WASHINGTON (AP) — The apparent end of the recession and stabilizing financial markets have not cured the banking industry, as souring and past-due loans have reached the highest levels in 26 years, the Federal Deposit Insurance Corp. said Tuesday. Banks earned $2.8 billion in the third quarter, but nearly 40 percent of that was from a one-time accounting trick. Loan balances plummeted and the fund that insures their deposits was $8.2 billion in the red. The number of banks on the FDIC’s “problem list” rose to 552 from 416 on June 30, the highest level in 16 years. Fifty banks failed during the quarter — the largest number since the second quarter of 1990. The FDIC’s fund that insures bank deposits fell by $18.6 billion, mostly because $21.7 billion was set aside for expected losses on future bank failures. The last similar deficit was in Dec. 1991, when a predecessor fund was more than $7 billion in the red. Separately, the Office of Thrift Supervision said Tuesday that thrifts eked out a $200 million profit in the third quarter. The agency called it “another break-even quarter,” after a small second-quarter profit was revised downward to a $94 million loss. Still, it was the first profitable quarter since the same period in 2007. The nominal profit was $1.3 billion, but $1.1 billion was a one-time gain at a single institution. The thrift’s holding company, which the OTS did not identify, shifted assets to reduce future tax expenses, agency officials said. The agency says the number of “problem thrifts” rose to 43 from 40 last quarter. Thrifts differ from banks in that they are required, by law, to have at least 65 percent of their lending in mortgages and other consumer loans. That makes them especially vulnerable to the housing downturn and unemployment. It also means they will play a key role in an eventual economic recovery. The FDIC voted this month to require banks to prepay three years of deposit insurance premiums by the end of next month to help replenish the dwindling deposit insurance fund, which is at its lowest point on record. That will raise about $45 billion. But bank failures this year through 2013 are expected to cost the fund $100 billion, so the prepayments won’t provide a long-term fix for the insurance fund. It does spare ailing banks the immediate cost of paying a second emergency fee this year. Depositors’ money — insured up to $250,000 per account — is not at risk, since the FDIC has the option of tapping a credit line with the Treasury Department. “While bank and thrift earnings have improved, the effects of the recession continue to be reflected in their financial performance,” FDIC Chairman Sheila Bair said. A 2.8 percent drop-off in loans outstanding — the largest percentage decline on record — showed that credit for consumers and businesses remained tight, she said. “There is no question that credit availability is an important issue for the economic recovery,” Bair said. “We need to see banks making more loans to their business customers.” That’s especially important for small businesses which get more than 60 percent of their credit from banks the FDIC insures, she said. Bank profits returned in the third quarter after a $4.3 billion loss in the previous quarter and $879 million in earnings last year. But analysts warned not to read much into the better earnings. “A few very large banks are making a pile of money, and the rest of the industry is hurting,” said Daniel Alpert, managing director of the New York investment bank Westwood Capital LLC. The largest Wall Street firms are benefiting from a host of government subsidies — such as capital injections, asset guarantees, low-cost borrowing — that cost taxpayers without improving the economy, Alpert said. “We’re creating riskless profits for the big banks,” he said. Still, banking analyst Bert Ely said the Federal Reserve’s low-interest rate policy is helping the whole industry. Net interest margin — the difference between what it costs banks to borrow and what they pay to depositors — reached a four-year high. It was a rare bright spot in the FDIC report. That bright spot comes at the expense of consumers, who are earning historically low interest rates on their deposits. “Americans are getting nothing in terms of interest on their savings so that the banks can make money,” Alpert said. High unemployment and slow spending are making it harder for banks to collect from consumers. Loans 90 or more days past due reached 4.9 percent — the highest in 26 years. Banks gave up on collecting $50.8 billion in loans during the quarter, an 80.5 percent increase from a year ago. It was the 11th straight quarterly increase and — at 2.7 percent — another 26-year high. OTS Acting Director John Bowman cast a cautious tone, saying thrift profits were hurt by money being set aside as they prepare for more loan losses. “We know that we have not seen the last thrift failure of this crisis,” Bowman said. Some smaller banks have protested the early insurance assessments that are being charged to replenish the deposit insurance fund. They complain that they had nothing to do with the excesses of big Wall Street banks, reckless mortgage lending and risky investments that precipitated the financial crisis, but are being forced to pay to help clean up the mess. There have been 124 bank failures so far this year, the most since 1992 at the height of the savings-and-loan crisis. They have cost the federal deposit insurance fund more than $28 billion. There were 25 bank failures last year and three in 2007. Bair said “there are no quick fixes” for the banking industry’s troubles — “only careful, hard work” to oversee banks as they continue writing off bad loans and attempt to ride out the downturn. “It really is all about the economy at this point,” she said. Read the r est here: Banks earn $2.8B in 3Q; FDIC says dangers persist (AP)

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LONDON (AFP) – The Bank of England admitted Tuesday it lent a total of 61.6 billion pounds to Royal Bank of Scotland and HBOS in secret during last year’s financial crisis, adding that the cash had been repaid. The British central bank revealed the loans, equivalent to 68 billion euros or 102 billion dollars, in a statement to coincide with governor Mervyn King’s appearance before a Treasury Select Committee hearing. The BoE said that in autumn 2008 it had offered emergency lending to Royal Bank of Scotland (RBS) and HBOS bank, which is now part of Lloyds Banking Group (LBG). The bank said the loans could now be revealed because it judged that there was no longer a risk of a “potentially systemic disturbance” to the financial system. “Now that RBS has signed up for the asset protection scheme and Lloyds has embarked on its alternative strategy for capital raising, the bank judges that there is no longer a need for the assistance to remain secret,” the BoE said. RBS borrowed a maximum of 36.6 billion pounds on October 17, 2008, and HBOS borrowed a maximum of 25.4 billion pounds on November 13, 2008. The groups repaid the cash in December and January respectively. Junior finance minister Paul Myners defended the move, and declined to say if other secret loans had been made to banks. “This is precisely what a central bank does in terms of providing lender of last resort facilities to support the banking system,” he told Channel 4. “The future of the banks matters to parliament and parliament recognises that the Bank of England occasionally needs to act covertly and has given the Bank of England the legal power to do that.” Struggling HBOS was bought by rival Lloyds TSB in a government-brokered deal that created Lloyds Banking Group earlier this year. However, LBG fell under state control as a result of the global financial crisis and is now 43-percent owned by the taxpayer. Royal Bank of Scotland was also ravaged by the credit crunch and the takeover of Dutch giant ABN Amro at the top of the market in 2007. The state now owns 84 percent of RBS after an enormous bailout. Another British bank, Northern Rock, was nationalised in February 2008 after it ran into severe funding problems because of the global credit crunch. Read more: Bank of England reveals huge secret loans to RBS, HBOS

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By Jeannine Aversa, The Associated Press WASHINGTON – The American economy is growing modestly, with consumers too wary about spending to invigorate the recovery. That’s the picture that emerged from reports Tuesday on the economy and the confidence of consumers, who power 70 per cent of it. Unemployment and tight credit have sapped shoppers’ willingness and ability to spend freely as retailers enter their crucial holiday season. And Americans are expected to grow more cautious about spending next year. That would make for a plodding recovery. The economy grew at a 2.8 per cent rate last quarter. Forecasts for the current quarter are for similarly lacklustre growth before a drop-off next year. “It’s hardly a rip-roaring recovery,” said Stuart Hoffman, chief economist at PNC Financial Services. “Usually coming out of a recession you get growth more like a rodeo bull – at a pace of six or seven per cent in the early quarters of recovery. That isn’t happening. It is coming out of the stalls more like a fat cow.” The Commerce Department’s revised estimate of gross domestic product for July through September was less than the 3.5 per cent growth rate foreseen just a month ago. And the estimate for GDP – the value of goods and services produced in the United States – was a tad less than the 2.9 per cent growth rate that economists surveyed by Thomson Reuters had expected. The main factors behind the downgrade: Consumers didn’t spend as much. Commercial construction weakened. And imports exerted more of a drag on the economy. Businesses also trimmed more of their stockpiles, further restraining growth. At the same time, the Conference Board’s latest survey of consumer confidence found gloom among shoppers. “I really won’t be spending money on Christmas,” said Ivan Horne, 47, of Tampa, Fla., who has been out of work for about a year. “I’m barely able to make enough to survive.” An Associated Press-GfK poll released this week found that 93 per cent of Americans say they’ll spend less this holiday season or about the same as last year. Also Tuesday, the Standard&Poor’s/Case-Shiller home price index of 20 major cities suggested that the summer’s trend of rising home prices is slowing. And analysts expect prices to dip again this winter as foreclosures rise. The tepid reading on economic growth and consumer confidence caused stocks to retreat from their 13-month highs. Over the past few months, though, the stock market has surged. A rally on Monday carried the Dow up 133 points to its highest point in just over a year. In part, stocks have been powered by a weak dollar and low interest rates. Lower rates let companies and investors borrow cheaply. They also cause some to shift money out of cash and bonds and into investments that promise higher returns, such as stocks. Stocks also have benefited from higher corporate profits. Companies have managed to squeeze out more profits without the cost of higher production or payrolls. They’ve done so by boosting their workers’ productivity and drawing down their existing stockpiles of goods. The GDP report showed the economy finally started to grow again from July through September, after a record four straight losing quarters. Yet growth probably won’t be strong enough to quickly drive down the nation’s unemployment rate, now at 10.2 per cent. For the current quarter, some analysts think economic growth will slow to around a 2.5 per cent pace, but it could hit a pace of around 3 per cent if holiday sales turn out better than expected. Though cautious, consumers are holding up despite high personal debt, a tight job market and hard-to-get credit. A government report out Wednesday is expected to show consumer spending rose 0.5 per cent in October, compared with a 0.5 per cent drop in September. Incomes, the fuel for future spending, are expected to edge up 0.2 per cent, after being flat. Many economists say they think the economy will weaken again next year. Some project growth at a pace of around 1 per cent as the benefits of the $787 billion stimulus package fade and consumers keep tightening. “I think when the bills come in January, you’ll see consumers pull back,” said Brian Bethune, economist at IHS Global Insight. “It’s going to be a slow-motion recovery.” In the third quarter, the Cash for Clunkers rebates and an $8,000 tax credit for first-time homebuyers juiced up sales of cars and homes. The clunkers program ended in August. But the tax credit has been extended and expanded beyond first-time buyers. It’s unclear whether the recovery can endure after government supports are gone. If consumers clam up, the economy could tip back into recession. Read more from the original source: Reports on US economic growth and consumer confidence signal modest rebound

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By Malcolm Morrison, The Canadian Press TORONTO – The Toronto stock market was negative Tuesday afternoon with buyers discouraged by data showing weaker than expected U.S. economic growth and tepid consumer sentiment just before the start of the holiday shopping season. Toronto’s S&P/TSX composite index dropped 50.2 points to 11,573.8 after the U.S. Commerce Department reported the economy grew at an annual rate of 2.8 per cent in the third quarter, compared with a previous government estimate of 3.5 per cent. The new reading was weaker than the 2.9 per cent revised growth rate economists had expected. “It’s the U.S. government doing everything and the consumer doing nothing,” observed John Stephenson, portfolio manager at First Asset Funds.. “If you look at the growth in the last quarter, (government stimulus) had a lot to do with it. We don’t have a solution to replace that except more stimulus so there’s really no exit strategy other than the government continues to print money.” The Canadian dollar was down 0.29 of a cent to 94.42 cents US. The financial sector was the leading advancer, up 0.4 per cent after the Bank of Montreal (TSX: BMO.TO ) reported its fourth-quarter net income rose 16 per cent from year-ago levels to $647 million. Earnings per share were $1.11, easily beating analyst estimates of 98 cents, compared with $1.06 a year earlier. Total revenue in the quarter increased by 6.3 per cent to $176 million while its provision for credit losses decreased to $386 million during the quarter, down $79 million from last year. Its shares moved up 39 cents to $53.94. “Well, I would say BMO has just done a stellar job. It was a great quarter, there is no way to say anything negative about it,” said Stephenson, adding the results bode well for earnings reports from the rest of the sector. Elsewhere on the Canadian earnings front, George Weston Ltd. (TSX: WN.TO ) said Tuesday that its profit dropped 52 per cent to $86 million or 56 cents a share in the most recent quarter, down from $180 million or $1.29 a share a year ago. Results at North America’s largest baker were hurt by foreign exchange charges. Revenue at the company, which holds a controlling interest in supermarket chain Loblaw Companies, slipped one per cent to $9.78 billion and its shares ticked 59 cents higher to $59.69. The TSX energy sector was off 0.12 per cent as the January crude contract on the New York Mercantile Exchange declined $1.63 to US$75.93 a barrel. Canadian Natural Resources (TSX: CNQ.TO ) climbed 87 cents to $71.86. Mining stocks were also negative. The gold sector was down 1.13 per cent even as the December bullion contract on the Nymex gained $1.10 to a record high close of US$1,165.80 an ounce. Goldcorp Inc. (TSX: G.TO ) faded 97 cents to $45.88. The base metals sector stepped back 1.27 per cent with December copper off one cent to US$3.12 a pound. Teck Resources (TSX: TCK-B.TO ) moved back 96 cents to C$36.40. The TSX Venture Exchange moved 2.36 points lower to 1,414.27. New York markets were also negative in the wake of the economic data with the Dow Jones industrials down 46.4 points to 10,404.5. The Nasdaq composite index was off 14.81 points to 2,161.2 while the S&P 500 index declined four points to 1,102.25 after the U.S. Conference Board said that its Consumer Confidence Index edged up to 49.5 from a revised reading of 48.7 in October. Economists surveyed by Thomson Reuters had expected a reading of 47.7. One component of the Conference Board’s confidence gauge that measures consumers’ assessment of the current economy fell slightly to 21.0, compared with 21.1 in October. Consumer spending accounts for more than two-thirds of all U.S. economic activity and a rebound in shopping is considered vital for a strong recovery. Other data out Tuesday morning showed that U.S. home prices rose slightly in September, the fourth straight monthly increase. Investors have been battling mixed signals on the economy in recent months. Areas like housing have shown modest improvements, but others like consumer confidence and employment are lagging. That has investors worried that their bets on an economic recovery over the past eight months may have been overdone. The main Toronto index is up about 50 per cent while the Standard & Poor’s 500 index is up 63.5 per cent since early March. In other corporate news, Manulife Financial Corp. (TSX: MFC.TO ) is expanding its Chinese operations with a deal to buy Fortis Bank’s 49 per cent interest in China-based ABN AMRO TEDA Fund Management Co. for 105 million euros, or US$156 million. Its shares declined 21 cents to $18.57. Kingsway Financial Services Inc. (TSX: KFS.TO ) shares fell 13 cents or 7.69 per cent to $1.56 after it said credit ratings agency A.M. Best has downgraded its issuer credit rating to Triple-C from Single-B. The financial strength ratings of several other insurers in which Kingsway has a major interest were also downgraded. Shares in Alimentation Couche-Tard Inc. (TSX: ATD-B.TO ), which operates convenience stores throughout Canada and the United States, gained 65 cents to $20.75 after it said says its latest quarterly profit was down nearly 10 per cent from a year earlier. But revenue was up 5.3 per cent. Western Coal Corp. (TSX: WTN.TO ) shares declined three cents to $2.72 after it said Monday a proposed class action lawsuit has been filed in Ontario Superior Court alleging inaccurate disclosure in company’s second-quarter financial report in 2007. Continued here: TSX lower on U.S. growth, consumer data; BMO earns boost financial sector

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By Tom Hals WILMINGTON, Delaware (Reuters) – Capmark Financial Group Inc CPFNG.UL said on Tuesday that it agreed to sell its mortgage loan servicing business to a joint venture between Berkshire Hathaway and Leucadia, which raised its bid on Monday to value the unit at about $468 million. Capmark Financial Group Inc filed for bankruptcy in October with a plan to sell its mortgage servicing business, one of the world’s largest, to Berkshire Hathaway Inc( BRKa.N ) and Leucadia National Corp ( LUK.N ) and then opened the agreement to higher bids. A Capmark attorney, Michael Kessler of Dewey & LeBoeuf, said the company also negotiated with a unit of PNC Financial Services Group Inc ( PNC.N ), which never put forward a proposal that met the requirements of a qualifying bid. Kessler said the Friday bid deadline was extended several times right through to Monday night to give more time for PNC’s Midland Loan Services to qualify. “During the course of the day, Berkadia also increased its bid to, I believe, have us cut off the bid extension deadline to PNC,” said Kessler. On Monday, the Berkshire-Leucadia venture, known as Berkadia, increased its bid to a value of about $468 million. Capmark’s prebankruptcy agreement with Berkadia was worth about $408 million, according to Kessler. Capmark services $288.6 billion in loans, the third-largest commercial and multifamily residential loan portfolio. The case is in re: Capmark Financial Group, U.S. Bankruptcy Court, District of Delaware, No. 09-13684. Read the original: Berkshire venture tops PNC for Capmark servicing

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TYNGSBORO, Mass.–(BUSINESS WIRE)–Beacon Power Corporation (Nasdaq: BCON – News ), a company that designs and develops advanced products and services to support more stable, reliable and efficient electricity grid operation, said today that the U.S. Department of Energy (DOE) has announced that it has awarded a stimulus grant to Beacon valued at $24 million, for use in the construction of the Company’s second 20 MW flywheel energy storage plant, to be located in Chicago, Illinois. “We’re extremely pleased to receive this grant award from the Department of Energy,” said Bill Capp, Beacon president and CEO. “DOE has long supported Beacon’s pioneering efforts to bring our clean, sustainable and cost-saving energy storage technology to the grid. This $24 million grant, which is the 4 th largest out of 16 energy storage grants announced today, represents the most significant financial boost Beacon has ever received from the federal government. We believe it underscores the unique value and stabilizing benefits of our grid-scale flywheel systems. We’re very grateful for DOE’s continued support.” Capp added: “Thanks to DOE’s strong support, we can now continue to move forward with plans to build and operate a second 20 MW regulation plant, in addition to the one we’ve begun work on in Stephentown, New York. Doing so will expand our merchant service provider business model in the regulation market, and create a foundation for promoting and selling turnkey systems to vertically integrated utilities here and overseas.” According to DOE, the funding award is to “Design, build, test, commission and operate a utility-scale 20 MW flywheel energy storage frequency regulation plant in Chicago, Illinois, and provide frequency regulation services to the grid operator, the PJM Interconnection. The project will also demonstrate the technical, cost and environmental advantages of fast-response flywheel-based frequency regulation management, lowering the cost to build a 20 MW flywheel energy storage plant to improve grid reliability while increasing the use of wind and solar power.” The grant for the Chicago facility results from one of Beacon’s two applications for DOE Smart Grid demonstration project funding, known as Funding Opportunity Announcement DE-FOA-0000036. Area of Interest 2.2 of the DOE solicitation contemplated one or two grants for Frequency Regulation Ancillary Services projects. The Department made only one award, which was for Beacon’s 20 MW regulation plant. The grant award of $24 million is for 50% of the project’s estimated cost. DOE will provide further details of the grant conditions in the near future. Flywheel Energy Storage and Frequency Regulation Frequency regulation is an essential grid service that is performed by maintaining a tight balance between electricity supply and demand. Beacon’s 20 MW plant has been designed to provide frequency regulation services by absorbing electricity from the grid when there is too much, and storing it as kinetic energy in a matrix of flywheel systems. When there is not enough power to meet demand, the flywheels inject energy back into the grid, thus helping to maintain proper electricity frequency (60 cycles/second). Thanks to their ability to recycle electricity efficiently and act as “shock absorbers” to the grid, Beacon’s flywheel plants will also help support the integration of greater amounts of renewable (but intermittent) wind and solar power resources. Unlike conventional fossil fuel-powered generators that provide frequency regulation, flywheel plants will not consume any fuel, nor will they directly produce CO 2 greenhouse gas emissions or other air pollutants, such as NO X or SO 2 . About Beacon Power Beacon Power Corporation designs, develops and is commercializing advanced products and services to support stable, reliable and efficient electricity grid operation. Beacon’s Smart Energy Matrix, now in production, is a non-polluting, megawatt-scale, utility-grade, flywheel-based solution designed to provide less expensive, and more sustainable and effective, frequency regulation services to the nation’s power grid. The Company’s business strategy is both to   supply   frequency regulation services from its own plants, and to sell its systems directly to utilities or grid operators in some parts of North America and selected international markets. Beacon is a publicly traded company with its research, development and manufacturing facility in the U.S. For more information, visit www.beaconpower.com . Safe Harbor Statements under the Private Securities Litigation Reform Act of 1995: This Material contained in this press release may include statements that are not historical facts and are considered “forward-looking” statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements reflect Beacon Power Corporation’s current views about future events, financial performances, and project development. These “forward-looking” statements are identified by the use of terms and phrases such as “will,” “believe,” “expect,” “plan,” “anticipate,” and similar expressions identifying forward-looking statements. Investors should not rely on forward-looking statements because they are subject to a variety of risks, uncertainties, and other factors that could cause actual results to differ materially from Beacon’s expectation. These factors include: a short operating history; a history of losses and anticipated continued losses from operations; the complexity and other challenges of arranging project financing and resources for one or more frequency regulation power plants, including uncertainty about whether we will be successful in finalizing the DOE loan guarantee support for our Stephentown, New York, facility, or complying with the conditions or ongoing covenants of that support; our need to comply with any disbursement or other conditions under the DOE grant program; a need to raise additional equity to fund the project and Beacon’s other operations in uncertain financial markets; conditions in target markets, including the fact that some ISOs have been slow to comply with FERC’s requirement to update market rules to include new technology such as the Company’s; our ability to obtain site interconnection approvals, landlord approvals, or other zoning and construction approvals in a timely manner; limited experience manufacturing commercial products or supplying frequency regulation services on a commercial basis; limited commercial contracts for revenues to date; the dependence of revenues on the achievement of product optimization, manufacturing and commercialization milestones; dependence on third-party suppliers; intense competition from companies with greater financial resources, especially from companies that are already in the frequency regulation market; possible government regulation that would impede the ability to market products or services or affect market size; possible product liability claims and the negative publicity which could result; any failure to protect intellectual property; retaining key executives and the possible need in the future to hire and retain key executives; the historical volatility of our stock price, as well as the volatility of the stock price of other companies in the energy sector, especially in view of the current situation in the financial markets generally. These factors are elaborated upon and other factors may be disclosed from time to time in Beacon Power filings with the Securities and Exchange Commission. Beacon Power expressly does not undertake any duty to update forward-looking statements. Read this articl e: U.S. Department of Energy Announces $24 Million Smart Grid Stimulus Grant Award to Beacon Power (Business Wire)

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Tough words from Chinese bank regulators sent the Shanghai Index toppling 3.5% last night and also sent the dollar soaring as investors poured out of the risk trade.  The dollar carry remains a focal point of the rally.  Today’s FX View from IB : A slew of overnight woes concerning the health of banks around the world was limited in its support for the U.S. dollar. One year ago that evidence would have been enough to raise the heartbeat of the bears and send the pre-market futures down by 2%. Today, equity index futures continue to point to another positive North American session and the net impact is to provide a prop for the euro rather than the U.S. dollar. The euro also rose after the strongest reading for 15 months in a poll of investor sentiment. The euro is back to unchanged on Monday’s close at $1.4975. Asian markets felt the full impact of a fresh health-scare for Chinese banks. Shanghai stocks slumped 3.5% overnight after the mainland banking regulator warned banks to meet industry capital requirements or else be prepared to face its sanctions. According to media reports, a source with knowledge of the plans says that at least four Chinese lenders have submitted capital raising plans to regulators. An S&P report used in-house metrics to look at risk-adjusted capital ratios of European banks and served up a warning to several houses including UBS, Allied Irish and BBVA. In the meantime, Lloyds Banking Group announced terms of its attempted largest-ever domestic rights issue with a near-60% discount to where its shares are trading. Finally, WestLB – the state-owned regional German lender is reportedly going to be allowed to fail by its majority owners according to a major Frankfurt-journal. The bank said later that it is in discussions with SoFFin, the German financial market stabilization fund to isolate its toxic assets. Yet while all of the above continues to unwind negative news about the health of the financial sector we have to point out that as much as it is newsworthy today, it’s hardly new news. So some major banks are enacting plans to raise capital. Isn’t this a good thing? It is in our minds. Failure to accomplish the feat could be taken as a negative in the event that these entities fail to attract fresh cash and at the same time prevailing investors walk away. Hence our headline today that risk aversion is taking a back seat. The euro rebounded from an overnight low at $1.4888 after a report showed that German business confidence rose in November to a 15-month high. The IFO institute’s reading of sentiment from 7,000 business executives came in strong with a reading of 93.9 and above the expected 92.5. Third quarter manufacturing demand has boosted prospects for growth especially at a time when inventories were allowed to slip. The most significant component of today’s report comes from the 98.9 reading for expectations about the future for the economy. This confirms what we note above that current perceptions reflect buoyancy after the measures aimed at dealing with the stability of the financial sector. While today’s warnings might be necessary to keep a tight rein on the financial sector, it is ultimately beneficial for the ongoing recovery process. The dollar continues to lose ground against the Japanese yen at ¥88.68 with the yen refusing to cede ground against the dollar after as the initial bout of risk aversion appeared to subside. It very much confirms that the dollar’s loss of status is set to continue. The British pound continues to pare earlier losses against the dollar and is up to $1.6583 from an overnight low at $1.6504. Bank of England data shows a modest rise in the number of mortgage approvals while lending to consumers and businesses dropped again. In a quiet Australian session the Aussie dollar came under some selling pressure, reacting quickly to the latest bout of risk aversion as investors continued to lighten the load somewhat on long Aussie positions. At 92.06 U.S. cents the Aussie is firmly off its overnight low of 91.55 cents. Source: IB Follow this link: RISK AVERSION TAKES A BACK SEAT

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WASHINGTON (AP) — The apparent end of the recession and stabilizing financial markets have not cured the banking industry, the Federal Deposit Insurance Corp. said Tuesday. Banks earned $2.8 billion in the third quarter, but loan balances plummeted and the fund that insures their deposits was $8.2 billion in the red. Souring loans continued to hurt bank balance sheets, but they were buoyed by higher operating revenues and a revived market for securities, the FDIC said. The number of banks on the FDIC’s “problem list” rose to 552 from 416 on June 30, the highest level in 16 years. Fifty banks failed during the quarter — the largest number since the second quarter of 1990. The FDIC’s fund that insures bank deposits fell by $18.6 billion, mostly because $21.7 billion was set aside for expected losses on future bank failures. The FDIC voted this month to require banks to prepay three years of deposit insurance premiums at the end of the year to help replenish the dwindling fund, which is at its lowest point on record. The last similar deficit was in Dec. 1991, when a predecessor fund was more than $7 billion in the red. Bank failures this year through 2013 are expected to cost the fund $100 billion — mostly in 2009 and 2010. But depositors’ money — insured up to $250,000 per account — is not at risk, with the FDIC backed by the government. Bank profits returned in the third quarter after a $4.3 billion loss in the previous quarter and $879 million in earnings last year. “While bank and thrift earnings have improved, the effects of the recession continue to be reflected in their financial performance,” FDIC Chairman Sheila Bair said. A 2.8 percent drop-off in loans outstanding — the largest percentage decline on record — showed that credit for consumers and businesses remained tight, she said. “There is no question that credit availability is an important issue for the economic recovery,” Bair said. “We need to see banks making more loans to their business customers,” especially small businesses. Read the original: Banks earn $2.8B in 3Q; insurance fund in the red (AP)

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* Q4 EPS C$1.11, above estimates, vs year-earlier C$1.06 * Announces deal to buy Diners Club from Citigroup * Loan loss provisions C$386 mln vs year-earlier C$465 mln * Shares down in early trade (Adds analysts’ comments, share price, details. In U.S. dollars unless noted) By Andrea Hopkins TORONTO, Nov 24 (Reuters) – Bank of Montreal ( BMO.TO ) reported a higher-than-expected quarterly profit on Tuesday and said it was buying the Diners Club North America credit card business to double its corporate card portfolio. The deal, combined with a 16 percent rise in quarterly earnings, emphasizes the relative strength of Canada’s big lenders as they emerge from the financial crisis with excess capital and solid balance sheets. BMO, Canada’s fourth-largest bank, kicked off the earnings season for the big banks with net income of C$647 million ($610 million), or C$1.11 a share, for its fourth quarter ended Oct. 31, up from C$560 million, or C$1.06, a year earlier. That was well above analysts’ average estimate of 98 Canadian cents a share, according to Thomson Reuters I/B/E/S, and BMO shares rose at the open on the Toronto Stock Exchange before sinking back along with those of the other big banks. BMO shares were down 0.3 percent at C$53.32 in early trade. The Toronto exchange’s financial index was down 0.5 percent. “Earnings were ahead of our expectations on better-than-expected revenues and lower loan loss provisions than expected,” RBC Dominion Securities analyst Andre-Philippe Hardy wrote in a note to clients. Minutes before announcing the surprisingly strong results, Toronto-based BMO said it was buying Diners Club North America credit cards from Citigroup Inc ( C.N ) [ID:nN24290954]. The deal, part of Citigroup’s strategy to shed non-core or unwanted assets, gives BMO exclusive rights to issue Diners Club cards in the United States and Canada. It will also more than double BMO’s corporate card business, as many business travelers use Diners Club cards. The terms of the deal were not disclosed. While BMO said the deal would add nearly $1 billion of receivables and $7.8 billion of card transactions, Barclays Capital analyst John Aiken said the acquisition was more about BMO’s attempts to make further inroads in the U.S. market than about a grab for earnings power. “While this may not be overly material to earnings – representing less than 2 percent of BMO’s business lending portfolio — we do view it as an opportune expansion that leverages its Canadian/U.S. platforms,” Aiken said in a research note.  Continued… See the original post: UPDATE 3-BMO profit up 16 pct, to buy Diners Club business

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By Malcolm Morrison, The Canadian Press TORONTO – North American stock markets got off to a weak start Tuesday after data showed weaker than expected economic growth in the U.S. during the third quarter. Toronto’s S&P/TSX composite dipped 0.8 of a point to 11,623.3 after the U.S. Commerce Department reported the economy grew at an annual rate of 2.8 per cent during the third quarter, compared with a previous government estimate of 3.5 per cent. The new reading was weaker than the 2.9 per cent revised growth rate economists expected. The Canadian dollar was down 0.15 of a cent to 94.56 cents US. There were also concerns about bank capital after China’s central bank warned commercial banks to control their lending. The warning comes ahead of the Beijing government’s annual economic planning meeting and could foreshadow more measures to reduce liquidity in the months ahead. However, the financial news was better in Canada where Bank of Montreal (TSX: BMO.TO ) reported that its fourth-quarter net income rose 16 per cent from year ago levels to $647 million. Earnings per share were $1.11, compared with $1.06 a year earlier. Total revenue in the quarter increased by 6.3 per cent to $176 million while its provision for credit losses decreased to $386 million during the quarter, down $79 million from last year. BMO shares were ahead 77 cents to $54.32 and the financial sector was up 0.3 per cent. Elsewhere on the Canadian earnings front, George Weston Ltd. (TSX: WN.TO ) said on Tuesday its quarterly profit dropped 52 per cent to $86 million or 56 cents a share during the most recent quarter, down from $180 million or $1.29 a share a year ago. Results at North America’s largest baker were hurt by foreign exchange charges. Revenue at the company, which holds a controlling interest in supermarket chain Loblaw Companies, slipped one per cent to $9.78 billion and its shares declined 32 cents to $58.78. The TSX energy sector was off 0.2 per cent as the January crude contract on the New York Mercantile Exchange declined six cents to US$77.50 a barrel. Miniong stocks were negative as the December bullion contract on the Nymex rose $4.40 from Monday’s most recent record high close to US$1,169.10 an ounce while December copper was off one cent to US$3.12 a pound. The TSX Venture Exchange moved 2.92 points lower to 1,413.71. New York markets were weak following the release of the revised GDP data with the Dow Jones industrials down 16.8 points to 10,434.2 after a U.S. house resales report exceeded forecasts and took the blue chip index up 133 points. The Nasdaq composite index was off 4.17 points to 2,171.84 after rising 30 points while the S&P 500 index was down 1.15 points to 1,105.1. Investors are also anxious to see the latest reading on American consumer confidence. Consumer spending accounts for more than two-thirds of all economic activity and a rebound in shopping is considered vital for a strong recovery and the data from the Conference Board is expected to show consumers are still nervous about the economy. The private-sector group’s Consumer Confidence Index for November was likely unchanged at 47.7, compared with October. A reading above 90 would signal the economy is on solid footing. Other data out Tuesday morning showed that U.S. home prices rose slightly in September, the fourth straight monthly increase. The Standard & Poor’s/Case-Shiller home price index of 20 major U.S. cities rose 0.3 per cent to a seasonally adjusted reading of 144.96 in September. Prices rose month-over-month in 11 metro areas, a weaker showing than in recent months. In other corporate news, shares in Canadian software company MKS Inc. (TSX: MKX.TO ) were up 18 cents to $8.99 after it announced it is raising its quarterly cash dividend by 20 per cent to 15 cents after reporting quarterly net income rose to $1.6 million from $1.4 million a year earlier. Revenue declined 10 per cent to $14.7 million and its shares rose 18 cents to $8.99. Aecon Group Inc. (TSX: ARE.TO ) has settled a dispute over the Quito International Airport project, subject to approval by Constitutional Court of Ecuador and other conditions. Project lenders will resume funding for construction but Aecon estimates its earnings from the project will be reduced by 18 per cent. Aecon shares climbed two cents to $14.32. Overseas, the warning from the Chinese central bank sent the Shanghai index tumbling 3.5 per cent – its biggest retreat in three months – as investors fretted over the warning. The index had been up 11.4 per cent so far this month. Elsewhere in Asia, Hong Kong’s Hang Seng index slid 1.5 per cent while Japan’s Nikkei 225 stock average dropped one per cent. London’s FTSE 100 index climbed 0.09 per cent, Frankfurt’s DAX edged 0.16 per cent lower while the Paris CAC 40 down 0.3 per cent. More: Stocks open weak as U.S. third quarter GDP growth revised downward

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NEW YORK–(BUSINESS WIRE)–Western Asset Global Corporate Defined Opportunity Fund Inc. (the “Fund”) announced today that pricing has been completed for its initial public offering. The Fund raised approximately $315.8 million in its common stock offering, assuming full exercise of the underwriters’ overallotment option, which may or may not occur. Its shares began trading today on the New York Stock Exchange under the symbol “GDO.” The Fund’s primary investment objective is to provide current income and then to liquidate and distribute substantially all of the Fund’s net assets to stockholders on or about December 2, 2024. As a secondary objective, the Fund will seek capital appreciation. There can be no assurance the Fund will achieve its investment objectives. The Fund seeks to achieve its investment objectives by investing, under normal market conditions, at least 80% of its managed assets in a portfolio of U.S. and foreign corporate fixed income securities of varying maturities. Under normal market conditions, the Fund will invest at least 40% of its managed assets in fixed income securities of foreign issuers organized or having a principal place of business outside the United States, including in emerging market countries. In addition, the Fund may invest up to 35% of its managed assets in fixed income securities of below investment grade quality. Under normal market conditions, the Fund expects to maintain on an ongoing basis a dollar-weighted average credit quality of portfolio holdings of investment grade quality. “Through an investment in shares of GDO, investors are able to take advantage of opportunities in global credit markets. Also, with exposure to global credit markets, GDO has the opportunity to provide investors with potentially greater diversification in their over-all investment portfolios. We are pleased to expand our closed-end fund offerings with a product that taps into Western Asset’s experienced credit analysts around the world,” stated Matt Schiffman, Head of Retail Americas for Legg Mason. Western Asset Global Corporate Defined Opportunity Fund Inc. is a newly organized, non-diversified, limited term, closed-end management investment company which is advised by Legg Mason Partners Fund Advisor, LLC (“LMPFA”) and subadvised by Western Asset Management Company (“Western Asset”). LMPFA and Western Asset are wholly owned subsidiaries of Legg Mason, Inc. (“Legg Mason”). The underwriting syndicate was led by Citigroup Global Markets Inc., Morgan Stanley & Co. Incorporated, and BoA Merrill Lynch. For more information, please contact the Fund at 1-888-777-0102 or visit the Fund’s web site at www.leggmason.com/cef . About Legg Mason Legg Mason is a global asset management firm with approximately $703 billion in assets under management as of September 30, 2009. The company provides active asset management in many major investment centers throughout the world. Legg Mason is headquartered in Baltimore, Maryland, and its common stock is listed on the New York Stock Exchange (NYSE: LM – News ). About Western Asset Western Asset is one of the world’s premier fixed-income managers. With offices in Pasadena, New York, London, Singapore, Hong Kong, Melbourne and Sao Paolo, Western Asset offers institutional and retail clients a full range of fixed-income products. By devoting all of its resources to fixed income, Western Asset is able to provide a full commitment to its clients in every area of the firm. Western Asset’s long performance track record and global presence has them positioned to continue their commitment to excellence in fixed-income management and client service. As of September 30, 2009, Western Asset had approximately $505.5 billion in assets under management. The Fund is a newly organized, non-diversified, limited term, closed-end management investment company. Investors should consider the investment objectives, risks, charges and expenses of the Fund carefully before investing. The prospectus, which contains this and other information about the Fund, should be read carefully before investing. A copy of the final prospectus relating to these securities may be obtained by contacting your financial advisor. All data and commentary provided in this press release are for informational purposes only. Legg Mason and its affiliates do not engage in selling shares of the Fund. The Fund’s common shares are traded on the New York Stock Exchange. Similar to stocks, the Fund’s share price will fluctuate with market conditions and, at the time of sale, may be worth more or less than the original investment. Shares of closed-end funds often trade at a discount to their net asset value. This press release contains “forward-looking statements” as defined under the U.S. federal securities laws. Generally, the words “believe,” “expect,” “intend,” “estimate,” “anticipate,” “project,” “will,” and similar expressions identify forward-looking statements, which generally are not historical in nature. Forward-looking statements are subject to certain risks and uncertainties that could cause actual future results to differ significantly from the Fund’s present expectations or projections indicated in any forward-looking statements. These risks include, but are not limited to, changes in economic and political conditions; regulatory and legal changes; leverage risk; valuation risk; interest rate risk; tax risk; the volume of sales and purchase of shares; the continuation of investment advisory, administration and other service arrangements; and other risks discussed in the Fund’s filings with the Securities and Exchange Commission. You should not place undue reliance on forward-looking statements, which speak only as of the date they are made. The Fund undertakes no obligation to publicly update or revise any forward-looking statements made herein. There is no assurance that the Fund’s investment objectives will be attained. Read more from the original source: Western Asset Global Corporate Defined Opportunity Fund Inc. Raises $315.8 Million, Starts Trading on the NYSE (Business Wire)

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By Ryan Vlastelica NEW YORK (Reuters) – U.S. stock index futures pointed to a flat open on Tuesday after data showed the U.S. economy grew in the third quarter, but at a slower-than-expected pace. The economy grew at a 2.8 percent annual clip, revised down from 3.5 percent estimated last month, the Commerce Department said. Analysts forecast a 2.9 percent rate. Reduced inventory “sets up for a better fourth quarter GDP with more restocking,” said John Canally, economist at LPL Financial in Boston. “I don’t expect a whole of market reaction. There will be more data later today which will be fresher.” November consumer sentiment data and the September Case/Shiller housing price index are also on tap and could provide insight into how firmly a recovery has taken hold. S&P 500 futures rose 2 points and were modestly below fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures were up 3 points, while Nasdaq 100 futures slid 1.25 points. Hewlett-Packard Co reported a quarterly profit that matched its preliminary results late Monday, and said that while the economy remained challenging, it saw signs of a recovery. (Additional reporting by Richard Leong; editing by Jeffrey Benkoe) The rest is here: Futures little changed after GDP data

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TORONTO (Reuters) – Toronto’s main stock market index could open higher on Tuesday as strong results from Bank of Montreal are expected to shine the spotlight on the Canadian financial sector. Meanwhile, firm gold prices could also help prop up the resource-heavy index. Toronto’s main stock index on Monday pared early gains but ended higher, touching its highest level in nearly 14 months as an early rally in oil prices powered energy stocks, while financials gained ground ahead of a flood of bank earnings reports. Here is some of the news that may affect the market: BANK OF MONTREAL Bank of Montreal said on Tuesday that quarterly profit rose 16 percent as it set aside less money for bad loans. CITIGROUP Citigroup Inc said on Tuesday that it would sell its Diners Club North America credit card business to Canada’s BMO Financial Group, as part of its strategy to shed non-core or unwanted assets. GOLD STEADY Gold inched up on Tuesday as investors favored it as a hedge against medium-term dollar weakness and possible inflation, but remained below the previous session’s record peak as the U.S. currency edged higher. U.S. CRUDE FLAT U.S. crude oil was flat on Tuesday, held down by a firmer dollar, but trade was thin ahead of the U.S. Thanksgiving holiday and data that was expected to show crude stocks rising in the United States. MAGNA INTERNATIONAL Germany’s Porsche aims to cancel a deal that would have Canada’s Magna International build the Porsche Boxster model series under contract, a source familiar with the situation told Reuters. CANADIAN NATIONAL RAILWAY Canadian National Railway Co will implement part of its contract proposals on its Canadian locomotive engineers, the carrier said on Monday. [nN23261031] MANULIFE FINANCIAL Canada’s top life insurer Manulife Financial Corp said it agreed to buy a 49 percent stake in ABN AMRO TEDA Fund Management Co in China for $156 million in cash, following up on pledges to hit the acquisition trail. RIOCAN REIT Canada’s RioCan Real Estate Investment Trust said it plans to sell about 5.5 million units at C$18.35 apiece for gross proceeds of C$100.9 million ($94.7 million). RESEARCH ROUNDUP Following is a summary of research actions on Canadian companies reported by Reuters on Tuesday. * RBC raises Iamgold Corp price target to $21 from $18; Rating Sector Perform * MacQuarie cuts Nexen Inc to Neutral from Outperform * Genuity raises Canadian Western Bank price target to C$27 from C$23; Rating Buy ($1=$1.06 Canadian) (Reporting by Scott Anderson, Editing by Chizu Nomiyama) Read the r est here: TSX may open higher, banks in spotlight

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TEMPE, Ariz.–(BUSINESS WIRE)–US Airways (NYSE: LCC – News ) announced today it has completed a series of transactions with key business partners designed to improve its near-term and future liquidity. The Company will significantly reduce capital expenditures over the next three years, eliminate the need to access aircraft finance markets in 2010 and extend certain debt maturities. These transactions improve projected year-end 2009 liquidity by approximately $150 million and generate, in aggregate, approximately $450 million of projected liquidity improvements by the end of 2010. “This is our third major strategic move in the past 100 days, following announcements of our innovative slot transaction with Delta Air Lines and the realignment of our network to focus on our most profitable flying,” said US Airways Chairman and CEO Doug Parker. “These moves are part of our continuing efforts to improve our balance sheet and return the Company to profitability. Our employees are continuing to run a great airline and doing a terrific job taking care of our customers and, with these strategic initiatives behind us, we believe US Airways is well positioned to take full advantage of the recovering economy.” US Airways Executive Vice President and Chief Financial Officer Derek Kerr stated, “By working with our key business and financial partners, we have structured a series of transactions that improve near-term liquidity by reducing capital spending and deferring certain debt repayments. These transactions also have eliminated the need to fund a fleet replacement program in capital markets that continue to be uncertain and expensive. We appreciate all of the support of our business partners in completing these transactions.” The Company’s actions include the deferral of 54 Airbus aircraft previously scheduled for delivery between 2010 and 2012 that are now to be delivered in 2013 and beyond. These deferral arrangements will reduce the Company’s aircraft capital expenditures over the next three years by approximately $2.5 billion, and reduce near- and medium-term obligations to Airbus and others by approximately $132 million. In addition, commencement of US Airways’ Airbus A350 XWB operations, with aircraft deliveries originally scheduled to start in 2015, will now be postponed until 2017. These deferrals will not significantly alter the airline’s capacity plans as aircraft originally scheduled to be replaced will be retained until the rescheduled new aircraft delivery dates. “Although we will slow deliveries during the next three years, over that period we will continue to modernize our fleet, which is already one of the youngest in the United States. The Company will take delivery of two A320 and two A330 aircraft in 2010 and an additional 24 A320 family aircraft in 2011 and 2012,” said Kerr. “We have financing commitments for all 28 aircraft and believe this is a more manageable delivery rate given the current economic environment.” In addition to the aircraft deferral, US Airways has arranged credit facilities in the amount of $95 million and $180 million of aircraft financing commitments for the 2010 deliveries. Also, the Company has agreed with Barclays to permanently lower the monthly unrestricted cash condition precedent for the advance purchase of frequent flyer miles and defer for 14 months the amortization of $200 million advanced in connection with the previous purchase of miles. US Airways was advised in these transactions by Seabury Securities LLC, a unit of Seabury Group LLC. US Airways, along with US Airways Shuttle and US Airways Express, operates more than 3,000 flights per day and serves more than 190 communities in the U.S., Canada, Europe, the Middle East, the Caribbean and Latin America. The airline employs more than 32,000 aviation professionals worldwide and is a member of the Star Alliance network, which offers its customers more than 19,000 daily flights to 1,071 airports in 171 countries. Together with its US Airways Express partners, the airline serves approximately 80 million passengers each year and operates hubs in Charlotte, N.C., Philadelphia and Phoenix, and a focus city at Ronald Reagan Washington National Airport. And for the eleventh consecutive year, the airline received a Diamond Award for maintenance training excellence from the Federal Aviation Administration for its Charlotte hub line maintenance facility. For more company information, visit usairways.com. (LCCF) Forward-Looking Statements Certain of the statements contained herein should be considered “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements may be identified by words such as “may,” “will,” “expect,” “intend,” “anticipate,” “believe,” “estimate,” “plan,” “could,” “should,” and “continue” and similar terms used in connection with statements regarding the outlook, expected fuel costs, revenue and pricing environment, and expected financial performance of US Airways Group (the “Company”). Such statements regarding future financial and operating results, the Company’s plans, objectives, expectations and intentions, and other statements that are not historical facts. These statements are based upon the current beliefs and expectations of the Company’s management and are subject to significant risks and uncertainties that could cause the Company’s actual results and financial position to differ materially from these statements. Such risks and uncertainties include, but are not limited to, the following: the impact of future significant operating losses; the impact of economic conditions and their impact on passenger demand and related revenues; a reduction in the availability of financing, changes in prevailing interest rates and increased costs of financing; the Company’s high level of fixed obligations and the ability of the Company to obtain and maintain any necessary financing for operations and other purposes and operate pursuant to the terms of its financing facilities (particularly the financial covenants); the impact of fuel price volatility, significant disruptions in fuel supply and further significant increases to fuel prices; the ability of the Company to maintain adequate liquidity; labor costs, relations with unionized employees generally and the impact and outcome of the labor negotiations, including the ability of the Company to complete the integration of the labor groups of the Company and America West Holdings; reliance on vendors and service providers and the ability of the Company to obtain and maintain commercially reasonable terms with those vendors and service providers; reliance on automated systems and the impact of any failure or disruption of these systems; the impact of the integration of the Company’s business units; the impact of changes in the Company’s business model; competitive practices in the industry, including significant fare restructuring activities, capacity reductions or other restructuring or consolidation activities by major airlines; the impact of industry consolidation; the ability to attract and retain qualified personnel; the impact of global instability including the potential impact of current and future hostilities, terrorist attacks, infectious disease outbreaks or other global events; government legislation and regulation, including environmental regulation; the Company’s ability to obtain and maintain adequate facilities and infrastructure to operate and grow the Company’s route network; costs of ongoing data security compliance requirements and the impact of any data security breach; interruptions or disruptions in service at one or more of the Company’s hub airports; the impact of any accident involving the Company’s aircraft; delays in scheduled aircraft deliveries or other loss of anticipated fleet capacity; weather conditions and seasonality of airline travel; the cyclical nature of the airline industry; the impact of insurance costs and disruptions to insurance markets; the impact of foreign currency exchange rate fluctuations; the ability to use NOLs and certain other tax attributes; the ability to maintain contracts critical to the Company’s operations; the ability of the Company to attract and retain customers; and other risks and uncertainties listed from time to time in the Company’s reports to the SEC. There may be other factors not identified above of which the Company is not currently aware that may affect matters discussed in the forward-looking statements, and may also cause actual results to differ materially from those discussed. The Company assumes no obligation to publicly update any forward-looking statement to reflect actual results, changes in assumptions or changes in other factors affecting such estimates other than as required by law. Additional factors that may affect the future results of the Company are set forth in the section entitled “Risk Factors” in the Company’s Report on Form 10-Q for the quarter ended September 30, 2009 and in the Company’s other filings with the SEC, which are available at www.usairways.com . -LCC- Originally posted here: US Airways Completes Major Liquidity Improvement Program (Business Wire)

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MOSCOW and NEW YORK, Nov. 24 /PRNewswire-FirstCall/ – Open Joint Stock Company “Vimpel-Communications” (”VimpelCom” or the “Company”) (NYSE: VIP – News ), a leading international provider of telecommunications services operating in Russia, the Commonwealth of Independent States (CIS) and South-East Asia, today announced its financial and operating results for the quarter ended September 30, 2009. Third Quarter 2009 Highlights and Recent Developments Operational Mobile subscribers increased by 1.7 million versus 2Q09, reaching 65.4 million Successful launch of operations in Vietnam under Beeline brand Agreement signed to enter Laos mobile market 3G presence in all regions of Russia as of November 21, 2009 Financial Net operating revenues reached 71.3 billion Russian rubles, an increase of 3.3% versus 2Q09 OIBDA reached a record 36.0 billion rubles, an increase of 2.9% versus 2Q09 Continued strong consolidated fixed and mobile OIBDA margin of 50.4% Net income attributable to VimpelCom amounted to 13.5 billion rubles Other Interim dividend payment of 190.13 rubles per common share proposed by the Board of Directors Major shareholders agreed to combine their stakes in VimpelCom and Kyivstar in a new company Commenting on the performance of the Company, Boris Nemsic, Chief Executive Officer of VimpelCom, said, “During the third quarter we continued to demonstrate growth in challenging market conditions and delivered a record 71.3 billion rubles in revenues and 36.0 billion rubles in OIBDA with a consolidated fixed and mobile OIBDA margin of 50.4%. We are particularly pleased with the OIBDA performance which demonstrates our ability to increase revenues and control costs in the new economic environment. The number of active mobile subscribers reached 65.4 million, which is 13% more than we had a year ago. We serve 1.9 million fixed and mobile broadband subscribers, which makes us one of the largest broadband providers in Russia and the CIS. Stable operational cash flow strengthened our financial position. As of today, we have repaid more than $2 billion dollars of our debt and fully funded capital expenditures. We continue to optimize our debt portfolio with the non-ruble portion of our debt decreasing to 76% of our total debt, compared with 85% at the beginning of the year. On October 5th, 2009, Altimo and Telenor agreed to combine their interests in VimpelCom and Kyivstar, paving the way for the creation of one of the largest telecom operators in the emerging markets. Management of VimpelCom welcomes this transaction and believes that the transaction, when completed, will bring benefits to our shareholders, employees and customers.” Key Consolidated Financial and Operating Results* CONSOLIDATED OPERATIONS* (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ———————— —— —— —– —— —– Net operating revenues 71,338 68,933 3.5% 69,035 3.3% ———————- —— —— — —— — OIBDA 35,980 33,636 7.0% 34,958 2.9% —– —— —— — —— — OIBDA margin, % 50.4% 48.8% 50.6% ————— —- —- —- Operating income 22,299 21,568 3.4% 22,250 0.2% —————- —— —— — —— — Operating income margin, % 31.3% 31.3% 32.2% ————————– —- —- —- SG&A 18,760 18,167 3.3% 18,458 1.6% —- —— —— — —— — including Sales & Marketing Expenses 5,766 5,867 -1.7% 5,414 6.5% ——————- —– —– —- —– — including General & Administrative Costs 12,994 12,300 5.6% 13,044 -0.4% ——————— —— —— — —— —- SG&A percentage 26.3% 26.4% 26.7% ————— —- —- —- Net income attributable to VimpelCom 13,513 6,513 107.5% 22,599 -40.2% ————————– —— —– —– —— —– Net income attributable to VimpelCom per common share, basic (RUR) 266.83 128.68 446.43 ————————– —— —— —— Net income attributable to VimpelCom per ADS equivalent, basic (RUR) 13.34 6.43 22.32 ————————– —– —- —– Capital expenditures 3,842 16,799 -77.1% 5,027 -23.6% ——————– —– —— —– —– —– Mobile subscribers (’000) 65,358 57,758 13.2% 63,676 2.6% ————————- —— —— —- —— — Broadband subscribers*) (’000) 1,930 785 145.9% 1,739 11.0% ———————– —– — —– —– —- * See definitions in Attachment A. Y-o-y stands for 3Q09 vs. 3Q08 comparison while q-o-q stands for 3Q09 vs. 2Q09. Net operating revenues 3Q ‘09* Russia CIS SEA Eliminations Total (RUR, millions) —— — — ———— —– ————— Mobile business 51,502 9,221 74 -138 60,659 ————— —— —– — —- —— Fixed business 13,583 2,167 0 -608 15,142 ————– —— —– — —- —— Eliminations -3,874 -312 0 -277 -4,463 ———— —— —- — —- —— Total net operating revenue 61,211 11,076 74 -1,023 71,338 ————————— —— —— — —— —— * Due to the increasing integration between different parts of our business, we include inter-company transactions in the reported revenues of geographic and business segments and indicate the amount of inter-company eliminations within and between the segments. The quarterly net operating revenues increased by 3.5% year-on-year and 3.3% as compared with the previous quarter demonstrating the strength of our core business. Continued focus on operational efficiency helped us to maintain a strong consolidated fixed and mobile OIBDA margin of 50.4%. We continue to maintain solid operational cash flow, which provides a basis for further investment in the development of our business. We invested 3.8 billion rubles during the third quarter of 2009. Taking into consideration the further strengthening of the Russian ruble, we have recalculated our CAPEX guidance for 2009 and expect CAPEX to be in the range of 10%-12% of our 2009 annual revenue. During the third quarter we repaid $690 million of debt. Our net debt continued to decline from $6.3 billion at the end of the second quarter down to $5.5 billion at the end of the third quarter. Our quarterly net income attributable to VimpelCom amounted to 13.5 billion rubles, including a modest 0.7 billion ruble net foreign exchange gain due to the strengthening of the ruble. Russia – Financial and Operating Results RUSSIA (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ———————- —— —— —– —— —– Net operating revenues 61,211 58,816 4.1% 59,136 3.5% ———————- —— —— — —— — OIBDA 30,951 29,457 5.1% 30,279 2.2% —– —— —— — —— — OIBDA margin, % 50.6% 50.1% 51.2% ————— —- —- —- Operating income 20,724 20,112 3.0% 20,574 0.7% —————- —— —— — —— — Operating income margin, % 33.9% 34.2% 34.8% ———————— —- —- —- SG&A 15,644 15,191 3.0% 15,417 1.5% —- —— —— — —— — including Sales & Marketing Expenses 4,940 4,918 0.4% 4,726 4.5% ——————- —– —– — —– — including General & Administrative Costs 10,704 10,273 4.2% 10,691 0.1% ——————— —— —— — —— — SG&A percentage 25.6% 25.8% 26.1% ————— —- —- —- Net income attributable to VimpelCom 13,754 6,274 119.2% 21,835 -37.0% ———————– —— —– —– —— —– Our quarterly net operating revenues in Russia amounted to 61.2 billion rubles, growing 3.5% quarter-on-quarter. The quarterly net operating revenues in Russia grew 4.1% compared to the exceptionally strong third quarter of 2008, when we reported high revenues from roaming and handset sales. The total Russia fixed and mobile OIBDA increased 5.1% year-on-year and reached 30.9 billion rubles with a total fixed and mobile OIBDA margin of 50.6%. In the mobile segment our revenues increased by 4.2% quarter-on-quarter. Slight upward trends in usage coupled with a seasonal increase from roaming led to an increase in ARPU of 2.8%. Our fixed-line revenues increased by 4.4% quarter-on-quarter. A seasonal decline in the usage by business customers during the summer months was offset by increasing wholesale revenues, which grew by 13.3% quarter-on-quarter. The fixed-line OIBDA margin decreased quarter-on-quarter from 29.6% to 26.4%. As a result the quarterly fixed-line revenues were also impacted by the appreciation of the Russian ruble as part of our contracts in the business segment are denominated in US dollars and Euro. In the third quarter of 2009 the total number of residential broadband subscribers in Russia, including FTTB and mobile broadband, reached 1.8 million, a 140% increase year-on-year and a 10% increase quarter-on-quarter. RUSSIA REVENUES (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ——————————- —— —— —– —— —– Net operating revenues 61,211 58,816 4.1% 59,136 3.5% ———————- —— —— — —— — Mobile revenues 51,502 49,401 4.3% 49,410 4.2% ————— —— —— — —— — Fixed revenues 13,583 10,789 25.9% 13,007 4.4% ————– —— —— —- —— — Eliminations -3,874 -1,374 -3,281 ———— —— —— —— RUSSIA OIBDA DEVELOPMENT*) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q (RUR, millions) —— —— —– —— —– ————— OIBDA Total 30,951 29,457 5.1% 30,279 2.2% ———– —— —— — —— — Mobile OIBDA 27,360 26,772 2.2% 26,427 3.5% ———— —— —— — —— — Fixed OIBDA 3,591 2,685 33.7% 3,852 -6.8% ———– —– —– —- —– —- Total OIBDA margin, % 50.6% 50.1% 51.2% ——————— —- —- —- Mobile OIBDA margin, % 53.1% 54.2% 53.5% ———————- —- —- —- Fixed OIBDA margin, % 26.4% 24.9% 29.6% ——————— —- —- —- RUSSIA OPERATING DEVELOPMENT 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q —————————- —— —— —– —— —– Mobile subscribers (’000)**) 51,028 45,093 13.2% 49,971 2.1% —————————- —— —— —- —— — MOU, min 213.6 228.5 -6.5% 211.8 0.8% ——– —– —– —- —– — ARPU mobile, (RUR) 331.4 368.2 -10.0% 322.5 2.8% —————— —– —– —– —– — Broadband subscribers (’000) 1,833 764 139.9% 1,659 10.5% —————————- —– — —– —– —- * Please find information on respective operating income amounts in the supplementary file FinancialOperatingQ32009.xls on our website at http://www.vimpelcom.com/news/qrep.wbp . ** Starting with this quarterly report, we no longer provide information on subscriber market share. This is because different churn policies used by mobile service providers result in reported subscriber market share figures that could be misleading. CIS – Financial and Operating Results CIS OPERATIONS (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ——————– —— —— —– —— —– Net operating revenues 11,076 10,663 3.9% 10,668 3.8% ———————- —— —— — —— — OIBDA 5,322 4,232 25.8% 4,908 8.4% —– —– —– —- —– — OIBDA margin, % 48.0% 39.7% 46.0% ————— —- —- —- Operating income 2,056 1,509 36.2% 1,929 6.6% —————- —– —– —- —– — Operating income margin, % 18.6% 14.2% 18.1% ———————— —- —- —- SG&A 2,851 2,945 -3.2% 2,844 0.2% —- —– —– —- —– — including Sales & Marketing Expenses 748 949 -21.2% 633 18.2% ——————- — — —– — —- including General & Administrative Costs 2,103 1,996 5.4% 2,211 -4.9% ——————— —– —– — —– —- SG&A percentage 25.7% 27.6% 26.7% ————— —- —- —- Net income attributable to VimpelCom 86 323 -73.4% 841 -89.8% ———————– — — —– — —– Mobile subscribers (’000) 14,235 12,665 12.4% 13,626 4.5% ————————- —— —— —- —— — Broadband subscribers (’000) 97 21 361.9% 80 21.3% ——————— — — —– — —- The total quarterly revenues from the CIS markets increased year-on-year by 3.9% to 11.1 billion rubles. Our continued focus on cost control increased consolidated OIBDA margin for the CIS segment by 2 percentage points to a record high of 48.0%, a remarkable achievement in challenging market conditions. In the third quarter of 2009, we observed a good increase in subscriber numbers across all markets where we operate. Our subscriber base in the CIS reached 14.2 million active users, 12.4% more than a year ago. Net income attributable to VimpelCom in the CIS segment reached 86 million rubles in the third quarter, with a modest impact from the foreign exchange gain as compared with the second quarter of 2009. CIS Revenues Development KAZAKHSTAN (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ————————– —— —— —– —— —– Net operating revenues 5,387 4,815 11.9% 5,061 6.4% ———————- —– —– —- —– — Mobile 5,311 4,750 11.8% 4,988 6.5% —— —– —– —- —– — Fixed 211 146 44.5% 190 11.1% —– — — —- — —- Elimination -135 -81 -117 ———– —- — —- Net operating revenues (KZT, millions) 25,928 23,830 8.8% 23,679 9.5% —————————- —— —— — —— — UKRAINE (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ———————– —— —— —– —— —– Net operating revenues 1,773 2,283 -22.3% 1,645 7.8% ———————- —– —– —– —– — Mobile 1,066 1,653 -35.5% 956 11.5% —— —– —– —– — —- Fixed 879 787 11.7% 800 9.9% —– — — —- — — Elimination -172 -157 -111 ———– —- —- —- Net operating revenues (UAH, millions) 442 456 -3.1% 390 13.3% —————————- — — —- — —- ARMENIA (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ———————– —— —— —– —— —– Net operating revenues 1,611 1,667 -3.4% 1,584 1.7% ———————- —– —– —- —– — Mobile 637 764 -16.6% 634 0.5% —— — — —– — — Fixed 974 903 7.9% 950 2.5% —– — — — — — Elimination 0 0 0 ———– — — — Net operating revenues (AMD, millions) 19,167 20,786 -7.8% 18,253 5.0% —————————- —— —— —- —— — UZBEKISTAN (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ————————– —— —— —– —— —– Net operating revenues 1,568 1,416 10.7% 1,693 -7.4% ———————- —– —– —- —– —- Mobile 1,467 1,345 9.1% 1,594 -8.0% —— —– —– — —– —- Fixed 103 71 45.1% 100 3.0% —– — — —- — — Elimination -2 0 -1 ———– — — — Net operating revenues (US$, millions) 50 58 -13.8% 53 -5.7% —————————- — — —– — —- TAJIKISTAN (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ————————– —— —— —– —— —– Mobile net operating revenues 468 358 30.7% 461 1.5% —————————– — — —- — — Mobile net operating revenues (US$, millions) 14.9 14.8 0.7% 13.7 8.8% —————————– —- —- — —- — GEORGIA (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ———————– —— —— —– —— —– Mobile net operating revenues 279 131 113.0% 229 21.8% —————————– — — —– — —- Mobile net operating revenues (GEL, millions) 14.9 7.6 96.1% 11.8 26.3% —————————– —- — —- —- —- CIS (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ——————- —— —— —– —— —– Net operating revenues 11,076 10,663 3.9% 10,668 3.8% ———————- —— —— — —— — Mobile 9,221 8,999 2.5% 8,859 4.1% —— —– —– — —– — Fixed 2,167 1,907 13.6% 2,040 6.2% —– —– —– —- —– — Elimination -312 -243 -231 ———– —- —- —- CIS OIBDA Development* KAZAKHSTAN (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ————————– —— —— —– —— —– OIBDA total 3,187 2,573 23.9% 2,745 16.1% ———– —– —– —- —– —- Mobile 3,064 2,495 22.8% 2,643 15.9% —— —– —– —- —– —- Fixed 123 78 57.7% 102 20.6% —– — — —- — —- OIBDA margin, % 59.2% 53.4% 54.2% ————— —- —- —- UKRAINE (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ———————– —— —— —– —— —– OIBDA total 380 -40 n/a 322 18.0% ———– — — — — —- Mobile 140 -215 n/a 82 70.7% —— — —- — — —- Fixed 240 175 37.1% 240 0.0% —– — — —- — — OIBDA margin, % 21.4% n/a 19.6% ————— —- — —- ARMENIA (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ———————– —— —— —– —— —– OIBDA total 825 813 1.5% 799 3.3% ———– — — — — — Mobile 306 337 -9.2% 298 2.7% —— — — —- — — Fixed 519 476 9.0% 501 3.6% —– — — — — — OIBDA margin, % 51.2% 48.8% 50.4% ————— —- —- —- UZBEKISTAN (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ————————– —— —— —– —— —– OIBDA total 738 798 -7.5% 865 -14.7% ———– — — —- — —– Mobile 696 774 -10.1% 825 -15.6% —— — — —– — —– Fixed 42 24 75.0% 40 5.0% —– — — —- — — OIBDA margin, % 47.1% 56.4% 51.1% ————— —- —- —- TAJIKISTAN (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ————————– —— —— —– —— —– Mobile OIBDA 162 115 40.9% 173 -6.4% ———— — — —- — —- Mobile OIBDA margin, % 34.6% 32.1% 37.5% ———————- —- —- —- GEORGIA (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ———————– —— —— —– —— —– Mobile OIBDA 30 -27 n/a 4 650.0% ———— — — — — —– Mobile OIBDA margin, % 10.8% n/a 1.7% ———————- —- — — CIS (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ——————- —— —— —– —— —– OIBDA total 5,322 4,232 25.8% 4,908 8.4% ———– —– —– —- —– — Mobile 4,398 3,479 26.4% 4,025 9.3% —— —– —– —- —– — Fixed 924 753 22.7% 883 4.6% —– — — —- — — OIBDA margin, % 48.0% 39.7% 46.0% ————— —- —- —- * Please find information on respective operating income amounts in the supplementary file FinancialOperatingQ32009.xls on our website at http://www.vimpelcom.com/news/qrep.wbp. CIS Operating Highlights KAZAKHSTAN 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ———- —— —— —– —— —– Mobile subscribers*) (’000) 6,835 5,614 21.7% 6,635 3.0% ————————— —– —– —- —– — MOU, min 98.1 108.1 -9.3% 90.7 8.2% ——– —- —– —- —- — ARPU mobile, (RUR) 257.9 294.1 -12.3% 253.6 1.7% —————— —– —– —– —– — ARPU mobile, (KZT) 1,240.7 1,455.4 -14.8% 1,187.1 4.5% —————— ——- ——- —– ——- — Broadband subscribers (’000) 0.3 n/a 0.3 0.0% —————————- — — — — UKRAINE 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ——- —— —— —– —— —– Mobile subscribers*) (’000) 2,199 2,403 -8.5% 1,934 13.7% ————————— —– —– —- —– —- MOU, min 203.7 261.5 -22.1% 217.8 -6.5% ——– —– —– —– —– —- ARPU mobile, (RUR) 168.3 234.9 -28.4% 166.8 0.9% —————— —– —– —– —– — ARPU mobile, (UAH) 42.0 47.4 -11.4% 39.7 5.8% —————— —- —- —– —- — Broadband subscribers (’000) 70 16 337.5% 53 32.1% —————————- — — —– — —- ARMENIA 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ——- —— —— —– —— —– Mobile subscribers*) (’000) 502 784 -36.0% 486 3.3% ————————— — — —– — — MOU, min 269.0 139.9 92.3% 238.4 12.8% ——– —– —– —- —– —- ARPU mobile, (RUR) 429.7 336.9 27.5% 436.9 -1.6% —————— —– —– —- —– —- ARPU mobile, (AMD) 5,117.2 4,200.1 21.8% 5,034.7 1.6% —————— ——- ——- —- ——- — Broadband subscribers (’000) 18.1 5.4 235.2% 19.2 -5.7% —————————- —- — —– —- —- UZBEKISTAN 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ———- —— —— —– —— —– Mobile subscribers*) (’000) 3,652 3,148 16.0% 3,605 1.3% ————————— —– —– —- —– — MOU, min 409.3 298.5 37.1% 225.6 81.4% ——– —– —– —- —– —- ARPU mobile, (RUR) 140.7 157.5 -10.7% 150.6 -6.6% —————— —– —– —– —– —- ARPU mobile, (US$) 4.5 6.5 -30.8% 4.7 -4.3% —————— — — —– — —- Broadband subscribers (’000) 8.3 n/a 7.6 9.2% —————————- — — — — TAJIKISTAN 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ———- —— —— —– —— —– Mobile subscribers*) (’000) 706 527 34.0% 677 4.3% ————————— — — —- — — MOU, min 173.3 255.9 -32.3% 173.1 0.1% ——– —– —– —– —– — ARPU mobile, (RUR) 224.1 250.7 -10.6% 221.6 1.1% —————— —– —– —– —– — ARPU mobile, (US$) 7.2 10.4 -30.8% 6.9 4.3% —————— — —- —– — — GEORGIA 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ——- —— —— —– —— —– Mobile subscribers*) (’000) 341 189 80.4% 289 18.0% ————————— — — —- — —- MOU, min 129.3 109.8 17.8% 123.1 5.0% ——– —– —– —- —– — ARPU mobile, (RUR) 288.5 238.9 20.8% 283.6 1.7% —————— —– —– —- —– — ARPU mobile, (GEL) 15.4 14.0 10.0% 14.5 6.2% —————— —- —- —- —- — * Starting with this quarterly report, we no longer provide information on subscriber market share. This is because different churn policies used by mobile service providers result in reported subscriber market share figures that could be misleading. South-East Asia Cambodian operations have been actively developing since our launch in May 2009. As of the third quarter of 2009, our services are available in the 17 largest provinces reaching 42% of the country’s population. By the end of 2009, we plan to expand coverage to reach more than two thirds of the country’s population. According to the latest independent research Beeline brand awareness was ranked third among 9 mobile operators in Cambodia with brand awareness at 62% on a country-wide level and 98% in the capital. Two months after the network launch in Vietnam, our networks cover the capital and the two largest cities as well as the 8 most populated provinces. By the end of January 2010, we plan to cover more than 40 provinces of Vietnam with a population of about 41 million. Our distribution network in Vietnam was extended to more than 10,000 points of sales including traditional retail outlets and new channels like Branded Trade Counters. According to the latest independent research, in the three largest cities of Vietnam the Beeline brand has reached 80% awareness level among the 15-65 year-old audience. SEA*) (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ——————— —— —— —– —— —– Net operating revenues 74 0 n/a 28 164.3% ———————- — — — — —– OIBDA total -234 -4 n/a -174 n/a ———– —- — — —- — *) See definitions in Attachment A. For more information on financial and operating data for specific countries, please refer to the supplementary file FinancialOperatingQ32009.xls on our website at http://www.vimpelcom.com/news/qrep.wbp. The Company’s management will discuss its third quarter 2009 results during a conference call and slide presentation on November 24, 2009 at 6:30 pm Moscow time (10:30 am US ET). The call and slide presentation may be accessed via webcast at the following URL address http://www.vimpelcom.com . The conference call replay will be available through December 1, 2009. The slide presentation webcast will also be available for download on VimpelCom’s website http://www.vimpelcom.com . The VimpelCom Group consists of telecommunications operators providing voice and data services through a range of mobile, fixed and broadband technologies. The Group includes companies operating in Russia, Kazakhstan, Ukraine, Uzbekistan, Tajikistan, Georgia, Armenia, as well as Vietnam and Cambodia, in territories with a total population of about 340 million. VimpelCom was the first Russian company to list its shares on the New York Stock Exchange (”NYSE”). VimpelCom’s ADSs are listed on the NYSE under the symbol “VIP”. This press release contains “forward-looking statements”, as the phrase is defined in Section 27A of the Securities Act and Section 21E of the Exchange Act. These statements relate to the proposed combination with Kyivstar and its benefits, the Company’s 2009 capital expenditures and the Company’s development plans in Cambodia and Vietnam. These and other forward-looking statements are based on management’s best assessment of the Company’s strategic and financial position and of future market conditions and trends. These discussions involve risks and uncertainties. The actual outcome may differ materially from these statements as a result of continued volatility in the economies in the markets in which the Company operates, unforeseen developments from competition, governmental regulation of the telecommunications industries, general political uncertainties in the markets in which the Company operates and/or litigation with third parties. The actual outcome may also differ materially if the Company is unable to obtain all necessary corporate approvals relating to its business, if the Company is unable to successfully integrate newly-acquired businesses, including Golden Telecom, and other factors. There can be no assurance that such risks and uncertainties will not have a material adverse effect on the VimpelCom Group. Certain factors that could cause actual results to differ materially from those discussed in any forward-looking statements include the risks described in the Company’s Annual Report on Form 20-F for the year ended December 31, 2008 and other public filings made by the Company with the United States Securities and Exchange Commission, which risk factors are incorporated herein by reference. VimpelCom disclaims any obligation to update developments of these risk factors or to announce publicly any revision to any of the forward-looking statements contained in this release, or to make corrections to reflect future events or developments. IMPORTANT NOTICE: The proposed exchange offer described in this communication has not yet commenced, and the description of the proposed exchange offer contained in this communication is not an offer to buy or the solicitation of an offer to sell securities. If the proposed exchange offer is commenced, the Company expects that VimpelCom Ltd. will file with the SEC a registration statement and other related materials with respect to the proposed exchange offer, and the Company will file with the SEC a solicitation/recommendation statement on Schedule 14D-9 with respect to the proposed exchange offer. Investors and shareholders are urged to read the registration statement and other related materials, the solicitation/recommendation statement on Schedule 14D-9 and any amendments, exhibits or other applicable documents regarding the proposed exchange offer if and when they become available because they will contain important information. Those materials will be made available to the Company’s shareholders at no expense to them. In addition, all of those materials (and all other exchange offer documents filed with the SEC) will be made available at no charge on the SEC’s website at www.sec.gov . – Definitions and tables are attached – Attachment A: Definitions Mobile subscribers are those subscribers in the registered subscriber base who were a party to a revenue generating activity in the past three months and remain in the base at the end of the reported period, except for the subscriber base in Cambodia which is calculated on a one month basis. Such activities include all incoming and outgoing calls, subscriber fee accruals, debits related to service, outgoing SMS, MMS, data transmission and receipt sessions, but do not include incoming SMS and MMS sent by our Company or abandoned calls. Total number of mobile subscribers also includes subscribers using mobile internet service via USB modems. Each ADS represents 0.05 of one share of common stock. This ratio was established effective August 21, 2007. ARPU (Monthly Average Revenue per User), a non-U.S. GAAP financial measure, is calculated by dividing the Company’s service revenue during the relevant period, including roaming revenue and interconnect revenue, but excluding revenue from connection fees, sales of handsets and accessories and other non-service revenue, by the average number of the Company’s subscribers during the period and dividing by the number of months in that period. The Company believes that ARPU provides useful information to investors because it is an indicator of the performance of the Company’s business operations and assists management in budgeting. The Company also believes that ARPU provides management with useful information concerning usage and acceptance of the Company’s services. ARPU should not be viewed in isolation or an alternative to other figures reported under U.S. GAAP. Broadband subscribers are those subscribers in the registered subscriber base who were a party to a revenue generating activity in the past three months. Such activities include monthly internet access using FTTB, xDSL and WiFi technologies as well as mobile internet service via USB modems. CIS Geographic Segment for the purpose of VimpelCom reporting includes our operations in the following countries: Kazakhstan, Ukraine, Uzbekistan, Tajikistan, Armenia and Georgia Fixed-line subscriber is an authorized user of fixed-line communications services. General and administrative costs (G&A) include salaries and outsourcing costs, including related social contributions required by Russian law; stock price-based compensation expenses; repair and maintenance expenses; rent, including lease payments for base station sites; utilities; other miscellaneous expenses, such as insurance, operating taxes, license fees, and accounting, audit and legal fees. Households passed are households located within buildings, in which indoor installation of all the FTTB equipment necessary to install terminal residential equipment has been completed. Mobile services are wireless voice and data transmission services excluding WiFi. MOU (Monthly Average Minutes of Use per User) is calculated by dividing the total number of minutes of usage for incoming and outgoing calls during the relevant period (excluding guest roamers) by the average number of mobile subscribers during the period and dividing by the number of months in that period. OIBDA is a non-U.S. GAAP financial measure. OIBDA, previously referred to as EBITDA by the Company, is defined as operating income before depreciation, amortization and impairment loss. The Company believes that OIBDA provides useful information to investors because it is an indicator of the strength and performance of our business operations, including our ability to finance capital expenditures, acquisitions and other investments and our ability to incur and service debt. While depreciation, amortization and impairment loss are considered operating costs under U.S. GAAP, these expenses primarily represent the non-cash current period allocation of costs associated with long-lived assets acquired or constructed in prior periods. Our OIBDA calculations are commonly used as bases for some investors, analysts and credit rating agencies to evaluate and compare the periodic and future operating performance and value of companies within the telecommunications industry. OIBDA should not be considered in isolation as an alternative to net income attributable to VimpelCom, operating income or any other measure of performance under U.S. GAAP. OIBDA does not include our need to replace our capital equipment over time. Reconciliation of OIBDA to operating income, the most directly comparable U.S. GAAP financial measure, is presented below in the reconciliation tables section. OIBDA margin is OIBDA expressed as a percentage of net operating revenues. Reconciliation of OIBDA margin to operating income as a percentage of net operating revenues, the most directly comparable U.S. GAAP financial measure, is presented below in the reconciliation tables section. Prepaid subscribers are those subscribers who pay for their services in advance. Roaming revenues include both revenues from VimpelCom customers who roam outside of home country network and revenues from other wireless carriers for roaming by their customers on VimpelCom’s network. Sales and marketing costs (S&M) include marketing, advertising and dealer commissions expenses. Take-up rate for the FTTB network is calculated by dividing the number of FTTB subscribers by the total number of households passed. VAS (value added services) includes short messages (”SMS”), multimedia messages (”MMS”), caller number identification, call waiting, data transmission, mobile Internet, downloadable content and other services. Capital expenditures (Capex) – purchases of new equipment, new construction, upgrades, software, other long lived assets and related reasonable costs incurred prior to intended use of the non current asset, accounted at the earliest event of advance payment or delivery. Long-lived assets acquired in business combinations are not included in capital expenditures. SEA – VimpelCom operations in South-East Asia, which include operations in Cambodia and VimpelCom’s respective equity in net results of operations of the Company’s Vietnamese associate GTEL-Mobile JSC (”GTEL-Mobile”). Net debt is calculated as the sum of short-term debt and long-term debt minus cash and cash equivalents. Attachment B: VimpelCom financial statements Open Joint Stock Company “Vimpel-Communications” Unaudited Condensed Consolidated Statements of Income Three months ended Nine months ended September 30, September 30, 2009 2008 2009 2008 —- —- —- —- (In millions of Russian rubles, except share (ADS) amounts) Operating revenues: Service revenues 70,359 67,913 204,047 180,516 Sales of equipment and accessories 863 949 2,885 1,054 Other revenues 173 123 475 317 — — — — Total operating revenues 71,395 68,985 207,407 181,887 Revenue based tax (57) (52) (191) (132) — — —- —- Net operating revenues 71,338 68,933 207,216 181,755 Operating expenses: Service costs 15,306 15,916 44,460 40,462 Cost of equipment and accessories 886 921 2,841 1,016 Selling, general and administrative expenses 18,760 18,167 55,424 49,265 Depreciation 11,452 9,687 32,355 27,445 Amortization 2,229 2,381 6,934 6,399 Provision for doubtful accounts 406 293 1,387 1,172 — — —– —– Total operating expenses 49,039 47,365 143,401 125,759 —— —— ——- ——- Operating income 22,299 21,568 63,815 55,996 Other income and expenses: Interest income 242 436 1,342 1,376 Net foreign exchange gain/ (loss) 693 (8,269) (12,304) (3,173) Interest expense (4,914) (3,439) (14,074) (8,220) Equity in net gain/(loss) of associates 152 65 (862) 65 Other (expenses)/ income, net (105) (181) (290) (438) —- —- —- —- Total other income and expenses (3,932) (11,388) (26,188) (10,390) —— ——- ——- ——- Income before income taxes and noncontrolling interest 18,367 10,180 37,627 45,606 Income tax expense 4,809 3,359 10,127 12,326 —– —– —— —— Net income 13,558 6,821 27,500 33,280 Net income/(loss) attributable to the noncontrolling interest 45 308 (98) 1,071 — — — —– Net income attributable to VimpelCom 13,513 6,513 27,598 32,209 ====== ===== ====== ====== Basic EPS: Net income attributable to VimpelCom per common share 266.83 128.68 545.11 634.94 ====== ====== ====== ====== Weighted average common shares outstanding (thousand) 50,643 50,615 50,628 50,728 Net income attributable to VimpelCom per ADS equivalent 13.34 6.43 27.26 31.75 ===== ==== ===== ===== Diluted EPS: Net income attributable to VimpelCom per common share 261.01 128.68 525.36 634.94 ====== ====== ====== ====== Weighted average diluted shares (thousand) 51,771 50,615 52,532 50,728 Net income attributable to VimpelCom per ADS equivalent 13.05 6.43 26.27 31.75 ===== ==== ===== ===== Open Joint Stock Company “Vimpel-Communications” Unaudited Condensed Consolidated Balance Sheets September December 30, 31, 2009 2008 —- —- (In millions of Russian rubles, except share amounts) Assets Current assets: Cash and cash equivalents 75,902 26,873 Trade accounts receivable, net of allowance for doubtful accounts 13,341 13,974 Inventory 2,461 4,191 Deferred income taxes 2,104 2,432 Input value added tax 3,994 5,349 Due from related parties 8,509 4,942 Other current assets 5,924 12,941 —– —— Total current assets 112,235 70,702 Property and equipment, net 168,407 188,778 Telecommunications licenses, net 17,862 22,470 Goodwill 98,930 102,148 Other intangible assets, net 21,996 25,935 Software, net 12,584 16,134 Investments in associates 13,801 14,501 Other assets 22,707 21,314 —— —— Total assets 468,522 461,982 ======= ======= Liabilities and equity Current liabilities: Accounts payable 15,198 26,409 Due to employees 3,343 3,108 Due to related parties 502 142 Accrued liabilities 11,646 8,484 Taxes payable 10,476 4,471 Customer advances, net of VAT 9,302 12,492 Customer deposits 824 868 Short-term debt 74,516 56,093 —— —— Total current liabilities 125,807 112,067 Deferred income taxes 16,453 18,934 Long-term debt 168,293 191,963 Other non-current liabilities 5,266 3,608 Commitments, contingencies and uncertainties – - Equity: Convertible voting preferred stock (.005 rubles nominal value per share), 10,000,000 shares authorized; 6,426,600 shares issued and outstanding – - Common stock (.005 rubles nominal value per share), 90,000,000 shares authorized; 51,281,022 shares issued (December 31, 2008: 51,281,022); 50,683,660 shares outstanding (December 31, 2008: 50,617,408) 3 3 Additional paid-in capital 42,688 42,624 Retained earnings 115,194 87,599 Accumulated other comprehensive (loss)/income (5,105) 3,992 Treasury stock, at cost, 597,362 shares of common stock (December 31, 2008: 663,614) (5,692) (5,983) —— —— Total VimpelCom shareholders’ equity 147,088 128,235 Noncontrolling interest 5,615 7,175 —– —– Total equity 152,703 135,410 ——- ——- Total liabilities and equity 468,522 461,982 ======= ======= Open Joint Stock Company “Vimpel-Communications” Unaudited Condensed Consolidated Statements of Cash Flows Nine months ended September 30, 2009 2008 —- —- (In millions of Russian rubles) Operating activities Net cash provided by operating activities 88,998 62,117 Investing activities Purchases of property and equipment (15,699) (33,206) Purchases of intangible assets (435) (1,747) Purchases of software (4,180) (5,093) Acquisition of subsidiaries, net of cash acquired – (100,348) Late payment for investment in associate (389) – Exercise of escrow cash deposit – 4,856 Loan granted – (8,491) Short-term deposits – (2,368) Purchases of other assets, net (958) (1,578) —- —— Net cash used in investing activities (21,661) (147,975) Financing activities Proceeds from bank and other loans 38,920 130,718 Proceeds from sale of treasury stock – 608 Repayments of bank and other loans (54,817) (10,227) Payments of fees in respect of debt issues (1,671) (1,322) Net proceeds from employee stock options 171 – Purchase of noncontrolling interest in consolidated subsidiaries (14) (23,462) Payment of dividends to noncontrolling party (23) (14,240) Purchase of treasury stock – (2,751) — —— Net cash (used in)/provided by financing activities (17,434) 79,324 Effect of exchange rate changes on cash and cash equivalents (875) 259 —- — Net increase/(decrease) in cash and cash equivalents 49,029 (6,275) Cash and cash equivalents at beginning of period 26,873 24,637 —— —— Cash and cash equivalents at end of period 75,902 18,362 ====== ====== Supplemental cash flow information Cash paid during the period: Income tax 8,917 12,603 Interest 9,335 4,905 Non-cash activities: Equipment acquired under financing agreements 6 1,448 Accounts payable for equipment and other long-lived assets 3,856 7,495 Acquisitions : Fair value of assets acquired – 64,159 Fair value of noncontrolling interest acquired – 4,968 Difference between the amount paid and the fair value of net assets acquired – 85,062 Consideration for the acquisition of subsidiaries – (129,430) — ——– Change in fair value of liabilities assumed – 24,759 === ====== Attachment C: Reconciliation Tables (Unaudited) Reconciliation of Consolidated OIBDA (In millions of Russian rubles) OIBDA Consolidated Total 3Q ‘09 3Q ‘08 2Q ‘09 ———————— —— —— —— OIBDA 35,980 33,636 34,958 —– —— —— —— Depreciation (11,452) (9,687) (10,451) ———— ——- —— ——- Amortization (2,229) (2,381) (2,257) ———— —— —— —— Operating income 22,299 21,568 22,250 —————- —— —— —— Reconciliation of OIBDA Margin OIBDA Margin Consolidated Total 3Q ‘09 3Q ‘08 2Q ‘09 ——————————- —— —— —— OIBDA margin 50.4% 48.8% 50.6% ———— —- —- —- Less: Depreciation as a percentage of net operating revenues (16.0%) (14.0%) (15.1%) ———————————- ——- ——- ——- Less: Amortization as a percentage of net operating revenues (3.1%) (3.5%) (3.3%) ———————————- —— —— —— Operating income as a percentage of net operating revenues 31.3% 31.3% 32.2% ———————————– —- —- —- Attachment D: Capex Development CAPEX (RUR, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ——————— —— —— —– —— —– Total capex 3,842 16,799 -77.1% 5,027 -23.6% ———– —– —— —– —– —– Russia 2,827 12,224 -76.9% 3,440 -17.8% —— —– —— —– —– —– CIS 756 4,527 -83.3% 817 -7.5% — — —– —– — —- Kazakhstan 310 1,868 -83.4% 376 -17.6% ———- — —– —– — —– Ukraine 95 1,137 -91.6% 95 0.0% ——- — —– —– — — Armenia 48 462 -89.6% 12 300.0% ——- — — —– — —– Uzbekistan 207 688 -69.9% 241 -14.1% ———- — — —– — —– Tajikistan 16 156 -89.7% 24 -33.3% ———- — — —– — —– Georgia 80 216 -63.0% 69 15.9% ——- — — —– — —- SEA 258 9 2767% 761 -66.1% — — — —- — —– Attachment E: Key Financial Results in US Dollars (Convenience Translation) CONSOLIDATED OPERATIONS (US$, millions) 3Q ‘09 3Q ‘08 y-o-y 2Q ‘09 q-o-q ———————– —— —— —– —— —– Net operating revenues 2,277 2,843 -19.9% 2,143 6.3% ———————- —– —– —– —– — OIBDA 1,149 1,388 -17.2% 1,085 5.9% —– —– —– —– —– — OIBDA margin, % 50.5% 48.8% 50.6% ————— —- —- —- Operating income 712 890 -20.0% 691 3.0% —————- — — —– — — Operating income margin, % 31.3% 31.3% 32.2% ———————— —- —- —- SG&A 599 749 -20.0% 573 4.5% —- — — —– — — including Sales & Marketing Expenses 184 242 -24.0% 168 9.5% ——————- — — —– — — including General & Administrative Costs 415 507 -18.1% 405 2.5% ——————— — — —– — — SG&A percentage 26.3% 26.3% 26.7% ————— —- —- —- Net income attributable to VimpelCom 431 269 60.2% 702 -38.6% ———————– — — —- — —– Net income attributable to VimpelCom per common share, basic (US$) 8.52 5.31 13.86 ———————— —- —- —– Net income attributable to VimpelCom per ADS equivalent, basic (US$) 0.43 0.27 0.69 ———————— —- —- —- Capital expenditures 123 692.9 -82.2% 156.0 -21.2% ——————– — —– —– —– —– Attachment F: Average Rates of Functional Currencies to Ruble* Functional Currency/ 1 RUR 1Q ‘08 2Q ‘08 3Q ‘08 4Q ‘08 1Q ‘09 2Q ‘09 3Q ‘09 ————— —— —— —— —— —— —— —— Kazakhstan KZT 4.9690 5.1038 4.9540 4.4077 4.0948 4.6771 4.8200 ———- — —— —— —— —— —— —— —— Ukraine UAH 0.2081 0.2101 0.2003 0.2274 0.2281 0.2376 0.2496 ——- — —— —— —— —— —— —— —— Tajikistan USD 0.0412 0.0423 0.0412 0.0367 0.0295 0.0311 0.0319 ———- — —— —— —— —— —— —— —— Uzbekistan USD 0.0412 0.0423 0.0412 0.0367 0.0295 0.0311 0.0319 ———- — —— —— —— —— —— —— —— Armenia AMD 12.6926 13.0012 12.4664 11.2309 9.6090 11.5227 11.9095 ——- — ——- ——- ——- ——- —— ——- ——- Georgia GEL 0.0641 0.0612 0.0582 0.0568 0.0495 0.0515 0.0535 ——- — —— —— —— —— —— —— —— Cambodia USD 0.0311 0.0319 ——– — —— —— * Functional currencies in Tajikistan, Uzbekistan and Cambodia are US dollars. See the rest here: VimpelCom Announces Third Quarter 2009 Financial and Operating Results (PR Newswire)

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VimpelCom Announces Third Quarter 2009 Financial and Operating Results (PR Newswire)

By Jeremy Gaunt, European Investment Correspondent LONDON (Reuters) – Financial markets did a quick about-face from the previous session’s patterns on Tuesday with stocks falling, the dollar recovering some losses and gold dropping back a bit from record highs. Investors were generally taking profits from Monday’s stock rally, which saw U.S. blue chips gain 1.3 percent and European shares 2 percent. There was also some concern about the banking sector. A German newspaper reported that the majority owners of WestLB (WDLG.UL) were threatening not to support the stricken German landesbank’s requirement for more capital. Rating agency Standard & Poor’s also said on Monday it found most banks in a global study were weakly capitalized, with Citigroup (NYSE: C – News ), UBS (VTX: UBSN.VX – News ) and Mizuho Financial Group (Tokyo:8411.T – News ) more than two-thirds below the average. MSCI’s all-country word stock index ( ^MIWD00000PUS – News ) was down 0.6 percent after gaining 1.7 percent on Monday. The volatile Chinese market ( ^SSEC – News ) was down nearly 3.5 percent. Market analysts said there was little surprise that some profit taking was taking place. But they remained relatively bullish about the future. “China is down after a strong run,” said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin. “But we’re still in a cyclical bull market.” The FTSEurofirst 300 ( ^FTEU3 – News ) index of top European shares was down 0.7 percent. Earlier, Japan’s Nikkei ( ^225 – News ) hit its lowest close in four months, down 1 percent on the day. Japan’s current concerns are focused on worries financial firms will tap the market for equity financing and on a stronger yen hurting the shares of exporters. Many global stock investors are being cautious heading into the year-end, wanting to lock in profits after a very good run in 2009 while also worrying about the true state of the world economy. Some concerns about the U.S. economy were at least temporarily eased on Monday when data showed sales of previously owned U.S. homes had risen to their highest level in more than 2-1/2 years. DOLLAR FIRMS The dollar was broadly higher after a bit of a battering on Monday while the euro fell on the German media report about WestLB. The U.S. currency was up 0.4 percent against a basket of competitors ( ^DXY – News ). It remains down 7 percent for the year, reflecting low U.S. yields on offer. The euro was down 0.4 percent at $1.4905 and the dollar slipped about the same to 88.65 yen. Gold slipped on the stronger dollar and was selling at around $1,164 an ounce, about $9 off an all-time peak hit on Monday. Euro zone government bonds rose, with Bund futures reaching their highest level since early October. (Additional reporting by Brian Gorman; editing by Chris Pizzey) (To read Reuters Global Investing Blog click on http://blogs.reuters.com/globalinvesting; for the MacroScope Blog click on http://blogs.reuters.com/macroscope; for Hedge Hub click on http://blogs.reuters.com/hedgehub ) See the original post here: Bank worries, profit-taking hits stocks (Reuters)

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* Profit taking, bank worries hit stocks * Dollar recoups some losses, weakening gold By Jeremy Gaunt , European Investment Correspondent LONDON, Nov 24 (Reuters) – Financial markets did a quick about-face from the previous session’s patterns on Tuesday with stocks falling, the dollar recovering some losses and gold dropping back a bit from record highs. Investors were generally taking profits from Monday’s stock rally, which saw U.S. blue chips gain 1.3 percent and European shares 2 percent. There was also some concern about the banking sector. A German newspaper reported that the majority owners of WestLB [WDLG.UL] were threatening not to support the stricken German landesbank’s requirement for more capital. [ID:nGEE5AN07U] Rating agency Standard & Poor’s also said on Monday it found most banks in a global study were weakly capitalised, with Citigroup ( C.N ), UBS ( UBSN.VX ) and Mizuho Financial Group ( 8411.T ) more than two-thirds below the average. [ID:nGEE5AM11I] MSCI’s all-country word stock index .MIWD00000PUS was down 0.6 percent after gaining 1.7 percent on Monday. The volatile Chinese market .SSEC was down nearly 3.5 percent. Market analysts said there was little surprise that some profit taking was taking place. But they remained relatively bullish about the future. “China is down after a strong run,” said Bernard McAlinden, investment strategist at NCB Stockbrokers in Dublin. “But we’re still in a cyclical bull market.” The FTSEurofirst 300 .FTEU3 index of top European shares was down 0.7 percent. Earlier, Japan’s Nikkei .225 hit its lowest close in four months, down 1 percent on the day. Japan’s current concerns are focused on worries financial firms will tap the market for equity financing and on a stronger yen hurting the shares of exporters. Many global stock investors are being cautious heading into the year-end, wanting to lock in profits after a very good run in 2009 while also worrying about the true state of the world economy. Some concerns about the U.S. economy were at least temporarily eased on Monday when data showed sales of previously owned U.S. homes had risen to their highest level in more than 2-1/2 years.  Continued… See the original post here: GLOBAL MARKETS-Bank worries, profit-taking hits stocks (at Reuters)

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WASHINGTON (AP) — Remember the economy’s return to growth last quarter? Well, it probably wasn’t as energetic as first thought. A government report due out Tuesday morning is expected to show that the economy expanded at a pace of 2.9 percent from July through September, according to Wall Street economists surveyed by Thomson Reuters. If they are right, it would mark a slower expansion than the 3.5 percent pace reported a month ago. Most of that rebound reflected federal support for spending on homes and cars. The main forces behind the expected third-quarter downgrade: commercial construction was weaker, the nation’s trade gap was more of a drag, businesses trimmed more of their stockpiles and consumers didn’t spend as much. So, the good news is the economy finally started to grow again, after a record four straight losing quarters. The bad news: The rebound, now and in the months ahead, probably will be lethargic. Federal Reserve officials and other economists say growth won’t be strong enough to quickly drive down the nation’s unemployment rate. The nation’s current 10.2 percent jobless rate marks only the second time in the post-World War II period that unemployment has topped 10 percent. “It’s a half-speed recovery,” said Stuart Hoffman, chief economist at PNC Financial Services Group. “We’re in the slow lane.” Some economists think growth will slow to around a 2.5 percent pace in the current quarter, although a few say it could clock in at about 3 percent if holiday sales come in better than expected. Most say they think the economy will weaken again next year, with growth at a pace of around 1 percent as the impact of the $787 billion stimulus package fades and consumers keep tightening their belts under the strain of high unemployment and hard-to-get credit. In the third quarter, the popular Cash for Clunkers rebates and an $8,000 tax credit for first-time homebuyers juiced up sales of cars and homes. The clunkers program is over now, but the tax credit has been extended and expanded beyond first-time buyers. What’s not clear is whether the recovery can continue after government supports are gone. If consumers clam up, the economy could tip back into recession. President Barack Obama recently cautioned that the economy could suffer a “double dip” downturn. Fed Chairman Ben Bernanke, however, says he doesn’t think that will happen. But last week the Fed chief did warn the recovery faces “important headwinds,” such as tight credit and a weak job market that will make consumers cautious in their spending. Those factors “likely will prevent the expansion from being as robust as we would hope,” Bernanke said. The government takes three cracks at estimating economic activity for any given quarter. Each estimate is based on more complete data. Tuesday’s will be the second reading of the third-quarter GDP data. The return of economic growth puts the White House in a delicate position: The president wants to take credit for ending the recession, but unemployment is still causing pain and anxiety throughout the country. Millions have yet to feel a benefit from the recovery in the form of a new job or even an easier time getting a simple loan. Even those with jobs are reluctant to go on a spending spree. The values of their homes and 401(k)s remain shrunken. Some economists think the jobless rate could climb as high as 11 percent by the middle of next year before making a slow descent. It could take at least four years for the unemployment rate to drop back down to more normal levels. “The best thing we can say about the labor market right now is that it may be getting worse more slowly,” Bernanke said last week. Against that backdrop, Obama said he’s weighing tax breaks that could encourage businesses to hire again. Unlike past rebounds that were driven by the spending of everyday Americans, this one appears to hinge on spending by businesses, foreigners and — until it runs out — the government. In 1980, businesses led an economic recovery. It quickly fizzled, and the economy fell into a severe recession in 1981 and 1982. The unemployment rate climbed to 10.8 percent, the post-World War II high. Visit link: Economic recovery likely not quite that energetic (AP)

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NORWALK, Conn.–(BUSINESS WIRE)–GE Capital, the financial services segment of the General Electric Company (NYSE: GE – News ), today announced the appointment of Steve Sargent as president and CEO of GE Capital’s business operations in Asia Pacific. Sargent, 49, will oversee operations for GE Capital in Asia Pacific, which is headquartered in Tokyo, Japan. He is taking over the role formerly served by John Flannery, who has been promoted to run GE’s operations in India. Sargent is a 16-year GE veteran with over 30 years of global financial services experience. Currently he is serving as president and CEO of GE for Australia and New Zealand (ANZ) and president and CEO of GE Capital for Australia and New Zealand. Sargent will continue heading GE Capital   ANZ until a replacement is named and will remain national executive for GE ANZ along with his new Asia Pacific role. “Steve is an ideal match for this position,” Mike Neal, GE vice chairman and GE Capital president and CEO, said. “He knows the industry, region and GE Capital equally well. Throughout his career, Steve has developed strong customer relationships, built talented teams and found innovative ways to grow the business. In a very challenging 2008, he lead our GE Capital ANZ team to grow earnings double digits while reducing costs. He will bring this operational excellence to Asia Pacific, an important market for us. The fact that we have someone of Steve’s caliber ready to take on this new challenge is a testament to GE’s leadership development.” Prior to his current role, Sargent held a number of senior finance, sales and quality positions in GE Capital, including president and CEO of GE European Equipment Finance from 2000 to 2003. He is a graduate of Charles Sturt University in Australia. About GE Capital GE Capital offers consumers and businesses around the globe an array of financial products and services. GE (NYSE: GE – News ) is Imagination at Work – a diversified technology, media and financial services company focused on solving some of the world’s toughest problems. For more information, visit gecapital.com or follow company news via Twitter (@GECapitalNews). About GE GE (NYSE: GE – News ) is a diversified infrastructure, finance and media company taking on the world’s toughest challenges. From aircraft engines and power generation to financial services, medical imaging, and television programming, GE operates in more than 100 countries and employs about 300,000 people worldwide. For more information, visit the company’s Web site at www.ge.com . Follow this link: Steve Sargent Named President and CEO of GE Capital Asia Pacific (Business Wire)

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By Gabriel Madway Reuters – A HP Invent logo is pictured in front of Hewlett-Packard international offices in Meyrin near Geneva August 4, … {”s” : “2353.tw,coms,csco,hpq”,”k” : “c10,l10,p20,t10″,”o” : “”,”j” : “”} SAN FRANCISCO (Reuters) – Hewlett-Packard Co (NYSE: HPQ – News ) tripled the size of its share repurchase program to $12 billion as China sales and better profit margins on its services boosted quarterly earnings. The fiscal fourth-quarter results released on Monday were in line with preliminary figures that HP gave two weeks ago, which had topped Wall Street’s estimates at the time. Shares of HP fell slightly in after-hours trading. HP, a hardware and technology services company that is a bellwether for IT spending, has been more cautious than some of its peers in predicting an economic turnaround. But Chief Executive Mark Hurd sounded somewhat more optimistic, noting pockets of returning demand, including in its closely watched printer business, which has struggled this year. “The economy remains challenging, but we do see encouraging signs of recovery in certain markets,” Hurd said on a conference call with analysts. “They’re basically pointing to year-over-year growth in the January quarter,” said Kaufman Bros analyst Shaw Wu. “It’s a good sign.” Hurd cautioned that Europe remains weak, if stable, and it was not clear when a recovery will take hold in the region. HP’s diversification, recurring revenue, and cost controls have provided it with a solid cushion during the downturn. HP bought EDS last year to become the No. 2 provider of IT services, behind IBM. HP said it has now cut 19,000 jobs as it continues to integrate the company. HP’s services revenue rose 8 percent, and the company said signings were “strong,” positioning it well for next year. PC unit sales rose 8 percent, although revenue fell 12 percent as prices across the industry continue to fall. HP, the world’s No. 1 PC maker, continues to engage Acer Inc (Taiwan: 2353.TW – News ) in a price war, analysts say, particularly on consumer laptops. HP said it made big gains in the enterprise PC business in the United States, and PC revenue in China jumped 40 percent. “Although growth has slowed down to a certain extent in the U.S, emerging markets, where consolidation is taking place, is providing new opportunities for HP to broaden its reach,” said Unni Narayanan, chief executive of Primary Global Research, an investment research firm. BIG BUYBACK Earlier this month HP announced a $3 billion deal to acquire 3Com Corp (NasdaqGS: COMS – News ), as it moved to take on network giant Cisco Systems Inc (NasdaqGS: CSCO – News ). As competition in the corporate data center heats up and industry consolidation continues, analysts expect HP to remain aggressive in M&A. “The No. 1 thing we get back from customers is they’d like us to do more, they’d like us to have a broader portfolio with more capabilities,” Hurd said. HP raised its stock repurchase plan by $8 billion, the company said. About $4 billion remained of an $8 billion share buyback program approved in September 2008. Chief Financial Officer Cathie Lesjak said the authorization was part of its normal strategy. HP reported a net profit of $2.4 billion, or 99 cents a share, in its fourth quarter, up from $2.1 billion, or 84 cents a share, in the year-ago period. Excluding items, HP earned $1.14 a share. Revenue fell 8 percent to $30.8 billion. As it forecast earlier this month, HP expects fiscal 2010 earnings, excluding items, of $4.25 to $4.35 a share on revenue of $118 billion to $119 billion. Shares of Palo Alto, California-based HP closed at $51.02, up 1.96 percent, on the New York Stock Exchange and fell to $50.71 after hours. (Reporting by Gabriel Madway and Paul Thomasch; Editing by Richard Chang) Continue reading here: HP triples stock buyback plan, profit up 14 percent (Reuters)

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WASHINGTON (AP) — President Barack Obama said Monday the nation’s economy is in good shape for the long term thanks to “core strengths” such as its universities, its innovation and a dynamic workforce. AP – Defense Secretary Roberty Gates, third from left, watches as President Barack Obama speaks during a meeting with members … But he also noted again how 2009 has been a sobering year for millions of newly unemployed people. “We cannot sit back and be satisfied given the extraordinarily high unemployment levels that we’ve seen,” Obama said in wrapping up a pre-Thanksgiving session with his Cabinet as other senior aides packed the meeting room. “We have only taken the first step in curing our economy.” The unemployment rate stands at a 26-year high of 10.2 percent, overshadowing more upbeat indicators such as a return in growth of the overall economy. Obama told reporters that his Cabinet discussion included matters of national security and the upcoming budget, but the emphasis was on job creation. He recapped both his administration’s efforts to help stabilize the financial sector and the web of challenges that have slowed an overall recovery. “Something that our economic team emphasized is that there are core strengths to the American economy that will put us in good stead over the long term,” Obama said. He said the key is bridging that gap toward a more prosperous time and promised he won’t let up “until businesses are investing again and businesses are hiring again.” Obama’s line about the underlying “core strengths” of the economy offered echoes of a phrase he mocked during last year’s presidential campaign. As the financial sector was collapsing in September 2008, Republican nominee John McCain assured Americans that “the fundamentals of our economy are strong,” a statement Obama quickly used as evidence that the Arizona senator was out of touch. President George W. Bush had also been known for using that phrase. Sitting between Secretary of State Hillary Rodham Clinton and Defense Secretary Robert Gates, Obama told his Cabinet to get some rest over the Thanksgiving holiday. But he said he also reminded his advisers that they have the chance to help millions of struggling people, and “we need to take advantage of that.” The president took no questions and did not respond to a reporter’s query about the president’s Afghanistan war review. Visit link: Obama: US economy has ‘core strengths’ (AP)

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By The Canadian Press TORONTO – Manulife Financial Corp. (TSX: MFC.TO ) is expanding its Chinese operations with a deal to buy Fortis Bank’s 49 per cent interest in China-based ABN AMRO TEDA Fund Management Co. for 105 million euros, or US$156 million. After the transaction closes in the first quarter of 2010 subject to regulatory approval, the new joint venture will be called Manulife TEDA Fund Management Co. Ltd., Canada’s largest insurance company said after markets closed Monday. The joint venture company will provide traditional retail and institutional asset management across the Chinese market. Manulife already has a big insurance joint venture in China and is one of several Canadian financial companies, including some of the big banks such as Bank of Montreal (TSX: BMO.TO ) and Royal Bank of Canada (TSX: RY.TO ), as well as Sun Life Financial (TSX: SLF.TO ) to have key operations in the rapidly growing Asian country. “While Manulife TEDA Fund Management Co. Ltd. plans to maintain and grow its existing platform of high quality asset management products, over time it also plans to seek regulatory approval for expanding its lines of business as and when permitted by CSRC (China Securities Regulatory Commission) and other relevant bodies,” Manulife added in a news release after stock markets closed. The company said the acquisition is expected to boost Manulife Financial’s earnings in the first year and have a negligible impact on capital levels. “Our new partnership with TEDA provides a rare strategic opportunity to make a fast-track entry into China’s large and high growth market for individual and institutional wealth management services,” stated Manulife president and CEO Donald Guloien. “This accelerates our expansion in China’s huge growth market by several years,” Guloien added. “We are impressed by the quality of this asset management operation with its strong management team and competitive culture.” Manulife noted that the asset management industry in China is expected to become one of the largest in the world in the coming decade. Current industry assets under management of US$338 billion are forecast to grow significantly and exceed US$1 trillion by 2014. Jean-Francois Courville, president and CEO of MFC Global Investment Management, the asset management division of Manulife Financial, said the company was “excited about the opportunity to extend the reach of our global asset management business into China.” “Our new joint venture should lead to opportunities to offer the asset management capabilities within Manulife TEDA Fund Management Company Ltd. to our global clients, to offer our global asset management capabilities into China, and to significantly strengthen our Asian investment management capabilities.” With the completion of this deal, Manulife Financial will have asset management companies in nine of 10 of its operating territories across its Asia Division and will be strategically better positioned to serve both the wealth management and protection needs of consumers in Asia. MFC Global Investment Management currently manages over US$100 billion in assets for institutional and retail clients worldwide, including US$13.5 billion under management for clients across Asia. ABN AMRO TEDA Fund Management Co. Ltd, established in 2002, currently has assets under management of US$3.8 billion and is 51 per cent owned by Northern International Trust, part of Tianjin TEDA Investment Holding Co., Ltd., owned by Tianjin City and managing total assets of US$18.2 billion. Operating in 38 cities in 11 provinces, Manulife-Sinochem Ltd. currently has more than 10,000 agents serving over 490,000 customers across China. MSL was established in 1996 and was the first joint venture life insurance company in China. Manulife Financial, Canada’s largest insurer, serves millions of customers in 22 countries and territories worldwide. Operating as Manulife Financial in Canada and Asia, and primarily through John Hancock in the United States, it has some US$407 billion in assets under management. In trading on the TSX, Manulife shares fell 18 cents to close at $18.78 on a volume of nearly 11.3 million shares. See the original post: Manulife buys 49 per cent interest in China-based ABN AMRO TEDA Fund

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By Kristine Owram, The Canadian Press TORONTO – Interest rates aren’t going up any time soon, but when they do the rise will be rapid enough to potentially prove devastating for homeowners who aren’t prepared, mortgage industry experts say. Because of this, mortgage lenders and brokers have a responsibility to help home buyers assess their capacity to make higher monthly payments, and to constantly evaluate their chances for default. “There should be some prudence and there should be counselling by mortgage brokers to ensure people do leave a little wiggle room,” Ivan Wahl, chairman and CEO of Xceed Mortgage Corp. (TSX: XMC.TO ), said at an industry conference Monday. Wahl praised Canadian regulators for preventing the housing meltdown that decimated the American economy, but said mortgage lenders have a responsibility to self-regulate as well. “Regulators have a very specific role, but you can’t regulate prudence,” he said. “Self-discipline has to continue to be supplied.” He called for an “early warning system” that would allow lenders to adjust quickly if an increased number of borrowers default on their mortgages as a result of higher interest rates. The Canadian housing market fared much better than its American counterpart during the recession due to both better regulation and a more prudent culture. While the financial crisis in the U.S. was caused in large part by subprime mortgages, which led homeowners to default en masse when housing prices began to fall, strict regulations helped the Canadian economy avoid a similar meltdown. Last week, a report said a record-high 14 per cent of U.S. homeowners with a mortgage were either behind on payments or in foreclosure at the end of September. Similar Canadian statistics are hard to come by, but the comparable number would be “much lower” in Canada, said Gregory Klump, chief economist of the Canadian Real Estate Association. Even mortgage lenders weren’t expecting the Canadian housing market to fare as well as it has. “The last half of ‘09 is better than anybody expected,” said John Webster, president and CEO of Scotia Mortgage Corp. “We were looking at a nuclear winter . . . (for new mortgages), a 30 to 35 per cent drop, and that hasn’t happened,” agreed Stephen Smith, chairman and president of First National Financial LP (TSX: FN-UN.TO ). The health of the Canadian housing sector has been aided by low interest rates – 5.59 per cent for a five-year fixed-rate mortgage and 2.25 per cent for a five-year variable-rate mortgage at one bank. Depending on whether they are fixed or floating-rate, mortgages are tied to either the bond market or the Bank of Canada’s key lending rate, which are closely related. The central bank’s rate has been sitting at a record low of 0.25 per cent since the spring and it has said it will keep it steady until at least next June to help stimulate the ailing economy. Benjamin Tal, senior economist with CIBC World Markets, said he expects the Bank of Canada will end up keeping its lending rate steady into 2011, as it would endanger the economy to raise rates too soon. However, this isn’t to say higher interest rates won’t hit Canadian consumers eventually, Tal said. He predicted inflation of between three and five per cent by 2011. “This will be enough to kill the bond market and to lead to higher interest rates down the road,” he said. And when interest rates do rise, they’ll rise quickly. This could hurt Canadian homeowners who haven’t carefully evaluated their ability to carry their mortgage at a higher interest rate. For example, a $200,000 mortgage with a term of 25 years and an interest rate of 2.25 per cent has monthly payments of $876.26. For the same mortgage with an interest rate of five per cent, the monthly payments become $1,169.18. “We have to educate ourselves and our clients that interest rates will rise and when they rise they will rise quickly, 200 to 300 basis points,” Tal said. Borrowers then have to decide if they’ll still be able to finance their mortgage at a higher interest rate. “If not, buy a smaller house,” Tal said. “It’s as simple as that.” Mortgage lenders and brokers gathered in Toronto on Monday for the Canadian Association of Accredited Mortgage Professionals’ annual conference and expo. CAAMP says the volumes of residential mortgage credit outstanding is forecast to grow by seven per cent between 2009 and 2011, and is predicted to pass $1 trillion in 2010. The average mortgage interest rate was 4.55 per cent as of October, down from 5.41 per cent a year ago. Originally posted here: Mortgage brokers should prepare borrowers for higher interest rates: experts

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67 WALL STREET, New York – November 23, 2009 – The Wall Street Transcript has just published its Travel and Leisure Report–Airlines, Hotels, Resorts, Cruise Lines, and Restaurants offering a timely review of the sector to serious investors and industry executives. This 137 page special feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available via The Wall Street Transcript Online . Topics covered: Consumer Traveler Spending – U-Shaped Recovery in Restaurant Sector – Low-Cost and Network Airlines – Airline Carriers and Online Travel Agencies – Hotel Occupancy Rates – Improvement in Transportation Sector – Upscale Casual and Fast Casual Restaurants – Near-Term Risk in Hotel Space – Fuel Prices a Universal Concern – Restaurant Industry Stability – Increased Consolidation in Airline Industry – Firming of Traffic Trends in Restaurant Space Companies include: Vail Resorts, Inc. (MTN); Air France-KLM (AFLYY); AirTrans (AAI); Alaska Air Group (ALK); Allegiant Travel Group (ALGT); American Airlines (AMR); Applebee’s (APPB); Ashford (AHT); BJ’s Restaurants (BJRI); Boeing (BA); Brinker (EAT); British Airways (BAY); Buffalo Wild Wings (BWLD); Burger King Corp (BKC); California Pizza Kitchen (CPKI); Carnival (CCL); Cheesecake Factories (CAKE); Chipotle Mexican Grill (CMG); Choice (CHH); Continental Airlines (CAL); Darden (DRI); Delta Airlines (DAL); Denny’s (DENN); DiamondRock (DRH); Domino’s Pizza (DPZ); Expedia (EXPE); Famous Dave’s (DAVE); FelCor (FCH); Gaylord Entertainment (GET); Great Wolf Resorts (WOLF); Green Mountain (GMCR); Hawaiian Holdings (HA); Home Inns & Hotels (HMIN); Hospitality Properties Trust (HPT); JetBlue Airlines (JBLU); LaSalle Hotel Properties (LHO); Lufthansa (LHA); MHI Hospitality Corporation (MDH); Marriott (MAR); McDonalds (MCD); Mesa (MESA); Morton’s Steakhouse (MRT); National Business Travel Association (NBTA); National Mediation Board (NMB); Orbitz (OWW); P.F. Chang’s (PFCB); Panera Bread (PNRA); Peet’s (PEET); Priceline (PCLN); Republic Airlines (RJET); Royal Caribbean Cruise Lines (RCL); Royal Caribbean International (HST); Ruby Tuesday (RT); Ruth’s Chris Steakhouse (RUTH); Sonesta (SNSTA); Sonic (SONC); Southwest Airlines (LUV); Spicy Pickle (SPKL.OB); Starbucks (SBUX); Starwood Hotels (HOT); Strategic (BEE); Sunstone (SHO); Texas Roadhouse (TXRH); UFood (UFFC.OB); US Air (LCC); United Airlines (UAUA); Wyndham (WYN) In the following brief excerpt from just one of the in depth interviews in the 137 page Travel and Leisure Report, an award winning equity analyst discusses the outlook for the sector and for investors. HELANE BECKER is a Managing Director at Jesup & Lamont who covers the transportation industry, focusing on airlines, air freight and freight forwarding. Ms. Becker has more than 25 years of experience in the financial industry, holding positions within research, trading and investment banking departments. Prior to joining Jesup & Lamont, she was Managing Director at CapStone Investments and helped to raise capital for small- to mid-cap companies. She also previously held positions at Smith Barney, Lehman Brothers and several other broker-dealers as a Senior Transportation Analyst. Ms. Becker was ranked first, second or third from 1985 to 1993 by Institutional Investor magazine. She was also ranked in the top five by the Wall Street Journal in 1992, 1993, 1997, 2001 and 2002 as one of the best analysts on the Street. Ms. Becker holds a B.A. from Montclair State University and an MBA from New York University. She is a member of several organizations, including Who’s Who Among Women in Business, and she is a former President of The Society of Airline Analysts. TWST: Let’s start with your overall outlook for the airline industry today. What is your outlook and why? Ms. Becker: We think that the airlines have seen the bottom or are in the process of bottoming, and our outlook for the third quarter is for an aggregate total of about $30 billion in revenue, and operating profit of about $600 million and a net loss of about $400 million. Obviously, all numbers exclude non-recurring gains, charges and mark-to-market hedge-related gains and losses. The revenue estimate is for a decline of about 8%. That compares to our initial estimate earlier in the year that revenues would be down between 7% and 9%. I think that the fourth quarter should show a little bit of improvement versus the third quarter and versus last year. We’re thinking the fourth quarter will be low single digits, so down 3% to 7%. And then 2010 we think will be better. TWST: So perhaps the worst is behind us? Ms. Becker: We think the worst is behind us. TWST: I’m sure you saw these statistics too, but I read recently that globally the airline industry is expected to lose $11 billion this year and another $3.8 billion in 2010. How much of that is attributable to the U.S. airline industry? Ms. Becker: I think that most of that is attributable to airlines outside the United States. The U.S. is far ahead of the rest of the world in terms of capacity reductions and adjustments to declines in traffic. Of the $11 billion decline that IATA is estimating, which is the number that you just cited, probably about $3.5 billion to $4 billion is related to the United States; the rest is outside the U.S. And the reason for that is the U.S. airlines were very quick to cut capacity when fuel prices were going up and the rest of the world did not. The rest of the major airlines, like British Airways (BAY) and Lufthansa (LHA), Air France-KLM (AFLYY), Japan Airline (JALSY), waited a very long time before they moved the needle on capacity. And so the U.S. airlines had about a one-year head start, and the result was that when traffic turned down, it didn’t look quite as bad for the U.S. airlines as it did for the peer group. Note: Opinions and recommendations are as of 10/07/09. HELANE BECKER Jesup & Lamont The Wall Street Transcript is a unique service for investors and industry researchers – providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 137 page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online . The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations. For Information on subscribing to The Wall Street Transcript, please call 800/246-7673 See the rest here: Buy Airline Stocks Now Says Ranked Equity Analyst (Wall Street Transcript)

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NEW YORK–(BUSINESS WIRE)– Citi’s Investment Research and Analysis group today released its annual “Prospects for Economies and Financial Markets for 2010,” which features detailed economic and market forecasts from Citi’ s economists and strategists. The report is the result of a collaborative effort across Citi’s Global Research team. Michael Saunders, Citi’s Global Head of Developed Markets Economics, said, “After the most severe global recession for decades, we now expect a sustained but uneven global recovery. Almost all major economies exited recession in Q2 and Q3, and we again make more growth forecast upgrades than downgrades. This month, we are upgrading our 2010 GDP forecasts for the U.S., Japan, U.K., Australia, New Zealand, Hong Kong, Korea, Argentina, Hungary, Poland, Czech Republic and Turkey.” Key highlights of the report include: Widespread Initial Recovery, Then Greater Disparities : The initial bounce in output is likely to be quite solid and even across major economies through early 2010. After this initial burst, Citi expects sustained momentum in Asia (excluding Japan); a fairly strong recovery in the U.S. and more gradual medium-term recovery in Europe and Japan. Asian Growth Outperforms All Regions, Led by China : After having an earlier and sharper rebound than the rest of the world, aided by inventory-restocking, aggressive policy stimulus, plus strong investment and consumer spending in China, we expect the region’s recovery will continue to gain momentum in 2010. Continued Low Global Interest Rates Through 2010 : The global economic recovery already has prompted interest rate hikes in a few countries, but our forecasts do not anticipate an early or aggressive turn by the main central banks. Even so, the untested nature of unconventional measures and their sheer scope require that central banks begin to develop a framework for policy exit that minimizes risks on both sides, Low Global Inflation: With ample spare capacity in most major industrial countries, inflation prospects remain unusually benign, (although the U.K. is a key exception), most major allowing central banks to maintain policy stimulus for an extended period. Credit Availability and Bank Regulation: Credit availability is likely to stay poor for a long period — probably a year or two rather than a quarter or two — as banks retrench and, under regulatory pressure, seek to raise extra capital. According to the IMF , U.S. banks in total are about 80% through the required capital raising to achieve likely regulatory norms by end-2010, but euro-area banks are less than halfway there. Poor credit availability will continue to cap recovery in coming quarters, especially in Europe. Unsustainable Fiscal Trends Will Have To Be Resolved: Previous experience suggests that unsustainable trends eventually are forced to correct. The process by which unsustainable fiscal trends are resolved will be a major influence on economic prospects in 2010 and beyond. Countries that fail to achieve fiscal sustainability may over time face a painful mix of worsening sovereign credit quality and rising debt service costs, undermining growth and making the eventual fiscal crunch even tougher. Saunders argues, “Global economies need central banks and governments to successfully manage the exit strategies from extreme monetary accommodation, without creating further instabilities and denting future growth prospects.” Long-Term Outlook – 2012 and Beyond “In 1980, the world’s biggest economies (USD terms) were the G7 plus China. The list was the same in 2000 and 2005,” said Saunders. “But the rankings of global economies will change markedly in the next 5-15 years, and we envisage a virtuous circle of rapid industrialisation and buoyant domestic demand in Asia, supporting growth in resource-rich regions (Africa, LatAm, Middle East, Russia and Brazil).” Key long-term policy considerations include: Importance of Emerging Markets : As emerging markets industrialize, strong underlying growth in Asian infrastructure, investment and — as prosperous middle classes emerge — consumer spending, will become a major new engine for global growth, filling the gap as consumer spending in the U.S., U.K. and other industrial countries moderates. Shifting Economic Powers and Global Financial Architecture : As economic power shifts towards emerging economies and industrial countries recover from the credit cycle, there may also be a shift in thinking about the appropriate model for economic growth and financial markets. Citi economists argue, “China and India, for example have more closed capital accounts and financial systems than many emerging economies and far more closed than the developed world – arguably, this is one of the factors that allowed these countries to escape crisis in the 1990s and to survive the recent crisis relatively well.“ About Citi Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 140 countries. Through Citicorp and Citi Holdings, Citi provides consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, transaction services, and wealth management. Additional information may be found at www.citigroup.com or www.citi.com . Link: Citi Global Economists Predict Strong Sustained Global Economic Recovery in 2010 (Business Wire)

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By Anurag Kotoky and Sweta Singh BANGALORE (Reuters) – People’s United Financial Inc ( PBCT.O ) agreed to buy Financial Federal Corp ( FIF.N ) for about $738 million in stock and cash to boost its equipment financing businesses. The deal values Financial Federal at $27.74 a share, a premium of 35 percent to the stock’s Friday close of $20.55. Financial Federal shares jumped as much as 36 percent Tuesday. People’s United shares, which rose as much as 4 percent, later pared their gains to trade down 5 percent. “I think its overall positive. It adds to their earnings power and balance sheet capacity for doing additional deals,” analyst Christopher Nolan of Maxim Group said. People’s United, one of the better-capitalized banks in the United States, said it expects the deal to add significantly to its operating profit in 2010 and be slightly positive to its capital levels on a pro forma basis. “Financial Federal is a leader in equipment financing and provides a valuable complement to our existing business lines, particularly, People’s Capital and Leasing, our equipment financing subsidiary,” People’s United Chief Executive Philip Sherringham said in a statement. Financial Federal’s shareholders will receive $11.27 in cash and one People’s United common share for each share held, in a deal that has a termination fee of $26 million. “I like the deal,” analyst Richard Weiss of Janney Montgomery Scott said. “Generally when you do deals in the middle of recession your eyes are wide open. More problems happen when you do deals when the times are really good because you are not as careful. I think they (People’s United) have done due diligence,” he added. The Bridgeport, Connecticut-based People’s United, which was added to the S&P 500 Index .SPX last November, has been saying it was seeking acquisitions as it had a massive cash reserve of $2.5 billion. People’s United spokesman Brent DiGiorgio had told Reuters in April the company was actively seeking acquisitions of like-minded banks in the corridor from Maine to Washington, D.C. At September 30, People’s United Financial’s tangible equity ratio — a measure of capital strength closely watched by investors these days — stood at 18.6 percent, higher than most of the banks in the nation. Analyst Weiss believes that the company, which has about $2.5 billion in excess cash, will be scouting for acquisition opportunities in the near-term, including possible deals brokered by the U.S. Federal Deposit Insurance Corp. “When you have a balance sheet like People’s in this kind of economy there is a lot of opportunity which should be coming in their way. They should be quite busy exploring different kind of acquisition opportunity,” Weiss said. (Reporting by Sweta Singh in Bangalore; Editing by Deepak Kannan and Anil D’Silva) See the rest here: People’s United to buy Financial Federal for $738 million

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Ed: I’d like to observe that not all that long ago, I went after Warren and got a rather stern “rebuke” of sorts from Janet, who engaged with me (via email) in a quite-spirited defense of Mr. Buffett. My, how the worm turns…. welcome to the conclusion I reached months ago Janet…. I still love ‘ya!     Warren Buffett, Stop Using My Credit Card! (pdf) TSF – Opinion Commentary – November 23, 2009 By Janet Tavakoli   I like Warren Buffett.  I even wrote a book about the financial crisis contrasting his principles of prudent finance with recent excessive leverage, bad lending, and malfeasance ( Dear Mr. Buffett ).  Buffett is not a regulator, an altruist, a consumer advocate, or an elected official.  As CEO and largest shareholder of Berkshire Hathaway, his goal is to maximize shareholder value.  U.S. capitalism has morphed into a financial oligarchy.  If Buffett’s choice is between getting along in the financial community or the public interest, public interest loses.  But he didn’t cause our financial crisis, and he spoke out in advance about excessive leverage and bad lending.  The financial markets are now wildly distorted.  Others have funding advantages Buffett can only dream about, so he exploits an advantage when it becomes available. I have been a trenchant critic of rampant financial malfeasance , and Buffett has only wished me well and told me to “keep writing.”   For my part, I try to keep in mind that we view the world through different lenses.  (Click the link above for the rest… it’s worth it.) See original here: Hoh Hoh: Tavakoli On Buffett

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TORONTO (Reuters) – Canadian fertilizer maker Agrium Inc ( AGU.TO ) said on Monday it would persist in its hostile bid for U.S. rival CF Industries Holdings ( CF.N ), a move that could prolong the already drawn-out three-way merger battle in the sector. CF has been fending off Agrium’s overtures since February and is itself locked in a hostile campaign to acquire U.S. fertilizer maker Terra Industries ( TRA.N ). Agrium’s roughly $5 billion bid for CF is contingent on CF dropping its bid for Terra. CF came a step closer toward reaching a deal with Terra, when Terra’s shareholders voted a slate of three CF nominees to its board on Friday. However, Agrium argued that the support that CF’s slate received at the Terra shareholder meeting was weaker than CF’s own shareholder support for Agrium’s offer. More than 60 percent of CF Industries’ shares were tendered into Agrium Inc’s “best and final” offer last week. Despite the results of the tender, CF can continue to stymie a deal, as it has a poison pill and other defense mechanisms in place to prevent Agrium from completing the transaction. “We look forward to meeting with CF to conclude a transaction and will continue to reach out directly to CF’s management and board as well as to their financial advisers,” Agrium’s Chief Executive Mike Wilson said in a statement. In the meanwhile, Terra has again rejected CF’s latest proposal to buy it, saying the new offer was at the same price as CF’s already-rejected proposal from November 1. CF has offered to pay $24.50 in cash and 0.1034 share of its stock for every Terra share. The offer also includes a $7.50 per-share special cash dividend, which Terra shareholders will receive whether the deal is accepted or not. CF’s latest bid continues to value Terra at about $4.05 billion, but it includes a 30-day “go shop” provision subject to a break-up fee and expense reimbursement. “We have proposed a process through which Terra and CF Industries could negotiate the terms of a transaction, while preserving Terra’s ability to seek higher offers,” CF’s Chief Executive Stephen Wilson said in a statement on Monday. The two chief executives are not related. (Reporting by Euan Rocha , editing by Maureen Bavdek) © Thomson Reuters 2009 All rights reserved Read the original here: Agrium to continue pursuit of CF Industries

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WASHINGTON (AFP) – A rush to cash in on tax incentives helped propel sales of existing US home by 10.1 percent in October, giving momentum to the ailing sector, industry data showed Monday. The National Association of Realtors said sales of existing single-family homes and apartments rose to a seasonally adjusted annual pace of 6.10 million units, well ahead of market expectations of 5.7 million. The data showed a small downward revision to September sales figures, but the October level was 23.8 percent higher than a year ago, when the financial crisis had deepened. “Many buyers have been rushing to beat the deadline for the first-time buyer tax credit that was scheduled to expire at the end of this month, and similarly robust sales may be occurring in November,” said association chief economist Lawrence Yun. “With such a sale spike, a measurable decline should be anticipated in December and early next year before another surge in spring and early summer.” Home prices remained under pressure. The median existing home price was down 7.1 percent from a year ago to 173,100 dollars in October. The association said sales prices have been distorted by distressed properties, which accounted for 30 percent of sales in October. Many prospective buyers had been rushing to qualify for an 8,000 dollar tax credit for first time home buyers that was due to expire at the end of the year. Congress however voted to extend the credit and expand it to include other home purchases as well. Follow this link: Tax credits prompt 10% surge in US home sales

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After emerging as a new hedge fund star in 2008, Peter Thiel has struggled in 2009 as a bearish outlook has left him sitting on the sidelines for this year’s stunning rebound. {”s” : “adp,bdx,hpq,intc,jbl,mbi,mcd,nke,wag”,”k” : “c10,l10,p20,t10″,”o” : “”,”j” : “”} According to Bloomberg , Thiel’s hedge fund Clarium Capital was down -15.8% as of the end of September. Thiel told an investor conference in October, “There was a degree to which the financial economy has been extremely decoupled from the real economy,” according to Bloomberg . A failure to recognize that decoupling has been at the center of Clarium’s struggles this year. Nonetheless, investors remain intrigued by Thiel’s pedigree as a co-founder of PayPal back in the dot-com era and as a board member of popular social networking website Facebook, where he reportedly owns a 5% stake. Thiel has generally eschewed his dot-com roots and tended toward blue chip, value-oriented holdings. Clarium’s top positions at the end of Q3 show footwear firm Nike (NYSE: NKE – News ) as the largest stake. Thiel opened the holding there during Q3. Also new to the Clarium portfolio during Q3 were electronics manufacturing services firm Jabil Circuit (NYSE: JBL – News ), lab equipment maker Becton Dickinson (NYSE: BDX – News ), outsourcing firm Automatic Data Processing (NASDAQ: ADP – News ), bond insurer MBIA (NYSE: MBI – News ), and drugstore Walgreen (NYSE: WAG – News ) Thiel also reported stakes in tech blue chips Hewlett-Packard (NYSE: HPQ – News ) and Intel (NASDAQ: INTC – News ) and burger giant McDonald’s (NYSE: MCD – News ). At tickerspy.com, members can track Clarium’s latest holdings, see a graph of their combined performance, and be notified when new holdings are made public . Pro portfolio performance is based on institutions’ top-15 holdings as disclosed in quarter-end filings with the SEC. Pro performance does not take into account additional holdings beyond the top 15 nor does it include positions that are not required to be disclosed by the SEC. As such, Pro portfolio performance should be considered an approximation and not a precise record of how an institution has performed over time. Fun and informative, tickerspy.com is a free investing website where you can track multiple stock portfolios and compare against 250 proprietary Indexes tracking themes from stem cells to green energy to precious metals. Best of all, tickerspy.com lets you spy on the portfolios of nearly 3,000 Wall Street institutions and hedge funds and see graphs of their performance. Try tickerspy.com today and find out how you stack up against investing legends like Warren Buffett! The rest is here: Dot-Com Hero Turned Hedge Fund Bear Skeptical of Recovery (Indie Research)

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HONG KONG (AFP) – Spanish bank BBVA may boost its current stake in China Citic Bank with a 1.6 billion dollar investment, a report said Monday citing sources close to the matter. Spain’s second-biggest bank, BBVA will up its ownership in China Citic to 15 percent from 10 percent in a move that comes as other European banks scaled back their exposure in China amid the global economic crisis, the Financial Times said. BBVA can acquire Citic shares at their Hong Kong initial public offering price plus 10 percent, or 6.45 Hong Kong dollars (0.8 US), the report said. Citic shares were up 3.6 percent at 6.70 Hong Kong dollars in midday trading. But the European lender has not made a final decision on whether to exercise that share-purchase option, which expires next week, the FT said. “We remain committed to deepening our relationship with Citic and regard it as a vital strategic partnership which is delivering value to our shareholders,” Manuel Galatas, BBVA managing director in Asia, told the paper. BBVA was the first Spanish bank to break into the Asian market with an initial 2006 investment in China Citic, the country’s seventh-largest lender by assets, the paper said. The Spanish bank has invested a total of 3.5 billion dollars in the company, it said. Foreign companies can hold a maximum 20 percent stake in Chinese firms. See the original post here: Spanish bank may boost China bank stake: report

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LONDON, Nov 23 (Reuters) – Britain’s FTSE 100 .FTSE index is seen opening 32 to 34 points higher on Monday, on track to snap a four-session losing streak, bolstered by rising metals prices. Financial bookmakers expected the UK blue chip index to gain as much as 0.7 percent on opening, after it ended down 0.3 percent at 5,251.41 on Friday, the lowest close since Nov 10. The index is still up 52 percent from a March low. In the absence of any UK data on Monday, investors’ attention will be drawn across the Atlantic, with U.S. existing home sales data for October scheduled for release. According to a Reuters poll of 29 economists, sales of previously owned homes are expected to climb to a seasonally adjusted annual rate of 5.70 million, the fastest pace since 5.73 million units were sold in July 2007 and up from 5.57 million units in September. Later in the week, the focus will fall on the second estimate for UK GDP during the third-quarter period of 2009 — due on Wednesday. The initial estimate, released in October, showed Britain’s economy contracted unexpectedly in the third quarter of this year, by 0.4 percent quarter-on-quarter, squashing hopes of an end to the recession and instead making the current recession the longest on record. The leader of the opposition David Cameron and a senior government figure are expected to outline their economic plans at the CBI conference in London on Monday. Pascal Lamy, director general of the World Trade Organisation, told the Sunday Telegraph that the British government could face trade sanctions if it is found guilty of protectionism as a result of the bank bail out. [ID:nGEE5AL0E5] * GLOBAL MARKETS-Gold at record; resource plays boost stocks [ID:nSP471682] * US STOCKS-Wall St dips as investors fret about recovery [ID:nN20241386] * FOREX-Dollar turns tail as gold climbs to record [ID:nSYD322692] * U.S. Treasuries rise on economic recovery worries [ID:nHKG293886] * Oil tops $78 amid fresh Iran tensions [ID:nSYD484303] * Gold strikes record on inflation, economic worries [ID:nSP479528] * Copper defies slower China imports, focus on weak dlr [ID:nSP532811] UK stocks to watch on Monday: CADBURY ( CBRY.L ) U.S. chocolate maker Hershey ( HSY.N ) is considering launching a bid of at least $17 billion for the British chocolatier as it seeks to trump a hostile offer by Kraft Foods Inc ( KFT.N ), a source familiar with the matter said on Friday. [ID:nN20243737] Swiss food giant Nestle ( NESN.VX ) may consider a bid for Cadbury to challenge a hostile 9.9 billion pound bid by Kraft Foods and a potential move by Hershey, Bloomberg reported on Sunday. [ID:nGEE5AL091] Cadbury would prefer a merger with Hershey rather than Kraft Foods, the British company’s chairman Roger Carr told the Sunday Telegraph. [ID:nGEE5AL0C4] Kraft Foods may raise its offer for Cadbury or offer more cash in its bid if rival takeover offers emerge, a source familiar with the situation said on Sunday. [ID:nN22239812] RIO TINTO ( RIO.L ) The miner Rio Tinto expects to receive at least $741 million from the floatation of its U.S. coal-mining unit, Cloud Peak Energy Inc ( CLD.N ), on the New York Stock Exchange, Rio said on Monday. [ID:nSYU009063] BHP BILLITON ( BLT.L ) The miner said on Sunday it had reached a wage deal with the union of workers who have mounted a 41-day strike at its Spence deposit in Chile, and was now waiting for miners to vote on it. [ID:nN22224140] BRITISH AIRWAYS ( BAY.L ) The airline’s chief executive Willie Walsh has warned cabin crew that he will not compromise on cost-cutting measures ahead of a strike next month, he told the Financial Times in an interview. [ID:nN22197934] ROYAL BANK OF SCOTLAND ( RBS.L ) The bank will sell $7 billion of debt in a two-part sale with the guarantee of the UK government, IFR reported. [ID:nN20239012] LLOYDS BANKING GROUP ( LLOY.L ) Lloyds Banking Group is expected to announce the terms of its 13.5 billion pound cash call on investors this week, said the Observer. BARCLAYS ( BARC.L ) Barclays has restarted talks to sell its three billion pound private equity arm, said the Mail on Sunday. ROYAL DUTCH SHELL ( RDSa.L ) The oil major is in talks to buy 10 percent of India’s Essar Oil ( ESRO.BO ) as part of a deal where it would sell three European refineries to the Indian firm, the Economic Times reported on Saturday, citing people with knowledge of the plans. [ID:nBOM416496] BAE SYSTEMS ( BAES.L ) BAE Systems said on Sunday it won a 3.4 million pound ($5.1 million) contract to develop next generation warships for the Royal Navy. BLACKS LEISURE ( BSLA.L ) Creditors of Blacks Leisure will meet on Monday to try to agree a company voluntary agreement (CVA) to save the British outdoor goods company from administration, the British Property Federation said on Sunday. [ID:nGEE5AL0FO] ITV ( ITV.L ) The new chairman of ITV, Archie Norman, is likely to change ITV2, ITV3 and ITV4 to a subscription model shortly after he assumes the position in January, reported the Mail on Sunday. NATIONAL EXPRESS ( NEX.L ) Phil White has been approached by National Express ( NEX.L ) shareholders about returning to run the firm, said the Sunday Times. COMPASS ( CPG.L ) The reporting of Compass’s full-year results this week will be boosted by the announcement of a 100 million contract with Lloyds Banking Group, said the Sunday Times. MITIE GROUP ( MTO.L ) The maintenance specialist posts first-half results. NORTHUMBRIAN WATER GROUP ( NWG.L ) The utility posts first-half results. HYDER CONSULTING ( HYC.L ) The infrastructure design consultancy posts first-half results. PHOENIX IT ( PHIT.L ) The computer services group posts first-half results. RM ( RM.L ) The educational software and services provider posts full-year results. PROVENTEC ( PPROV.L ) The steam cleaning and coatings technologies firm posts first-half results. TODAY’S UK PAPERS > Financial Times [PRESS/FT] > Other business headlines [PRESS/GB] (Reporting by Tricia Wright) ((tricia.wright1@thomsonreuters.com; +44 207 542 8114; Reuters Messaging: tricia.wright1.reuters.com@reuters.net)) © Thomson Reuters 2009 All rights reserved See the rest here: UK Stocks — Factors to watch on Nov 23 (at Reuters)

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PARIS, Nov 23 (Reuters) – Financial bookmakers expected to see the leading European benchmark indexes rising on Monday, as stocks were poised to snap a four-session losing streak, helped by rising commodity prices. Financial spreadbetters expected Britain’s FTSE 100 .FTSE to open 32 to 34 points higher, or as much as 0.7 percent, Germany’s DAX .GDAXI to open 29 to 32 points higher, or as much as 0.6 percent, and France’s CAC-40 .FCHI to open 28 to 30 points higher, or as much as 0.8 percent. Copper prices rallied sharply on Monday, shrugging off a 40 percent fall in China’s refined copper imports in October as a weaker dollar and gains in other commodity markets dominated sentiment, while oil prices rose above $78 a barrel as heightened tension between Iran and Western nations raised speculation over a potential supply risk. European equities slipped for a fourth session on Friday to reach a two-week closing low, as financials dropped on worries over some banks’ exposure to Ukrainian debt, while weaker crude oil prices hurt energy shares. ———————-MARKET SNAPSHOT AT 0610 GMT———————- LAST PCT CHG NET CHG S&P 500 .SPX 1,091.38 -0.32 % -3.52 NIKKEI .N225 9,497.68 -0.54 % -51.79 MSCI ASIA EX-JP .MIASJ0000PUS 476.39 0.43 % 2.04 EUR/USD EUR= 1.4933 0.50 % 0.0074 USD/JPY JPY= 88.82 0.03 % 0.0300 10-YR US TSY YLD US10YT=RR 3.360 — -0.01 10-YR BUND YLD EU10YT=RR 3.252 — 0.01 SPOT GOLD XAU= $1,162.30 1.23 % $14.10 US CRUDE CLc1 $78.29 1.06 % 0.82 ———————————————————————– * Wall St dips as investors fret about recovery [ID:nN20241386] * Gold at record; resource plays boost Asian stocks [ID:nGEE5AM01J] * Dollar turns tail as gold climbs to record [ID:nSYD322692] * Oil tops $78 amid fresh Iran tensions [ID:nSYD484303] * U.S. Treasuries rise on economic recovery worries [ID:nHKG293886] * Gold strikes record on inflation, economic worries [ID:nSP457620] * Copper defies slower China imports, focus on weak dlr [ID:nSP532811] (Reporting by Blaise Robinson ; editing by Simon Jessop) ((blaise.robinson@reuters.com ; +33 1 4949 5269, Reuters Messaging: blaise.robinson.reuters.com@reuters.net)) © Thomson Reuters 2009 All rights reserved Original post: European Factors-Shares set to snap losing streak (at Reuters)

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TAIPEI (AFP) – Taiwan plans to restrict Chinese stock investment in strategic sectors, as it seeks to keep control of its economy amid rapidly growing ties with the mainland, local media said Monday. Chinese institutional investors will be allowed to hold no more than a total of 10 percent in listed companies in the telecommunications, aviation and finance industries, the Commercial Times reported, citing unnamed sources. The paper also said the Financial Supervisory Commission will meet with relevant agencies soon to discuss what cap should be set on Chinese investments in less-vital sectors, according to the paper. The report was published a week after Taiwan and China signed three landmark memorandums paving the way for growing cooperation in banking, insurance and securities. The agreements, which will go into effect in January, will enable Chinese institutional investors to buy shares in Taiwan’s stock market for the first time. The announcement of the signing was met with criticism that Taiwan’s government had acted too fast, without ensuring proper debate about the implications of the wide-ranging pacts. In particular, the opposition Democractic Progressive Party, which favours formal independence from the mainland, has voiced concern that too close relations with China could cost the island its de-facto self-rule. China and Taiwan have been governed separately since the end of a civil war in 1949, but Beijing still considers the island part of its territory, awaiting reunification. However, relations have improved significantly since the China-friendly politician Ma Ying-jeou became president last year, with last week’s memorandum being just one example of warming ties. The Financial Supervisory Commission declined comment Monday morning when contacted by AFP. Originally posted here: Taiwan to curb China investment: report

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By Lincoln Feast Reuters – Investors play cards in front of an electronic screen showing stock information at a brokerage house in Taiyuan, … {”s” : “^axjo,dls.ax”,”k” : “c10,l10,p20,t10″,”o” : “”,”j” : “”} SINGAPORE (Reuters) – Gold rose more than 1 percent to a record high on Monday as concerns about accelerating inflation and weak economic growth prompted investors to seek relatively safer assets, while supply concerns boosted oil and copper. Asian stocks also rose, led by gains in Australia thanks to higher resource stocks, although volumes were light with Japan out on holiday. Many investors have been reducing their positions and cutting risk as a strong year begins to wind down and with economic indicators still showing scant evidence of a sustained recovery. Highlighting the growing concerns evident in the market, yields on U.S. 2-year Treasuries have fallen below 0.75 percent, approaching levels seen at the height of the financial crisis in December last year. “It worries me that two-year yields are trading as they are plus (short-dated) bill rates went negative and gold is bid, bid, bid,” said Robert Rennie, chief currency strategist at Westpac. “It makes me think there is a huge flight to quality going on that hasn’t hit FX yet…perhaps a bit of a warning sign.” The dollar, which often rises in times of increased uncertainty and worries about global growth, gave up early gains against a basket of currencies ( ^DXY – News ), while the commodity-linked Australian dollar benefited from the strong gold price. Spot gold was trading around $1,162 an ounce, having hit a peak around $1,163, up a third so far this year. Helped by the safe haven bid and purchases by a number of central banks, gold has surged since the start of November, hitting nine record highs and gaining 11 percent in the past three weeks. STOCKS STALLED The heightened sense of caution has stalled a rally in global stocks, which have traded in a broad range since mid-October. After falling last week, MSCI’s index of Asia-Pacific stocks outside of Japan ( ^MSCIAPJ – News ) rose 0.7 percent, taking its gains so far this year to almost two-thirds. Japanese markets were closed for a holiday. Australian shares (ASX: ^AXJO – News ) rose 0.6 percent, with shares of Drillsearch Energy Ltd (ASX: DLS.AX – News ) jumping more than 19 percent after the company reported a promising oil find. Crude oil futures rose 1 percent to $78.24 a barrel, supported by heightened tensions between Iran and Western nations which raised speculation of a potential supply risk. Iran’s armed forces launched large-scale air defense war games on Sunday to show off the country’s deterrence capabilities in the face of pressure from the West over its nuclear program, and a cleric in the Revolutionary Guards warned that the Islamic Republic would fire missiles at “the heart of Tel Aviv” if attacked. “There’s always a supply risk premium that can arise from these elevated tensions in the Middle East and that is a factor pushing up oil prices this morning,” said Toby Hassall, a commodities analyst at the Commonwealth Bank of Australia. Supply concerns also supported copper, which was testing $7,000 a metric tons amid strikes by workers in Chilean mines. Read this articl e: Gold at record; resource plays boost stocks (Reuters)

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By Lincoln Feast SINGAPORE (Reuters) – Gold rose more than 1 percent to a record high on Monday as concerns about accelerating inflation and weak economic growth prompted investors to seek relatively safer assets, while supply concerns boosted oil and copper. Asian stocks also rose, led by gains in Australia thanks to higher resource stocks, although volumes were light with Japan out on holiday. Many investors have been reducing their positions and cutting risk as a strong year begins to wind down and with economic indicators still showing scant evidence of a sustained recovery. Highlighting the growing concerns evident in the market, yields on U.S. 2-year Treasuries have fallen below 0.75 percent, approaching levels seen at the height of the financial crisis in December last year. “It worries me that two-year yields are trading as they are plus (short-dated) bill rates went negative and gold is bid, bid, bid,” said Robert Rennie, chief currency strategist at Westpac. “It makes me think there is a huge flight to quality going on that hasn’t hit FX yet…perhaps a bit of a warning sign.” The dollar, which often rises in times of increased uncertainty and worries about global growth, gave up early gains against a basket of currencies , while the commodity-linked Australian dollar benefited from the strong gold price. Spot gold was trading around $1,162 an ounce, having hit a peak around $1,163, up a third so far this year. Helped by the safe haven bid and purchases by a number of central banks, gold has surged since the start of November, hitting nine record highs and gaining 11 percent in the past three weeks. STOCKS STALLED The heightened sense of caution has stalled a rally in global stocks, which have traded in a broad range since mid-October. After falling last week, MSCI’s index of Asia-Pacific stocks outside of Japan rose 0.7 percent, taking its gains so far this year to almost two-thirds. Japanese markets were closed for a holiday. Australian shares rose 0.6 percent, with shares of Drillsearch Energy Ltd jumping more than 19 percent after the company reported a promising oil find. Crude oil futures rose 1 percent to $78.24 a barrel, supported by heightened tensions between Iran and Western nations which raised speculation of a potential supply risk. Iran’s armed forces launched large-scale air defense war games on Sunday to show off the country’s deterrence capabilities in the face of pressure from the West over its nuclear program, and a cleric in the Revolutionary Guards warned that the Islamic Republic would fire missiles at “the heart of Tel Aviv” if attacked. “There’s always a supply risk premium that can arise from these elevated tensions in the Middle East and that is a factor pushing up oil prices this morning,” said Toby Hassall, a commodities analyst at the Commonwealth Bank of Australia. Supply concerns also supported copper, which was testing $7,000 a metric tons amid strikes by workers in Chilean mines. Originally posted here: Gold at record; resource plays boost stocks

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* Gold at record above $1,160 on safe-haven bid * Asian stocks firmer, led by Australian resource stocks * Oil, copper boosted by supply worries By Lincoln Feast SINGAPORE, Nov 23 (Reuters) – Gold rose more than 1 percent to a record high on Monday as concerns about accelerating inflation and weak economic growth prompted investors to seek relatively safer assets, while supply concerns boosted oil and copper. Asian stocks also rose, led by gains in Australia thanks to higher resource stocks, although volumes were light with Japan out on holiday. Many investors have been reducing their positions and cutting risk as a strong year begins to wind down and with economic indicators still showing scant evidence of a sustained recovery. Highlighting the growing concerns evident in the market, yields on U.S. 2-year Treasuries have fallen below 0.75 percent, approaching levels seen at the height of the financial crisis in December last year. “It worries me that two-year yields are trading as they are plus (short-dated) bill rates went negative and gold is bid, bid, bid,” said Robert Rennie, chief currency strategist at Westpac. “It makes me think there is a huge flight to quality going on that hasn’t hit FX yet…perhaps a bit of a warning sign.” The dollar, which often rises in times of increased uncertainty and worries about global growth, gave up early gains against a basket of currencies, while the commodity-linked Australian dollar benefited from the strong gold price. Spot gold was trading around $1,162 an ounce, having hit a peak around $1,163, up a third so far this year. Helped by the safe haven bid and purchases by a number of central banks, gold has surged since the start of November, hitting nine record highs and gaining 11 percent in the past three weeks. STOCKS STALLED The heightened sense of caution has stalled a rally in global stocks, which have traded in a broad range since mid-October. After falling last week, MSCI’s index of Asia-Pacific stocks outside of Japan rose 0.7 percent, taking its gains so far this year to almost two-thirds.  Continued… Read more: RPT-GLOBAL MARKETS-Gold at record; resource plays boost stocks (at Reuters)

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LONDON (Reuters) – Coca-Cola (NYSE: KO – News ), the world’s largest soft-drink maker, is planning to more than double its number of bottling plants in China within a decade, the Financial Times said. Doug Jackson, president of Coca-Cola’s China unit, said the company also planned to distribute more than six times as many Coke-branded coolers to retailers, bars and restaurants in China over the same period. “We are going to grow ahead of the rate of the industry,” he told investors in Atlanta last week, the paper added. Last week, Coke unveiled goals that called for the revenue generated by the company and its bottlers to double to roughly $200 billion by 2020, with profit margins increasing. See the article here: Coke to double China bottle plants within decade: report (Reuters)

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NEW YORK, Nov 22 (Reuters) – Microsoft Corp ( MSFT.O ) has had talks with News Corp ( NWSA.O ) about a tie up, which would involve News Corp getting paid to take its news websites off Google Inc ( GOOG.O ), a source familiar with the matter said on Sunday. News Corp, which owns such papers as the Wall Street Journal and the Sun, started the discussions, which were at an early stage, the source said. Microsoft has also talked with other online publishers about removing their sites from Google, according to the Financial Times, which first reported the development. Microsoft could not be reached immediately on Sunday. News Corp declined to comment. The source is anonymous because the talks are not public. (Reporting by Robert MacMillan ; writing by Paritosh Bansal ; Editing Bernard Orr) ((paritosh.bansal@thomsonreuters.com +1 646 223 6113; Reuters Messaging: paritosh.bansal.reuters.com@reuters.net)) © Thomson Reuters 2009 All rights reserved See the original post: Microsoft, News Corp weigh web pact -source

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By Tom Raum, The Associated Press WASHINGTON – Suddenly the Federal Reserve is everybody’s punching bag. Strip the Fed of its bank regulation powers, some in Congress are demanding. Get probing audits of its behind-the-scenes operations, others say. The chairman of the Federal Reserve Board is always fair game for criticism and second-guessing, usually over interest rate actions. But this year the criticism is much broader as Congress responds to widespread public anger that the Fed bailed out Wall Street but not ordinary Americans, and with unemployment in double digits. Former Fed Chairman William McChesney Martin Jr. famously said that the central bank’s job was to yank away the punchbowl just when everybody is starting to party. And while Fed Chairman Ben Bernanke has signalled the Fed will keep interest rates low for now, a round of higher rates inevitably will come. The Fed finds itself both the punchbowl keeper and the punching bag. Imagine the outcry when it does begin to crank up rates – perhaps just ahead of next year’s midterm elections. Fireworks seem likely at Senate confirmation hearings early next month on President Barack Obama’s nomination of Bernanke to a second four-year term as chairman. Many economists and Fed watchers say congressional efforts to rein in the Fed’s powers could interfere with the central bank’s ability to help guide the fragile economy to recovery. The Fed’s very independence and its unique ability among U.S. institutions to create money out of thin air enabled it to act quickly to stabilize the nation’s financial system after it froze up last September after the bankruptcy of the Lehman Brothers investment house, Fed backers say. “It might have been the Fed’s finest moment when it had to jump into the market,” said David M. Jones, a former Fed economist and president of DMJ Advisors, a Denver-based consulting firm. “We still have to wait to see how effective the Fed is in its exit strategy and whether it can keep inflation in check. But this badgering by Congress, even if there is populist sentiment, is inappropriate.” The Fed’s aggressive intervention also set the stage for the current criticism. Many lawmakers question whether the Fed’s money machine has mainly benefited financial markets and not the broader economy. Lawmakers are also peeved that the central bank acted without congressional involvement when it brokered the 2008 sale of failed investment bank Bear Stearns and engineered the rescue of insurer American International Group. Bernanke, first appointed by President George W. Bush, has worked closely with both Treasury Secretary Timothy Geithner and Bush Treasury Secretary Henry Paulson in confronting the worst financial crisis in decades. Geithner also has gotten his share of congressional wrath, mainly for his administering of the $700 billion bank bailout fund. “In the past, the Federal Reserve was held in very high esteem,” said Rep. Ron Paul, R-Texas, a libertarian who twice ran quixotic presidential campaigns and remains a darling of skeptics of Washington. Now, it’s “the source of our problem,” suggests Paul, author of the best-seller “End the Fed.” Usually an outlier, Paul suddenly has found an army of at least 307 House colleagues and 30 senators marching behind his legislation to subject the Fed to intense scrutiny by Congress’ Government Accountability Office. The House Financial Services Committee endorsed Paul’s approach 43-26 last week over objections from its chairman, Rep. Barney Frank, D-Mass. The bill would authorize Congress to audit not only the Fed’s lending programs but its basic decisions to set monetary policy by raising or lowering interest rates. Paul has been introducing a version every year since the early 1980s, but this is the first time it has garnered any serious attention. Senate Banking Committee Chairman Chris Dodd, D-Conn., who will preside over Bernanke’s confirmation hearings, has proposed legislation that would strip the Fed of its bank-regulation authority and give the Senate a role in selecting the 12 regional Federal Reserve bank presidents. Dodd says his measure would return the Fed to its core mission of setting monetary policy, claiming it proved itself “an abysmal failure” by not cracking down on risky lending practices that led to the financial meltdown. Dodd is in an extremely tight battle for re-election, even though he has served in Congress for 35 years. “I don’t think it ever hurts to have a member of Congress stand up and denounce the Fed. There is a lot of anger out there, and this is basically a therapeutic gesture,” said Ross Baker, a political scientist at Rutgers University. Still, Baker said, it probably isn’t wise to tamper with the formula that makes the Fed “very much an anomaly in American government. It’s independent, it has to be. You don’t want the Fed to be under the control of the president. And it kind of sits out there – not in the executive branch, not in the legislative branch, not in the judicial branch. Sort of its own little element in the separation-of-powers constellation.” While the Fed is subject to some congressional oversight, its decisions don’t have to be ratified by the president or Congress. Fed officials are not paid with money appropriated by Congress. Should Bernanke be worried? “Not only should be worried, he’s clearly ratcheted up his game in terms of his communications with Congress,” said Norman Ornstein, a senior fellow at the American Enterprise Institute. Ornstein said the Fed bashing this time is different from before, with “a broader base of support. And it’s coming from people who in the past would not have hit the Fed. There’s a lot of populist anger out there – on the left, in the centre and on the right. And politicians are responsive to that.” – EDITOR’S NOTE: Tom Raum covers economics and politics for The Associated Press. An AP News Analysis Visit link: Analysis: Fed bashing on rise in face of anger over Wall Street bailouts, high unemployment

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