Monday, January 14, 2008

Romney, McCain, Huckabee Shift to Economy in Michigan

(Bloomberg) -- Michigan's hard-hit economy occupies center stage as two favorite sons, Mitt Romney and John McCain, square off in a potentially decisive contest for the Republican presidential nomination, with an outsider, Mike Huckabee, gaining ground.

``It's a strong three-man race,'' said Scott Reed, a Republican strategist who isn't affiliated with any candidate. Michigan's primary tomorrow ``is a must-win for Romney, a need- to-win for McCain, and Huckabee just has to do well enough to go on to South Carolina,'' which votes Jan. 19.

Romney, who was born and raised in Michigan, is staking his candidacy on a victory in the state after his second-place showings in Iowa and New Hampshire this month. Even though Romney, 60, hasn't lived in the state for more than three decades, he benefits from high name recognition: His late father, George, was chairman of American Motors Corp., a three- term governor in the 1960s and a presidential candidate.

Michigan's highest-in-the-nation unemployment rate and ballooning home-mortgage foreclosures have forced the candidates to tout their economic remedies.

``When the nation begins to feel a hiccup, we all talk about a stimulus package, the need to put money in the hands of consumers and so forth,'' Romney said in an interview today. ``But when Michigan has been suffering for 10 years, people have sat by and been somewhat idle.''

This weekend, Romney and McCain sparred over who would best be able to address the state's economic woes. Romney, who promises to lower tax rates ``across the board'' to stimulate the economy, criticized McCain for saying some lost jobs would never come back.

`Going Away'

``Some say these are jobs that are just going away and you better get used to it,'' the former Massachusetts governor said at a campaign stop Jan. 12 outside a General Motors Corp. plant in Ypsilanti where the automaker has announced plans to fire 200 workers. ``Are we going to allow the entire domestic automotive manufacturing industry to disappear?''

After losing to Huckabee in Iowa and to McCain in New Hampshire, Romney is relying on a win in Michigan to stay competitive. Last week, his campaign canceled ad purchases in South Carolina and Florida and shifted the money to the Wolverine State.

``Romney's running as someone who really understands Michigan's problems,'' said Tom Rath, one of the candidate's top strategists.

2000 Race

McCain, 71, also is well-known in Michigan, having won the state's Republican primary in 2000, defeating then-Texas Governor George W. Bush.

The Arizona senator is counting on a repeat performance to give him momentum for subsequent primaries. Like Romney, McCain rushed from New Hampshire to Michigan, where he began touting an economic agenda that includes reining in federal spending, shoring up Social Security and Medicare, middle-class tax cuts and job training.

Michigan had a 7.4 percent unemployment rate in November, compared with a national rate of 4.7 percent, according to the U.S. Labor Department. It is also feeling the effects of the credit crisis: In 2007, Michigan accounted for 35,404 of the 588,882 U.S. home-mortgage foreclosures, according to foreclosure.com.

In Livonia on Jan. 12, McCain said training and technological improvements would lead to new, better-paying jobs.

`Bright Future'

``Michigan has a bright future; but it will not be reached attempting to recreate the past,'' McCain said.

Huckabee, 52, has also jumped into the economic debate. In an address at the Detroit Economic Club on Jan. 11, the former Arkansas governor laid out his proposals for a ``fair tax'' based on consumption that would replace federal income and payroll levies.

The state ``helped save America'' during World War II ``and now it may be time for America to help save Michigan,'' he said.

His low-budget campaign is also is running a TV ad that obliquely takes a shot at Romney's background as co-founder of Bain Capital LLC, a Boston buyout firm, suggesting he reminds Americans of ``the guy who laid them off.''

The ordained Baptist minister's appeal goes beyond his economic message. Lower and Western Michigan have blocs of evangelical voters who may turn out for him in large numbers. These voters account for up to 30 percent of the state's Republican electorate, and their support for Huckabee would hurt Romney more than McCain, said Reed, who managed Bob Dole's 1996 presidential campaign.
 

IBM Beats Estimates on Emerging Markets; Shares Climb

(Bloomberg) -- International Business Machines Corp., the world's biggest computer-services company, posted earnings and sales that topped analysts' projections as orders from Asia and Europe bolstered results.

IBM advanced 8 percent in early trading, which would be the most in more than five years if it holds when U.S. markets open. Fourth-quarter profit climbed to $2.80 a share and sales rose to $28.9 billion, exceeding predictions by more than $1 billion.

Business in Asia, Europe and developing countries drove results, Chief Executive Officer Samuel Palmisano said today in a statement. The remarks eased concern that slowing economic growth in the U.S. will drag down technology company profits and marked a reversal from the previous quarter, when IBM disappointed investors with slack hardware sales.

IBM rose $7.85 to $105.52 in early trading after closing at $97.67 on Jan. 11 on the New York Stock Exchange. The Armonk, New York-based company's shares climbed 11 percent last year.

Analysts anticipated profit from continuing operations of $2.60 a share and revenue of $27.7 billion, according to the average of estimates compiled by Bloomberg.

The company plans to report full results on Jan. 17.
 

Friday, January 11, 2008

No fresh Vodacom bid for GT

(FIN24) - Vodacom, SA's biggest mobile network, operator has not tabled a fresh offer for a controlling stake in Ghana Telecoms (GT) but couldn't rule out adding a sweetener to its initial $500m (R3.5bn) bid.


"I've read reports from Ghana to that effect [of a higher offer]," said Dot Field, head of group communications at Vodacom. "But the fact is that we have not tabled a fresh offer for GT."


She added, however, that Ghana remained a market in which the group was "firmly" interested... as indicated in our annual report".


Initial bids for a 51% stake in GT were rejected by transactional advisors who argued that they were way below the government's asking price. Bidders included Portugal Telecom and France Telecoms.
 
 

Gold Futures Rise to Record $900.10 on Interest-Rate Outlook

(Bloomberg) -- Gold futures rose to a record $900.10 an ounce on speculation the Federal Reserve will further cut U.S. interest rates, weakening the dollar and boosting the investment appeal of the precious metal. Silver also climbed.

Interest-rate futures show a 68 percent chance the Fed will lower borrowing costs 0.5 percentage point to 3.75 percent by Jan. 30 after Fed Chairman Ben S. Bernanke suggested cuts may be necessary to guard against an economic slowdown. Gold rose 31 percent last year when the Fed slashed rates 1 percentage point, sending the dollar 9.5 percent lower against the euro.

``If the Fed drops rates, a lower dollar will propel gold higher,'' said Leonard Kaplan, president of Prospector Asset Management in Chicago. ``Everything we buy is going to be more expensive. Any raw material will go through the roof. The smart people see inflation.''

Gold futures for February delivery rose $4.70, or 0.5 percent, to $898.30 an ounce at 11:55 a.m. on the Comex division of the New York Mercantile Exchange. The price reached the record at 10:40 a.m. The record level was confirmed by Nymex.

Silver futures for March delivery rose 2 cents, or 0.1 percent, to $16.295 an ounce. The price earlier reached $16.415, the highest since January 1981. The metal gained 15 percent last year.

HSBC Securities USA Inc. and Morgan Stanley predicted the Fed will reduce its benchmark rate by half a percentage point this month after Bernanke's comments, up from their previous forecast of a quarter point.
 

Thursday, January 10, 2008

Tony Blair to join JPMorgan: source

(Reuters) - Former British prime minister Tony Blair is expected on Thursday to join U.S. bank JPMorgan Chase & Co Inc as a senior adviser, according to a person familiar with the situation.

JPMorgan declined to comment. The Financial Times in London first reported the move on its Web site, saying it would be the first of a series positions Blair expects to take in the private sector.

Blair, a key ally of U.S. President George W. Bush, was replaced last year by Gordon Brown as prime minister amid growing discontent over Great Britain's policy in Iraq.

Details of Blair's duties with JPMorgan, the third largest U.S. bank, were not immediately available.
 

Citigroup and Merrill in talks for foreign capital: report

(Reuters) - Citigroup Inc. (C.N: Quote, Profile, Research) and Merrill Lynch & Co Inc. (MER.N: Quote, Profile, Research) are in discussions to receive more capital from investors, primarily foreign governments, The Wall Street Journal reported on Thursday.

Citigroup could get as much as $10 billion, likely all from foreign governments, while Merrill is expected to get $3 billion to $4 billion, much of it from a Middle Eastern government investment fund, the report said.

The report also said Citigroup's board is expected to discuss cutting the firm's dividend in half, a move that could save it more than $5 billion a year.

Representatives were not immediately available for comment at either bank.

U.S. banks have been wrestling with huge subprime mortgage losses, prompting some to seek cash from sovereign wealth funds
 

Recession fears are growing

(Reuters) - Expectations for the weakest consumer spending performance in 17 years during 2008 kept the odds of a recession at nearly 40 percent, a survey of top forecasters showed on Thursday.

Panelists surveyed by the Blue Chip Economic Indicators newsletter have the odds of a recession in the next year at 38 percent, a little weaker than the 39 percent odds forecast a month ago.

But the most recent survey was taken ahead of December's grim unemployment report and the newsletter stated that growth forecasts would have been weaker if taken after release of that data.

"The January 4th news of the first decline in private sector nonfarm payrolls since July 2003 and whopping 0.3 of a percentage point jump in the unemployment rate during December no doubt caused some of our panelists to further trim their forecasts of economic growth this year and heightened speculation about the possibility of a recession," the newsletter stated.

"Whether or not the economy is already in a recession, about to enter one, or manages to muddle through without one, will only be known in the fullness of time," the newsletter wrote.

Based on the Jan 2-3 survey of economists -- taken a day ahead of the government's weak employment report that showed a huge uptick in the December unemployment rate and the weakest job growth in more than four years -- consumer spending this year is expected to grow at the weakest annual pace since 1991.