Christian P.

Salazar

Prof. S. Rioza

FM 09403

Sept. 25, 2012

U.S. jobless claims fall to lowest in four and half years

The Labor Department report on Thursday was the latest data to suggest improvement
in the jobs market, though the surprisingly large 30,000 drop in new claims may have
reflected distortions due to seasonal adjustments that are likely to be smoothed out in
coming weeks. He noted that one state reported a decline in claims last week when a
rise had been expected. No states had been estimated for the report, he said. "We will
likely see some payback in the claims data reported next week. But through this
potential volatility, it does look like the trend in the claims is improving somewhat,"
said Daniel Silver, an economist at JPMorgan. California, given its large population and
past "massive swings" in its claims data, was probably the state that caused the sharp
drop in the seasonally adjusted figure, Silver said. A second Labor Department official
said "a processing issue" resulted in the state, which he did not identify, reporting fewer
claims than expected. "We cannot dictate to a state how they process their claims ... This
is one of the years they happened to be behind everyone else," he said, adding the
Columbus Day holiday last week may have been one factor. "This individual state,
whenever there are increases in claim, usually range from 15,000 to almost 20,000," he
added. The jobs data was tempered by a second report on Thursday that hinted at
weaker U.S. and global demand.

Reference: http://www.reuters.com/article/2012/10/11/us-usa-economyidUSBRE89A0R520121011

Reaction:
The number of Americans filing new claims for jobless benefits slid last week to
the lowest level in more than four and a half years, according to government data that
may provide a boost to President Barack Obama a month before voters go to the polls.

The overall trend seems to be that the labor market is improving. Seasonal
factors had predicted a very large increase in claims last week, which he said would be
typical for the first week of the quarter. Unadjusted claims did rise, but far less than
expected, resulting in the sharp drop in the seasonally adjusted figure.

Christian P. Salazar

Prof. S. Rioza

FM 09403

Sept. 28, 2012

Japan's Softbank in talks for $12.8 billion Sprint stake: source

Softbank said reports about the talks were "based on speculation". "We have not
announced anything. We do not comment on speculation," the company said. No one
from Sprint was immediately available for comment. Sprint Nextel, worth $15.12 billion
at Wednesday's close, is the third-largest U.S. carrier, and had more than 56 million
users at end-June. Kevin Roe at Roe Equity Research estimated Softbank could be
offering around $6.40 per Sprint Nextel share - implying a 27 percent premium to
Sprint's Wednesday close.
It lost that monopoly last year, when rival KDDI Corp also began offering the device.
Softbank faces tougher competition at home against KDDI and market leader NTT
Docomo. The company has grown from a packaged software distributor 30 years ago
into a broad telecoms group worth more than $40 billion. It took over Vodafone Japan
in 2006. As it chases market share, Softbank said this month it would buy smaller
mobile service operator eAccess Ltd in a $1.84 billion deal, saying this would give the
firm a total of 39 million users, just ahead of KDDI's 36 million. That deal was struck at
a premium of more than three times eAccess's share price.
Reference: http://www.reuters.com/article/2012/10/11/us-sprint-softbankidUSBRE89A0I520121011

Reaction:
Wealthy Founders Softbank, founded and led by Masayoshi Son - Japan's
second-richest man, according to Forbes - was the first of Japan's leading mobile carriers
to offer Apple Inc's iPhone in Japan.

Softbank Corp, Japan's third-largest mobile carrier, is in talks to buy a majority

stake in U.S. operator Sprint Nextel Corp for more than 1 trillion yen ($12.8 billion), said
a source with direct knowledge of the matter, as it seeks to expand overseas. Softbank is
in talks with several banks to borrow money to finance a bid, the source told Reuters.

Christian P. Salazar

Prof. S. Rioza

FM 09403

Oct. 2, 2012

Rating cut piles pressure on Spain to seek aid

"We expect the current situation to continue to run until either market or political
pressures become more acute," U.S. investment bank JP Morgan said in a note to clients.
"The promise of ECB action may be holding back both sorts of pressure in the nearterm, and there is little evidence to suggest that either will necessarily reappear over the
next few weeks."The European Central Bank's plan to buy the bonds of struggling
governments has raised hopes of an end to the most acute phase of the euro zone's
crisis. Spain's delay in asking formally for such aid is steadily undermining such
hopes.Prime Minister Mariano Rajoy, who has said he will only make an aid request
decision when he had all the details, is thought to be waiting for regional elections
October 21 and, if the ECB effect keeps debt costs down, he may delay a decision
further. While neither Rajoy or the euro zone's paymaster Germany seem keen for Spain
to dive in to a rescue plan, further market pressure or a sovereign downgrade to junk
would hasten the process, economists say."In the short term we suspect that the noise
and column inches generated by the S&P downgrade will be disproportionate to its
impact," Citi said in a note. "But the longer term impact could be very significant if the
market sees the trajectory towards Spain's eventual exclusion from (investment grade)
indices as inevitable." Secretary of State for the Economy Fernando Jimenez Latorre
reiterated that Madrid was still considering whether to apply for aid. S&P's action
brought it in line with peer Moody's, which also has Spain on the verge of losing its
investment grade and is due to complete a review of that rating this month.
Reference: http://www.reuters.com/article/2012/10/11/us-spain-economy-pricesidUSBRE89A0J020121011
Reaction:
Spain faced renewed pressure to take the politically humiliating step of seeking
sovereign aid on Thursday after a credit agency cut its rating to near junk, triggering a
spike in its borrowing costs.
Standard and Poor's said recession was limiting Spain's options on policy and
delay in asking for aid could drag on the new rating, which it kept on negative outlook indicating another cut is in prospect. Another headache for the government came with
data showing consumer prices rose at their fastest pace in 16 months in September,
further depressing demand among cash-strapped consumers.

Christian P. Salazar

Prof. S. Rioza

FM 09403

Oct. 5, 2012

Greek central banker's big pay-off

The scale of the pay-off, previously unknown to most Greeks, is likely to prove
controversial, amounting to nearly 2.8 million euros ($3.6 million) after tax. The Greek
central bank has also faced criticism over the recent rescue of the country's troubled
state-run Agricultural Bank (ATE), which left-wing Greek MPs described as the
"robbery of the century." In that deal the authorities decided to place ATE's nonperforming loans into a bad bank' and hand the rest of ATE to Piraeus. The Bank of
Greece said Provopoulos faced no conflict of interest from his severance deal and had
fully informed the authorities of the payment. When Reuters sent questions to
Provopoulos, the Bank of Greece legal department responded: "In compliance with the
applicable Greek law, Governor Provopoulos declared the severance payment to all
pertinent tax and judicial authorities." In a letter to Reuters, Dr Vassilios Kotsovilis, the
bank's legal director, added: "The severance payment, having been agreed upon at an
earlier time and under very different (pre-crisis) circumstances, was neither of an
arbitrary nature nor of an extra-ordinary nature." Kotsovilis said details of the payment
were reported in "the press and blogs of the period." However, Reuters was unable to
find mention of the payment despite extensive searches in both Greek and English.
Piraeus, which is suing Reuters over a previous report about the bank, said in a
statement: "In view of legal proceedings... we consider it inappropriate to comment in
any detail.
Reference: http://www.reuters.com/article/2012/10/11/us-greece-bog-provopoulosidUSBRE89A0OD20121011
Reaction:
As governor of the central bank, Provopoulos, now 62, has played a key role in
propping up Greece's banking system, which has received billions of euros in liquidity
from the ECB and is in line for up to 50 billion euros of new capital from the bailout
provided by euro zone countries and the International Monetary Fund.

The governor of the Bank of Greece was given a severance payment of 3.4 million
euros when he left his former employer, a major bank that he now regulates, documents
seen by Reuters show. George Provopoulos was awarded the sum when he stepped
down as vice-chairman of Piraeus Bank to become governor of Greece's central bank
and a member of the board of the European Central Bank in 2008

Christian P. Salazar

Prof. S. Rioza

FM 09403

Oct. 9, 2012

Wall Street flat as Apple dents gains from jobless data

Apple (AAPL.O) shares fell 1.4 percent to $632.25 after a U.S. appeals court overturned
a preliminary injunction on the sale of Samsung Electronics Co Ltd's (005930.KS) Galaxy
Nexus smartphone, dealing a blow to Apple Inc in a battle against Google Inc's
(GOOG.O) increasingly popular mobile software. "The tone was positive before the
claims data, so it gave us a nice boost. But the reality sets in that these are just one
week's figures and are subject to revision, so people have turned back to some profittaking," said Tim Ghriskey, chief investment officer at Solaris Asset Management,
Bedford Hills New York. "We are still at a very early cycle of earnings so there is not
much to take the market to the upside." Earlier data showed initial jobless claims fell to
their lowest in more than four and a half years, dropping by 30,000 to a seasonally
adjusted 339,000, against the 370,000 economists had predicted. In addition, Citigroup
upgraded its stance on U.S. equities to "overweight," citing cheap equity valuations and
aggressive central bank actions to stimulate the economy. Citigroup expects global
equity markets to rally 9 percent by the end of 2013. Sprint Nextel (S.N) shares jumped
13 percent to $5.70 on news that Japan's Softbank Corp (9984.T) may buy a majority
stake in the wireless carrier. Clearwire Corp (CLWR.O), in which Sprint holds a
majority interest, surged 38 percent to $1.79. MetroPCS (PCS.N) shares dropped 4.2
percent to $11.53. "The Sprint-Nextel deal shows there are deals to be had. Companies
are looking to find ways to grow their footprint even in this economy," said Brian
Amidei, managing director and partner at wealth management firm HighTower
Advisors. Sprint share trading hit record volumes before slowing down in the early
afternoon and tempering the market's earlier gains.
Reference: http://www.reuters.com/article/2012/10/11/us-markets-stocksidUSBRE89708R20121011
Reaction:
U.S. stocks erased most gains and were little changed on Thursday as a drop in
Apple shares after a legal ruling dented broad market gains on a sign of improvement
in the jobs market.
The analysts point to the long-term economic outlook, and concerns about
slowing world growth. Markets hate ambiguity, and today's trading patterns are a good
example of the larger ambiguous picture in the global economy. Markets hate
ambiguity, and today's trading patterns are a good example of the larger ambiguous
picture in the global economy.

Christian P. Salazar

Prof. S. Rioza

FM 09403

Oct. 12, 2012

Gold up with riskier assets, snaps four-day decline

Bullion could further consolidate gains after four consecutive monthly increases prior to
October, analysts said. Its rally sent prices to an 11-month high last Friday, but its
failure to break above $1,800 an ounce triggered technical weakness. Spot gold rose 0.3
percent on the day to $1,767 an ounce by 2:10 PM EDT (1810 GMT). The metal fell by
more than 2 percent over the prior four trading days, its longest stretch of declines since
June. U.S. COMEX gold futures for December delivery settled up $5.50 at $1,770.60 an
ounce, with trading volume about 40 percent below its 30-average, preliminary Reuters
data showed.Gold priced in euros rose for a fourth consecutive day to within 1 percent
of its record high, underscoring bullion buying among Europeans as a safe haven amid
economic uncertainty. Gold rose along with the euro, which ignored Standard & Poor's
downgrade on Spain's credit rating to one notch above junk. [ID:nL6E8LB5D3] Analysts
said expectations of economic slowdown had already been factored into financial
markets. A Reuters polls of hundreds of economists worldwide showed that next year
offers only a slight improvement for a global economy hit by recession in Europe and
slowing or moribund growth in Asia and the United States.

Reference: http://www.reuters.com/article/2012/10/11/us-markets-preciousidUSBRE89803620121011

Reaction:
Gold rose on Thursday, tracking U.S. equities and other commodities higher, as a
sharp drop in the number of Americans filing new claims for jobless benefits helped the
metal snap four straight days of declines.

The metal, a traditional inflation hedge, was boosted by economic optimism after
U.S. government data on Thursday showed jobless claims fell by a surprisingly large
30,000 last week to the lowest level in four and a half years.
Gold is very much moving in line with other riskier assets, and any type of
healthy economic data goes a long way to boost demand for gold and other riskier
assets.