Business News: Don Draper's Revenge

Business News: Don Draper's Revenge

Don Draper's Revenge

Posted: 24 Nov 2010 02:00 PM PST

What's in Amazon's Box? Instant Gratification

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The New Skins Game

Posted: 24 Nov 2010 02:00 PM PST

NFL Union: Player Lockout Near Certain

Posted: 26 Nov 2010 02:15 AM PST

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By Bloomberg

Nov. 26 (Bloomberg) -- DeMaurice Smith, the executive director of the National Football League players union, speaking in an interview on Bloomberg Television’s “Political Capital With Al Hunt” airing this weekend, said a player lockout next season is a “near certainty” and it would cost the U.S. economy an estimated $5 billion in lost wages, taxes and other revenue if the entire season is canceled.

(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)

AL HUNT: We begin the show with the National Football League Players Association executive director, DeMaurice Smith, who joins us in our Washington studio. Thank you so much for being with us.

DEMAURICE SMITH: It’s a pleasure. Thank you.

HUNT: You’ve warned that there would be a huge economic impact in New York if the National Football League locks out the players for the next season. Do you have any sense of what -what nationally the economic loss would be to the country if -

SMITH: The - the magnitude of the loss would be at the very least about $160 million to $170 million per team city.

HUNT: Per team city? So that’s -

SMITH: Per team city.

HUNT: As much as $5 billion?

SMITH: Easily. That is a conservative estimate of the economic impact. And for every city, we’re talking not only fans who would obviously miss their football, but we have over 150,000 people who work in our stands, the support networks that service those stadiums. The economic impact is one that is not in the best interests of the country.

HUNT: Let me ask you this. You’re fighting for public opinion, but your members include people like Albert Haynesworth, who plays about every third defensive down for the Washington Redskins, makes $100 million bucks. There are people out there in Kokomo, Indiana, who are going to say, “Wait a minute. I’m going to worry about that?”

SMITH: Well, look, and we believe that the players of the National Football League are among the best athletes on the planet. The game has grown exponentially over the last 15 years. You’ve seen team values increase by 500 percent over 15 years. No one is going to say that the players of the National Football League don’t get rewarded handsomely for the things that they do.

But on the business side of this, the reality is, it is a sport that is driven by the best athletes in the world. Nobody is going to make an apology for that. But where we are right now in this lockout is, in a world where players have committed $3 billion to the construction, operation and upkeep of the last six stadiums alone -

HUNT: Right.

SMITH: - so not only do the players risk everything on the field, obviously, but the players of the National Football League have become economic investors in the business of football.

HUNT: So do you have superstars like Peyton Manning? Are they really going to be in your corner when push comes to shove?

SMITH: They’re already in our corner. I’m blessed to have guys not only like Peyton and Jeff Saturday, but players like Drew Brees. And all across the league, players have made a decision to stand up and fight not only for what they believe is an economically fair deal, but also fight for something that is much larger than that.

HUNT: Let me ask you this, though. Your guys have a limited time, three-and-a-half years average tenure in the NFL. The owners have a huge contract with television networks which they get whether the games are played or not. Don’t they have most of the leverage?

SMITH: Well, it depends on, obviously, what you think leverage is. I think that economically the players of the National Football League, we know they have an economic leverage over us. We know that those TV contracts that were negotiated even if the games aren’t played is a huge economic hammer that hangs over the players.

But there’s another one, as well. When I took this job, I went through some of the notes that Gene Upshaw had left. He was fond of one saying over and over: The players play for an extremely short period of time, but the owners play long every day.

HUNT: Right.

SMITH: Our owners own teams for decades, and our players play for about 3.5 years. But when it does come to leverage, about understanding the necessity of sacrifice, teamwork, our players believe that they are this game, that if this game is going to be played and if it is going to be played at a high level, that they are the ones who make this game fun for America, I believe that we have a tremendous amount of leverage.

HUNT: You have a $200 million lockout fund, I believe. If the worst comes, do you have any sense yet - how are you going to use that? Are you going to use it for stipends, for health insurance? And would your players qualify for unemployment compensation?

SMITH: We will use our lockout fund and every bit of leverage to maximize the interest of our players and our families. Right now, we know that about 1,900 players and their families will lose their health care in March if this lockout occurs. We have estimated about 300 expectant mothers in that period of time. We have kids who are awaiting heart transplants and a few who are on kidney dialysis.

Right now, the first and foremost on our minds is taking care of our families. After that, we’ve told the players to expect a lockout, prepare for it, and support not only your current teammates, but the people who played this game.

HUNT: The owners say you’ve got to get a smaller slice of their revenues because they’re hurting, that everything is down, and they don’t make the kind of profits they used to make. They haven’t showed you their books. Do you think they’re lying to you?

SMITH: We live in a world where it’s trust, but verify, to use an often-used phrase. The owners have told us that no team is losing money. The owners have told us that no team is facing economic peril. They haven’t even told us that teams are - have a smaller amount of profits this year and the past.

All the players have said - all we have said - is we want to get a deal done. We’d rather get a deal done quickly. We are looking at -

HUNT: Think you’ll get to see their books?

SMITH: I think that if they want a deal done by the end of the year, which is where I think we should be, I think there has to be a substantial increase in the amount of economic information that’s turned over.

Looking at the value destruction on the sponsorships, ticket renewals, club seat renewals, all of those things are things that will start to cost not only the players of the National Football League, but also the owners, and dearly will cost the fans.

HUNT: If this happens, will politics get involved? The conventional wisdom is, a Republican House would tend to side more with the owners and that maybe the White House wants to do anything to avoid any kind of an impasse. Do you have a sense of whether they have more political clout than you do?

SMITH: I don’t think - I don’t think they do. I think that the two things that become apparent when anyone looks at this picture, American football is the most popular sport. Our games outdrew the regular season games of -outgrew the World Series games this year.

But the second thing is also clear: Every team city looks to lose $150 million as we recover from the worst recession of our lives. It does seem to me that whether you are a Republican or a Democrat, whether you are a conservative or a liberal, at the end of time, you believe that $150 million out of those team cities that have already invested in football is not good for your citizens and not good for your constituents.

HUNT: Let me ask you just one question about what the union position is on all the severe injuries, concussions, the sad Jim McMahon stories. On the one hand, you call for more action; on the other hand, you criticize the league for penalizing those who engage in brutal - in brutal hits. Isn’t there a contradiction there?

SMITH: What we criticize is what we see as the duplicity. You cannot fine players in the name of safety on Sunday and on Monday cancel the players’ and their wives’ and their children’s health insurance. You can’t put your arms around taking severe action in the name of health when we know that right now players receive pain medications, an abundant amount of painkillers from medical personnel every year.

You can’t on one hand say that we are doing everything for health and safety, but right now, as we sit in Washington, D.C., the National Football League has sued over 300 players to prevent them from getting worker’s comp.

HUNT: OK.

SMITH: So what we believe that we need to get to is a world where this game is safe, not only for the players who play it today, but safe for the kids that we know who want to play it tomorrow.

HUNT: Let me ask you this. As of today, what would you say are the likely odds of a lockout next season?

SMITH: We have told our players to prepare for a lockout.

HUNT: You think it’s probable?

SMITH: I think it’s a near certainty.

HUNT: You do?

SMITH: All we can do is certainly hope for the best, prepare for the worst. We told our players that in March, in all likelihood, this lockout would be effectuated.

HUNT: Right.

SMITH: Unfortunately, the league has prepared for this since 2007. We’ve tried to respond to it since 2009.

HUNT: Mr. Smith, thank you so much for being with us.

***END OF TRANSCRIPT***

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What a Laker Ticket Really Costs

Posted: 27 Nov 2010 05:24 AM PST

Climate Control's Unlikely Allies

Posted: 27 Nov 2010 05:24 AM PST

Arnold Schwarzenegger on Climate Control

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Private Financing for a Greener World

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Ireland Seeks EU Aid Agreement Before Markets Open

Posted: 27 Nov 2010 05:14 AM PST

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By Finbarr Flynn and Dara Doyle

(Adds finance ministry comment in third paragraph)

Nov. 27 (Bloomberg) -- Ireland is in the final stages of negotiating an international bailout for its banks before markets open on Monday as workers march to protest budget cuts.

Euro region finance ministers may seal an agreement with Ireland tomorrow on a conference call slated for 4 p.m. Brussels time, a European Union official said. Prime Minister Brian Cowen estimates it may amount to 85 billion euros ($112 billion.)

Irish police estimate 20,000 people took to the streets of Dublin as bailout talks focus on the interest rate charged to Ireland and the fate of senior bondholders. A finance ministry spokesman said the rate will be “sustainable” after state broadcaster RTE reported that nine-year loans from the EU and the International Monetary Fund may cost as much as 6.7 percent.

“This is the result of allowing speculators, bankers and developers to run riot, pillaging and ruining our economy,” said Jack O’Connor, head of the Irish Congress of Trade Unions, in a statement.

The need for a pact is intensifying as capital flows out of Irish banks. The government in 2008 told senior bondholders they wouldn’t lose their money if banks failed. The risk now is that breaking the pledge may spark a rout in other euro-region debt.

“One possible scenario is that the financial package for Ireland could include an element of restructuring affecting senior debt,” Fitch Ratings said in a statement yesterday. “Fitch has no visibility of this matter but notes that such a restructuring could have wider implications for the euro area.”

Burning Bondholders?

Ireland’s woes are having domestic political repercussions. Cowen’s party yesterday lost a special election for a vacant parliamentary seat to a Sinn Fein candidate who said he wanted to “burn” holders of bank debt.

Ireland’s loans will probably come from the IMF, the European Commission and the European Financial Stability Facility. The IMF rate will be the cheapest and the rate from the EFSF, which provides most of the funds, will be the most expensive, RTE said.

The average rate on three-year loans will be around 5.5 percent, the Irish Times said, citing an unidentified person familiar with the negotiations. Greece was charged around 5 percent by the EU for three-year loans when in May. The IMF charged around 3.4 percent for most of its portion.

“The government in my view needs to play hardball,” Leo Varadkar, a spokesman for the opposition Fine Gael party, said on RTE.

Bond Selloff

Allied Irish Banks Plc and Bank of Ireland Plc bonds fell yesterday on concern the government will abandon a pledge to protect senior bondholders and force them to share the bailout costs. EU and IMF officials are taking legal advice on how senior bondholders can share the cost of the rescue without triggering lawsuits, the Irish Times said yesterday, without saying where it got the information.

While deposit outflows have “stabilized” in recent weeks, Anglo Irish Bank Corp. Chairman Alan Dukes told Bloomberg Television two days ago that the nationalized lender lost about 12 billion euros of deposits this year and that “other banks are having similar problems.” Anglo Irish yesterday had its long-term counterparty credit rating cut to below investment grade by Standard & Poor’s, which cited concerns about sovereign support for the bank.

Contagion Risk

Deposits at Allied Irish and Bank of Ireland have fallen by a combined 22 billion euros since the end of June, according to estimates from Emer Lang, an analyst at Dublin-based securities firm Davy.

Ireland’s crisis is now forcing Portuguese and Spanish politicians to quell speculation that they are next in line for rescue. The average yield investors demand to hold 10-year debt from Greece, Ireland, Portugal, Spain and Italy yesterday reached a euro-area record of 7.57 percent. By contrast, Germany pays 2.73 percent.

Portugal and Germany yesterday denied a report in the Financial Times Deutschland that Portugal is being forced to seek aid. The country’s parliament yesterday approved the government’s 2011 budget proposals, which include the deepest spending cuts in more than three decades. The European Central Bank bought the country’s bonds yesterday, according to people familiar with the transactions.

In Spain, Prime Minister Jose Luis Zapatero told Catalan radio RAC1 that investors who are “short” on Spain “are going to be wrong and will go against their own interests.” Finance Minister Elena Salgado said that Spain will issue less debt at the remaining auctions of 2010 because the nation’s financing needs for this year are already covered.

“The sovereign debt crisis has gone from third to fifth gear in just a matter of days,” said Kathleen Brooks, research director at Gain Capital Group LLC in London. “Whereas the Greek crisis and the start of the Irish crisis were concerned with individual sovereigns and their problems, the current chapter of Europe’s sovereign woes has turned into a periphery- wide issue where no one is safe.”

--With assistance from Joe Brennan in Dublin, Emma Ross-Thomas in Madrid, Mark Deen in Paris, Simon Kennedy and John Glover in London, Stephanie Bodoni in Brussels, Joao Lima in Lisbon and Patrick Donahue in Berlin. Editors: John Fraher, Fergal O’Brien

To contact the reporters on this story: Finbarr Flynn in Dublin at fflynn3@bloomberg.net Dara Doyle in Dublin at ddoyle1@bloomberg.net.

To contact the editor responsible for this story: John Fraher at jfraher@bloomberg.net

U.S. Carrier in Korean Seas as War Talk Hits Market

Posted: 27 Nov 2010 03:29 AM PST

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By Bomi Lim

(Adds Russian ministry statement in 16th paragraph.)

Nov. 27 (Bloomberg) -- The aircraft carrier USS George Washington and four smaller warships begin exercises with South Korean vessels tomorrow in a show of force that North Korea warned will take the peninsula to the “brink of war.”

The drills, to be held in the waters west of the Korean peninsula, follow North Korea’s Nov. 23 attack on a South Korean fishing community and military base that killed four people, including two civilians. Shells shattered windows of a school and set houses ablaze on Yeonpyeong island in a disputed area about 20 kilometers (12.4 miles) from the North Korean mainland.

While the U.S. has called the drills “defensive in nature,” Kim Jong Il’s regime warned that any infringement of North Korea’s sovereignty would spark another attack. Japan’s Prime Minister Naoto Kan ordered the Cabinet yesterday to stay in Tokyo in case of “unexpected” developments.

The shelling of Yeonpyeong escalated tensions that flared after an international inquiry found that North Korea torpedoed the South Korean warship Cheonan in March, killing 46 sailors. President Barack Obama, along with Kan and South Korean President Lee Myung Bak, have called on China to use its influence to temper North Korean acts of aggression, while Chinese Premier Wen Jiabao has reiterated calls for stability, without ascribing any blame to North Korea.

The Korean won was Asia’s worst-performing currency against the dollar yesterday, after North Korea threatened “a shower of terrifying fire.” The Kospi stock index fell 1.3 percent.

Defense Minister

South Korea is considering reinstating North Korea as the “main enemy” in its defense guidelines, Yonhap News reported today, citing a government official it didn’t identify. The term may be restored in a Defense White Paper following North Korea’s artillery attack, the Korean-language news agency said.

South Korea’s Lee appointed former Joint Chiefs of Staff Chairman Kim Kwan Jin, 61, to replace Defense Minister Kim Tae Young, who quit amid criticism that the military’s response to the shelling was inadequate.

Lee wants to “reconstitute the military policy landscape,” said Jasper Kim, an associate professor at Ewha Womans University’s Graduate School of International Studies in Seoul. “The current Lee Myung Bak administration was already hawkish, but now it’s entered into a hyper-hawkish foreign policy mode.”

Lead to War

“Escalated confrontation would lead to a war,” a North Korean government agency in charge of relations with South Korea said in a statement on the state-run Korean Central News Agency. “Gone are the days when verbal warnings are served only.”

Shipping was warned to avoid an area of the Yellow Sea parallel to China’s northeastern city of Qingdao while gunnery exercises take place from Nov. 29 to Dec. 3, according to the National Geospatial-Intelligence Agency. Qingdao lies about 615 kilometers west of Seoul.

The nuclear-powered USS George Washington, which holds about 85 aircraft and is served by a crew of 6,500, was last in waters off the Korean Peninsula in July as part of drills the U.S. announced after the Cheonan’s sinking.

China said at the time it was “firmly opposed” to any foreign military maneuvers that may threaten stability in the region. The Foreign Ministry yesterday warned against having the exercises in China’s “exclusive economic zone” without its authorization, Xinhua News Agency reported.

Given Notification

The Pentagon reiterated that the U.S. military notified China of the planned exercise as it has in the past.

“This exercise and the whole series of exercises is not directed at the Chinese,” U.S. Navy Captain Darryn James, a Pentagon spokesman, said yesterday. “It’s designed to strengthen deterrence against North Korea.”

China is North Korea’s main economic and political benefactor and the two countries fought together against U.S.- led United Nations forces during the 1950-53 Korean War. The peninsula remains in a technical state of war since the conflict ended in a cease-fire.

Russia’s Foreign Minister Sergei Lavrov and his Chinese counterpart Yang Jiechi urged a prevention of a further escalation on the peninsula and vowed to “work toward easing the tension between the two Korean parties as well as resuming the six-party talks” during a telephone call today, according to an e-mailed statement from the Moscow-based ministry.

The U.S.-South Korea drills, which will involve air defense and surface warfare readiness training, are “designed to improve our military commitment to regional stability through deterrence,” the U.S. Forces Korea in Seoul said on Nov. 24.

Shelling

The U.S. stands “shoulder to shoulder” with South Korea, Obama told Lee in a Nov. 23 telephone call following the island shelling, the first of its kind since the war. The U.S. has about 25,000 troops stationed in South Korea.

North Korea called South Korea’s drills “military provocation” conducted in its waters.

The western sea border, demarcated by the UN after the war and never accepted by North Korea, was the scene of deadly naval skirmishes in 1999 and 2002.

North Korea contends the border should have been drawn further south in order to include Yeonpyeong and four neighboring islands as part of its territory.

--With assistance from Michael Forsythe in Beijing, Saeromi Shin in Seoul and Maria Kolesnikova in Moscow. Editors: Paul Tighe, Mike Harrison

To contact the reporter on this story: Bomi Lim in Seoul at blim30@bloomberg.net

To contact the editors responsible for this story: Bill Austin at billaustin@bloomberg.net; Paul Tighe at ptighe@bloomberg.net

Qantas A380 Plane Departs on First Service in 23 Days

Posted: 26 Nov 2010 11:13 PM PST

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By Wendy Pugh and Robert Fenner

(Updates with chief executive comment in fourth paragraph.)

Nov. 27 (Bloomberg) -- Qantas Airways Ltd. resumed Airbus SAS A380 services for the first time since an engine explosion 23 days ago with a superjumbo departing Sydney with Chief Executive Officer Alan Joyce on board.

Flight QF31 bound for London via Singapore took off at about 5:50 p.m. Sydney time, Qantas spokesman Thomas Woodward said by phone today.

Qantas, Australia’s largest airline, had grounded its fleet of six A380s since Nov. 4, when a Rolls-Royce Group Plc Trent 900 engine exploded over Indonesia forcing an emergency return to Singapore. The Sydney-based carrier will put another of the world’s largest passenger aircraft into service next week as well as two new jets due from Airbus before Dec. 25.

“What we want to do is show we have full confidence in the aircraft,” Joyce told reporters at Sydney airport before boarding the plane to Singapore. “I am comfortable with every Qantas operation that takes place. We are always going to operate with 100 percent safety in mind.”

The airline has begun modifying as many as 16 Trent 900s and won’t return planes powered by them to service until completing inspections with Airbus, regulators and Rolls-Royce.

Qantas configures its A380s for 450 passengers and the jets represent 17 percent of its international capacity. Joyce leased aircraft and redeployed Boeing Co. 747s and other widebody jets to meet the airlines’ schedule during the grounding.

The carrier, which is due to receive two new A380s in 2011, uses the jets on long-haul routes to Europe and North America.

Qantas hasn’t put an estimate on the cost of the disruptions and while it may seek compensation from London-based Rolls-Royce, Joyce said it’s too early to say what that might be.

The carrier’s shares have declined 7 percent since Nov. 3 compared with a 2.6 percent fall in the benchmark S&P/ASX 200 index. The stock closed unchanged at A$2.67 on Nov. 26.

--Editors: Suresh Seshadri, Paul Tighe

To contact the reporters on this story: Wendy Pugh in Melbourne wpugh@bloomberg.net; Robert Fenner in Melbourne rfenner@bloomberg.net

To contact the editor responsible for this story: Paul Tighe at ptighe@bloomberg.net

Japan Upper House Censures 2 Ministers, Adding Pressure on Kan

Posted: 26 Nov 2010 10:10 PM PST

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By Mayumi Otsuma and Sachiko Sakamaki

Nov. 27 (Bloomberg) -- Japan’s opposition-controlled upper house censured two Cabinet ministers last night, the latest blow to Prime Minister Naoto Kan as his public approval rating dwindles.

Non-binding motions urged Chief Cabinet Secretary Yoshito Sengoku and Transport Minister Sumio Mabuchi to resign over their handling of the collision between a Chinese fishing boat and Japanese Coast Guard vessels near islands claimed by both nations. Kyodo News earlier reported the motions had passed.

Opposition criticism of Kan’s administration and leadership has eroded public support for his Democratic Party of Japan-led government. The Liberal Democratic Party, the largest opposition force, has threatened to boycott parliament, while the current legislative session may end Dec. 3 with about a dozen bills left unapproved.

“Kan may have to shift Sengoku and Mabuchi to other posts in a Cabinet reshuffle as early as December,” said Hirotada Asakawa, an independent political analyst based in Tokyo. “But this may further damage his popularity, and Kan will be more and more driven toward a dead end.”

Minoru Yanagida resigned as justice minister this week after reportedly telling constituents he didn’t know why he was appointed and the job needs only two phrases: “I’d like to refrain from commenting on individual cases,” and “We’re responding to the case in accordance with the law.”

Public approval of Kan’s Cabinet fell to 23.6 percent, down 9.1 percentage points from early this month, Kyodo News reported Nov. 24, citing its own poll.

Support for the ruling DPJ fell below the opposition LDP for the first time under Kan’s leadership, at 22.1 percent to 24.6 percent.

--With assistance from Takako Taniguchi in Tokyo. Editors: Jim McDonald

To contact the reporter on this story: Mayumi Otsuma in Tokyo at motsuma@bloomberg.net

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

Loonie Falls Third Week as Korea, Ireland Raises Risk Aversion

Posted: 26 Nov 2010 09:17 PM PST

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By Allison Bennett and Chris Fournier

Nov. 27 (Bloomberg) -- The Canadian dollar fell for a third week as concern that Europe’s debt woes and conflict between North and South Korea will escalate renewed risk aversion, driving investors to the safety of the U.S. currency.

The currency gained against 15 of its 16 most-traded counterparts as investors increased bets the Bank of Canada would boost interest rates and Russia began adding the Canadian dollar to its international reserves. A report next week is forecast to show the economy added 15,000 jobs in November.

“Canada is very sensitive to global risk sentiment,” Camilla Sutton, a Bank of Nova Scotia currency strategist in Toronto, said in a telephone interview. “Canada outperformed over the five days as it’s in a good sovereign position but escalated fears of contagion in Europe and escalated tensions in Korea have been an ongoing theme.”

The Canadian currency fell 0.4 percent to C$1.0208 per U.S. dollar yesterday, compared with C$1.00168 Nov. 19. It reached C$1.0076 on Nov. 25, the strongest level since Nov. 16. The last time the dollar fell three straight weeks was August. It has declined 0.1 percent this month. One Canadian dollar buys 97.96 U.S. cents.

The loonie, as the dollar is often called because of the waterfowl on the C$1 coin, rose 2.8 percent to C$1.3519 versus the euro, its biggest weekly gain on the 16-nation currency since the week ended May 14.

Korean Conflict

The euro fell yesterday after the Financial Times Deutschland reported that euro-area policy makers are pushing Portugal to seek assistance from a 750 billion-euro ($993 billion) bailout fund to shield Spain from contagion. German Chancellor Angela Merkel warned this week the euro-area is “exceptionally serious.” Irish officials are trying to complete a deal for an international aid package before financial markets reopen next week.

North Korea on Nov. 23 fired artillery on to a South Korean fishing village and military base, killing four people. A state- run news agency said planned naval exercises by South Korea and the U.S. moved the peninsula “closer to the brink of war.”

The Canadian dollar is the still the second-best performer this month against its U.S. counterpart as annual inflation rate rose more than forecast, increasing speculation the Bank of Canada will resume interest rate hikes.

Consumer prices rose 2.4 percent in October, faster than all 22 economists in a Bloomberg survey predicted, a government report showed Nov. 23.

Central Bank

“The interest rate hike is farther down the road but Europe and Korea are here and going to be around a while,” said John Curran, a senior vice president at CanadianForex Ltd., an online foreign-exchange dealer. “The Canadian dollar will remain relatively stable and won’t trade too far out of its range unless people get really worried about things in Europe.”

Central bank governor Mark Carney kept his key policy rate unchanged in October after three successive increases, citing a weaker inflation outlook. Since then U.S. and Canadian indicators suggest the growth may be picking up, making increases more likely.

Yields on the June 2011 bankers acceptances contract, a barometer of short-term rate expectations, rose 10 basis points in the three days after the inflation report.

Canada’s currency will strengthen past parity against the U.S. dollar by the end of March, according to the median forecast in a Bloomberg News survey of 27 economists.

Russian Purchases

Canada’s benchmark two-year bond yield rose 2 basis points this week to 1.67 percent.

Russia announced Nov. 24 it had begun diversifying foreign exchange reserves by purchasing Canadian dollars.

“We have recently begun investing in assets denominated in the Canadian dollar,” Alexei Ulyukayev, first deputy chairman of Russia’s central bank, said in an interview in Moscow. “So far the amounts are very small, but there’s perhaps potential for increasing our holdings.”

In June, Ulyukayev said Russia was considering adding the Australian and Canadian dollars after fluctuations in the greenback and euro. Russia’s reserves were made up of 47 percent U.S. dollars, 41 percent euros, 10 percent pounds and 2 percent yen. Russia hasn’t bought any Australian dollars yet, he said.

--With assistance from Bomi Lim in Seoul. Editors: Dave Liedtka, Greg Storey

To contact the reporter on this story: Allison Bennett in New York at abennett23@bloomberg.net

To contact the editor responsible for this story: Dave Liedtka at dliedtka@bloomberg.net

Taiwan Holds City Elections After Campaign Shooting

Posted: 26 Nov 2010 09:04 PM PST

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By Janet Ong and Weiyi Lim

(Adds Ma Ying-jeou, Chen Shui-bian and Lee Teng-hui were Taipei mayors before becoming president in 10th paragraph.)

Nov. 27 (Bloomberg) -- Taiwan voters choose mayors in elections today after Sean Lien, son of Taiwan’s former vice president Lien Chan, was shot and wounded while campaigning for the ruling Kuomintang party on the eve of the ballots.

Voting is taking place in two northern municipalities, two in the south and one in central Taiwan, which together account for about 60 percent of Taiwan’s 23 million people. Lien and his son are members of the KMT, which controls three areas, while the opposition Democratic Progressive Party is in power in two.

“The gun shot incident will garner more votes for the KMT in Taipei city and Sinbei,” said Philip Yang, a professor of political science at National Taiwan University in Taipei. “Some people who weren’t going to vote may be compelled to do so now.”

President Ma Ying-jeou has seen his popularity fall to 30 percent in September from 58 percent after his inauguration in 2008, according to polls by Global Views, a Taipei-based magazine. Losses in the local elections may harm the KMT before presidential elections scheduled for March 2012.

Sean Lien’s condition is stable following the shooting in Taipei county and he is under observation after an operation, the National Taiwan University Hospital said in a statement on its website. He was shot in the left cheek, with the bullet exiting his right temple, Tan Ching-ting, a spokeswoman for the National Taiwan University Hospital, said by phone.

Shooter Arrested

A 29-year-old man surnamed Huang died in the gunfire, and a shooter, identified as Lin Cheng-wei, was arrested at the scene, said Wang Cho-chiun, head of the National Police Agency.

Ma condemned the incident and ordered an investigation, according to a statement from his office.

Former President Chen Shui-bian was shot in March 2004 on the eve of the presidential election, which triggered weeks of street protests on allegations he may have set up his own shooting to win sympathy votes. Lien Chan, then chairman of the Kuomintang, lost to Chen by 30,000 votes out of about 13 million cast.

“This is very negative for the future of Taiwan’s election process, democracy and our international image,” said Yang. “It sets a bad model for us and there would be such concerns for campaigning next time.”

Ma, Chen and Lee Teng-hui were mayors for Taipei city before becoming Taiwanese presidents.

Bets on the Exchange of Future Events indicate that former premier Su Tseng-chang of the DPP has a 50.9 percent chance to win the Taipei mayoral race, compared with 49.8 percent for the KMT’s incumbent Hau Lung-bin as of Nov. 24. KMT candidates are leading in New Taipei in the north and Taichung in the center, according to predictions on the exchange. The DPP is winning in Kaohsiung and Tainan in the south.

The simulated market, with about 80,000 participants, is maintained by the Center for Prediction Markets at National Chengchi University in Taipei. No money is involved, as Taiwan’s law doesn’t allow futures contracts on political events.

--Editors: Paul Tighe, James Regan

To contact the reporters on this story: Janet Ong in Taipei at jong3@bloomberg.net; Weiyi Lim in Taipei at Wlim26@bloomberg.net

To contact the editors responsible for this story: Bill Austin at billaustin@bloomberg.net; Paul Tighe at ptighe@bloomberg.net

Madoff Investors Sued by Trustee Trying to Recover Fake Profits

Posted: 26 Nov 2010 09:03 PM PST

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By Bob Van Voris and Edvard Pettersson

Nov. 27 (Bloomberg) -- A group of Bernard Madoff’s former investors were sued by a court-appointed trustee seeking to recover fictitious profits they received in the six years before the con man’s firm filed for bankruptcy in December 2008.

The trustee, New York attorney Irving Picard, sued people who invested with Madoff and withdrew more money than they contributed. Picard, with the approval of the bankruptcy judge overseeing the liquidation of New York-based Bernard L. Madoff Investment Securities LLC, has said he will pursue fictitious profits paid to investors in so-called clawback suits.

Most of the previous suits filed by Picard have sought money from Madoff family members, employees, feeder funds and others who are alleged to have known Madoff was running a fraud. In many of the suits filed yesterday, Picard doesn’t claim the investors knew or should have known about the fraud.

“The transfers received by defendant constitute non- existent profits supposedly earned in the account, but, in reality, they were other people’s money,” Picard said in a complaint seeking $2.8 million from David Washburn, a Madoff investor.

Washburn didn’t return a phone call seeking comment.

Also sued was Marion Madoff, the wife of Madoff’s brother Peter, who Picard said received $14.1 million in customer funds that should be returned. Picard already sued Peter Madoff in October of last year.

Charles Spada, a lawyer for Peter Madoff, didn’t immediately return a call to his office after business hours yesterday.

New Complaints

Picard filed at least 41 new complaints yesterday in U.S. Bankruptcy Court in Manhattan.

The new complaints follow more than two dozen filed by Picard seeking to recover more than $17.5 billion from various parties, including Madoff’s friends and family, and from feeder funds, which directed most or all of their clients’ money to Madoff. One of the suits, filed Nov. 23, seeks $2 billion from UBS AG over claims the Swiss bank aided Madoff’s fraud.

Madoff, 72, is serving 150 years in prison after pleading guilty to orchestrating history’s biggest Ponzi scheme at his New York-based firm.

At the time of his arrest, Madoff’s account statements reflected 4,900 accounts with $65 billion in nonexistent investments, according to Picard. Investors lost about $20 billion in principal.

The bankruptcy case is SIPC v. Bernard L. Madoff Investment Securities LLC, 08-1789, U.S. Bankruptcy Court, Southern District of New York (Manhattan).

--Editors: Peter Blumberg, Andrew Pollack

To contact the reporters on this story: Bob Van Voris in U.S. District Court in New York at rvanvoris@bloomberg.net; Edvard Pettersson in Los Angeles at epettersson@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

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Campbell's Quest for Productivity

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