Business News: Verizon Wireless May Show iPhone Next Week

Business News: Verizon Wireless May Show iPhone Next Week

Verizon Wireless May Show iPhone Next Week

Posted: 08 Jan 2011 03:40 PM PST

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By Adam Satariano and Olga Kharif

(Adds report on phone’s availability in the fifth paragraph.)

Jan. 8 (Bloomberg) -- Verizon Wireless, the largest U.S. mobile-phone company, sent out invitations for an event in New York on Jan. 11 that two analysts say is probably an announcement for its long-awaited iPhone.

“If it looks like a duck, talks like a duck and walks like a duck, it’s probably a duck,” Yair Reiner, an analyst with Oppenheimer & Co., said yesterday. “The question has always been on timing. We could hear as early as” the new week.

Adding Verizon would end Dallas-based AT&T Inc.’s four-year run as the exclusive U.S. carrier of Apple Inc.’s iPhone, a period in which the device has both been a top seller and faced complaints about reception. The move brings millions of potential customers to Apple and may crimp the growth of devices that run on Google Inc.’s Android operating system, Reiner said.

“By getting on to Verizon, Apple has the opportunity to sell more iPhones and could potentially slow Android’s momentum at the carrier that has been that platform’s most important patron,” Reiner said.

The Wall Street Journal, citing an unidentified person familiar with the matter, reported today the phone will be in stores by the end of the month. Bloomberg News reported last June that the device will be available in January.

Lincoln Center

This past week, ComScore Inc. said Android topped the iPhone in U.S. smartphone subscribers for the first time, accounting for 26 percent of the market, compared with 25 percent for Apple. BlackBerry maker Research In Motion Ltd. had the top spot with 33.5 percent.

Apple and Verizon are waiting for the technology industry’s focus to move away from the Consumer Electronics Show being held in Las Vegas, said Rajesh Ghai, an analyst at ThinkEquity LLC in San Francisco.

“They didn’t want it to be lost in the noise of CES,” Ghai said. “They wanted a stand-alone, exclusive event.”

Verizon’s event will be held at Lincoln Center in New York at 11 a.m., Peter Thonis, a Verizon spokesman, said in an e- mail. He declined to provide any details on the event.

Natalie Harrison, a spokeswoman for Cupertino, California- based Apple, also declined to comment.

Verizon Communications Inc., the New York-based company that co-owns Verizon Wireless with Vodafone Group Plc, fell 30 cents to $35.93 in New York Stock Exchange trading on Jan. 7. The shares have risen 21 percent in the past year. Apple gained $2.39 to $336.12 on the Nasdaq Stock Market, and has climbed 60 percent in the past year.

--Editors: Peter Elstrom, Sylvia Wier

To contact the reporters on this story: Adam Satariano in San Francisco at asatariano1@bloomberg.net; Olga Kharif in Portland, Oregon, at okharif@bloomberg.net;

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net; Peter Elstrom at pelstrom@bloomberg.net

Uniqlo: Asia's Top Clothier Goes Back to Basics

Posted: 06 Jan 2011 02:00 PM PST

Abu Dhabi Shares Advance on Global Economic Growth; Aldar Rises

Posted: 09 Jan 2011 03:30 AM PST

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By Zahra Hankir

Jan. 9 (Bloomberg) -- Abu Dhabi’s benchmark index rose to the highest level in almost a month, as U.S. economic reports boosted confidence in the world’s largest economy and shares in Abu Dhabi’s largest real-estate developer advanced.

Aldar Properties PJSC rallied 2.9 percent after agreeing to manage a $204 million contract to expand Abu Dhabi’s Masdar campus. The ADX General Index climbed 0.4 percent to 2,764.15 at 2 p.m. in Abu Dhabi, the highest close since Dec. 12. Gains were led by telephone company Emirates Telecommunications Corp.

“Global optimism for equity markets” helped push local shares higher, said Tariq Qaqish, director and fund manager at Al Mal Capital PSC in Dubai.

U.S. stocks rallied last week after private payrolls reported by ADP Employer Services topped estimates and service- industry growth beat forecasts. The Institute for Supply Management’s non-manufacturing index rose to 57.1 last month, the highest level since 2006 and more than the 55.7 median estimate in a Bloomberg survey of economists.

The S&P 500 climbed 1.1 percent last week, while Europe’s STOXX Europe 600 Index jumped 1.9 percent.

Aldar closed at 2.45 dirhams, a one-month high. The company will manage the Masdar contract awarded to Arabian Construction Co. and the project will be completed in 18 months, Arabian Construction said today in a statement.

Emirates Telecommunications, the United Arab Emirates phone company known as Etisalat, increased 0.5 percent to 10.75 dirhams, the biggest one-day gain since Jan. 3.

Egypt’s market is closed for a holiday. Kuwait’s gauge slipped 0.1 percent, and Qatar’s QE Index was little changed. Dubai’s DFM General Index retreated 0.2 percent, and Bahrain’s measure lost 0.1 percent. In Israel, the TA-25 Index also decreased 0.1 percent.

Israel’s benchmark Mimshal Shiklit government bond that’s due January 2020 rose. The yield on the notes dropped 2 basis points to 4.76 percent.

--With assistance from Ronit Goodman in Tel Aviv. Editors: Amanda Jordan, Bruce Stanley

To contact the reporter on this story: Zahra Hankir in Dubai at zhankir@bloomberg.net

To contact the editor responsible for this story: Claudia Maedler at cmaedler@bloomberg.net

Sudanese Vote as Oil-Rich South Eyes Independence

Posted: 09 Jan 2011 03:06 AM PST

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By Maram Mazen and Jared Ferrie

(Updates with comment by voter in third paragraph, former U.S. president Carter in 14th paragraph.)

Jan. 9 (Bloomberg) -- Southern Sudan began voting in a referendum on independence as the oil-rich region appeared set to choose to secede and form Africa’s newest nation.

Polling stations opened at 8:00 a.m. for the 4 million people who registered to cast ballots. A majority and a 60 percent turnout are required for a valid result, which is set to be announced Feb. 1. Southern Sudan’s independence, 54 years after the end of British rule in Sudan, would be declared in July.

“I want to vote for freedom for myself and for my children,” Margaret Alela, a 30-year-old unemployed resident of Juba, the regional capital, said in an interview. “I want my children to live in a free country with education and healthy living. I hope the new government in South Sudan will deliver these things.”

The referendum is the culmination of a 2005 peace agreement ending a civil war that lasted almost 50 years, except for a cease-fire from 1972 to 1983, between the Muslim north and the south, where Christianity and traditional religions dominate. About 2 million people died in the second phase of the conflict.

A vote for independence will give the south control of almost 80 percent of Sudan’s oil production of 490,000 barrels a day, pumped mainly by China National Petroleum Corp., Malaysia’s Petroliam Nasional Bhd. and India’s Oil & Natural Gas Corp. Sudan is the third-biggest producer in sub-Saharan Africa behind Nigeria and Angola.

Kiir Votes

Salva Kiir, the president of Southern Sudan, voted in the Juba at the gravesite of John Garang, the founder of the Sudan People’s Liberation Movement who died in a helicopter crash on July 30, 2005.

“Dr. John and all those who died with him are with us today, and I must assure them they did not die in vain,” Kiir said.

On the eve of the vote, the authorities reported two outbreaks of violence, in the disputed border region of Abyei and in oil-rich Unity state.

Two days of clashes in Abyei that started on Jan. 7 killed as many as nine people, the speaker of the local assembly, Charles Abyei, said by phone yesterday, while Southern Sudan’s army said it killed six rebels in fighting in Unity state.

War Legacy

The north-south conflict is a year older than independent Sudan itself. The first outbreak of violence occurred in August 1955, when a company of southern soldiers rebelled in the town of Torit against the policy of “Sudanization” as British rule was ending. Reversing colonial policy of barring Muslim domination of Southern Sudan, northerners took all senior posts in the south, except for six southerners in junior positions.

“The Arabs have been cheating us for too long, from 1955 until now,” Seibit Shanga, a 35-year-old primary school teacher in Juba, said in an interview. “That’s why we want to be independent. There is no proper education, no hospitals, no buildings; you can see people are very poor. They are stealing our resources.”

Some observers had expressed fears that a choice of independence would reignite civil war, with U.S. Secretary of State Hillary Clinton describing north-south tensions as “a ticking time bomb” in a Sept. 8 speech at the Council on Foreign Relations.

Improved Atmosphere

The atmosphere surrounding the referendum improved in recent weeks. Sudanese President Umar al-Bashir, who urged southerners to vote against independence, has promised to respect the outcome of the vote.

“Reports we’ve had so far from all over the nation, north and south, have been that everything is calm and peaceful and the people seem to be very enthusiastic about voting,” former U.S. President Jimmy Carter, whose Atlanta- based Carter Center is monitoring the vote, told reporters during a visit to a polling station in Juba today.

If the referendum runs smoothly and the government accepts its results, U.S. President Barack Obama will begin formal steps to re-evaluate the designation of Sudan since 1993 as a state sponsor of terrorism, Senate Foreign Relations Committee Chairman John Kerry told reporters on Jan. 7 in Khartoum.

‘Choose Peace’

“Today, I am repeating my offer to Sudan’s leaders -- if you fulfill your obligations and choose peace, there is a path to normal relations with the United States, including the lifting of economic sanctions and beginning the process, in accordance with United States law, of removing Sudan from the list of states that sponsor terrorism,” Obama wrote in an opinion piece published yesterday in the New York Times. “In contrast, those who flout their international obligations will face more pressure and isolation.”

Al-Bashir’s government and the SPLM authorities in Juba have pledged to ensure that production of crude isn’t disrupted and to work out how to share oil revenue.

While most of the crude is in the south, where the government depends on oil revenue for 98 percent of its budget, the export pipelines, Port Sudan on the Red Sea and refineries are in the north.

Investment Opportunities

An independent Southern Sudan would present foreign investors with “enormous opportunities,” Sebastian Spio- Garbrah, managing director of DaMina Advisors LLP, a New York-based research group, said in note to clients on Dec. 29. In addition to oil and gold, he said, the region is believed to have “abundant” deposits of minerals including marble, gypsum and chromite, which is used to make ferrochrome, an ingredient in stainless steel.

Half of the region’s population lives on less than $1 a day, 85 percent of the adult population is illiterate and one in seven women who become pregnant will probably die from pregnancy-related causes, the United Nations said in a document called “Scary Statistics.”

Voting at the more than 2,600 polling stations, most of them in the south, will continue until 5 p.m. on Jan. 15, when organizers will begin tallying the ballots.

“We want separation,” Michael Lut Majok, 48, said after he cast his vote in Khartoum, where he’s been living since 1977 when he fled the war in Lakes state in Southern Sudan. “We want to have development, build schools, hospitals. We’re all going to the south.”

--With assistance from Matt Richmond in Juba. Editors: Karl Maier, Paul Richardson

To contact the reporters on this story: Maram Mazen in Khartoum via the Cairo newsroom at mmazen@bloomberg.net. Jared Ferrie in Juba via Johannesburg at pmrichardson@bloomberg.net.

To contact the editor responsible for this story: Philip Sanders in London at psanders@bloomberg.net.

Trans-Alaska Pipe Shuts Down on Leak, Operator Says

Posted: 09 Jan 2011 12:04 AM PST

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By Chanyaporn Chanjaroen

(Adds comment from analyst in first, fifth paragraphs.)

Jan. 9 (Bloomberg) -- The Trans-Alaska Pipeline System, the 800-mile network that shifts crude across the northernmost U.S. state, has been shut down after a leak, forcing producers including BP Plc to suspend most of their local output. Prices may climb if the problem isn’t fixed, according to one analyst.

The system was closed from about 8:50 a.m. Alaska time on Jan. 8 after the leak at Pump Station 1, operator Alyeska Pipeline Service Co. said in an initial statement. There were no injuries and no “apparent impacts to the environment,” Alyeska said in a second statement, without stating when flow would be restarted. Federal and state staff are helping with the response.

BP is cutting crude output on Alaska’s North Slope by 95 percent after Alyeska reported the leak, according to spokesman Steve Rinehart, who commented by phone from Anchorage. BP’s North Slope production is about 410,000 barrels a day.

The system carries about 15 percent of domestic U.S. oil output, according to Alyeska’s website. After the shutdown, producers have been pro-rated to 5 percent of normal output, according to the operator, which is owned by the producers, including BP. Crews began recovering oil about seven hours after the shutdown, the second Alyeska statement said.

“If there’s no resolution by tomorrow, we may see prices heading towards $90 a barrel or higher,” said Gavin Wendt, founding director at Sydney-based MineLife Pty Ltd. in Sydney. “The market is very susceptible to supply-side problems.”

Crude’s Gains

Crude oil futures in New York ended at $88.03 a barrel on the New York Mercantile Exchange on Jan. 7, the lowest settlement since Dec. 17. BP stock closed at 492.5 pence in London last week. The shares tumbled 22 percent last year after the explosion of its Macondo well in the Gulf of Mexico in April.

The leak was reported earlier in the Wall Street Journal.

“Engineers are assessing the situation and developing a plan to safely restart the pipeline,” Alyeska said in the second statement. The leak appeared to be from a section of piping adjacent to a booster-pump building that is encased in concrete, the first statement said.

ConocoPhillips also produces from North Slope fields. Natalie Lowman, a ConocoPhillips spokeswoman in Anchorage, didn’t immediately return three telephone calls from Bloomberg News seeking comment.

The Alaskan pipeline system starts in Prudhoe Bay on the North Slope and runs to Valdez, the northernmost ice-free port in North America, according to Alyeska’s website. Since the system began operating in 1977, Alyeska has shipped more than 16 billion barrels of oil, according to the website.

Largest Field

BP owns 26 percent of Prudhoe Bay and neighboring fields in Alaska with Exxon Mobil Corp., ConocoPhillips and Chevron Corp. The Prudhoe Bay field, the largest field in the U.S., came online in 1977 and can produce about 400,000 barrels a day.

Alyeska is owned by BP, ConocoPhilips, Exxon Mobil, Chevron and Koch Industries Inc., according to statements on its website.

The Alaskan pipeline system was also shut last May after a leak, according to a company statement at the time. In March 2006, the Trans-Alaska system spilled 6,400 barrels in a leak that was caused by corrosion on a pipe wall.

“We have had significant production reduction before for various reasons, including bad weather,” said BP’s Rinehart. “It’s not uncommon.” The company can’t tell how long the shutdown will last, he said.

--Editors: Jake Lloyd-Smith, Jim McDonald

To contact the reporter on this story: Chanyaporn Chanjaroen in London at cchanjaroen@bloomberg.net

To contact the editor responsible for this story: Jake Lloyd-Smith at jlloydsmith@bloomberg.net

Giffords Is a Centrist Democrat Who Defies Political Labels

Posted: 08 Jan 2011 09:10 PM PST

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By James Rowley

Jan. 9 (Bloomberg) -- Arizona U.S. Representative Gabrielle Giffords was one of 19 Democrats to withhold support from their party’s leader, Nancy Pelosi, as the U.S. House of Representatives chose a new speaker Jan. 5.

Giffords, who was seriously wounded yesterday by a gunman while attending a meeting with constituents in Tucson, cast her vote for Georgia Representative John Lewis as the new Republican-controlled House picked John Boehner of Ohio to be the new speaker. She was one of two Democrats to vote for Lewis, a veteran of the 1960s civil rights movement.

The protest vote against Pelosi, who led House Democrats to defeat in last November’s election, was largely conducted by members of the Blue Dog Coalition, a group of fiscally conservative Democrats that includes Giffords among its members. She voted against legislation in 2009 to bail out auto companies such as General Motors Co.

Yet, like Pelosi, Giffords, 40, is a supporter of abortion rights, stem-cell research and other social issues favored by more liberal Democrats. She voted last month to overturn the Defense Department’s “don’t ask, don’t tell” ban on gays serving openly in the military. She voted for the health-care legislation last year that was Pelosi’s crowning legislative achievement as speaker.

Immigration

Representing a congressional district in southeast Arizona that includes a large stretch of the U.S. border with Mexico, Giffords has advocated for tougher U.S. border security and has pushed legislation to increase the number of Border Patrol agents. In 2007, she conditioned her support for immigration-overhaul legislation on beefed-up border surveillance and giving employers more “identification tools” to help them avoid hiring undocumented workers.

Still, Giffords voted for legislation last year that would have allowed some children of illegal immigrants to obtain legal status. She also criticized Arizona’s 2010 law that requires local police to determine the immigration status of people they stop for routine traffic checks.

In a statement after its passage, Giffords called it “an extreme immigration law” that “does nothing to secure our border.” Giffords said the legislature enacted the law “in response to the federal government’s failure to act” to stem illegal border crossings and that it should be a “wake-up call to Washington politicians who have refused to take seriously their responsibility to address the crisis on our border.”

Health-Care Legislation

Giffords supported the passage of legislation last year that redesigned the U.S. health-care system to extend insurance to more than 32 million people. In a statement today, leaders of Planned Parenthood Federation of America, which supports abortion rights, called Giffords a “fearless champion of health care for all Americans.”

A native of Tucson, Giffords graduated in 1993 from Scripps College in California and obtained a master’s degree in regional planning from New York’s Cornell University in 1997. After working in New York for PricewaterhouseCoopers LLP, she returned to her hometown to run her family’s tire business. In 2007, she married astronaut Mark Kelly, 46.

Her political career began in 2000 with her election as an Arizona state representative. Two years later, she was elected to the Arizona state senate and in 2006 ran for Congress when the incumbent, Republican Jim Kolbe, announced his retirement.

Immigration Law

Elected to the House that year, Giffords quickly jumped into the debate on immigration law and border security. The drive that year to overhaul U.S. immigration laws failed to produce sweeping legislation and the debate continues.

In 2010, Giffords was challenged for re-election by Republican Jesse Kelly, who was backed by the fiscally conservative Tea Party movement. She won by about 4,000 votes with support from almost 49 percent of the electorate.

Former U.S. Labor Secretary Robert Reich told the Arizona Republic newspaper in 2007 that Giffords had a bright political future. “I wouldn’t be surprised if she’s the first or second female president of the United States,” Reich said.

--Editors: Ann Hughey, Laurie Asseo.

To contact the reporter on this story: James Rowley in Washington at jarowley@bloomberg.net

To contact the editor responsible for this story: Mark Silva in Washington at msilva34@bloomberg.net

Doctors Optimistic U.S. Congresswoman Will Survive Shooting

Posted: 08 Jan 2011 09:05 PM PST

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By Drew Armstrong

Jan. 9 (Bloomberg) -- Doctors are optimistic U.S. Representative Gabrielle Giffords of Arizona will survive being shot in the head by a man who opened fire at her community meeting in Tucson, killing six people including a federal judge.

A man taken into custody after yesterday’s shooting had “a troubled past” and had made threats against public figures, Pima County Sheriff Clarence Dupnik told reporters. Authorities are looking for another man who may have accompanied the suspect to the meeting, the sheriff said.

At least 18 people were shot, and among those who died were U.S. District Judge John Roll and a 9-year-old girl.

Giffords, a Democrat beginning her third two-year term in the U.S. House, survived a single gunshot to the head and underwent surgery at University Medical Center in Tucson, Dr. Peter Rhee said at a press conference. Giffords was responding to commands, and neurosurgeons were optimistic for her recovery, Rhee said.

“With guarded optimism I hope that she will survive but this is a very devastating wound,” former U.S. Surgeon General Richard Carmona said later at Dupnik’s news conference. Carmona said he spoke with Giffords’s surgeons and viewed medical reports. “She’s severely injured,” he said.

The suspect taken into custody was identified as Jared Loughner, 22, according to a U.S. law enforcement official who spoke on condition of anonymity because he wasn’t authorized to release the information. A pistol was used in the shootings, the official said.

‘Tragedy’ for Country

President Barack Obama, speaking to reporters in Washington, called the shooting “a tragedy for our entire country.”

“Violence has no place in a free society,” the president said earlier in an e-mailed statement. Obama sent Federal Bureau of Investigation Director Robert Mueller to Arizona to lead the probe into the shooting.

Legislative business on the U.S. House calendar for the coming week is being postponed, House Majority Leader Eric Cantor, a Virginia Republican, said in a statement. The House had planned to vote Jan. 12 on a repeal of Obama’s health-care overhaul.

Dupnik said he is “not convinced” the suspect acted alone. Dupnik said authorities had a photo of the man who may have accompanied the gunman and who was being viewed as a “person of interest.” He described the person as white and “probably in his 50s.”

Dupnik also said a “suspicious package” found outside Giffords’s Tucson offices was being investigated.

Witness to Shooting

Alex Villec, 19-year-old volunteer for Giffords’s campaign, told reporters at the scene that he was just feet away when the man opened fire. The man barged through a line of people waiting to meet Giffords and asked to speak with her, he said.

Villec, a sophomore at Georgetown University, said he told the man to go to the back of the group and wait his turn. He did, and returned several minutes later, when he opened fire.

“It was clear who he was going for, he was going for the congresswoman,” Villec said. He hid behind a pillar as the shooting continued, then ran. “I’m lucky,” he said.

Two people wrestled the gunman to the ground, said Richard Kastigar, a bureau chief for the Pima County Sheriff’s Office.

“Some very brave folks during this horrific event tackled the shooter and sat on him,” Kastigar said.

Dupnik said the suspect “ran into the crowd and when he got to her he started shooting.” He said the suspect hadn’t made any statements to authorities and invoked his constitutional rights.

‘Disgrace to Arizona’

John McCain, the Republican Arizona senator who ran against Obama for president, called the assailant “a disgrace to Arizona, this country and the human race.”

Giffords, 40, was first elected in 2006 from Arizona’s 8th congressional district, which includes a 114-mile (183- kilometer) border with Mexico. She previously served in the Arizona Legislature and was chief executive officer of her family’s tire and automotive business.

Giffords is married to Mark Kelly, a U.S. Navy pilot and NASA astronaut and is the only congresswoman with a military spouse on active duty.

Roll, the judge who was fatally shot, was named to the U.S. District Court for Arizona by President George H.W. Bush in 1991. He became chief judge of the court in 2006.

Roll, 63, previously served as a judge in the Arizona state courts and as an assistant U.S. attorney.

‘One of Our Own’

“We in the judiciary have suffered the terrible loss of one of our own,” Chief Justice John G. Roberts Jr. said in a statement. “Judge John Roll was a wise jurist who selflessly served Arizona and the nation with great distinction.”

The congresswoman was holding a “Congress on Your Corner” event at a grocery store when the gunman appeared and started shooting.

Tucson resident Roger Whithed, 55, said he lives three doors away from Loughner’s family and that he and others on the street don’t know the family well.

The street is a block of single-story homes with cacti and desert plants in the front yards. The home identified by Whithed as belonging to Loughner’s family was cordoned off with tape and blocked with police cars.

Douglas Smith, a spokesman for Army Recruiting Command at Fort Knox, Kentucky, said Loughner attempted to enlist in the Army in 2008 and was rejected.

The attack was condemned by the current and former speakers of the House of Representatives.

“I am horrified by the senseless attack,” House Speaker John Boehner, an Ohio Republican, said in a statement. “An attack on one who serves is an attack on all who serve.”

Meeting With Constituents

Boehner’s predecessor, House Minority Leader Nancy Pelosi, a California Democrat, said in an e-mailed statement, “It is especially tragic that she was attacked as she was meeting with her constituents.”

Dupnik said that while officials don’t know the gunman’s motive, he was concerned about extreme rhetoric in the U.S.

“The anger, the hatred, the bigotry has gotten out of control,” Dupnik said. “Unfortunately, Arizona has become sort of the capital. This has become the Mecca for bigotry and prejudice.”

Such language “may be free speech but it’s not without consequences,” the sheriff said.

--With assistance from Brendan McGarry, Dan Hart, Tim Homan and Shobhana Chandra in Washington. Editors: Mark Rohner, Laurie Asseo.

To contact the reporter on this story: Drew Armstrong in Washington at darmstrong17@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net

Queensland Town Gets Reprieve as Rainfall Continues

Posted: 08 Jan 2011 08:53 PM PST

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By Jacob Greber and Michael Heath

(Updates with river levels in Gympie in fifth paragraph.)

Jan. 9 (Bloomberg) -- A river through the Australian town of St George has peaked at a lower level than forecast, providing a reprieve for residents, as heavy rain in other parts of Queensland state prompts warnings of further flooding.

The Balonne River in St George reached a peak yesterday of 13.2 meters (43.3 feet), about 20 centimeters short of record flooding that hit last year, the Australian Bureau of Meteorology said in a statement on its website today. Other Queensland towns, Maryborough and Gympie, are bracing for floodwaters to peak after renewed rainfall.

“We had the bad fortune of a previous flood, but what we learnt out of it was how to manage it better,” Queensland Senator Barnaby Joyce told Sky News in an interview today.

St George established a flood defense barrier at a level of 14.5 meters using high ground and earthworks, the Balonne Shire Council said. The river remained at a peak of 13.2 meters at 7:27 a.m. local time today, according to the bureau.

Major flooding continues on the Mary River between the towns of Gympie and Tiaro, with levels expected to peak at about 8.4 meters today in Maryborough, the bureau also said today. Gympie’s river level was 13.7 meters at 1:55 p.m. local time, and was likely to climb to at least 17 meters early tomorrow.

A surge above that level is possible if rainfall continues, the bureau said.

‘Got It Covered’

The region’s mayor, Mick Kruger, told the Australian Broadcasting Corp. that the council has erected a levy bank on Maryborough’s main street to keep water out of the town’s central business district. “We are hoping it doesn’t get to the 9 meters, but if it does, we’ve got it covered,” Kruger said.

The floods, Queensland’s worst in 50 years, have forced the evacuation of 4,000 people and affected about 1 million square kilometers, or an area the size of France and Germany. Major General Mick Slater, leading the state’s recovery taskforce, said it may take years to repair infrastructure.

Queensland Premier Anna Bligh has estimated the bill from the disaster, which has closed mines and spoiled crops, may be more than A$5 billion ($5 billion). The state is Australia’s largest coal exporter and accounts for about 20 percent of the nation’s A$1.3 trillion economy.

Lost Exports

The region is losing A$480 million a week in lost coal exports, said Mark Pervan, head of commodity research at Australia & New Zealand Banking Group Ltd. in Melbourne. About 160 million metric tons of annual coal production has been halted under force-majeure contract clauses, equivalent to 41 percent of the world’s export coking coal supply, and 8 percent of global export thermal supply, he said.

St George, a town of 3,500 people about 500 kilometers (310 miles) inland from the state capital of Brisbane, expects river levels to remain above 13 meters until mid next week.

“There’s been a lot of relief here in St George as we’ve been able to establish that the water is not going to get past the previous record, or only slightly,” Premier Bligh said yesterday while visiting the town with Prime Minister Julia Gillard. “We’re not going to see the worst-case scenario.”

Eleven people have died in floodwaters in the past few weeks and an estimated 200,000 people in the state have been affected, according to Queensland police. Police said a 19-year- old woman drowned yesterday while swimming in a swollen creek.

The floods closed the airport at Rockhampton, an east-coast city of 75,000 residents about 500 kilometers north of Brisbane. Train lines were cut and roads to the south and west of the town were closed. The airport may remain shut to commercial flights until at least Jan. 11, according to a notice on its website.

Third-Wettest Year

“The peak has held steady for a couple of days longer than what we thought,” Rockhampton Mayor Brad Carter said in a press briefing broadcast on Sky News yesterday. He doesn’t expect water to recede before Jan. 14.

Australia had its third-wettest year on record in 2010, according to the weather bureau, which says showers and storms will continue across Queensland into the coming week.

The rain has destroyed cotton crops, halted coal deliveries, shut mines and prompted producers including BHP Billiton Ltd. and Rio Tinto Group to declare force majeure, the legal clause allowing them to miss contracted deliveries.

‘Depends on Rain’

The “timing of the recovery depends on the rain,” ANZ Bank’s Pervan said in a note to investors Jan. 7. “The rub is that the wet season normally peaks in February/March, so risks remain high for an extended delay.”

Bligh said the government is working with coal miners on discharging water from the pits. “They’re some of the biggest employers in central Queensland, and the best thing we can do for those communities is to get people back to work,” she said.

Australia’s dollar touched a two-week low versus the U.S. currency on speculation the Reserve Bank of Australia will slow the pace of interest-rate increases after the floods tempered the economic outlook.

The cost of hiring larger ships to haul coal fell in the past week by the most in almost six months as the flooding shut mines and cut cargoes, according to the Baltic Exchange in London.

--With assistance from Angus Whitley in Sydney. Editors: John McCluskey, Jake Lloyd-Smith,

To contact the reporters on this story: Jacob Greber in Sydney at jgreber@bloomberg.net; Michael Heath in Sydney at mheath1@bloomberg.net

To contact the editor responsible for this story: Jim McDonald at jmcdonald8@bloomberg.net

IMF’s Lipsky Calls U.S. Government Finances a ‘Major’ Challenge

Posted: 08 Jan 2011 08:08 PM PST

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By Vivien Lou Chen

Jan. 8 (Bloomberg) -- International Monetary Fund First Deputy Managing Director John Lipsky said U.S. government finances will present policy makers with a “major challenge” for years.

“The challenges facing U.S. public finances shouldn’t be underestimated,” Lipsky said during a conference panel discussion today on the U.S. role in the world economy. There is a “brief window of opportunity” for fiscal-policy adjustments, and “the U.S. needs to make the most of this window of opportunity.”

Treasury Secretary Timothy F. Geithner this week said lawmakers must raise the $14.29 trillion federal borrowing limit in the first quarter of 2011 or risk a default on U.S. debt. The U.S. had a $1.3 trillion budget deficit in fiscal year 2010, which ended Sept. 30. President Barack Obama’s debt-reduction panel failed last month to agree on recommendations for ways to reduce the annual deficit to about $400 billion in 2015.

“Fiscal adjustment is going to be one of the major challenges for U.S. policy makers for some time to come,” Lipsky said at the annual meeting of the Allied Social Science Associations in Denver. While “supportive fiscal and monetary policies” should remain in place for the near term to boost a “sluggish” recovery, they are leaving behind a “legacy of high debt,” he said.

U.S. employers added 103,000 jobs in December, fewer than the median projection of 150,000 in a Bloomberg News survey, Labor Department figures showed yesterday. The report affirmed Federal Reserve Chairman Ben S. Bernanke’s view that it could take “four to five more years” for the labor market to completely mend.

--Editors: Christopher Wellisz, Jim McDonald

To contact the reporter on this story: Vivien Lou Chen in Denver at vchen1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net