UPDATE 1-US House Democrats vow continued push on China bill
By Doug PalmerWASHINGTON, Oct 14 (Reuters) - U.S. Democratic lawmakers
vowed on Friday to keep pressing for a vote on China currency
legislation, now blocked by Republican leaders, which they said
is vital for U.S. competitiveness in global markets.”It is estimated that currency manipulation costs our
economy over a million jobs,” said Steny Hoyer, the No. 2 in
the House of Representatives Democratic leadership. “I urge the
Republican leadership to put the currency bill on the floor.”Earlier this week, the Senate voted 63-35 to pass a bill
aimed at China by allowing companies to seek U.S. government
“countervailing duties” against goods from countries with
undervalued currencies.The House is controlled by Republicans and the Senate by
Democrats.Many U.S. lawmakers contend that China undervalues its
currency by as much as 15 to 40 percent to give its companies
an unfair price advantage in international trade.House Speaker John Boehner, a Republican, says he fears the
bill could start a trade war and has refused to bring it to the
floor for a vote, even though a similar measure passed the
House last year 348-79.”They don’t want this bill on the floor for one reason: it
would pass,” said Representative Sander Levin, the top Democrat
on the House Ways and Means Committee. “The speaker should let
the House work its will.”Representatives Tim Ryan and Betty Sutton, two Democrats
from Boehner’s home state of Ohio, also said they had no
intention of letting the issue drop.Democrats hope Republican lawmakers will hear from
constituents on the issue when they return to their districts
next week.The Obama administration says it shares the goal of the
legislation, which is getting China to revalue its currency.
But it has raised concern that some provisions in the Senate
bill could violate World Trade Organization rules.Meanwhile, the U.S. Treasury Department faces a Saturday
deadline to issue an semi-annual report on whether any country
is manipulating its currency for an unfair trade advantage.The Obama administration, in five previous reports, has
pushed China to move more quickly to revalue its currency.
However, it has declined to take the step of formally labeling
China a currency manipulator.
UPDATE 2-US should help more homeowners -Treasury official
While she stopped short of offering any new proposals, Mary
Miller, assistant Treasury secretary, said low interest rates
created room for greater action in housing, which has been at
the epicenter of the struggling U.S. economy.”The housing crisis has been long and painful, and there’s
still more work to be done,” Miller said in a speech at a CFA
Institute conference in Boston.The Obama administration “is interested in reviewing all of
the barriers to refinancing” loans backed by Fannie Mae and Freddie Mac , the government-owned
mortgage finance providers, in order to assist more homeowners
realize savings, she said.Fannie Mae and Freddie Mac, which were seized by the
government in September 2008, will not escape from government
conservatorship anytime soon, Miller also said.”I don’t see any easy way to unwind conservatorship,” she
said in answer to a question following her speech.. “I don’t
see an easy option to do something different.”Any changes to the existing Home Affordable Refinance
Program should not cause investors in mortgage bonds to get
cold feet, Miller said in her speech. Many investors have
worried they could take a hit.”The terms of the HARP program have been known to the
market since program inception, and should not introduce new
issues,” Miller said.Investors in these securities have already enjoyed a much
longer holding period than historical prepayment levels might
have allowed, she added.Miller also addressed an initiative that housing regulators
have floated to rent, sell or dispose of foreclosed homes
controlled by Fannie Mae and Freddie Mac.”We think there is an opportunity to address the backlog of
unsold homes by creating a process for moving real estate owned
by the government to new private owners, with a particular
interest in creating rental options,” she said.The effort “is very likely to become a reality in the next
couple of quarters,” Miller said, adding that one possibility
is organizing bulk sales on a geographic basis.The Federal Housing Finance Agency put out a request for
information to solicit the best ideas on how to accomplish
sales of foreclosed homes to perhaps turn them into rental
properties back in August. About 4,000 comment letters were
received, Miller said.”Clearly there is interest here, and we look forward to
supporting the FHFA as they move ahead,” she said.
After reviewing bids, Citi looks to sell EMI in pieces: sources
The British music company is reviewing competing offers for EMI Publishing from BMG Music, a joint venture between Bertelsmann and private equity firm Kohlberg Kravis Roberts, and Sony/ATV — a joint venture between Sony Corp and the estate of Michael Jackson, these people said.BMG-KKR and Sony have submitted the highest offers for EMI’s publishing business, the people said. One of them added that the two bids came in close to each other.Vivendi SA’s Universal Music Group and Len Blavatnik’s Warner Music Group are vying for the recorded music side of EMI, people familiar with the matter said.U.S. bank Citigroup, which took control of EMI in February, is expected to pick winning bidders for the businesses by the end of next week, the people said.While Warner Music has also been interested in buying all of EMI, significant anti-trust hurdles on the publishing segment, as well as challenges in lining up financing in a volatile market, makes such a deal unlikely, the people said.Moreover, Blavatnik, whose Access Industries bought Warner Music in May for $3.3 billion, has privately expressed reluctance to bid aggressively so soon after winning Warner Music, according to two of the people close to the transaction process. WMG Chairman Edgar Bronfman Jr. has long coveted EMI, and losing out on the chance to buy it once again is certain to hasten his departure from the company.EMI Chief Executive Roger Faxon has publicly argued against splitting the business, saying that each side benefits the other. Since the former head of EMI’s publishing operation took over leadership of the entire company, he has pushed to more closely integrate both divisions, making it potentially more difficult to split the company.But the chances of selling EMI as a whole were hurt by the tightening of credit markets in recent weeks, which have prompted banks to stiffen lending terms, thereby making deals more expensive, the people familiar with the matter said.EMI, whose artist roster includes the Beastie Boys, the Beatles and Keith Urban, is seen as one of the last remaining attractive assets in the music industry. The company said in June that it was exploring strategic alternatives and has since been running an auction, which two sources said has been code named “Project Nile.”Dividing EMI will likely generate richer bids for Citi, which is hoping to collect as much as $4 billion from the auction, said people familiar with the matter.EMI’s publishing unit is the stronger of the two assets and has attracted bids of roughly $2 billion from Sony/ATV Music Publishing and BMG Music Rights, according to two people. Sony/ATV is run by Marty Bandier, who is best known in the music business for building EMI Publishing into the industry’s premiere publishing operation over 16 years before leaving in 2006.BMG, which is a joint venture of German media giant Bertelsmann and private equity firm KKR, has made a string of music publishing acquisitions in the last year. The venture does not have a recorded music arm.Universal Music Group is currently the frontrunner for EMI’s recorded music division, which includes the Capitol and Virgin labels, one of the people said.A Citi spokeswoman declined comment. A representative for EMI was not immediately available for comment. All bidders have declined to comment throughout the sale process.
After reviewing bids, Citi looks to sell EMI in pieces: sources
The British music company is reviewing competing offers for EMI Publishing from BMG Music, a joint venture between Bertelsmann and private equity firm Kohlberg Kravis Roberts, and Sony/ATV — a joint venture between Sony Corp and the estate of Michael Jackson, these people said.BMG-KKR and Sony have submitted the highest offers for EMI’s publishing business, the people said. One of them added that the two bids came in close to each other.Vivendi SA’s Universal Music Group and Len Blavatnik’s Warner Music Group are vying for the recorded music side of EMI, people familiar with the matter said.U.S. bank Citigroup, which took control of EMI in February, is expected to pick winning bidders for the businesses by the end of next week, the people said.While Warner Music has also been interested in buying all of EMI, significant anti-trust hurdles on the publishing segment, as well as challenges in lining up financing in a volatile market, makes such a deal unlikely, the people said.Moreover, Blavatnik, whose Access Industries bought Warner Music in May for $3.3 billion, has privately expressed reluctance to bid aggressively so soon after winning Warner Music, according to two of the people close to the transaction process. WMG Chairman Edgar Bronfman Jr. has long coveted EMI, and losing out on the chance to buy it once again is certain to hasten his departure from the company.EMI Chief Executive Roger Faxon has publicly argued against splitting the business, saying that each side benefits the other. Since the former head of EMI’s publishing operation took over leadership of the entire company, he has pushed to more closely integrate both divisions, making it potentially more difficult to split the company.But the chances of selling EMI as a whole were hurt by the tightening of credit markets in recent weeks, which have prompted banks to stiffen lending terms, thereby making deals more expensive, the people familiar with the matter said.EMI, whose artist roster includes the Beastie Boys, the Beatles and Keith Urban, is seen as one of the last remaining attractive assets in the music industry. The company said in June that it was exploring strategic alternatives and has since been running an auction, which two sources said has been code named “Project Nile.”Dividing EMI will likely generate richer bids for Citi, which is hoping to collect as much as $4 billion from the auction, said people familiar with the matter.EMI’s publishing unit is the stronger of the two assets and has attracted bids of roughly $2 billion from Sony/ATV Music Publishing and BMG Music Rights, according to two people. Sony/ATV is run by Marty Bandier, who is best known in the music business for building EMI Publishing into the industry’s premiere publishing operation over 16 years before leaving in 2006.BMG, which is a joint venture of German media giant Bertelsmann and private equity firm KKR, has made a string of music publishing acquisitions in the last year. The venture does not have a recorded music arm.Universal Music Group is currently the frontrunner for EMI’s recorded music division, which includes the Capitol and Virgin labels, one of the people said.A Citi spokeswoman declined comment. A representative for EMI was not immediately available for comment. All bidders have declined to comment throughout the sale process.
UPDATE 1-U.S. 10-year note auction meets with weak demand
By Chris ReeseNEW YORK, Oct 12 (Reuters) - A U.S. Treasury auction of $21
billion of reopened 10-year Treasury notes on Wednesday had the
weakest investor demand in nearly a year as investors turned to
beaten down stocks and away from the lower-risk government
debt.The bid-to-cover ratio — a gauge of demand — was 2.86,
which marked the lowest since November 2010.The auction also brought a high yield of 2.271 percent,
which was above where 10-year notes were trading in the
when-issued market at the time of the sale, and a signal
investors were unwilling to pay for the notes at market-level
rates. The higher-than-expected yield in the auction is known
as a “tail.”“The 10-year auction was weak with a 3.5 basis point
(tail), the largest tail since December 2009,” said Ian Lyngen,
senior government bond strategist at CRT Capital Group in
Stamford, Connecticut.”The percentage of indirect bidders, a category which
includes overseas central banks, was about 35 percent and the
lowest since a 10-year note auction in February 2010.The low indirect demand comes a day after the U.S. Senate
passed legislation designed to press China to let its currency
rise in value.China opposes the legislation, and analysts are always
watching for any signs China might slow its purchases of U.S.
Treasuries in an expression of displeasure with the United
States.The weak demand in Wednesday’s auction was not ascribed to
any Chinese reluctance to buy however, as analysts said some
signs Europe was moving to address its debt crisis were
encouraging more of a “risk-on” investment attitude that was
sapping Treasuries’ safe-haven allure.”It just may mean that people are a little more comfortable
with risk than they were in the past week,” said David Coard,
head of fixed income sales and trading at Williams Capital in
New York.”There seems to be more comfort in the notion that the
economy is not going to experience a double-dip. There’s more
confidence that the Europeans have the situation there under
control and that’s making people feel more comfortable with
risk assets.”
Swiss rich shell out more on luxury lifestyles
* Without rise in Swiss franc, SALLI index up 5.3 pctZURICH, Oct 11 (Reuters) - Switzerland’s super-rich spent
more on their lifestyles in the year to August, even though
imported luxury goods were made cheaper by the strong franc,
wealth management and advisory company Stonehage said on
Tuesday.The 1.2 percent increase in Stonehage’s Affluent Luxury
Living Index (SALLI) for Switzerland beat the 0.2 percent rise
in the Consumer Price Index in the same period and bucked a 6.2
percent drop registered in the SALLI in the previous two years.”The cost of luxury living increased despite the continuing
strength of the Swiss Franc against leading currencies, which
cut the price of many high-end goods for consumers,” Stonehage
said in a news release.”The currency-linked price reductions of imported goods were
counteracted by steep rises in living costs in Switzerland,
particularly in terms of the rental market.”The Stonehage report looked at Switzerland’s ultra-wealthy,
families with disposable assets of more than $10 million. A
recent report from Boston Consulting found 9.9 percent of Swiss
households had over $1 million in disposable assets, the highest
proportion in Europe and second in the world behind Singapore.The SALLI is based on a basket of some 50 goods and services
and includes items such as school tuition fees, property rental
in Zurich and Geneva, ski holidays, fine wine and cigars.If currencies had stayed flat, SALLI would have shown luxury
goods and services inflation at 5.3 percent, Stonehage said.In the period, the franc rose 10 percent against the euro
and 21 percent against the dollar, pushing down the cost of
imported luxury items such as cars and cigars.Travel costs fell 5.6 percent, while spending on luxury
consumables fell 4.7 percent as prices for luxury holidays and
imported cigars and champagne plunged in Swiss franc terms.But those falls were cancelled out by rises in rental costs
in Zurich and Geneva of 12 percent and 4 percent, respectively.”It’s true there is a shortage of top quality accommodation
in Switzerland, but we didn’t anticipate price rises would be on
that scale,” said Mark McMullen, Executive Director of
Stonehage’s Geneva branch.Also buoying spending was an 8 percent jump in art prices,
which helped push spending on “investments of passion” like
luxury cars and jewellery to a 1.1 percent year-on-year rise.Sales at luxury goods groups such as Richemont and
LVMH have held up well this year as newly wealthy
families in emerging markets have stepped in as buyers, taking
up the slack from recession-hit developed markets.However, shares in these groups began to flag in the third
quarter as concerns grew about the sustainability of growth in
China, the world’s fastest-growing luxury goods market.
