The era of falling food prices has come to an end with the world population set to add another 2 billion people, according to Cargill Inc., the U.S. farm commodities trader.
The United Nations
Asian stocks fell Thursday as Japanese business confidence and Chinese manufacturing both slipped, but European shares rose as data showing the region’s economic output contracted less than anticipated.
Benchmark oil rose to near $96 per barrel after a big slide the day before while the dollar rose against the euro but fell against the yen.
Stock markets headed higher in early European trading. Britain’s FTSE 100 rose 0.7 percent to 5,404.36. Germany’s DAX jumped 1.1 percent to 5,734.83 and France’s CAC-40 added 0.9 percent to 3,001.80.
Wall Street was headed for a higher opening, with Dow Jones industrial futures rising marginally to 11,770 and S&P 500 futures gaining slightly to 1,207.20.
The purchasing managers’ index published by financial data company Markit showed eurozone manufacturing and services output contracting for a fourth month in December, although at the slowest rate since September. The composite output index stood at 47.9 in December, up from 47.0 in November.
“The December Eurozone purchasing managers surveys are better than feared and show welcome, much-needed improvement. However, the likelihood remains that Eurozone GDP will contract in the fourth quarter, even if the decline may not be as has been feared,” said Howard Archer of IHS Global Insight in a report.
But stocks faced strong headwinds earlier in Asia as business confidence fell in Japan and Chinese manufacturing data showed a contraction, although at a slower rate.
Japan’s Nikkei 225 index shed 1.7 percent to close at 8,377.37, a three-week low. South Korea’s Kospi lost 2.1 percent to 1,819.11 and Hong Kong’s Hang Seng tumbled 1.8 percent to 18,026.84.
Mainland Chinese shares lost ground for a sixth straight trading day, with the benchmark Shanghai Composite Index falling 2.1 percent to 2,180.90, while the Shenzhen Composite Index lost 2.3 percent to 886.01.
In Japan, confidence at major manufacturers fell over the last quarter. The Bank of Japan’s “tankan” survey of business sentiment fell to minus 4.
The figure represents the percentage of companies saying business conditions are good minus those saying conditions are unfavorable, with 100 representing the best mood and minus 100 the worst.
Japan’s strong yen has hit multiple historic highs this year against the dollar, making business conditions difficult for Japan’s export-reliant economy.
Meanwhile, preliminary manufacturing figures showed that Chinese factory output contracted, but at a slower rate, in December. HSBC’s purchasing manager’s index for December stood at 49 us fast cash.0, up from 47.7 in November. Any number below 50 indicates a contraction in manufacturing activity.
But the figure didn’t raise hopes that China might ease its monetary policy anytime soon.
“I don’t think there will be an interest rate cut in the short-term,” said Dickie Wong, executive director of research at Kingston Securities Ltd. in Hong Kong. “Sentiment is really bad in China.”
On Wall Street, stocks plummeted Wednesday amid a growing sense that Europe’s leaders have failed to contain that region’s debt crisis.
Since European leaders reached an agreement to rein in future government budget deficits last week, investors and credit rating agencies have criticized the deal for failing to address current problems.
Italy had to pay higher borrowing rates in its last bond auction of the year Wednesday. The third-largest economy among the 17 nations the use the euro paid 6.47 percent interest to borrow 3 billion euros ($3.95 billion) for five years _ up 0.17 percentage point from last comparable auction _ and the highest rate since the euro came into existence in 1999.
The higher rates make it more expensive for Italy to borrow money and reflect rising doubts that the country will be able to repay its debts.
Oil prices, which plunged more than $5 on Wednesday, drove down energy-related shares. South Korea’s S-Oil Corp. fell 4.7 percent. Hong Kong-listed China National Offshore Oil Corp. dropped 4.6 percent.
Asian banking shares fell on the heels of a downgrade by Fitch Ratings of five major European commercial banks and cooperative banking groups. Hong Kong-listed Industrial & Commercial Bank of China, the world’s largest bank by market value, fell 2.6 percent. Australia’s Westpac Banking Corp. fell 1.8 percent.
The Dow Jones industrial average fell 1.1 percent to close at 11,823.48 on Wednesday. The Standard & Poor’s 500 index fell 1.1 percent to 1,211.82. The Nasdaq fell 1.6 percent to 2,539.31.
Benchmark oil for January delivery was up 76 cents at $95.71 a barrel in electronic trading on the New York Mercantile Exchange. The contract declined $5.19 to finish at $94.95 per barrel on the Nymex.
In currency trading, the euro slipped to $1.2975 from $1.2977 late Wednesday in New York. The dollar slipped to 77.92 yen from 78.07 yen.
The newspaper coverage was troubling: London’s huge international showcase was beset by planning problems, local opposition and labor woes _ and the transport was a mess.
It sounds like the 2012 Olympics, but this was the Great Exhibition of 1851 generating stories of late trains, unscrupulous landlords and dangerous overcrowding.
Coverage of the event is found in 4 million pages of newspapers from the 18th and 19th centuries being made available online Tuesday by the British Library, in what head of newspapers Ed King calls “a digital Aladdin’s Cave” for researchers.
The online archive is a partnership between the library and digital publishing firm Brightsolid, which has been scanning 8,000 pages a day from the library’s vast periodical archive for the past year and plans to digitize 40 million pages over the next decade.
A glance at the stories of crime and scandal shows some things haven’t changed _ including grumbling letter-writers complaining about disruption caused by the 1851 exhibition, held inside a specially built Crystal Palace in London’s Hyde Park.
“People were saying, ‘This isn’t good, I can’t ride my horse in Hyde Park,’” said King. One regional newspaper editor complained that the “celebrated p.m. fast train service to London” arrived two hours late and warned visitors “not to trust themselves to the tender mercies of the numerous private housekeepers” renting out rooms at exorbitant prices.
The library hopes the searchable online trove will be a major resource for academics and researchers. The vast majority of the British Library’s 750 million pages of newspapers _ the largest collection in the world _ are currently available only on microfilm or bound in bulky volumes at a newspaper archive in north London, where the yellowing journals cover 20 miles (32 kilometers) of shelves.
“We’ve got 200 years of newspapers locked away,” King said. “We’re trying to open it up to a wider audience.”
There will be a cost to download articles online, though they can be accessed for free at the library’s London reading rooms.
Most of the first batch of 4 million pages are from the 19th century, and include stories about huge international events, freak accidents and local crimes, as well as articles about Victorian celebrities such as Florence Nightingale, whose nursing of troops in the Crimean War made her famous.
There are stories of war and famine, crime and punishment, alongside birth and death notices, family announcements and advertisements for soap, cocoa, marmalade, miracle cures and treatments for baldness.
Crime columns provide a glimpse at rough 19th-century justice. Newspapers printed lists of people transported to Australia for stealing money, silver, cloth, hay and, in one case, “seven cups and five saucers.”
The archive includes national and regional newspapers from Britain and Ireland, as well as more specialized publications. The Cheltenham Looker-On reported on society, fashions and gossip in the genteel English spa town. The Poor Law Unions’ Gazette contained vivid accounts of workhouse life, and descriptions of inmates who had absconded.
King said the library hopes the archive will also help amateur genealogists find information about their ancestors.
Library staff have already highlighted a few links to the famous, including an 1852 appearance in insolvency court by Simon Cowell’s great-great-great grandfather, Michael Gashion, and a local newspaper item about the great-great grandfather of actress Kate Winslet, who was “embedded in a mass of bricks and timber” when a hotel facade fell on him in 1903.
Bob Satchwell of press trade group the Society of Editors welcomed the archive _ some good news for newspapers amid all the negative press from Britain’s ongoing phone hacking scandal.
He said the website “opens up a magical new window on a magnificent treasure trove of real history, recording the lives of ordinary people doing extraordinary things in vibrant communities, rather than merely the cold facts of politics and pestilence.”
Bank of America is selling most of its remaining shares in China Construction Bank, expecting an after-tax gain of about $1.8 billion.
It said Monday that about 10.4 billion shares will be sold through private transactions with a group of investors. Bank of America will hold about 1 percent of the Chinese company’s common shares after the transactions close.
Bank of America Corp., based in Charlotte, N.C., had owned about 10 percent of China Construction before it announced plans in late August to begin cutting its stake.
It’s the latest initiative by Bank of America to increase its capital base to comply with new international regulations governing large banks. The bank has taken several steps recently to sell non-core assets and businesses.
Nicaraguan president and one-time Sandinista revolutionary Daniel Ortega appears headed for victory Sunday in an election that his critics say could be the prelude to a presidency-for-life.
Since returning to power in 2007, the 65-year-old Ortega has boosted his popularity in Central America’s poorest country with a combination of pork-barrel populism and support for the free-market economy he once opposed.
Now, riding on a populist platform and World Bank praise for his economic strategies, he seeks a third term _ his second consecutive one _ after the Sandinista majority on the Supreme Court overruled the term limits set by the Nicaraguan constitution.
With nearly 50 percent of voter support and an 18-point lead over his nearest challenger in the most recent poll, Ortega could end up with a mandate that would not only legitimize his re-election but allow him to make constitutional changes guaranteeing perpetual re-election.
He leads his closest competitor, opposition radio station owner Fabio Gadea of the Liberal Independent Party, by 18 points. Conservative Arnoldo Aleman, a former president and perennial candidate, has 11 percent support in the poll taken between Oct. 10-17 with a margin of error of 2.8 percentage points.
Ortega led the Sandinista movement that overthrew dictator Anastasio Somoza in 1979, and withstood a concerted effort by the U.S. government, which viewed him as a Soviet-backed threat, to oust him through a rebel force called the Contras.
The fiery, mustachioed leftist ruled through a junta, then was elected in 1984 but was defeated after one term in 1990. After two more failed runs, he softened his rhetoric, took a free-market stance, and regained the presidency in the 2006 election.
To his supporters, he is just plain Daniel, while opponents say that in his new incarnation, he has espoused “Orteguismo,” a politics of personality based on Christianity, socialism and free enterprise.
In his most recent term, Ortega has built wide support among the youth and the poor in a country of 5.8 million people, more than 40 percent of whom live on less than $2 a day.
He also has maintained ties to the U.S. even as he has grown closer to Venezuelan socialist President Hugo Chavez, signed the Central American Free Trade Agreement and cultivated Nicaragua’s large business sector. Per capita income, one of the lowest in Latin America, has grown steadily since 2006, according to the World Bank, which has praised Ortega’s macroeconomic policies as “broadly favorable.”
Still, he has been helped immensely by Chavez, who according to estimates has provided at least $500 million a year in discounted oil and outright donations.
Many warn his success comes at democracy’s expense. Claims of widespread fraud in the 2008 municipal elections led Washington to cancel $62 million in development aid.
The 2006 election drew more than 18,000 election observers. This time election observation is much more difficult and local observers are being denied credentials.
The European Union and the Organization of America States have negotiated access to Sunday’s vote. The Carter Center, whose Nicaragua delegation was led by former President Jimmy Carter in 2006, has elected not to observe because of the restrictions.
Ireland announced a deepening austerity drive Friday, committing itself to cut euro3.8 billion ($5.2 billion) from its 2012 deficit and to keep increasing taxes and slashing spending through 2015 to meet the terms of its international bailout.
Finance Minister Michael Noonan said the rising level of cuts and tax increases outlined in his 2012-15 fiscal plan are needed for Ireland to claw its 2015 deficit back within 3 percent of gross domestic product, the key target in last year’s bailout deal.
“The large gap that still exists between government spending and revenue must be closed,” Noonan told a Department of Finance press conference. “Continuing to run big deficits and engaging in the high levels of borrowing required to fund them is simply not viable. To do so would result in unsustainable debt and a long-term loss of sovereignty.”
Ireland in November 2010 was forced to negotiate a potential euro67.5 billion ($92 billion) credit line from the European Union and International Monetary Fund after the nation reached the brink of bankruptcy over its runaway bank-rescue program. Ireland already has drawn down nearly half of that funding. EU and IMF monitors have lauded Ireland’s commitment to fight its deficits as part of the deal.
Even before seeking international aid, Ireland was the first of Europe’s debt-struck nations to impose emergency austerity budgets after its ill-regulated banks began to buckle in 2008 amid imploding property markets in Ireland, Britain and the United States. Irish banks were exceptional risk-takers in all three markets. The government ended up nationalizing five banks at a cost to taxpayers expected to top euro70 billion ($100 billion).
The planned 2012-15 cuts run deeper than previously expected, in part, because Ireland has trimmed its growth forecasts in line with continued depression in consumer demand and rising uncertainty in its key American and European export markets.
Ireland lowered its 2012 growth projection to just 1.6 percent versus previous expectations of 2.5 percent. Average growth for 2013-15 also was reduced from 3 percent to 2.8 percent, a figure that many economists said still looked too rosy.
Friday’s plan presumes that consumer demand will not recover soon in a country where households often are fearful of losing their jobs, mired in negative-equity mortgages, and struggling to pay rising bills on reduced incomes.
It expects consumer demand to keep declining a further 1 percent next year, versus a previous assumption of flat growth. And demand in 2013 now is expected to be flat, versus previous hopes of a 1 percent uptick.
Noonan said deficit reduction in 2012, to be detailed in his budget Dec. 6, would involve euro1.6 billion in tax increases and euro2.2 billion in spending cuts.
He said a further euro3.5 billion would be cut from the 2013 deficit, euro3.1 billion in 2014, and euro2 billion in 2015. In total, the planned euro12.4 billion in deficit cuts over the next four years would involve euro4.65 billion in tax increases _ or more than euro1,000 for every man, woman and child in Ireland.
Such cuts, he said, were forecast to reduce Ireland’s deficit for 2012 to 8.6 percent of GDP; for 2013 to 7.5 percent; 2014 to 5.1 percent; and 2015 to 2.9 percent.
Noonan conceded that the cutting and tax hikes were suppressing economic growth, but said Ireland had no choice but to bite the bullet hard. He said Ireland’s unemployment rate, currently near a 17-year high of 14.4 percent, would improve only once consumer spending grows from 2014 onward.
“The likelihood is that exports will remain the only significant source of positive momentum in the economy for the next couple of years,” he said, referring to Ireland’s 1,000-strong stable of foreign high-tech companies, which generate a growing proportion of tax revenues but relatively few jobs.
Business leaders welcomed the size of the planned deficit cuts as necessary, but warned that the government should press harder for spending cuts, rather than hiking taxes.
“International evidence shows that tax-based austerity is more harmful to economic growth and employment than current expenditure reductions,” said Danny McCoy, director of the Irish Business and Employers Confederation, the main lobbying group for Ireland’s more than 7,000 businesses.
ST. LOUIS
Even higher fares couldn’t pull American Airlines out of its financial nosedive.
American’s parent, AMR Corp., said Wednesday that it lost $162 million in the third quarter, as fuel spending jumped 40 percent, wiping out higher revenue from fare increases and passenger fees.
It was AMR’s fourth straight losing quarter and 14th in the last 16. In last year’s third quarter _ often the strongest of the year for airlines because of heavy summer travel _ AMR earned $143 million, or 39 cents per share.
AMR hasn’t turned a full-year profit since 2007, and it has lost more than $12 billion since 2001, adding to speculation that it could be headed toward bankruptcy protection.
American has high costs, a heavy debt load, too many gas-guzzling planes in its fleet, and years of labor problems.
AMR spent $2.3 billion on fuel, easily topping wages and benefits as the biggest third-quarter expense and swamping American’s average fares increase of 7 percent.
Revenue rose 9 percent to $6.38 billion. While that was $30 million better than analysts expected, the loss of 48 cents per share was wider than analysts’ forecast of 43 cents per share, according to FactSet.
Investors were disappointed. The company’s shares fell 11 cents, or 4.1 percent, to $2.71 in morning trading.
Chairman and CEO Gerard Arpey said the third quarter was “challenging for American Airlines,” but said the company was moving aggressively to improve. The top goal, he said, was to control costs.
As recently as 2008, American was the world’s largest airline, but has since been surpassed by Delta, which bought Northwest, and United, which bought Continental. American is trying to compensate for its smaller size by expanding partnerships with British Airways and Japan Airlines to win more lucrative international travel.
As other airlines merged and returned to profitability in the last two years, analysts and investors have grown impatient with AMR management, skewering executives for failing to show enough urgency in fixing American’s problems.
The last few days provided another example of AMR’s woes. The company raised expectations it would settle labor negotiations with American Airlines pilots and win money-saving schedule flexibility, but there was no weekend deal and AMR’s stock fell 6 percent on Monday.
American and the pilots’ union could still reach an agreement any day, allowing American to argue that it is doing something to control costs and boost productivity.
The airline is also taking steps to update its fleet. It announced in July that it will buy 460 new jets from Boeing Co. and Airbus over several years. That should reduce fuel and maintenance spending, but the improvement will be gradual.
American said advance bookings are about the same as last year, but with a weak economy, it has cut the late-fall and winter flights by 3 percent compared with last winter. That should ease pressure to slash fares and help the airline cope with a high number of pilot retirements.
But American said fourth-quarter costs per mile will rise more than 6 percent over the same period last year. That figure doesn’t include fuel costs.
AMR’s stock price has fallen 64 percent this year _ far more than any other major U.S. airline company _ reflecting speculation that the company could be forced into bankruptcy protection like so many other carriers over the past decade.
Most analysts think that won’t happen anytime soon because the company has about $4.3 billion in unrestricted cash and short-term investments that could be liquidated in a pinch.
Standard & Poor’s analyst Jim Corridore said he doesn’t see a need for bankruptcy in the next year but called AMR shares “high risk.” He said problems include pilot retirements, lack of movement on labor talks, and AMR’s need to borrow money.
Al-Qaida’s branch remains a powerful threat in this deeply unstable nation, even after a U.S. drone strike that eliminated three of its key figures. Its military leadership remains intact and is only growing stronger amid months of political turmoil tearing Yemen apart.
As the president struggles to keep power, Islamic militants have taken advantage of the government’s crumbling control to take over several cities in the south, raising the danger they can establish a permanent stronghold. On Saturday, militants holding Zinjibar, a southern provincial capital, battled government forces in fighting that killed at least 28 soldiers and militants.
Yemen is considered a crucial battleground with the terror network. The impoverished nation on the southern tip of the Arabian Peninsula is on the doorstep of Saudi Arabia and the oil-producing nations of the Gulf and lies on strategic sea routes leading to the Suez Canal. But order has crumbled as President Ali Abdullah Saleh faces more than seven months of protests demanding an end to his 33-year authoritarian rule, and his loyalists have battled with military units and tribal fighters who sided with the opposition.
Ironically, the turmoil appears in one way to have been a boost to U.S. efforts to fight al-Qaida in Yemen, considered the terror network’s most active and dangerous branch.
Saleh seems to have sought to cling to power by making himself more valuable to Washington, which has pressed him to retire and allow a stable transition. In recent months, Saleh _long criticized as unreliable in his fight against al-Qaida _ has given U.S. counterterrorism units a far freer hand to act in his country, U.S. and Yemeni officials say.
Top U.S. counterterrorism adviser John Brennan has said the Yemenis have been more willing to share information about the location of al-Qaida targets. Yemeni security officials say the U.S. was conducting multiple airstrikes a day in the south since May and that U.S. officials were finally allowed to interrogate al-Qaida suspects, something Saleh had long resisted. The officials spokes on condition of anonymity to discuss intelligence issues.
The cooperation was key to hunting down Anwar al-Awlaki, the American-Yemeni cleric who was killed in Friday’s strike by U.S. drones in a desert stretch of central Yemen. Killed with him was Samir Khan, a Pakistani-American who was a propagandist for the group, producing its English-language Web magazine, Inspire.
Also believed to have died in the blast is the top bombmaker for al-Qaida in Yemen _ Ibrahim al-Asiri. The 29-year-old Saudi designed the explosives used in the group’s most notorious plots, including the Christmas 2009 failed attempt to blow up a jetliner headed to Detroit and an intercepted pair of explosives-laden printers that were mailed from Yemen to the United States in 2010.
Late Friday, two U.S. officials said intelligence indicated al-Asiri was among those killed in the strike. The officials spoke on condition of anonymity because al-Asiri’s death has not officially been confirmed.
Their deaths would strike a heavy blow to the international reach of al-Qaida in the Arabian Peninsula, as the group is called, since al-Awlaki was a valuable recruiter of Muslims abroad to carry out attacks and al-Asiri was an experienced constructor of explosives for such attacks.
But the strike “doesn’t change the dangerous dynamic. The big picture is that the country is falling apart,” says Christopher Boucek, a scholar who studies Yemen and al-Qaida. “Saleh is pushing it into civil war by refusing to step down … creating the chaos that al-Qaida will thrive in.”
Still at large are crucial figures in the group, including its leader Nasser al-Wahishi, a Yemeni who once served as Osama bin Laden’s personal aide in Afghanistan. He fled to Iran after the U.S.-led invasion of Afghanistan in 2001, and Tehran handed him over to Yemen, where he was jailed.
But in 2006, he broke out of a Sanaa prison along with nearly two dozen other al-Qaida militants in an escape U.S. officials have said had help from supporters within the regime.
He then founded al-Qaida in the Arabian Peninsula, incorporating remnants of the Saudi branch of the terror network that had been crushed by a crackdown in the kingdom in the mid-2000s, and launched a campaign to overthrow Saleh.
Alongside him is Qassim al-Raimi, the group’s military commander who Yemeni officials believe masterminded the Christmas airliner and the package bomb plots, and deputy leader Saeed al-Shihri, a Saudi who fought in Afghanistan and spent six years in the U.S. military prison at Guantanamo Bay, before being released and going through Saudi Arabia’s famous “rehabilitation” institutes.
Also still at large is Fahd al-Quso, a Yemeni who was also close to bin Laden and has been indicted in the United States for a role in organizing the 1998 suicide bombing of the USS Cole off the coast of Yemen’s southern port of Aden, which killed 17 sailors and injured 39 others. Al-Quso is also believed to have helped prepare the young Nigerian accused of carrying out the attempted 2009 airline bombing.
Al-Qaida in the Arabian Peninsula is estimated to have several hundred fighters hiding in mountainous provinces, sheltered by sympathetic tribes disillusioned with Saleh’s regime.
Its fighters are believed to be among hundreds of Islamic militants who earlier this year took control of Zinjibar, capital of southern Abyan province, the nearby town of Jaar and several surrounding villages. Since then, they have fended off military forces besieging them.
The military’s troops have been plagued by disarray in the fight. Two competing units are involved in the fight _ one under Saleh’s command and the other under the leadership of a defecting general, leading to internal conflicts.
At one point, the U.S. had to airlift food and other supplies to one military unit that was on the verge of surrendering for lack of material. Yemeni security officials say the U.S. has also carried out airstrikes in the Zinjibar area to help in the battle, though American officials have not confirmed any such strikes.
On Saturday, government troops tried to advance into the eastern part of Zinjibar in heavy clashes with militants. The Defense Ministry said in a statement that 20 militants and six soldiers were killed in the day’s fighting. Military officials, speaking on condition of anonymity because they were not authorized to talk to the press, said airstrikes also hit a hospital in Jaar that militants used as a hideout. It was not immediately clear if there were casualties.
The influential Russia finance minister who was just ousted by President Dmitry Medvedev is warning that Russia’s budget is overextended.
Alexei Kudrin was forced out Monday after a public spat with Medvedev.
In a statement, Kudrin says over the past several months despite his numerous objections “decisions were taken on budget policies that without doubt have increased budget risks.”
He said those included “excessive commitments in the defense sector and social sector that will inevitably affect the entire national economy.”
Kudrin said wanted to resign in February but Prime Minister Vladimir Putin asked him to stay on. Putin on Tuesday appointed one of Kudrin’s deputies, Anton Siluanov, to serve as acting finance minister.