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Wednesday 13th February 2013
Plastics a hot commodity
Designed for the Jet Age
Horse cull by cash-strapped owners
UBS fined in UK over AIG fund sales
Tata news crosses the world
Military production could boost Canadian economy, report says
G4S hit with £85million bill over London 2012 Olympics security fiasco
Ryanair blocked from Aer Lingus takeover
Yen Rallies on G-7 Comments While U.S., Europe Stocks Advance
Fashion chain Republic poised for administration
Triple-dip recession unlikely but eurozone fears remain, says CBI
It’s (still) the economy, stupid – in 5 numbers
Cashing In on the Cashless Economy

Plastics a hot commodity
Barry Critchley - financialpost.com - 12th February 2013

Any transaction that has an enterprise value of $1-billion is significant. And when the transaction involves a private Canadian corporation, the deal is even more significant.

That’s the state of affairs at Ontario-headquartered Mold-Masters Ltd., a so-called hot runner specialist that was sold Tuesday to Ohio-based Milacron LLC by its two owners, the publicly listed U.K. investment firm 3i Group PLC, and the Gellert family, the group that started the company in 1963. Milacron is privately owned, is backed by the global private equity firm, CCMP Capital Advisors, and defines itself as “a global plastics industry leader and provider of premium fluids to the metalworking” industry.

“It’s a great business and candidly one that you didn’t want to part with, one that you would like to own forever” said Ken Hanau, the New York-based managing partner of 3i North America, who along with Richard Relyea, a principal at the firm, worked on the transaction. “It is a high-quality asset, one of the crown jewels of the industrial sector in Canada,” he added. According to its website, Mold-Master, which has revenue of about $270-million, “designs and manufactures the plastic industry’s most advanced hot runner systems, temperature controllers and auxiliary equipment.”

Hanau said that 3i, which bought about a 50% stake in Mold-Masters in 2007, has done well on its investment. “We put in about $120-million in back in 2007 and we are getting back about $350-million,” he said, adding that the investment is even more attractive when measured in £-terms given the rise of the C$ over the period.

So why sell? According to Hanau, it’s all part of the world of private equity. “We have been in the business for five and a half years. We have created some real value. As a global private equity firm, the deals that we do in North America, we try to leverage that global network and Mold-Masters was a great platform for that,” he said, adding that in its time at the helm, the company made three acquisitions in Europe, one in Canada, tripled the size of its facility in China while opening a manufacturing operation in India. “When you create a lot of value, it felt like the right time to sell. We are in the business of marriage and divorce.”

In a statement, Simon Borrows, 3i’s chief executive, said the firm has focused on “seeking realizations where we can maximize proceeds, and in doing so, demonstrate healthy value uplifts to net asset value and good cash profits.”

Hanau denied the sale was motivated either by 3i’s decision to reduce its debt level or because of the activities of an activist investor — though the net proceeds will be used to reduce 3i’s debt load. “That had absolutely nothing to do with the sale,” said Hanau, who played a key role in the firm, buying the original 50% stake in Mold-Masters.

The process to sell Mold-Masters started last December. Three firms — RW Baird (the lead), Morgan Stanley and Houlihan Lokey — were retained to guide that process. “We ran an auction process and there was great interest for the asset,” said Hanau who believes interest arose because of Mold-Masters’ “fundamental organic growth of 10%, its very high margins and considerable end-market diversification,” with more than 40% of its sales going to Asia.

Interest came from both private equity firms and strategic buyers, including firms in Canada. The sale requires regulatory approval and is expected to close by June.


Designed for the Jet Age
Britain's airport heritage has been sadly neglected but in New York
mid-century gems have been rescued for future generations

Chris Beanland - The Independent - 13th February 2013

Looking at the bland state of some British airports – especially the ones where budget airlines rule the roost – it seems almost unthinkable that flying used to be the most dramatic and futuristic way to travel. That glamour was expressed in the mid-century buildings to which planes taxied. The airport terminal was a place of wonder. The difficult question we face now is whether to preserve these ageing icons of aviation, or pave over them to build the gleaming glass terminals that today's airlines and their passengers clamour for.

No one turned out to bid farewell to the Queens and Europa Buildings at Heathrow, despite them being awarded a London Architecture Award by the Royal Institute of British Architects in 1955. The airport's original terminal complex was demolished in 2009 after 54 years of service – and plenty of limelight: Terence Rattigan's 1963 film The VIPs was set here and starred Elizabeth Taylor, Richard Burton and Orson Welles. On top of the rubble, a huge new Terminal 5-style hub for the Star Alliance is rising.

"For me, airports should be utterly modern and without nostalgia. The point of planes and terminals is that they should be contemporary," muses Alain de Botton. The philosopher wrote A Week At The Airport – The Heathrow Diary, and is unabashed: "To feel nostalgic about an airport is like feeling nostalgic about old milk. Talk of 'the glamour of yesteryear' is defeatist and depressing. We need to discover ways of being glamorous now. So let's destroy the old and build the new."

But the old still dazzles: Croydon Airport's muscular clock tower, Birmingham's original Elmdon terminal and the greatest of them all – Liverpool. This art-deco monster, which is now a Crowne Plaza Hotel, is the Tempelhof of Merseyside – a curving brick behemoth crowned with what looks like a lighthouse.

Now Gatwick's original Beehive building appears under threat if a second runway were to be built at the Sussex airport. The Beehive opened in 1936 – so far ahead of its time that the airport around it wasn't even ready to handle planes to Paris. With its distinctive circular shape, it was recognised with Grade II* listing. But if the Government baulks at an expanded Heathrow or a Thames Estuary airport, its days could be numbered.

LaGuardia's Marine Air Terminal was New York's Beehive. A drum structure squatting on the shores of Bowery Bay – Boeing 314 flying boats used to bob up and unload their human cargo here. The 74-year-old grande dame is still used for shuttle flights to Washington DC.

Across Long Island at John F Kennedy, the city's main airport, it's a tale of two terminals. Eero Saarinen's heart-stopping Trans World Flight Center is ready to re-open after a painstaking $20m time-machine transformation. The restoration has made this swoop-roofed marvel in the so-called "googie" style look like it's 1962 all over again. But the omens for the Pan Am Worldport are not as propitious: it's due to be demolished by 2015.

The sweeping concrete lines of the former TWA hub have been saved, "due to its landmark status and significant potential for adaptive reuse", according to JFK's Susan Baer. Inside, Saarinen's use of space is mesmerising; signs point to the Lisbon Lounge bar, where Negronis will soon be enjoyed once more by JetBlue passengers. But the airport hasn't taken the historic terminal belonging to TWA's old rivals Pan Am to their hearts in the same way. "The obsolete Worldport does not have landmark status or a viable adaptive reuse," states Baer bluntly.

JFK and Delta want to bulldoze the 1960 Worldport and shift operations. But a grass-roots movement is set on saving the quirky building crowned by an unusual flying-saucer roof.

"The Port Authority and Delta's reasons for destroying the Worldport are laughable," argues Kal Savi, the campaign's leader. "Even in its dilapidated state, I'm always in awe as I stand under that amazing roof, remembering how important this site is. It's a mid-20th-century Ellis Island." Savi's mother worked for Pan Am and he fell for the building as a child. "I was 10 when I took my first trip on a Pan Am 747 from JFK to Heathrow in 1971. I remember vividly departing the Worldport from Gate 3."

JFK is unique because each airline built their own terminal. Some have already bitten the dust, such as IM Pei's National Airlines Sundrome in 2010. Elsewhere in the US, campaigning has saved other modernist airport architecture: Building One at Newark Airport, Chicago O'Hare's Rotunda, and the 1962 Theme Building in the centre of LAX's sprawling forecourt.

"The Worldport means a lot to me. I know my father was very proud of it," says Leslie Turano Taylor, daughter of the building's architect Emanuel Turano. But it's the millions of tiny human dramas – or comedies – played out that make these historic hubs meaningful. "My fondest memory is a flight to Italy from the terminal in 1980. Dad hadn't been there since he designed it. He went in search of the loo and almost missed the flight because he couldn't remember where he'd put it.


Horse cull by cash-strapped owners
Jamie Smyth - The Financial Times - 12th February 2013

Economic woes across the rich world have led to a surge in the number of horses being slaughtered and a flood of cheap horsemeat that regulators fear is illicitly entering the food chain.

In Ireland, a country where owning a horse became a status symbol during its “Celtic Tiger” boom years, 10 times as many horses were slaughtered last year compared with 2008, the year the global economic crisis took hold. In the US about 100,000 unwanted horses are reported every year, while in the UK 9,000 horses were slaughtered for meat in 2012, almost double the number just three years earlier.

The growing ranks of unwanted horses and a corresponding jump in equine slaughtering sits at the centre of a horsemeat crisis hitting the European food industry.

Ireland’s Food Safety Authority began DNA testing beef products for horse contamination in November on the back of its suspicion that meat from the increasing numbers of horses being slaughtered was finding its way into the food chain.

Its discovery that burgers sold by UK supermarket chain Tesco contained 29 per cent horsemeat sparked what has become a Europe-wide investigation into contamination that has drawn in British-owned frozen food giant Findus and other producers of cheap frozen meals.

“There is widespread abuse of the passport system used to regulate the trade and slaughter of horses and ensure meat does not enter the food chain,” says Roly Owers, World Horse Welfare Charity. “There has been a real surge in the trade of low value animals. It is a pretty murky world.”

The surge can be seen most easily in Ireland, which is home to a €1bn bloodstock industry and, with an estimated 110,000 sports horses, is the most horse dense country in Europe. In 2007, the country produced 12,633 thoroughbred foals, more than the combined total of France and the UK.

But the economic crisis has yielded a growing number of unwanted horses, many of which are being slaughtered. Last year almost 25,000 horses were sent for slaughter at registered abattoirs and slaughter houses, up from just over 2,000 in 2008. The number of abandoned horses is also on the rise with 2,364 animals seized in 2010 by Irish authorities, treble the number five years earlier.

“Every youngster had their own horse, but when the recession struck everyone took a knock and people just couldn’t afford it,” said Pat Hyland, one of a handful of farmers who has begun selling horsemeat in Ireland owing to the rise in equine slaughtering.

The situation became so acute last year the Irish Thoroughbred Breeders’ Association published advice for struggling owners.

“Rather than leave your horse standing starving in a field it is better to use a registered abattoir and treat them humanely,” said Shane O’Dwyer, manager at the association.

But Ireland is not alone. In the US, a report by the Government Accountability Office in 2011 reported that a steep rise in horse neglect was straining resources of local authorities. The recession and a ban on equine slaughtering in US were pinpointed as key problems leading to the export of 138,000 horses for slaughter to Mexico and Canada in 2010.

Spain, too, has seen a sharp rise in horses being sent to the slaughter house. According to data from the agriculture ministry, the volume of horse meat produced in 2012 was 56 per cent higher than in the previous year.

Charities also report a growing problem in the UK, which extends into the lucrative racehorse industry. “The number of people able and willing to take on former racehorses is drying up. Joe Public just can’t afford it any more,” said Graham Oldfield, chairman of the board of trustees at the Racehorse Sanctuary.
He said “indiscriminate breeding” had led to a glut of racehorses that had little chance of being successful and which had nowhere to go.

“This isn’t just a UK problem. We are getting horses from Italy and Spain,” he said. “We have a waiting list of 74 horses and I am turning away at least two requests a week from owners,” he said.

Simon Coveney, Ireland’s minister for agriculture, announced on Tuesday his department was taking over direct supervision of all slaughter houses dealing with horses to ensure a vet was present at all times. He said Dublin had revoked the approval of one equestrian centre, the Irish Cob Society, to maintain a stud book and issue horse passports in the autumn due to concerns proper procedures were not being followed.

Mr Coverney said there was no evidence at the moment to suggest that there was any connection between horses slaughtered in Ireland and the finding of horse meat in Irish meat products. But he said the approval of two slaughter plants had been temporarily suspended in the past two years over concerns about compliance.

Dublin says it has traced the contamination of beef burgers made in Ireland with horsemeat to imports of frozen beef trimmings from Poland. Warsaw has said it has so far found no evidence its processors were to blame.


UBS fined in UK over AIG fund sales
World Radio Switzerland - 12th February 2013

Swiss bank UBS has been fined 9.45 million pounds by UK regulators for exposing customers to unacceptable risk in a sale of an AIG investment fund.

Reuters reports British regulator FSA also said the bank failed to deal with customer complaints about the AIG fund sale properly.

The fund was sold to about 2,000 high net-worth clients between 2003 and 2008, with initial investments of 3.5 billion pounds.
The fund was suspended when prices dropped during the credit crisis leaving 565 clients unable to access money.

UK officials said UBS mis-sold that fund to at least 19 customers and mishandled at least 11 complaints.
Compensation for those clients would be about 10 million pounds, the officials said.


Tata news crosses the world
Andy Pearson -  Port Talbot MagNet - 13th February 2013

The importance of Port Talbot’s steelworks to Wales was underlined today when it was announced that Tata’s Number 4 Blast furnace was to re-start.

Media coverage has already been widespread. It includes: Reuters, Metro, BBC Online, ITV and the Evening Post.

Tata issued this statement.
Tata Steel has restarted its second blast furnace at the Port Talbot steelworks in the UK following the completion of a £185 million rebuilding project.

The restarting of blast furnace No. 4 – the UK’s largest industrial engineering project last year – will improve Tata Steel’s operational flexibility and enable it to better serve customers in the UK and the rest of Europe.

The state-of-the-art new furnace is more efficient and will allow Tata Steel to continue to meet the demanding requirements of UK and European manufacturing industries. Production has now started and the molten iron from the furnace will be converted into high-quality steel for a wide range of customer sectors, including construction, automotive, lifting and excavating, domestic appliances and packaging.

Karl Köhler, CEO of Tata Steel’s European operations, said: “This rebuild has been a flagship investment, part of our strategy for long-term competitiveness in UK, EU and worldwide markets. The efficiency and sustainability of the new furnace will also make a major contribution to our efforts to create an ‘all-weather’ company in Europe.

“We have been able to take advantage of a period of low steel demand to carry out this major engineering project and we are still operating today in an intensely challenging commercial environment. Restarting the furnace will help us improve our delivery performance which will enable us to better serve our customers, but we will continue to manage our output at levels appropriate to market conditions.”

Blast furnace No. 4 was decommissioned in July last year before being completely rebuilt, incorporating the latest technology to improve energy efficiency, environmental performance, safety standards and capacity. The requirements of Tata Steel’s customers were central to the rebuild project. The furnace has enhanced health, safety and environmental care facilities, making it a worldwide standard-setter as one of the most efficient in the world.

Further energy and environmental benefits will be gained from the recently-completed £55m energy-from-heat scheme at Port Talbot’s steelplant which will save 10MW of energy – enough to power 20,000 homes.

Michael Leahy, general secretary of the community trade union and chair of the UK trade unions’ Steel Committee, said: “The project’s completion is a source of great pride and hope for the future of steelmaking in the UK. The blast furnace project created many jobs for local contracting firms, providing a real boost to the South Wales economy at a difficult time. Longer term, the rebuilt furnace marks the start of a new era of sustainable steelmaking in the UK.”

The start-up of the new furnace has enabled Tata Steel to restart its second hot strip mill in South Wales. In anticipation of the furnace restart, the Llanwern hot strip mill resumed production in December. The restarts give the company greater operational flexibility and enable it to better serve its customers.

Statement from Aberavon MP Dr Hywel Francis

I am delighted with this news. It is a clear and unequivocal sign from Tata Steel that it continues to have faith in the long-term future of the plant. It is to the credit of the local management and unions and the whole workforce that they have won the confidence of Tata Steel Europe.

I know from recent meetings I have attended with local MPs and AMs as well as with the Secretary of State for Wales, Mr David Jones, the sense of common purpose is a determining factor in the continuation of major investment at the plant.

I shall continue to champion the cause of steel at Port Talbot in my work in Parliament because it is the life blood of our local communities and is such a major part of the Welsh economy.


Military production could boost Canadian economy, report says
Lee Berthiaume - Montreal Gazette - 12th February 2013

The Harper government is examining ways to turn Canada into a major arms producer in a bid to leverage hundreds of billions of dollars in planned defence spending into Canadian jobs and prosperity.

On Tuesday, an experts’ panel appointed by the government last year recommended focusing on six specific industries in which Canada can become a world leader as part of a revamp of the military procurement strategy.

It said the first priority is to equip the Canadian Forces, but that the government can and should help strengthen the country’s defence and security sector so it can expand its reach into the rest of the world.

Public Works Minister Rona Ambrose said the government will review the panel’s recommendations closely.

However, she also indicated the government is determined to use the planned military spending to help both the military and average Canadians.

“The opportunity here is a great one, not just for the Canadian Forces, but also for the Canadian economy,” she told defence industry representatives in Ottawa. “The opportunity for the Forces and the opportunity for the economy goes hand in hand.”

The panel, headed by Canadian businessman Tom Jenkins, advised the government to nurture six specific industries: Arctic and maritime security; protective equipment for soldiers; command and support capabilities; cyber-security; training systems; and maintenance and support.

It also said government should establish a balance between developing original defence equipment domestically and being involved in international partnerships, as well as purchasing outright or adapting existing equipment to Canada’s needs.

This would enable not only the equipping of the Canadian military, but also position the country to develop and market weapons, vehicles and other military equipment to the rest of the world.

Competition is expected to be stiff; not only are other countries such as the United States, France, Germany and even Russia already ahead in the game, but many potential customers are implementing deep defence spending cuts.

Still, Jenkins’s panel noted that planned military spending has the potential to have more impact on the Canadian economy than the oilsands, which are estimated to generate $364 billion over 25 years.

Jenkins told reporters it is “a unique time” for the federal government and Canada’s defence industry given that the air force, army and navy are all looking at an influx of new equipment to replace older vehicles and weapons.

For that reason, he said, it is a time when the government and Canada “can think about this strategically” — using those investments for the country’s economic growth and prosperity.

But any effort to modify military spending for economic benefit will be extremely complex as the federal government will be forced to balance not only the needs of the Canadian Forces, but also contend with a powerful and influential defence industry.

The controversy surrounding the $45-billion F-35 stealth fighter program, and problems that have been bubbling around the government’s plan to spend $35 billion on new ships, are examples of the scale of the issues that can plague defence spending.

National Defence, like all federal departments, is also facing deep budget cuts, on the order of between $1.1 billion and $2.5 billion over the next three years.

Most importantly, however, is that the Harper government is reviewing its so-called Canada First Defence Strategy (CFDS), a plan announced in 2008 to invest $490 billion in the military over 20 years.

This is after Defence officials warned as far back as 2011 that the strategy was unaffordable.

Ambrose acknowledged questions around the planned defence spending, but she maintained the Harper government is not wavering in its commitment to investing hundreds of billions into rebuilding the Canadian Forces.

“That spend will continue to be large,” she said. “There’s a huge commitment of spending for the Canadian Forces under the CFDS. And at this point, the shipbuilding strategy aside, we haven’t taken in my estimation a very strategic approach to the (defence) spending.”

NDP military procurement critic Matthew Kellway said his party supports creating a strong defence industrial strategy if it creates Canadian jobs and economic prosperity, and he said Canadian industry can compete with other global players.

But he called the Jenkins’s reports release “a terrible irony” given that there are so many unanswered questions around the Canada First Defence Strategy.

“We had better be clear on what money gets spent on this equipment,” Kellway said. “The Canada First Defence Strategy has been known to simply not add up.”


G4S hit with £85million bill over London 2012 Olympics security fiasco
metro.co.uk - 12th February 2013

Bungling security group G4S has taken an £85million hit for failing to provide enough guards at the London Olympics.

The contractor was forced to accept a larger-than-expected loss from London 2012 after months of negotiations with Games organisers.

G4S was told it would be paid only £171million of the £256million it wanted after members of the Armed Forces had to be called in to make up the shortfall of thousands of guards.

The company said it would now be £70million worse off overall from London 2012, rather than its previous estimate of £50million losses.

G4S will miss out on £48million to cover military and police costs and £37million as punishment for project management failures.

Chief executive Nick Buckles has kept his job, despite chief operating officer David Taylor-Smith and global events head Ian Horseman Sewell earlier losing theirs.

Mr Buckles, who was criticised by the Commons home affairs select committee, said: ‘The UK government is an important customer and we felt it was in all of our interests to bring this matter to a close.’

About one-tenth of the group’s work is with British government departments or organisations.

G4S received revenue of £7.5billion in 2011 and has contracts with bodies, including six prisons, airports, banks, courts and councils across Britain.

Olympic organiser Locog’s chief financial officer Neil Wood said: ‘We are pleased to have reached an agreement that protects taxpayers’ interests.’


Ryanair blocked from Aer Lingus takeover
Amanda Greenwood - traveldailymedia.com - 12th February 2013

Ryanair has been blocked from taking over Aer Lingus for the third time.

The low-cost carrier said it believed the European Commission’s move was a “political decision” in light of IAG’s takeover of bmi although many in the travel industry had raised concerns over potential limited competition if the takeover was to go ahead.

The low-cost carrier had made moves to help the deal pass including preliminary deals with IAG and Flybe to take over any routes that may overlap.

”Ryanair was notified this [Tuesday] morning at a state-of-play meeting with the EU Commission, that the EU Commission intends to prohibit Ryanair’s offer for Aer Lingus, despite the fact that Ryanair has met every competition concern raised in the EU’s statement of objections and during the review process,” its statement read.

The airline is now appealing in the European Courts but has failed an AerLingus merger twice before.

“It appears clear from this morning’s meeting, that no matter what remedies Ryanair offered, we were not going to get a fair hearing and were going to be prohibited regardless of competition rules,” added Robin Kiely from Ryanair.


Yen Rallies on G-7 Comments While U.S., Europe Stocks Advance
Joseph Ciolli and Lu Wang - Bloomberg News - 12th February 2013

The yen jumped as an official from the Group of Seven nations said the countries are concerned about volatility in Japan’s currency. U.S. stocks advanced as investors dissected earnings reports and awaited President Barack Obama’s State of the Union speech tonight.

The yen climbed 0.8 percent to 93.57 per dollar at 4 p.m. in New York, paring a gain of as much as 1.4 percent. The Standard & Poor’s 500 Index climbed 0.2 percent, rising to the highest since November 2007 on a closing basis, and the Stoxx Europe 600 Index closed up 0.5 percent. Spain’s 10-year bond yields fell 10 basis points to 5.32 percent. Industrial metals led commodities higher, while corn slid for an eighth day in its longest slump since 2010.

Japan’s currency was higher against all 16 major peers after the G-7 official, who requested not to be further identified, said the group is concerned about excess moves in the yen and investors misinterpreted an earlier statement on exchange rates. The clarification came hours after the world’s major industrial economies appeared to signal acceptance for a weaker Japanese currency so long as Prime Minister Shinzo Abe’s government didn’t actively pursue devaluation.

“It was a vague, bland statement at first,” Joe Manimbo, a market analyst at Western Union Business Solutions, a unit of Western Union Co., said by telephone from Washington, D.C. “When we got the subsequent clarification, it showed officials were really concerned about the pace of yen weakness, which they seem to see as a potential threat to global growth.”

Yen Watch
The yen has weakened 18 percent against the dollar since its 2012 high in February amid speculation of further stimulus measures to bolster Japan’s economy. The yen slumped against the dollar yesterday as Haruhiko Kuroda, a possible contender for Bank of Japan governor, said additional monetary easing could be justified this year. U.S. Treasury Undersecretary Lael Brainard said she supports Japan’s effort to end deflation after the yen slid for four straight months through the end of January.

The yen climbed 0.5 percent to 125.87 per euro. The Dollar Index, a gauge of the U.S. currency against six major peers, slipped 0.3 percent to 80.08. The pound weakened against 15 of 16 major peers as U.K. inflation last month held at the highest since May.

G-7 Confusion
G-7 finance ministers and central-bank governors said in the earlier statement released in London, “we reaffirm that our fiscal and monetary policies have been and will remain oriented towards meeting our respective domestic objectives using domestic instruments, and that we will not target exchange rates.” They will join officials from the G-20, which includes the G-7 and emerging markets such as Brazil, China and India, in Moscow on Feb. 15-16.

The yen pared gains after a U.K. official said the G-7 statement on exchange rates today is not about an individual country or currency. The official spoke on condition of anonymity.

“Officially, the most important countries are not singling out Japan,” Douglas Borthwick, a managing director and head of foreign exchange at Chapdelaine FX in New York, said in a telephone interview. “People understand that if anyone’s going to have their feet to the fire right now in terms of currency weakness, it’s going to be Japan. But it’s very hard for most countries to throw stones because they’re all living in glass houses.”

Among U.S. stocks, Michael Kors Holdings Ltd. rallied after raising its forecast in anticipation of a jump in same-store sales. Avon Products Inc. jumped as adjusted profit topped analysts’ estimates.

Facebook Inc. sank as Sanford C. Bernstein & Co. cut its recommendation. Coca-Cola Co. slipped after global volume sales missed analysts’ estimates.

Earnings Season
Earnings have exceeded the average analyst estimate at about 74 percent of the 354 companies in the S&P 500 that released results so far in the earnings season, and 66 percent have beaten sales estimates, data compiled by Bloomberg show.

The S&P 500 has rallied almost 7 percent in 2013 as U.S. lawmakers reached a budget compromise. The gauge is about 3 percent below its record reached in October 2007. The index has more than doubled since bottoming in March 2009 as the Federal Reserve conducted three rounds of bond-buying to lower interest rates and boost economic growth.

Obama tonight will propose spending on infrastructure, clean energy and education, according to an administration official briefed on the speech. His argument, directed at congressional Republicans amid a battle over fiscal policy, is that fostering economic growth is the best strategy to narrow a federal budget gap that has exceeded $1 trillion in each of the last four years.

European Markets
Today’s gain trimmed the Stoxx 600’s drop from this year’s high on Jan. 29 to 1.1 percent. The volume of shares changing hands in Stoxx 600 companies was 11 percent lower than the 30- day average, according to data compiled by Bloomberg.

Barclays Plc climbed 8.6 percent as the U.K. bank said it will eliminate 3,700 jobs to reduce costs after posting its first full-year loss in more than two decades. L’Oreal SA, the world’s largest cosmetics maker, rallied 3.8 percent as earnings increased.

Finmeccanica SpA, Italy’s biggest defense company, plunged 7.3 percent as two people familiar with the matter said Chief Executive Officer Giuseppe Orsi was arrested amid a probe of possible bribes paid to win the sale of 12 helicopters to India.

Barclays Cuts
Spanish and Italian bonds advanced as the two nations auctioned a total of 14 billion euros ($18.8 billion) of bills. The yield on Spain’s two-year notes slipped 10 basis points to 2.69 percent, and the rate on similar-maturity Italian debt slipped eight basis points to 1.65 percent.

The MSCI Emerging Markets Index was little changed and is up 0.4 percent for the year. That compares with a 5.5 percent gain in 2013 for the MSCI World Index of developed nations. Sixty-one percent of companies in the MSCI gauge for emerging markets have reported quarterly profit that missed estimates, almost twice the rate for developed nations, Bloomberg data show.

South Korea’s Kospi Index closed 0.3 percent lower, erasing a 0.4 percent advance, after North Korea tested a nuclear weapon. Poland’s WIG20 Index lost 1.1 percent as Telekomunikacja Polska SA, the nation’s largest phone company, tumbled 28 percent after cutting its dividend proposal for the second time in four months. India’s Sensex Index jumped 0.5 percent, snapping an eight-day rout. Indonesia’s benchmark gauge jumped 1 percent. Markets in China, Taiwan, Malaysia and Vietnam are shut for Lunar New Year.

Nickel and lead added at least 1.1 percent for the biggest gains in the S&P GSCI Index of commodities, while sugar, wheat and cotton retreated. Corn dropped 0.9 percent on forecasts for increased production. Oil rose 0.5 percent to $97.51 per barrel in New York.


Fashion chain Republic poised for administration
Diandra Todesco - theupcoming.co.uk - 13th February 2013

The first company to go into administration in 2013 was camera retailer Jessops, with entertainment stores HMV and Blockbuster following quickly behind. With over 10,000 jobs already lost in the second month of the year alone, fashion has been unbelievably lucky to remain unscathed. Until now, that is.

Just this week it was announced fashion chain Republic may be entering administration, and with around 120 stores to the company’s name, there are fears their 1,600 staff will be made unemployed. According to reports, the group have already appointed business firm Ernst & Young to handle the administration.

Founded in Leeds in 1986, Republic had humble beginnings, with founder Tim Whitworth originally selling clothes as a Saturday boy on a market stall. The business grew, and years later turned into one that stocked brands such as Diesel, Lipsy and French Connection alongside its own. In 2010 business was booming for Republic, as American firm TPG bought the clothing retailer for an estimated £300m. However, after last Christmas, sales started to fall, with customers turning to both high street and online rivals.

But there is a slim hope for Republic, as companies such as sportswear group, Sports Direct, may join rivals in looking to adopt a smaller version of the retailer out of administration.


Triple-dip recession unlikely but eurozone fears remain, says CBI
The Scotsman - 13th February 2013

The CBI has cut its UK growth forecast for this year, but said the UK should avoid a triple-dip recession.

The business body expects the economy to grow 1 per cent, less than its previous estimate of 1.4 per cent, warning that the potential for a new “flare-up” in eurozone tensions was likely to keep confidence and growth in check.

But it said a rise in job vacancies and an improvement in business sentiment since its last forecast suggested the economy would avoid another recession and grow 0.3 per cent in the first quarter of this year.

Hopes that Britain will avoid a triple-dip recession have been boosted by surveys that showed the services sector returned to growth in January and manufacturing output rose at its fastest pace since September 2011.

CBI director-general John Cridland said: “We are beginning to see the return of organic growth, with clear signs that firms offering the right products into the right markets are growing sales and expanding.”

But he said the potential for eurozone tensions to flare up, coupled with tough conditions in the domestic market, explained why business confidence remained patchy.

He said: “The fear of external storm clouds lingers.”


It’s (still) the economy, stupid – in 5 numbers
Sean Sullivan - Washington Post - 12th February 2013

When President Obama addresses a joint session of Congress in tonight’s State of the Union address, his main focus will be the economy. It’s easy to see why.

Obama’s emphasis on immigration and gay rights in his second inaugural address last month drew new attention to each issue. But, after a bit of a messaging hiatus on the economy, it’s clear the President needs to come back to it tonight since it is the single issue that galvanized large majorities of Americans.

Here’s that story — told in 5 stats.

* 7.9 percent: The nation’s unemployment rate stands at nearly 8 percent, the latest monthly jobs report showed. Yes, that’s substantially better than 2010, when it consistently neared 10 percent. But, it’s far from ideal. The monthly jobs report received a lot more attention during the 2012 campaign when both parties tried to use it to gain an advantage. But, even though it’s no longer being dissected in the political arena to the extent it was last fall, it’s still a important metric — and one against which Obama’s record will be judged for the next four years.

* 3: The three most frequently cited “top” priorities for Obama and Congress in a recent Pew Research Center survey were strengthening the economy, improving the job situation, and reducing the budget deficit. Climate change, guns, and immigration weren’t identified as top priorities with nearly as much frequency as the leading economic issues.

* 35 percent: A plurality of voters said they are most interested in hearing Obama discuss the economy in his State of the Union, according to a Quinnipiac University poll released on Monday. For the President, it would be difficult to justify not talking at length about the issue most Americans are interested in hearing about.

* 6 percentage points: By a 47-41 percent margin in the Quinnipiac poll, voters said they trust Obama more than congressional Republicans to handle the economy. If Obama keeps up his political advantage over the GOP on the issue, it could lend him some leverage in upcoming fiscal debates. And if he wants to maintain the public opinion high ground he currently has over GOP leaders on Capitol Hill, Obama will need to communicate to voters that he is making a full-court press on the economy.

* 59 percent: Nearly six in ten voters said the economy was the top issue facing the country when they cast their votes last November, exit poll data show. Mitt Romney took 51 percent of those voters, while Obama took 47 percent. The president won reelection, but not because Americans felt great about the economy under his watch; Obama convinced voters the country was headed in the right direction. It’s an argument Democrats will have to make again in the upcoming midterm elections, which are now less than two years away.


Cashing In on the Cashless Economy
Karsten Strauss - Forbes - 12th February 2013

Reach into your pocket and look at what you find. Is there a dollar bill there, or a few coins? You’re a dinosaur! Get ready for the cashless economy.

Is it a news flash that cashless transactions are on the rise and commerce is trending away from paper money and coins? If you answered yes, direct your attention to Square, Paypal, Dwolla, Amazon, Google’s Wallet, Pay with a Tweet, Intuit, Stripe and let’s throw in your bank’s debit services as well, among others.

Recently, it even became possible to buy Dominos pizza with a Bitcoin. Bitcoin – a digital currency transaction network that is not traced as other transactions are – has come under attack by the Department of Justice as a “renegade currency” but perseveres nonetheless.

There are those who would argue that nonsensically – perhaps foolishly – hauling around hard currency will one day be a hazy memory drifting aimlessly through the minds of centenarians holding tenuously to their faculties in an assisted living complex in the not-so-distant future. One of those (the arguers, not the centenarians) is serial entrepreneur Mike Mann.

The End of Cash (and the money to be made getting rid of it)
Mann, an entrepreneur with a series of companies and charitable organizations under his belt, is now setting his sights on creating a company to profit from the move away from the physical dollar. Instead of competing with the slew of companies already in the cashless transaction market, his new venture – Cashless.com – seeks to act as a consultant for merchants wishing to get into the cashless game.

“The cashless transaction industry has already become a big thing and its going to be literally hundreds of times as big,” Mann said. He’s already looking to hire company leadership for Cashless.com.

The consultant role of the yet-to-launch firm would allow the it to remain agnostic and hold a retailer’s hand through the process of making the transition, he explained. In the process, Cashless would offer the seller insight into the discounting, coupons, social media-driven promotions, tracking  and PR opportunities that comes with cash-free commerce.

The idea is in background right now and Mann said he intends to raise $1 million in seed funding over the next three months  – mostly from friends and family – to hire about a dozen people to help focus on South Florida as a test market. “We’ll go for the second round after that,” he said. Round two will not be relegated to friends and family.

Mann’s list of start-ups includes Internet Interstate (sold to Verio in 1994) and BuyDomains.com (sold to Highland Capital and Summit Partners in 2005). There’s also  Phone.com, DomainMarket.com and SEO.com, all of which were featured in Inc.com’s list of the top 500 fastest growing companies last year.

Mann may best be known as a prolific buyer and seller of domain names, making headlines last spring for buying up almost 15,000 domains in a 24-hour period for a price tag of about $100,000. By his own tally, he’s personally chosen over 800,000 domain names in his career, he told Forbes.

On the charity front, he’s founded Grassroots.org,  a capacity-building services for nonprofits; ChangeTheWorld.org, which matches business students with nonprofits; and interns.org, which recruits interns for nonprofits. He also began Make Change! Trust, a fund that supports select 501(c)(3) organizations and a personal mission of his. “I want to makes tens and hundreds of millions to put into Make Change! Trust,” he said.

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