarter, Microsoft should continue to focus on growing interest from app developers to help grow its appeal among users," said Anshul Gupta, a Gartner analyst.
Apple's iOS, the operating system for the iPhone, remained second with a 14.2% share, down from 18.8% a year earlier.
Gartner said Apple's average prices dropped because many of its phones sold were older, discounted models of the iPhone. This "demonstrates the need for a new flagship model," Gupta said, but added that "it is risky for Apple to introduce a new lower-priced model too."
Gartner's data showed Samsung sold 71.3 million smartphones in the quarter, representing a market share of 31.7%.
Apple was second with 31.9 million, followed by South Korea's LG, with 11.4 million and a share of 5.1%, and China's Lenovo and ZTE.
Samsung was also the top seller of all mobile phones, with a total of 107 million in the period, or 24.7%. Finland-based Nokia was second with a market share of 14% and 60.9 million phones sold, Gartner said.

UK flirts with a new house price bubble

Britain is flirting with another runaway rise in house prices, according to a poll of economists, with a firm majority putting the chances at 50-50 or higher over the next five years.
Despite those concerns, there was a clear consensus that the recent improvement in data heralds a sustainable economic recovery for the UK, which has struggled over the last three years to escape recession.
A clear pick-up in Britain's housing market, accelerated by the government's "Help to Buy" programme introduced in this year's Budget and other measures to boost lending, is a sign of rising confidence in the economy.
But with the last housing boom of 1997-2007 still fresh in the mind, there are concerns that Britain is falling back into the same mentality that led to a tripling of the average house price in 10 years.
Only nine out of 29 economists surveyed since Friday said the prospect of another house price bubble - whereby prices rise so fast they would be vulnerable to a sharp correction - is small. The other 20 were split between seven describing the risk as even, 11 as likely, and two as very likely.
The sample comprises economists working for major banks, and research institutions and consultancies.
Danny Gabay, economist at Fathom Financial Consulting, said media talk of a new housing bubble wasn't very helpful, and that rising house prices are not intrinsically a bad thing.
"We're not concerned about a new housing bubble, we're concerned about the fact we never worked off the last one before they began to re-inflate it," he said.
"We've stopped any attempt at any of the repair work that is essential for this economy to be able to heal properly."
Sustainable economic recovery
A July survey from the Royal Institution of Chartered Surveyors showed the fastest growth in house prices since 2006. Official data showed house prices in London, which typically lead the rest of the country, jumped 8.1% in June compared with the same month a year ago.
Despite declining sharply in 2008 and 2009 after Britain and other advanced economies plunged into severe recession, UK house prices have remained overvalued compared to economic fundamentals, according to every quarterly UK housing market poll since then.
Gabay argues that not only have the government and the Bank of England stopped the process of deleveraging, they're now encouraging homebuyers to take on more debt.
British Finance Minister George Osborne said last month that the "Help to Buy" programme - which provides government-backed equity loans to first-time buyers and people moving to new-build houses worth up to £600 000 pounds ($927 700) - was a targeted response to a malfunctioning mortgage market. He dismissed concerns property prices had become a one-way bet.
"I don't think in the current environment a house price bubble is going to emerge in 18 months or three years," Osborne told parliament.
Bank of England Governor Mark Carney, asked last week at a press conference about the prospect of another housing bubble, did not address whether or not that was a risk for the economy. He said the market should be put into context: mortgage applications are still well below historic averages.
Rising house prices would support economic recovery as they make homeowners feel wealthier and more likely to spend.
The poll showed the UK economy is likely to improve further from here over the next 18 months at least.
The vast majority of respondents, 30 of 35, said upbeat purchasing managers indexes, burgeoning consumer confidence and an improving retail outlook all pointed to the battered economy getting back on track.
Britain's economy is expected to grow by between 0.4 and 0.5% per quarter from here through to the end of next year, with the consensus barely changed from last month's poll, although the outlook is not without risks.
"Though sustainable, the prospective recovery is likely to face headwinds from the euro zone, a weak UK credit system and the economy's structural problems - over-reliance on finance, lack of skills," said Stephen Lewis, chief economist of Monument Securities.