Our blog's intention is to request the US government to grant us a chance to defend our mother country Japan at the American court of law regarding the resolution "Comfort Women" passed July 30, 07.



America's New Deal for Global Energy Mix


In 1973, Richard Nixon, in the teeth of the Arab oil embargo, pledged that the U.S. would achieve energy independence within seven years. Like his presidency, that didn't quite work out. Net imports provided 35% of U.S. oil in 1973. Seven years later, they supplied 37%, and by 2005, 60%.

Now, that trend is reversing fast. In the 12 months ended in August, net imports met just 46% of oil demand. Similarly, net imports of natural gas climbed from 4% of consumption in 1973 to a peak of more than 16% in 2007, but were back under 9% in the year ended in August.

This isn't energy independence. But just as America's growing energy-import dependence in the 1970s had implications of global proportions, so will this reversal four decades later.

In natural gas, the opening of shale resources has caused excess supply and cratered prices. Despite calls to use more natural gas, demand hasn't caught up. That is why the likes of Cheniere Energy now want to liquefy and export natural gas to cash in on the spread between low U.S. prices and much higher European and Asian ones.

Capturing the benefit of this price difference will be a central battle in the natural-gas market over the next decade. Exports of natural gas would tighten domestic supply, raising prices. That is risky politically. Michael Levi at the Council on Foreign Relations reckons those benefiting from the natural-gas glut mainly utilities, petrochemical companies and heating consumers are more organized politically than natural-gas producers and exporters. The argument that gas should be exported not in its raw form but as an input to American-made goods will be tough to ignore.

Either way, more abundant U.S. gas already is affecting other markets. Gas cargos earmarked previously for America have been diverted elsewhere. For companies that historically enjoyed a grip on markets like Europe Russia's Gazprom springs to mind this competing supply is a headache.

Turning to oil, U.S. net imports, annualized, have dropped from almost 13 million barrels a day in late 2006 to just under nine million barrels now. Apparent demand has dropped by about 1.5 million barrels in that time. But the U.S. also has turned from being an importer of more than 2.5 million barrels a day of refined oil products to being a net exporter today.

U.S. production of oil and natural-gas liquids is surging, too. Bank of America Merrill Lynch Global Research estimates shale-oil output should increase above 2.5 million barrels a day by 2015. But if the growth rate was maintained, BofA reckons that could be 5.5 million barrels instead, almost double North Sea production.

There also is the expanding output of biofuels and structural head winds to demand recovery, such as tightening vehicle fuel-economy standards. Add it all up, and "suddenly, you halve your imports" of oil from precrisis levels, reckons Francisco Blanch, BofA's head of commodities research.

With demand increasing in emerging markets, this shift in imports is unlikely to crash oil prices. But it could cap rallies, particularly if it boosts the dollar. Reduced oil imports and increasing net exports of value-added refined products, will cut into the U.S. trade deficit. It also will highlight the U.S. economy's structural strengths versus others, particularly of the euro zone.

Europe suffers from lower productivity, key to offsetting energy input costs, and already is highly dependent on energy imports. Even putting aside the euro-zone debt crisis, America's newly tapped energy riches should increase its lead over this decade.



Europe’s Single Currency May Unravel Before Action, UBS Says

QBy Dan Hart - Nov 26, 2011 1:56 PM CT



この意味するところは、ユーロ危機は、限界に来たということである。ユーロ圏の分解は目前ということである。伊勢平次郎 ルイジアナ

Europe’s monetary union may unravel sooner than the region’s leaders can mobilize to ensure the sovereign-debt crisis doesn’t overwhelm the currency, a UBS AG (UBSN) foreign exchange strategist wrote.

“Financial markets continue to move faster than politicians,” Mansoor Mohi-uddin, head of foreign exchange strategy for UBS, wrote in today’s note. Markets are starting to “price in the endgame” for the currency, he said.

European bonds slumped after Germany failed to draw bids for 35 percent of the offered amount at an auction of 10-year bunds this week, stoking concern the region’s debt crisis is infecting even the safest sovereign securities.

The dissolution of the currency would force Germany and other countries’ banks to take losses on their sovereign bond holdings and burden them with the need to raise even more capital, the Singapore-based analyst wrote.

German Chancellor Angela Merkel’s desire for closer fiscal union in Europe could weaken that country’s position if funds needed to be transferred to strengthen the monetary union, Mohi- uddin wrote.

He said next week’s meeting of European finance ministers and the auction of 8 billion euros worth of Italian bonds are expected to be a key measure of the euro’s strength.

The euro slid for a fourth week, dropping 2.1 percent to $1.3239 yesterday versus the dollar, the longest losing streak in 18 months. Also, the 17-nation currency fell for a third week against the yen as Belgium’s credit rating was downgraded. The currency fell 1.1 percent to 102.91 yen.

Dow Jones Newswires reported on the research note earlier.

To contact the reporter on this story: Dan Hart in Washington at



Euro Zone Risks Doing Too Little Too Late


After nearly two years in which the focal point of the euro-zone debt crisis has shifted from one European capital to another, it has finally arrived where it belongs: in the bloc's headquarters in Brussels.

The crisis has only ever been partly about the sustainability of the sovereign debts of Greece, Ireland, Portugal, Italy and Spain. More crucially, it has always been a political crisis, an institutional crisis, a crisis of governance. It has been about a failure to develop mechanisms to ensure financial discipline among euro-zone members and to come to the aid of countries in financial trouble. There can be no solution to the crisis that doesn't first address this governance crisis.

Two myths have sustained hopes. First, that rising government-bond yields simply reflected a loss of credibility by some governments—for which the solution was an even-greater commitment to austerity and structural reform. Second, that if the euro zone's survival were threatened, the European Central Bank would deploy its all-powerful "bazooka" to buy bonds and prevent a collapse into chaos.

The first myth has been demolished. Despite the weekend's landslide election of a fiscal hawk in Spain, its 10-year bond yields ended Monday 0.25 percentage point higher, at 6.52%. Despite the appointment of a technocrat government in Italy under Mario Monti, Italian 10-year bond yields remain at 6.63%. Meanwhile, the ECB continues to do everything it can do debunk the second myth, saying it can't and won't act as lender of last resort to governments.

In response to poor policy decisions, investors, banks and corporations are cutting exposure to euro-zone government bonds—except Germany's—amid fears they now contain liquidity risk, credit risk and, increasingly, currency risk.

Even if the ECB changed its mind on the legality of a commitment to underwrite government debts, it isn't clear this would solve the problem. The ECB can buy bonds only in the secondary markets. That wouldn't necessarily guarantee Spain and Italy primary access to bond markets. It isn't clear why ECB intervention would encourage the return of private-sector buyers, since this would make little difference to overall debt burdens and doubts about debt sustainability would persist. What's more, bonds acquired by the ECB will effectively rank senior to their own, leading to bigger haircuts in the event that the debt ultimately proves unsustainable.

Besides, the run on the sovereign-debt markets is only the most visible aspect of the euro-zone crisis: The run on the banking system is equally damaging. Short-term dollar-funding markets and senior unsecured bond markets have been closed since the summer; the interbank market is also suffering. Banks are being forced to raise the cost and reduce the availability of credit, further undermining growth and competitiveness.

At best, the ECB can buy time—but for what? Any true solution must start with repairing the broken sovereign-bond market—something that now requires the creation of euro-zone bonds. The European Commission is due to announce proposals Tuesday, but an agreement could take months, while delivering the necessary treaty changes could take years. Meanwhile, the real question remains—as it has always been—what political price will Germany demand to put its balance sheet on the line?

Germany's greatest fear is moral hazard. How can it be sure countries will stick with reforms once market pressure is relaxed? Replacing elected politicians with unelected technocrats can be only a short-term remedy. Both EC President José Manuel Barroso and European Council President Herman van Rompuy are preparing proposals to improve economic governance. But most ideas under discussion amount to tinkering with scrutiny of national budgets, not the full-blown fiscal and political union needed to credibly underpin euro bonds.

Perhaps the intensity of the crisis will force dramatic political change in Brussels, as it has in member states. Perhaps governments will embrace radical transfers of sovereignty to avoid the cataclysm of a euro collapse. But the risk is that, as so often in the crisis, when politicians finally act, it may be too little, too late.

No Relief for Europe's Bonds


A selloff in euro-zone bonds continued on Monday, as investors shrugged off the election of a fiscally conservative government in Spain and continued to clamor for bold action by European policy makers.

A day after Spain's Popular Party won a sweeping victory over the ruling Socialists in the general election, Spanish borrowing costs approached their highest levels since the European debt crisis began. Italy's 10-year yield continued to rise, as did yields for Portugal, Ireland and Greece. The yields on the highest-rated European bonds also pushed upward, with the Netherlands, Austria, Finland and France all rising.

With few signs that the European Central Bank is willing to significantly beef up its purchases of euro-zone bonds to stabilize the market, investors world-wide continue to dump bonds of heavily indebted euro members and snap up U.S. Treasurys and the benchmark for safety in Europe, the German bund.

Europe's prescription for solving the crisis has focused on forcing vulnerable countries to cut public spending. Yet that course, championed in particular by Germany, has done little, if anything, to win back investor confidence.

"There's a growing recognition that austerity alone is not going to solve the problem," said Stuart Thomson, chief market economist for Ignis Asset Management. But equally, he said, "there's a growing recognition that the ECB cannot solve the problem. Those who are looking for a miracle with unlimited (money printing) from the ECB are misguided. To believe in that is to believe in Santa Claus."

The relentless selling pressure in Europe underscores a simple, difficult truth. Euro-zone governments—excluding Ireland, Greece and Portugal, which have already been cut off from the markets—need to borrow roughly €800 billion ($1.08 trillion) in 2012 to repay maturing debts and fund their operations, according to Barclays Capital estimates. But investors, who in normal times were more than willing to lend, are increasingly turning up their nose at all but the safest-looking European nations that want to borrow.

"Hedge funds are not there anymore. Banks are pulling out. You have ordinary fund managers not being active anymore. You haves central banks reducing risk," said Peter Schaffrik, head of European rates strategy at RBC Capital Markets in London.

Monday brought fresh reports that some of Japan's big investment trusts are turning away from European government bonds. Kokusai Asset Management Co. said it has sold all the Spanish and Belgian government bonds held by its Global Sovereign Open fund, the largest investment trust in Japan. Other risk-averse Japanese investors are taking a similar approach. Mizuho Trust & Banking Co. removed Italian government bonds from its overseas sovereign fund targeting individual investors in September.

Closer to home, large French banks BNP Paribas SA, Société Générale SA and Crédit Agricole SA have reported in recent weeks that they have chopped exposure to government bonds in troubled euro-zone countries in recent months.

Such departures from the European bond market—whether a short-term or long-term phenomenon—have made it increasingly difficult for buyers and sellers to agree on prices recently, prompting calls for the ECB to boost its buying of sovereign debt to keep market conditions orderly.

"In the very, very near term, you need to stabilize the prices and there's only one entity that can do that and that's the central bank," said Scott Thiel, head of European and non-U.S. fixed income for BlackRock in London.

The postelection slump of Spanish bond prices Monday, as well as persistently weak prices of Italian and Greek bonds, suggests investors may think the crisis has gone beyond the control of national governments alone and requires difficult, time-consuming alterations to the fabric of the euro zone. The yield on Spanish 10-year government bonds rise as high as 6.6% on Monday, before closing at 6.55%.

French yields nearly hit 3.62%, after Moody's analysts published a note saying that "elevated borrowing costs persisting for an extended period would amplify the fiscal challenges the French government faces amid a deteriorating growth outlook."

The ECB's reluctance to step up its limited bond purchases partly reflects a fear of a political backlash in Germany, where many lawmakers are already angry that the bank is intervening in government bond markets at all.

The German government repeated its view on Monday that the euro-zone crisis was caused by a lack of fiscal discipline and economic competitiveness in some nations on the euro periphery—and that the solution therefore lies in overhauls in those countries, not in ECB bond buying or collective European debt issuance.

Whether the ECB decides to boost its bond-buying or not, investors seem to be coming to the conclusion that any true solution to the European debt crisis will be a years-long process in which governments will be asking electorates to accept enormous sacrifices, in the form of entitlement cuts and tax increases, as well as weak growth and high unemployment.

This week, the European Union's executive arm will float proposals for joint issues of bonds among the currency's 17 governments. But Goldman Sachs analysts in a note Monday suggested such an approach "will take time, probably measured in years, for common issuance to start."

"It's all part of a process," said Stewart Cowley, head of fixed income of Old Mutual Asset Management in London, of any eventual solution to the crisis. "And if it goes wrong, all bets are off in Europe."



‘Enough’s Enough’ on Undervalued Yuan: Obama

By Julianna Goldman and Margaret Talev - Nov 14, 2011 1:55 AM CT .

 President Barack Obama kept up his pressure on China's foreign-exhange policy and trade practices, saying “enough’s enough” on what the U.S. views as a too-slow appreciation of the yuan.

While there's been a “slight improvement,” China’s exporters “like the system the way it is” and are resistant to any moves to loosen the reins on the yuan, Obama said.

“Changes are difficult for them politically, I get it,” Obama said at a news conference concluding a summit with Asia- Pacific leaders in Hawaii yesterday. “But the United States and other countries, I think understandably, feel that enough’s enough.”

As he seeks to reassert U.S. interests in Asia, Obama is using increasingly strong language on China’s trade, currency and intellectual property policies. The U.S. contends China’s currency is kept artificially low, putting American businesses at a disadvantage and driving up Chinese trade surpluses.

Obama, who met Nov. 12 with China’s President Hu Jintao in Honolulu, said that as China’s influence rises, leaders of the world’s second-largest economy must take more responsibility for making sure trade is fair and that intellectual property rights are respected. Hu and Obama were in the Hawaiian capital to attend the annual Asia Pacific Economic Cooperation summit.

China’s Response
China has pushed back against the pressure. After Obama told Hu that the U.S. public and businesses were losing patience with China’s policies, the Chinese Foreign Ministry released a statement saying the U.S. trade deficit and unemployment are not caused by the yuan exchange rate and a large appreciation in the currency won’t solve U.S. problems.

“China’s foreign exchange policy is a responsible one,” Hu told Obama, according to the statement. The country will “continue reforming its exchange rate mechanism.”

The yuan has gained about 8 percent against the dollar in nominal terms since the country ended a two-year peg to the U.S. currency in June 2010, and 30 percent since July 2005. In real, or inflation-adjusted, terms the gain has been more than 10 percent, because consumer prices have risen faster in China than in the U.S.

The yuan rose 0.04 percent to 6.3400 per dollar as of 10:30 a.m. in Shanghai, according to the China Foreign Exchange Trade System.

“We recognize they may not be able to do it overnight,” Obama said about the currency valuation, “but they can do it much more quickly than they’ve done it so far.”

Companies ‘Wary’
Obama said that he’s consistently raising concerns with the Chinese about currency, intellectual property and market access because U.S. companies “are wary” that they will be restricted in doing business in China if they raise complaints.

Two-way trade between the U.S. and China was $457 billion last year and the U.S. deficit was $273 billion. Still Obama and U.S. businesses regard China as a growing market for American goods; of the 2.3 million vehicles General Motors Co. (GM) delivered in the second quarter, 588,000 were sold in China, where the Detroit-based company is No. 1 in market share.

A March survey by the American Chamber of Commerce in China found 78 percent of member companies in the country said their China operations in 2010 were very profitable or profitable. At the same time, 24 percent of respondents said China’s economic reforms had done nothing to improve the environment for U.S. businesses in the country, up from 9 percent who said the same an earlier poll.

Iran Sanctions

During the news conference, Obama also said the U.S. is examining stronger sanctions on Iran over its nuclear program. He said U.S. Russia and China “agree on the objective” that Iran must not be allowed to develop a nuclear weapon. He declined to say whether Hu and Russian President Dmitry Medvedev indicated they would support a new round of penalties.

Russia and China have resisted efforts to impose tighter sanctions on Iran at the United Nations. The International Atomic Energy Agency has concluded that Iran, the second-largest oil producer in the Organization of Petroleum Exporting Countries after Saudi Arabia, has continued working on nuclear weapons capability until at least last year.

Obama said the sanctions that have already been imposed have “enormous bite.”

While Obama’s focus during the 55-minute press conference was on Asia, he couldn’t escape domestic politics. He was asked at several points to respond to criticisms raised by Republican presidential candidates at a Nov. 12 debate.

Republican Criticism
Former Massachusetts governor Mitt Romney said Obama’s “greatest failing” as president was not preventing Iran from making progress toward a nuclear weapon and that “if we reelect Barack Obama, Iran will have a nuclear weapon.”

Obama said he’s “going to make a practice of not commenting on whatever is said in Republican debates until they’ve got an actual nominee.” Still, he defended his administration’s efforts to hold Iran accountable and indirectly hit back at Romney.

“Now, is this an easy issue? No,” he said. “Anybody who claims it is, is either politicking or doesn’t know what they’re talking about.”

On domestic issues, Obama said the bipartisan congressional supercommittee working to narrow the U.S. budget deficit must “bite the bullet” and come up with a plan that includes both cutting spending and increasing revenue.

“Prudent cuts need to be matched with prudent revenue,” Obama said. “There are no magic beans that you can toss in the ground and suddenly a bunch of money grows on trees.”

To contact the reporters on this story: Julianna Goldman in Honolulu at; Margaret Talev in Honolulu at;


オバマ “チャイナはルールに従はなければならない!”

By David Nakamura, Saturday, November 12, 5:14 PM

HONOLULU — President Obama moved quickly Saturday to project the image of renewed American leadership in the Asian Pacific, announcing broad agreement on a multi-nation free-trade pact and warning China that it must “play by the rules” as its international influence increases.

On the first day of the Asian Pacific Economic Cooperation summit here, Obama sketched out his administration’s vision of an expanded U.S. role, telling a ballroom of hundreds of business leaders that the newfound engagement is a “reaffirmation of how important we consider this region.

Courting help from Asian powers, President Barack Obama on Saturday sought to improve the beleaguered American jobs outlook with an eye toward next year's election. (Nov. 12)

.“On the business side, this is where the action’s going to be,” Obama said. Later, he added, “I’m very proud of the leadership America has shown in the past, but I also don’t want to underestimate the leadership we’re showing now.”

Yet even as Obama sought to establish U.S. primacy, his Chinese counterpart, President Hu Jintao, offered his own, competing vision for regional growth — one with dynamic Chinese markets and improving internal business standards as the driving engine.

“China has huge market potential and capital,” Hu told the same business leaders. “China will work hard to turn itself into an innovation-driven country . . . so we can transition from ‘made in China’ to ‘created in China.’ ”

The remarks came hours before the two presidents were scheduled to engage directly in a bilateral meeting Saturday afternoon. And the early political maneuvering set the tone for what is expected to be continued competition for influence with China during Obama’s nine-day trip through the Asia Pacific, which includes stops in Australia, to announce a new military partnership, and Bali, Indonesia, for a regional security summit.

Early Saturday, Obama hailed progress on the Trans-Pacific Partnership, a free-trade agreement with eight other nations that his administration has said will help create jobs as it opens foreign markets to U.S. exports. He said the countries reached broad agreement on the pact and are aiming to have legal language for the framework in place by next year.

“With nearly 500 million consumers between us, there is so much more we can do together,” Obama told the leaders of the other countries at a morning meeting. China, the world’s second-largest economy behind the United States, is not involved in the pact, while Japan, the third-largest economy, announced its intention last week to start discussions on joining the partnership.

Chinese officials complained that they were not invited to the trade pact talks, but Michael Froman, a U.S. deputy international security adviser, said the agreement is “not something that one gets invited to. It’s something that one aspires to.”

In his appearance before the business leaders, Obama, who fielded questions from Boeing chief executive W. James McNerney Jr., said there can exist a “friendly and constructive competition” with China. But the president emphasized that the Chinese must be willing to revalue their currency rates to balance trade, respect intellectual-property rights and allow U.S. companies to compete fairly for contracts inside China.

“The bottom line is the United States cannot be expected to stand by if there is not reciprocity in trade and economic relations. We will continue to bring it up,” Obama said. “There is no reason why this should inevitably lead to sharp conflict. There’s a win-win opportunity there. In the meantime, where we see rules broken, we’ll continue to speak out and bring action.”

For his part, Hu addressed head-on the criticism that Obama and other world leaders have leveled at China over what they say has been its unfair play during its fast economic rise.

Hu painted the picture of a central government actively engaged in creating a more open, just and transparent business environment where international companies can invest with comfort that they will be treated fairly.

He acknowledged that China lacks innovation and that its well-developed urban areas and slower-paced rural economies “lack coordination.” And he pledged stronger government action to crack down on intellectual property rights violations.

But, he stressed, “China’s development constitutes an important force driving economic growth in the Asia Pacific region and the world.”



By David Nakamura and William Wan, Published: November 11

As he began a nine-day trip to the Asia-Pacific region Friday, President Obama was aiming to reassure jittery U.S. allies and emerging nations that they have another avenue to prosperity at a time when an increasingly aggressive China is extending its sphere of influence.

At each stop — a pair of regional summits in Hono­lulu and in Bali, Indonesia, bookending a visit to Australia to highlight a military alliance — Obama is expected to send a clear signal that the United States is a “Pacific power,” eager to help build economic success and security in the fast-developing region.

 Chinese Premier Wen Jiabao has vowed to create an economy driven by consumption.

 Politicians are starting to take a tougher stance against China as the 2012 elections heat up and the economic recovery stalls. A bill designed to punish China for undervaluing its currency is gaining momentum in Congress. Here’s a look at what the GOP candidates have said about China.
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.In doing so, the president will make it clear the Chinese must “follow the rules of the road,” as one administration official put it this week.

High on the list of U.S. priorities is getting commitments from China to enact more flexible currency rate standards to help balance trade; respect intellectual property rights; and adopt a less aggressive military posture in the disputed South China Sea.

For their part, the Chinese are concerned about a budding trade pact between the United States and eight other nations, and they will be closely monitoring Obama’s visit next week to an Australian military base.

Since last year, China has fed the worries of its neighbors with a string of aggressive diplomatic and military moves, including attention-grabbing confrontations in the South China Sea, which is believed to hold valuable oil and minerals and is heavily used for commercial shipping.

The area has been in dispute for decades, with various portions claimed by Vietnam, the Philippines, Malaysia, Brunei and Taiwan. China has made the largest claim, on a U-shaped section that covers almost the entire region.

China’s increasing willingness to throw its weight around has put other countries on edge and spurred them to solicit U.S. assistance. Even Burma, also known as Myanmar, appears to be hedging against the rise of its longtime ally, releasing political prisoners in a bid to appeal to the West.

Danny Russel, senior director for Asia on the National Security Council, said that at the East Asia Summit in Bali next week, the United States and other participating nations, including China, will seek consensus on “international norms and law — freedom of navigation, the right to unimpeded legitimate commerce” and “collaborative efforts to avoid the accidental conflict or miscalculation . . . that could lead to a spike in tensions.”

Small signs of the U.S.-China rivalry for influence emerged even before Obama’s departure from Washington. When U.S. officials said this week that they hoped to ramp up talks on trade and green jobs growth with emerging nations at the Asia-Pacific Economic Cooperation summit in Honolulu, Beijing quickly criticized the agenda as too ambitious.

U.S. expectations are “too high” and “beyond the reach” of many developing Asian nations, Assistant Foreign Minister Wu Hailong told reporters.

Obama’s trip is part of the administration’sevolving foreign policy vision. Officials have pointed to the winding down of wars in Afghanistan and Iraq and said that now is the time to pivot toward the Asia-Pacific region.



Pacific rim finance chiefs vow to fend off malaise from EU crisis with trade, growth, reforms
By Associated Press, Published: November 10 | Updated: Friday, November 11, 2:13 AM


むっとしたのか、中国は、“TPPは期待過剰だ”と中傷した。だが、USTRの、RON・KIRK代表は、“中国が何を言おうが自由だが、TPPが発展して行くことを傍観するだろう”と突き放した。やはり、TPPは中国の軍事経済力を牽制することが、目的の一つとなっている。伊勢平次郎 ルイジアナ

HONOLULU ? Asia-Pacific finance chiefs agreed Thursday to do whatever it takes to prevent the malaise from Europe’s debt crisis spreading to the region as a possible European recession threatens the global economy.

The spillover from the European crisis is adding to the urgency in the Asia-Pacific ? now the strongest driver of world growth ? for more effective trade regimes to help spur job creation and for reforms to ensure financial resiliency

U.S. Treasury Secretary Tim Geithner speaks to the press at the Asia-Pacific Economic Cooperation summit Thursday, Nov. 10, 2011, in Honolulu.
.“We are all directly affected by the crisis in Europe,” U.S. Treasury Secretary Timothy Geithner said after a meeting of finance ministers of the 21-member Asia-Pacific Economic Cooperation forum. “But the economies gathered here are in a better position than most to take steps to strengthen growth in the face of these pressures.”

The officials gathering in Hawaii for the annual summit of Pacific rim economies also hope to build support for a comprehensive regional free trade pact to help boost their economies.

The European Union has warned that the 17 countries that use the euro common currency could slip into “a deep and prolonged recession” next year as the debt crisis that has already engulfed Ireland, Portugal and Greece has shown alarming signs of spinning out of control. A European recession would be felt sharply in the U.S., where growth is already anemic, and in Asia, which relies on Europe as a big market for its cars, clothing, consumer electronics and other exports.

“Growth and job creation has weakened in the region, particularly in advanced economies,” the APEC ministers said in a statement that cited “heightened downside risks for the global economy.”

“Such risks need to be addressed decisively to restore confidence, financial stability and sustainable growth,” it said.

The APEC finance ministers discussed ways to re-energize economic growth and create jobs through nuts-and-bolts measures such as investment in infrastructure and reforms aimed at providing more access to financing for the poor.

The U.S. and eight countries supporting a regional free trade pact, the Trans-Pacific Partnership, meanwhile met on the sidelines of the APEC gathering and agreed to work toward forging a broad outline for the plan.

The Pacific trade pact known as the TPP now includes Chile, New Zealand, Brunei and Singapore ? all relatively small economies. The U.S., Australia, Malaysia, Vietnam and Peru are negotiating to join.

Word was awaited from Japan, the world’s third biggest economy, on whether it will seek to become part of the group, which if it were regionwide would encompass more than half the world’s economic output. Japanese Prime Minister Yoshihiko Noda was expected to make an announcement Friday on the issue.

The U.S. recently clinched long-sought free trade pacts with South Korea, Colombia, and Panama ? agreements that if ratified will bring to 20 the number of countries that have free trade agreements with the U.S. Washington views the Pacific trading bloc as a potentially “valuable tool toward anchoring us in the region and building the next generation trade model, from the ground up,” U.S. Trade Representative Ron Kirk said in an interview.

Bringing onboard other big regional powers such as Japan and China, the world’s second-largest economy, would vastly expand the bloc’s scope and impact.

In Honolulu, Washington was keeping up pressure on China to commit to faster trade liberalization and to freeing its currency, which U.S. officials say remains undervalued even though it has gained substantially against the U.S. dollar in recent years.

The finance ministers’ statement included a call for exchange rate flexibility. Treasury Department officials said China’s willingness to back such a commitment ? both at the Group of 20 meeting in Cannes last week and in Honolulu this week ? could encourage similar moves by other Asia-Pacific economies.

But Beijing’s apparent openness to move faster on its currency policy was not matched by similar support for the Trans-Pacific Partnership, which earlier this week a senior official in Beijing described as “overly ambitious.”

Kirk shrugged off suggestions by some analysts that China might use competing arrangements with Asian trading partners to challenge the U.S.-backed free trade bloc.

“Well then, China can stay on the sidelines and watch us build the most dynamic trade partnership in the Asia-Pacific,” Kirk said. “If China believes this is too ambitious, that’s a decision for China to make.”


Associated Press writer Jaymes Song contributed.



Merkel’s Greek Strategy Risks Backfiring as Euro’s Exit Routes Are Mapped

By Simon Kennedy - Nov 10, 2011 5:00 PM CT .

Merkel Greek Gambit May Backfire as Euro Exit Routes Mapped

Chris Ratcliffe/Bloomberg

Angela Merkel, Germany's chancellor, left, talks with Nicolas Sarkozy, France's president, ahead of the first working session at the Group of 20 (G20) Cannes Summit at the Palais des Festivals, in Cannes.

Angela Merkel, Germany's chancellor, left, talks with Nicolas Sarkozy, France's president, ahead of the first working session at the Group of 20 (G20) Cannes Summit at the Palais des Festivals, in Cannes. Photographer: Chris Ratcliffe/Bloomberg

QNov. 10 (Bloomberg) -- Neil MacKinnon, global macro strategist at VTB Capital, discusses the euro-zone crisis and his view that the European Central Bank should act as a lender of last resort. Talking with Francine Lacqua on Bloomberg Television's "On the Move," MacKinnon also talks about Bank of England monetary policy. (Source: Bloomberg)

.Germany and France’s drive to force Greece to honor its euro commitments risks backfiring on Chancellor Angela Merkel and President Nicolas Sarkozy.

A week after the currency’s guardians declared for the first time that countries can be ejected from the 17-nation bloc, U.S. stocks tumbled on concern German politicians are already creating exit chutes for the weakest members.

The sell-off suggests Europe’s crisis is spiraling into a new stage as investors bet on which countries are most likely to quit the euro, starting with Greece. The risk is that this will make it harder for debt-laden countries to convince investors they can get their finances in order and for policy makers such as Merkel, Sarkozy and European Central Bank President Mario Draghi to bolster the euro’s defenses.

“This is a dangerous phase,” Neil MacKinnon, global macro strategist at VTB Capital in London and a former U.K. Treasury official, told Bloomberg Television’s “On the Move” with Francine Lacqua yesterday. “All of a sudden, we’re talking about the future of monetary union in its current format.”

U.S. stocks dropped late Nov. 9 as news broke that members of Merkel’s ruling Christian Democratic Union party plan to debate a motion next week allowing countries to leave the euro region. The Standard & Poor’s 500 Index fell as much as 1 percent. In Europe, the Stoxx 600 Index has lost 2.6 percent in the past two sessions. U.S. stocks rose yesterday after Standard & Poor’s confirmed its AAA rating on France.

Igniting Speculation

Merkel and Sarkozy ignited speculation that the euro area could contract near midnight on Nov. 2 in Cannes, France, when they warned outgoing Greek Prime Minister George Papandreou that a planned referendum on his country’s latest bailout must serve as a ballot on whether Greece wants to stay in the euro.

“The referendum will revolve around nothing less than the question: does Greece want to stay in the euro, yes or no?” Merkel said with Sarkozy beside her.

While the ploy worked and Papandreou shelved the referendum, it undermined the message of the euro’s founding treaty that membership was “irrevocable” -- a line Sarkozy and Merkel had stuck to in the two years since the crisis broke out.

Sarkozy and Merkel opened a “Pandora’s Box,” said Stephen King, chief economist at HSBC Holdings Plc in London, this week. He was referring to the Greek myth in which the first woman on earth disobeys orders of the gods by opening a jar and unleashing evil around the world, leaving only hope behind.

No Escape

Countries unable to play by the euro’s rules may now have to leave the bloc, upending the assumption that “once in the euro a country could never escape,” King said in a note to clients. Now “what’s true of Greece may now also be true of Italy.”

Italian 10-year bond yields surged to a euro-era high of 7.46 percent Nov. 9 as investors questioned the ability of its lawmakers to restrain the euro-region’s second-largest debt load after Greece. While the yield slipped to 6.89 percent yesterday, the crisis showed signs of spreading to France. Credit default swaps on the euro region’s second-largest economy rose eight basis points to a record 204 yesterday, CMA prices showed.

Some politicians are already working on a plan to push out errant members that can’t get their finances in order. Merkel’s Christian Democratic Union may adopt a motion at an annual party congress next week to allow euro members to exit the currency area, Norbert Barthle, the ranking CDU member on the German parliament’s budget committee, said.

The drive was dismissed by other members of Merkel’s party. Germany will resist any attempt to reduce the euro to its strongest members, the parliamentary finance spokesman for the CDU said yesterday. “Such a shrinking process would be deadly for Germany,” Michael Meister said in a telephone interview.

Any pan-European appetite for a re-drawing of the euro’s boundaries may be on show Dec. 9 when leaders hold another summit, this time to discuss deepening euro-area convergence, tightening fiscal discipline and strengthening economic ties.

“They might be talking about an exit clause for the euro area after Greece,” said Daniel Gros, director of the Centre for European Policy Studies in Brussels.

It wouldn’t be the first time the strategy of Merkel and Sarkozy has ended up hurting rather than calming markets. Thirteen months ago they agreed at the French resort of Deauville that private investors must contribute to future European bailouts. The resulting bond-market selloff played a part in Ireland and Portugal subsequently requiring bailouts.


Any change in composition would validate the opinions of academics and investors including Harvard University’s Martin Feldstein and Mohamed El-Erian, chief executive officer of Pacific Investment Management Co.

Feldstein, who warned in a 1998 paper that monetary union would prove an “economic liability,” and El-Erian both say ensuring the euro’s existence may require a smaller, stronger bloc.

A report last month from the London-based Economist Intelligence Unit, titled “After Eurogeddon?,” said any fracturing would likely leave the euro in the hands of a strong northern core featuring Germany, Austria, Belgium, Finland, Luxembourg, the Netherlands, Slovakia, Slovenia and Estonia.

While France would suffer from a likely surge in the new euro it would remain a member because its monetary union with Germany is fundamental to France’s political and economic interests, the report said. Greece would be first to leave followed eventually by Portugal, Ireland, Italy, Spain, Malta and Cyprus, it said.


“If they push out weaker countries and the euro stays, it would represent a smaller number of countries, so the currency should be stronger,” said Nicola Marinelli, who oversees $153 million at Glendevon King Asset Management in London. “But we don’t know the knock-on effects that could come from a country leaving so there would be a period of great uncertainty and weakness.”

European leaders will still do their utmost to keep the euro-zone in its current form, said Marc Chandler, chief currency strategist at Brown Brothers Harriman & Co. in London.

“Rather than break-up, the solution for Europe’s crisis will be more integration,” he said. “European officials, including Germany and France, in word and deed recognize the important of preserving the euro zone as currently constituted.”

Great Depression

A break-up could threaten a repeat of the Great Depression, HSBC’s King said in an analysis last month. For the exiting country, the banking system could face collapse, capital controls would be needed to stop citizens moving savings out of the country and companies would face default. On top of that, inflation would spiral, technical problems such as updating computer codes would be required and the accompanying departure from the European Union would leave it subject to trade tariffs, he said.

Turmoil could also spread to other debt-strapped nations, featuring bank runs “in countries perceived to be at risk of leaving,” Deutsche Bank AG chief economist Thomas Mayer told clients this week.

King says with banks in pain and restricting credit, the ECB would have little option but to inject a vast amount of liquidity and print money to buy potentially unlimited quantities of bonds.

“The seismic shift in European convictions presented in Cannes could come back to haunt its authors,” said Mayer.

To contact the reporter on this story: Simon Kennedy in London at



Hitachi eyes nuclear deal with Lithuania by end-2012

VILNIUS | Thu Nov 10, 2011 7:31am EST

Nov 10 (Reuters) - Lithuania and an alliance of Japanese Hitachi and U.S. General Electric hope to sign a deal by end-2012 on building a 1,300 megawatt nuclear plant by 2020, a partner said on Thursday.

Lithuania wants to build a new nuclear power plant to cut energy dependence on Russia, with Baltic states and Poland.

"We are excited about the nuclear project in Lithuania," Shozo Saito, chairman of the board of Hitachi-GE Nuclear Energy, told an energy conference in Lithuania capital.

Lithuania Energy Minister Arvydas Sekmokas, at the same conference, said the government planned to sign the nuclear plant deal by end this year.

"I hope so," Saito told Reuters, when asked, if he saw that date as possible.

However, Sekmokas said that the signing of shareholders and concession agreements might be delayed to the beginning of 2012, if Lithuania's regional partners need more time.

Both Latvia and Estonia have indicated they were interested in the project, but Poland, which plans its own nuclear plants, has not made a final decision.

Under the plan, each partner would get a share of electricity from the plant, depending on the scale of its investment, at a cost price, and they could sell it on the market.

"The plant itself would operate on a non-profit base," Rimantas Vaitkus, the chief executive of the nuclear power plant project company VAE, said.

He added the total cost of the plant with one third generation ABWR reactor would be under 5 billion euro.

"I don't want to speculate about the price, we are still negotiating it," Saito said.

Lithuania expected Hitachi not only to provide the reactor, but also to invest in the plant, taking shares.

Saito declined to disclose the planned size of the investment, but added: "We are certainly not taking more than 50 percent."

He also said both Japan and U.S. institutions might provide finance, including government funded Export-Import Bank of Japan.


Italy Sells Bills at Highest Rate in 14-Years  

By Chiara Vasarri - Nov 10, 2011 5:54 AM CT .

 Italy sold 5 billion euros ($6.8 billion) of one-year bills, the maximum for the auction, and demand rose as the Treasury lured investors with the highest yield in 14 years after debt-crisis contagion sent borrowing costs to records.

The Rome-based Treasury sold the bills to yield 6.087 percent, the highest since September 1997 and up from 3.57 percent at the last auction on Oct. 11. Demand was 1.99 times the amount on offer, compared with 1.88 times last month. The yield on Italy’s benchmark 10-year bond fell below 7 percent after the auction from a euro-era record 7.45 percent.

“Demand was good, with 2 times on the bid-to-cover,” Annalisa Piazza, a fixed-income strategist at broker Newedge Group in London. “Domestic retailers have probably supported demand.”

Italy’s borrowing costs surged yesterday after Prime Minister Silvio Berlusconi offered to resign and LCH Clearnet SA demanded more collateral on the country’s debt. The yield on the nation’s 10-year bond yield remained above the 7 percent level that led Greece, Portugal and Ireland to seek bailouts.

The yield on the benchmark bond fell after the auction, declining 25 basis points to 6.98 percent at 12:48 p.m. in Rome. That pushed the difference with German bonds to 5.23 percentage points, down from 5.53 percentage points yesterday. Italy’s next market test comes at a Nov. 14 auction of five-year bonds.

Still ‘Solvent’
“A prolonged period of 10-year bond yields in excess of 7 percent alongside a faltering economy is a dangerous mix, and could send Italy’s debt dynamics toward an unsustainable and ultimately insolvent position,” Raj Badiani, an economist at Global Insight Inc. in London, said in a research note. Still, “Italy remains solvent’” and “can survive several quarters of expensive debt auctions.”

Italy probably has cash reserves of about 35 billion euros, according to Gianluca Ziglio, a London-based interest-rate strategist at UBS AG, a cushion that may allow the Treasury to skip auctions later in the year.

Italy can’t afford to stay out of markets for long. Its debt of 1.9 trillion euros is bigger than that of Greece, Spain, Portugal and Ireland combined. The country faces about 200 billion euros in bond maturities in 2012 and another 108 billion euros of bills. The first bond redemption comes on Feb. 1, when Italy must pay back 26 billion euros for debt sold 10 years ago.

‘Buyer Strike’
“The major risk for Italy is not necessarily escalating bond yields, but rather a ‘buyer strike’ at a debt auction,” said Thomas Costerg, an economist at Standard Chartered Bank in London. That would signal “the loss of confidence is such that Italy is unable to raise finance” and “rollover its debt,”

The jump in Italian yields is boosting financing costs, which the government estimated in September would be 76.6 billion euros this year, or 4.8 percent of gross domestic product. Prior to yesterday’s surge, rising yields had added another 0.3 percent of GDP to the price tag, according to an estimate by Mizuho International Plc.

At current borrowing costs, Italy will face 28 billion euros in additional interest payments over the next three years, wiping out about half its projected budget savings through 2014, according to estimates on Nov. 8 by Open Europe, a policy institute based in Brussels and London.

To contact the reporter on this story: Chiara Vasarri in Rome at

ロイター “ユーロ圏が分裂する”と警鐘鳴らす

By Barry Moody and Andreas Rinke

ROME/BERLIN | Wed Nov 9, 2011 5:45pm EST

ROME/BERLIN (Reuters) - Italian borrowing costs reached breaking point on Wednesday after Prime Minister Silvio Berlusconi's insistence on elections instead of an interim government threatened prolonged instability and kindled fears of a split in the euro zone.

European Commission President Jose Manuel Barroso issued a stern warning of the dangers of splitting the zone, rocked by an escalating debt crisis. EU sources told Reuters French and German officials had held discussions on just such a move.

"There cannot be peace and prosperity in the North or in the West of Europe, if there is no peace and prosperity in the South or in the East," Barroso said.

Italian 10-year bond yields shot above the 7 percent level that is widely deemed unsustainable, reflecting an evaporation of investor confidence and prompting German Chancellor Angela Merkel to issue a call to arms.

Merkel said Europe's plight was now so "unpleasant" that deep structural reforms were needed quickly, warning the rest of the world would not wait. "That will mean more Europe, not less Europe," she told a conference in Berlin.

She called for changes in EU treaties after French President Nicolas Sarkozy advocated a two-speed Europe in which euro zone countries accelerate and deepen integration while an expanding group outside the currency bloc stays more loosely connected -- a signal that some members may have to quit the euro.

"It is time for a breakthrough to a new Europe," Merkel said. "A community that says, regardless of what happens in the rest of the world, that it can never again change its ground rules, that community simply can't survive."

The European Central Bank, the only effective bulwark against market attacks, intervened to buy Italian bonds in large amounts but remained reluctant to go further.

Italy has replaced Greece at the center of the crisis and is on the cusp of needing a bailout that Europe cannot afford.

"Financial assistance is not in the cards," one euro zone official said, adding that the bloc was not even considering extending a precautionary credit line to Rome.

Having lost his majority in a parliamentary vote, Berlusconi confirmed he would resign after implementing economic reforms demanded by the European Union, and said Italy must then hold an election in which he would not stand.

He opposed any form of transitional or unity government -- which the opposition and many in the markets favor -- and said polls were not likely until February, leaving a three-month policy vacuum in which markets could create havoc.

Italian President Giorgio Napolitano said there was no doubt about the resignation of Berlusconi once economic reforms were implemented by parliament within days.

"Therefore, within a short time either a new government will be formed...or parliament will be dissolved to immediately begin an electoral campaign," Napolitano said.

Even with the exit of a man who came to symbolize scandal and empty promises, it will not be easy for Italy to convince markets it can cut its huge debt, liberalize the labor market, attack tax evasion and boost productivity.

Worries that the debt crisis could be infiltrating the core of the euro zone were reflected in the spread of 10-year French government bonds over their German equivalent blowing out to a euro era high around 140 basis points.


Policymakers outside the euro area kept up pressure for more decisive action to stop the crisis spreading.

Christine Lagarde, head of the International Monetary Fund, told a financial forum in Beijing that Europe's debt crisis risked plunging the global economy into a Japan-style "lost decade."

"If we do not act boldly and if we do not act together, the economy around the world runs the risk of downward spiral of uncertainty, financial instability and potential collapse of global demand."

Berlusconi has reluctantly conceded that the IMF can oversee Italian reform efforts.

Euro zone finance ministers agreed on Monday on a road map for leveraging the 17-nation currency bloc's 440-billion-euro ($600 billion) rescue fund to shield larger economies like Italy and Spain from a possible Greek default.

But there are doubts about the efficacy of those complex plans, and with Italy's debt totaling around 1.9 trillion euros even a larger bailout fund could struggle to cope.

Lagarde said she was hopeful the technical details on boosting the European Financial Stability Fund (EFSF) to around 1 trillion euros would be ready by December.

Many outside Europe are calling on the ECB to take a more active role as other major central banks do in acting as lender of last resort. German opposition to that remains implacable, seeing it as a threat to the central bank's independence.

"The ECB will be drawn like everyone else by the weight of gravity (to act)," one euro zone official said.


EU sources told Reuters German and French officials had discussed plans for a radical overhaul of the European Union that would involve establishing a more integrated and potentially smaller euro zone.

The discussions among policymakers in Paris, Berlin and Brussels raise the possibility of one or more countries leaving the zone, while the core pushes to deeper economic integration.

In a speech in Berlin, Barroso said Germany's gross domestic product could contract by 3 percent if the 17-member zone shrank and its economy would shed a million jobs.

"What is more, it would jeopardize the future prosperity of the next generation," he said.

Barroso said any push toward deeper integration should not come at the price of new divisions among EU member states.


With the markets' fire turned firmly on Italy, Greece's struggle to find a new prime minister became something of a sideshow, but one which demonstrated the difficulty in taking decisive action anywhere within the euro zone.

Greek Prime Minister George Papandreou said he was stepping down without saying who would succeed him as the nation heads toward bankruptcy, but party sources said leaders had agreed it would be the speaker of parliament.

Parties from left and right settled on veteran socialist Filippos Petsalnikos, barring-last minute snags, the sources said, turning to their own political class after ditching a plan to recruit a former top European Central Bank official.

The socialist and conservative parties had wanted former ECB vice-president Lucas Papademos to lead a government of national unity but he appears to have made demands about his level of influence which they could not swallow.

(Additional reporting by Dina Kyriakidou and Lefteris Papadimas in Athens, Emelia Sithole-Matarise, Kirsten Donovan and William James in London; Writing by Mike Peacock; Editing by Janet McBride and Andrew Roche)


国際エネルギー機関 “原発なしに、エネルギーは高騰する”

Energy Costs to Rise ‘Viciously’ Without Atomic Power, IEA Outlook Says

By Lananh Nguyen - Nov 9, 2011 4:00 AM CT .

“再生可能なエネルギー、または、原発をプロモートしなければ、2035年までに、エネルギーの需要は、40%増加して、エネルギーもコストは非常なほどに高騰する”とパリに本部を置くIEAは語った。伊勢平次郎 ルイジアナ

Energy will become “viciously more expensive” and polluting if governments don’t promote renewable and nuclear power in the next two decades instead of burning coal, the International Energy Agency said.

Global demand for energy is set to increase 40 percent by 2035, the Paris-based agency said today in its annual World Energy Outlook report. Consumption will rise 1.3 percent a year to 16.96 billion metric tons of oil equivalent in 2035, spurred by China and other emerging economies, the IEA said.

The worst atomic accident in 25 years at the Fukushima plant in Japan on March 11 led Germany, Europe’s biggest economy, to close eight of its 17 reactors permanently. Nuclear plants generate power continuously while emitting virtually no greenhouse gases. Without nuclear, keeping world temperature gains at 2 degrees Celsius (3.6 Fahrenheit) will cost an extra $1.5 trillion through 2035, the IEA said.

“If we do not have an international legally binding agreement soon, and if it doesn’t give a boost to a major investment wave of clean energy technologies by 2017, the door to 2 degrees will be closed forever,” Fatih Birol, the IEA’s chief economist in Paris, said in an interview yesterday. A shift away from nuclear power “would definitely be bad news for energy security, for climate change and also for the economics of the electricity price.”

Energy Infrastructure
Investment in energy infrastructure of $1.5 trillion a year is needed to meet projected demand through 2035, and even then, “the cost of energy will increase,” Birol said.

The IEA, which advises 28 industrialized consuming nations, forecast crude prices will climb to $120 a barrel in 2035, or a nominal $212. The surge will coincide with oil demand rising to 99 million barrels a day in 2035 from 87 million last year, the agency said.

The Organization of Petroleum Exporting Countries’ share of global oil output will increase to 51 percent in 2035 from 42 percent last year, according to the IEA.

“More than 90 percent of the growth in oil production in the next two decades needs to come from the Middle East and North African countries,” costing $100 billion of investment a year, Birol said. If spending slips to a third of this level, oil prices could jump to $150 a barrel, the IEA said in the 659- page report.

Global coal demand will advance to 4.1 billion tons of oil equivalent from 3.29 billion tons in 2009, or a 24 percent rise over the forecast period, under the IEA’s base case scenario.

Coal Demand
“Prospects for coal are especially sensitive to energy policies, notably in China, which today accounts for almost half of global demand,” the IEA said. “More efficient power plants and carbon capture and storage technology could boost prospects for coal, but the latter still faces significant regulatory, policy and technical barriers.”

Natural gas is the only fossil fuel for which demand rises under all three of the IEA’s scenarios, increasing its demand forecast by as much as 5.1 trillion cubic meters a year by 2035 from about 3.1 trillion in 2009.

The use of nuclear energy will increase to 1.2 billion tons of oil equivalent by 2035, or 72 percent, from 703 million tons in 2009, the IEA said.

Renewable energies, excluding hydro power, are projected to account for 15 percent of power generation in 2035 from 3 percent in 2009, the IEA said. The use of renewables will be backed by a five-fold increase in subsidies to $180 billion, driven largely by China and the European Union.

“Growth, prosperity and rising population will inevitably push up energy needs over the coming decades, but we cannot continue to rely on insecure and environmentally unsustainable uses of energy,” IEA Executive Director Maria van der Hoeven said in a statement.

To contact the reporter on this story: Lananh Nguyen in London at


U.S. Yields at Almost Lowest in a Month

By Cordell Eddings and Daniel Kruger - Nov 7, 2011 1:03 PM CT


一方、ユーロ圏の財政危機が続いている。ギリシアが一段落した。だが、イタリアの財政が危機に陥っているため、イタリア国債の利回りは、6.68%に上がっている。これは、危険水域の6%を越えたということだ。イタリア経済は、EU内で、第三番目の大きさだ。“象が居間に入っているようなもんだ”と、その累積した負債の問題を比喩する銀行家たち。ギリシア~ポルトガル~アイルランドが救済を求めた。その同じ道をイタリアが歩き始めた。伊勢平次郎 ルイジアナ

Treasury rose, pushing 10-year yields to almost the lowest levels in a month, amid concern that Italy may struggle to reduce its debt burden, boosting demand for the relative safety of U.S. debt.

Yields on Italy’s 10-year notes reached as high as 6.68 percent, the most in 14 years, after Prime Minister Silvio Berlusconi bowed to domestic demands to water down a 45.5 billion euro ($62.5 billion) austerity package. Greek politicians agreed to form a national unity government to secure international financing. U.S. three-year note yields were little changed before a $32 billion sale the debt tomorrow.

“Italy is the elephant in the room,” said Larry Milstein, managing director in New York of government and agency debt trading at R.W. Pressprich & Co., a fixed-income broker and dealer for institutional investors. “Greece was a sideshow. Italy is potentially a much bigger problem, so the overhang of the fear trade into Treasuries has remained.”

The yield on the 10-year note fell five basis points to 1.99 percent at 2:01 p.m. New York time, according to Bloomberg Bond Trader prices. It reached 1.93 percent on Nov. 3, the least since Oct. 6. The 2.125 percent securities maturing in August 2021 rose 13/32 or $4.06 per $1,000 face value to 101 7/32. A basis point is 0.01 percentage point.

Three-year note yields were little changed at to 0.36 percent.

The Standard & Poor’s 500 Index declined 0.2 percent.

Fed Buys

The Federal Reserve bought $2.7 billion of debt maturing from February 2036 to August 2041 under its program to lower borrowing costs. The Fed began its Maturity Extension Program, known as Operation Twist in October and plans to buy $400 billion in longer-term maturities by the end of June 2012 -- about $44 billion per month.

Italy’s record bond yields are sending the nation down the same path taken by Greece, Portugal and Ireland in the days before they were forced to seek rescues.

Italy’s yields gained even after the European Central Bank was said to have bought the nation’s debt today. With almost 1.6 trillion euros of bonds outstanding, Italy has more liabilities than Spain, Portugal and Ireland combined, making it vulnerable to increases in borrowing costs. The Greek two-year yield climbed to more than 107 percent.

Prime Minister Silvio Berlusconi struggled to hold on to power and prove he can implement austerity measures pledged to European Union allies as reports of his imminent resignation sent Italian stocks surging.

Italy Discussions

News agency Ansa said Berlusconi denied a report by Giuliano Ferrara, his former spokesman and editor of newspaper Il Foglio, who wrote today that the premier would step down “within hours.” Berlusconi will likely resign next week in return for support in a vote on the austerity and economic- growth measures, Ferrara said in a phone interview after his initial report.

“The marginally good news coming out of Greece is being outweighed by troubling news coming out of Italy, which explains why the risk-on rally that some might have expected has not materialized this morning,” Kevin Giddis, president of fixed- income capital markets at the brokerage firm Morgan Keegan Inc. in Memphis, Tennessee, wrote in a note to clients.

Credit-default swaps on Greek government debt suggest an 89 percent chance of default within five years, data from CMA show. The chance that Italy will fail to meet its debt obligations is 36 percent, while the U.S. is at 4 percent, the data show.

Treasuries weakened earlier after Greece’s George Papandreou met with Antonis Samaras, the leader of the main opposition party, and agreed to form a new government with the aim of leading the country to elections “immediately after the implementation of European Council decisions on October 26,” according to an e-mailed statement yesterday from the office of President Karolos Papoulias in Athens.

Greek Meetings

Both sides will convene again today to decide who will be the head of the administration with a separate meeting to discuss the timeframe and the new government’s mandate, according to the statement.

The U.S. government plans to sell $72 billion of debt this week. The three-year notes to be sold tomorrow yielded 0.39 percent in pre-auction trading, dropping from the 0.544 percent at the prior sale on Oct. 11.

Investors bid for 3.3 times the amount for sale in October, more than the average of 3.21 for the past 10 auctions. Indirect bidders, the category of investors that includes foreign central banks, bought 37.8 percent of the notes compared with 35.9 percent in the prior auction.

Debt Sales

The Treasury is scheduled to sell $24 billion of 10-year notes on Nov. 9 and $16 billion of 30-year bonds on Nov. 10.

Hedge-fund managers and other large speculators increased their net-short position in 10-year note futures in the week ending Nov. 1, according to U.S. Commodity Futures Trading Commission data.

Speculative short positions, or bets prices will fall, outnumbered long positions by 128,693 contracts on the Chicago Board of Trade. Net-short positions rose by 62,813 contracts, or 95 percent, from a week earlier, the Washington-based commission said in its Commitments of Traders report.

The median forecast of economists surveyed by Bloomberg News is for Treasury 10-year yields to rise to 2.24 percent by the end of December and 2.35 in the first quarter of 2012.

To contact the reporters on this story: Daniel Kruger in New York at; Cordell Eddings in New York at


米国情報部 “チャイナは、世界最大のサイバー泥棒だ”

China is World’s Biggest Cyber Thief: U.S. Report

By Eric Engleman - Nov 3, 2011 9:06 PM CT .

Aug. 11 (Bloomberg) -- Paul Kocher, president of Cryptography Research, talks about threats to computer security. Hackers based in China spent five years ransacking the computer networks of the United Nations, multinational corporations, the Olympic committees of several countries and the U.S. and Canadian governments, two security companies said. He speaks with Emily Chang on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

 U.S. intelligence officials called China the world’s biggest perpetrator of economic espionage in a report that says the theft of sensitive data in cyberspace is accelerating.

Hackers and illicit programmers in China and Russia are pursuing American technology and industrial secrets, jeopardizing an estimated $398 billion in U.S. research spending, according to the report released today by the National Counterintelligence Executive, the agency responsible for countering foreign spying on the U.S. government.

The report went beyond previous U.S. official assessments in blaming the two countries for stealing sensitive economic and commercial information. Areas cited as most targeted include pharmaceuticals, information-technology, military equipment and advanced materials and manufacturing processes.

“China and Russia view themselves as strategic competitors of the United States and are the most aggressive collectors of U.S. economic information and technology,” according to the findings. The report drew on 2009-2011 data from at least 13 agencies, including the Central Intelligence Agency and the Federal Bureau of Investigation.

The report emphasized the two countries’ use of cyberspace to conduct espionage against U.S. corporations, government agencies and universities. Storage of business records, research results, and economic data in digital form makes it possible for foreign hackers to “gather enormous quantities of information quickly and with little risk,” the report said.

‘Intolerable Level’
“The nations of China and Russia, through their intelligence services and through their corporations, are attacking our research and development,” Robert “Bear” Bryant, the U.S. National Counterintelligence Executive, said at a news conference unveiling the report. “If we build their economies on our information, I don’t think that’s right.”

Representative Mike Rogers, the chairman of the U.S. House Intelligence Committee, said last month that hacker attacks by China had reached an “intolerable level” and called on the U.S. and its allies to “confront Beijing.”

China’s “continued theft of sensitive economic information is a threat to our national security, hurts American businesses and workers, and causes incalculable harm” to the world economy, Rogers, a Michigan Republican, said in an e-mail today. “This once again underscores the need for America’s allies across Asia and Europe to join forces to pressure Beijing to end this illegal behavior.”

‘Onslaught’ of Intrusions
U.S. corporations and computer security specialists have reported an “onslaught” of network intrusions originating from Internet Protocol addresses in China, according to the findings. The report highlights the technical difficulties in determining whether such attacks were state-sponsored.

“China’s rapid development and prosperity are attributed to its sound national development strategy and the Chinese people’s hard work as well as the ever enhanced economic and trade cooperation with other countries beneficial to all,” Wang Baodong, a Chinese embassy spokesman, said in an e-mail. “We are opposed to willfully making unwarranted allegations against China as firmly as our opposition to any forms of unlawful cyberspace activities.”

A faxed question to China’s foreign ministry in Beijing asking for comment was not immediately answered.

A former senior U.S. intelligence official, speaking on the condition of anonymity because intelligence matters are classified, said in a telephone interview that China regards cyberspace as a free-fire zone where it can steal secrets and plant malware, sometimes embedded in computers and other equipment before it is sold to Western companies.

Cloud Computing Vulnerable
The $398 billion in spending on research and development occurred in 2008 by U.S. industry, government agencies, universities and nonprofits, according to National Science Foundation data cited by the report.

The pace of economic espionage will accelerate in the next several years, according to the report by the National Counterintelligence Executive, part of the Office of the Director of National Intelligence. Increased use of technologies such as smart phones and cloud computing, which lets users access data and applications over the Internet, creates vulnerabilities hackers can exploit, the report found.

The new report faults American companies for not taking the threat seriously enough.

Security Proposal Pending
“Only 5 percent of corporate chief financial officers are involved in network security matters, and only 13 percent of companies have a cross-functional cyber risk team that bridges the technical, financial, and other elements of a company, according to a 2010 study,” the authors wrote.

The Obama administration issued a cyber security proposal in May that would require companies to report data breaches, toughen penalties for computer crimes and direct the Homeland Security Department to work with banks, utilities and transportation operators to develop cyber-security plans.

A Republican House task force recommended last month boosting cyber security for the nation’s critical infrastructure through the use of voluntary industry standards, incentives and limited regulation.

To contact the reporter on this story: Eric Engleman in Washington at



Hot Stocks When Solar Goes Cold


"Deflation" is bandied about so much these days that its impact has arguably been, er, deflated. But when Chinese manufacturers complain that prices for their goods have dropped too low—now that's deflation.

Solar-equipment prices have plummeted as governments in Europe—home to 79% of all new installations over the past five years—have slashed generous subsidies. Solar wafers now command just over 40 cents a watt, below the cash cost of most manufacturers, according to CLSA. Packaged solar modules are running at just over $1 a watt, around break-even or less for almost two-thirds of manufacturing capacity.

Even Chinese manufacturers, whose expansion has intensified competition, steadily reducing average selling prices, are suffering. Companies such as Suntech Power are planning to cut back on production to cope with weaker demand and clear inventory.

Shares in U.S.-listed Suntech and Chinese rivals such as Trina Solar and JA Solar Holdings are down more than 60% in the past six months, but are very volatile. Suntech, for example, hit a low of $1.70 a month ago but is now at $2.53.

.At such low prices, and with consolidation one obvious answer to competitive pressure, these stocks may represent bargains. But price deflation looks structural in solar equipment—indeed, it needs to be if this energy source is ever to dispense with high subsidies.

On that basis, the safer bet would be the companies buying this cheaper equipment. Michael Parker at Sanford C. Bernstein highlights Chinese renewable-project operators such as Hong Kong-listed China Datang Corp. Renewable Power and Huaneng Renewables Corp. They will also enjoy the continued support of a financially stronger government committed to ambitious green-energy targets. That potent combination should be anything but deflationary for their stock prices.


IAEA・天野議長 “原発は、ゆっくりと発展する”

amano director General iaea

Post-Fukushima nuclear energy demand up but slower, IAEA head says

Director General of the International Atomic Energy Agency, IAEA, Yukiya Amano from Japan, speaks during a news conference after the first meeting of the IAEA's board of governors at the International Center, in Vienna, Austria, Monday, Sept. 12, 2011. (AP Photo/Ronald Zak)NEW YORK (Kyodo) -- Yukiya Amano, head of the International Atomic Energy Agency, said Tuesday demand for nuclear energy around the world is on the rise, although the nuclear crisis in Japan triggered by the March earthquake and tsunami has dented growth.

"Despite the accident, the IAEA's latest projection is that the number of operating nuclear reactors in the world will continue to increase steadily in the coming decades, although less rapidly than was anticipated before the accident," the agency's director general said in his report to the 66th U.N. General Assembly.

Most of the growth will occur in countries such as India and China that already have operating nuclear power plants, he said.

At the same time many developing countries still plan to introduce nuclear power due to growing global demand for energy and concerns about climate change as well as about volatile fossil fuel prices and the security of energy supplies.

Explaining that the agency has been working with the crisis-hit Fukushima Daiichi nuclear power plant in Japan since the accident, doing "everything it can" to help, he also stressed the importance of a 12-point action plan on nuclear safety adopted by IAEA member states in September.

"The action plan represents a significant step forward," he said. "It is vital that it is fully implemented in all countries with nuclear power and that the right lessons are learned from the Fukushima Daiichi accident."

Amano further explained that the Japanese government and Tokyo Electric Power Co., which runs the plant, "are now confident" that a cold shutdown will be achieved by the end of the year.

Japan's Deputy Ambassador Kazuo Kodama, speaking after Amano's report, said his country is moving forward.

"Despite the tragic events occurring earlier this year in Japan, I am convinced that, through the resilience of our people and assisted by the generous support of our partners in the international community including the IAEA, we will overcome this challenge," Kodama said.

"I am equally confident that we will find a path towards a safer nuclear future, benefiting from the lessons learned in this instance and the accumulated wisdom of the world in this field."

Apart from mentioning Fukushima, Amano also reiterated the agency's concerns about North Korea, Iran and Syria.

North Korea's nuclear program "remains a matter of serious concern," given reports that it is constructing a new uranium enrichment facility and a light water reactor, he said.

On Iran, Amano cited his recent reports that the country "is not providing the necessary cooperation to enable the agency to conclude that all nuclear material in Iran is in peaceful activities."

Regarding Syria, he said the agency recently concluded it is "very likely" that a building destroyed at the Dair Alzrou site in 2007 was a nuclear reactor that should have been declared to the IAEA.

In June the IAEA reported Syria's noncompliance with its safeguards obligations to the U.N. Security Council and General Assembly.

(Mainichi Japan) November 2, 2011



Author: Nobuyoshi Ozaki

A long forty six years have passed since I stepped on to American soil. I have had various odd jobs in the past until I recently retired. Examples include working with Steven Spielberg as assistant director in a film called "1941." I was supervisor and later became Public Relation representative for Toyota Group - USA. My last occupation was a Senior Research analyst working in Silicone Valley for a major news paper from Tokyo, Japan. My spouse, Christine is a flight attendant, traveling often to the Middle East and Africa. We have spent three quarters of our life together as world adventurers. This photo was taken in Argentina. We now live in swampy Louisiana.