Safe you Finance

China’s property market may be heading into a bubble as the economy’s reliance on real estate reaches a level close to the housing peaks in the U.S. and Japan, according to Citigroup Inc.

The CHART OF THE DAY shows investment in residential property accounted for 6.1 percent of China’s gross domestic product last year, the same level as the record in the U.S. in 2005 that was followed by the subprime crisis, said Shen Minggao, Citigroup’s China research head. It’s also about 2 percentage points away from Japan’s 1970s housing boom, he said.

“China’s property market is entering into a bubble stage,” Shen said in a phone interview. “It’s evident that property prices are no longer sustainable once the residential investments achieve above 8 percent of nominal GDP, and China may not be an exception.”

A 10 percent drop in China’s property investment translates to a 1 percentage point decline in nominal GDP, Shen said. Adding investments indirectly related to the real estate industry, nominal GDP will fall 2 percentage points to 2.5 percentage points, he said.

China’s property prices rose for 19th month in December, climbing 6.4 percent from a year earlier. The government last week increased the minimum down-payment for second-home purchases, told local governments to set price targets on new properties, and introduced taxes for homes in Shanghai and Chongqing. The measures followed two interest rate increases in the past four months and a ban on third mortgages.

Chinese Premier Wen Jiabao also said Jan. 18 the government will “resolutely” implement controls on the real estate market in the first quarter. China’s property prices will fluctuate within a 10 percent range this year, Shen said, adding that the country “may only avoid the bubble burst if current property tightening is effective.”

–Bonnie Cao and Jay Wang. Editors: Linus Chua

To contact Bloomberg News staff for this story: Bonnie Cao in Shanghai at +86-21-6104-3035 or bcao4@bloomberg.net

Source

Foreign tourists and Egyptians flocked to Cairo’s main airport on Saturday, scrambling to find flights out of the country as days of often violent protests that forced the resignation of the government showed few signs of abating.

Israeli carrier El Al was trying to arrange a special flight Saturday to take roughly 200 Israeli tourists out of the country, a Cairo International Airport official said, speaking on condition of anonymity because he was not authorized to brief the media. Israel’s embassy in Egypt declined to comment.

The efforts came as between 1,500 and 2,000 travelers were at the airport’s two main departure terminals, most without reservations and frantic to find any available seats of outbound flights. But the bid could prove difficult, if not futile, as some European and U.S. airlines began to announce cancelations or suspensions of service to Cairo and Egypt’s national carrier was said to be experiencing lengthy delays.

EgyptAir had suspended overnight departures Friday because of a government-imposed curfew. The carrier had yet to take a similar step Saturday, though the expansion of that curfew to between 4 p.m. and 8 a.m. made it increasingly unlikely that travelers would be able to head to the airport for evening flights.

German carrier Lufthansa said it had canceled both of its two scheduled flights to Cairo on Saturday. Air Berlin canceled one flight to Cairo. U.S. carrier Delta Airlines, which flies direct to Cairo from the U.S., said service to and from Cairo would be “indefinitely suspended as a result of civil unrest.”

The violence that gripped Cairo, the Egyptian capital, and several other cities over the past few days has presented President Hosni Mubarak with the biggest challenge of his nearly 30-year rule. The protesters are demanding his ouster and that measures be taken to address rampant poverty and corruption, the rising cost of living and the growing disparity in income distribution.

But the protests threaten to undercut one of Egypt’s key foreign revenue generators _ tourism, which accounts for about 11 percent of Egypt’s gross domestic product. Tourism brought in over $9 billion for Egypt in the first nine months of 2010 and $10.8 billion the year before.

Egypt’s military closed off access to the pyramids in Giza _ with tanks and armored personnel carriers sealing off the site on the Giza Plateau. The area is normally packed with tourists and is a main draw for those who come to Cairo.

The move _ aimed at ensuring the tourists’ security _ was likely to be seen as another worrying indicator in a nation that until earlier this week had been a pillar of stability in a trouble-prone region fast cash without a hassle.

Officials said that about 40 percent of the throngs of travelers at the airport were Egyptians, with the rest Westerners and other Arabs. It remained unclear what options were available to them given the limited flights.

EgyptAir flights were running late, in some cases because crew were unable to reach the airport, or were worried about the drive to the facility, said the airport official.

The United States on Friday had cautioned its citizens to avoid nonessential travel to Egypt and urged those already in the country to remain at home or in their hotels. The calls were echoed by other Western government, with Germany’s foreign office on Saturday calling on its citizens to avoid traveling to Cairo, Alexandria and Suez _ the three cities hardest hit by the protests.

So far, the protests appear to have mainly affected travel plans to Cairo, while the Red Sea resorts favored by the Europeans and Russians who make up the majority of foreign tourists to Egypt.

Two of the biggest German tourism agencies, TUI and Thomas Cook, gave their customers the option to either cancel their trips to Egypt or to chose a different destination without incurring penalties.

A spokeswoman for Thomas Cook, Nina Kreke, said that so far there had not been any requests for cancelations.

Anja Braun, a spokeswoman for TUI, said that most German tourists were vacationing in resorts along the Red Sea where the situation was calm.

“Nobody has asked to return early to Germany,” Braun said, adding that while there had been a few cancelations and customers changing their travel destinations to other countries instead of Egypt, one could not say that there was a “wave of cancelations.”

Both TUI and Thomas Cook could not say how many tourists travel to Egypt every week with their agencies, but according to the German Travel Association some 1.2 million Germans vacation in Egypt every year.

Rene-Marc Chikli, president of the CETO association of French tour operators, said the group was suspending all departures this weekend for Egypt. Many travelers who are already in Egypt are being routed away from Cairo to see other destinations, such as Luxor, Aswan or the Red Sea, he told France Info radio.

France’s Foreign Ministry updated its website to advise travelers to Egypt to “postpone all non-urgent travel.” French citizens already in Egypt are advised to “limit their movements to what is strictly necessary and stay far away from crowds.”

Source

Goldman Sachs received nearly $3 billion from AIG for "proprietary" transactions after the insurance company had been bailed out by the government, according to a federal inquiry.

The Financial Crisis Inquiry Commission said Goldman submitted documents that showed it received $3.4 billion in 2008 from AIG related to credit default swaps, a type of insurance policy, on bundles of mortgage-backed securities.

"Of that $3.4 billion, $1.9 billion was received after, and thus made possible by, the federal bailout of AIG," the commission writes in its final report on the causes of the crisis.

The report says $2.9 billion of the $3.4 billion total — including some of the money made possible by the bailout — was for "proprietary trades," which suggests the money went directly to Goldman, rather than to a client.

The payments were separate from the $14 billion Goldman received for credit default swaps from Maiden Lane, the limited liability company set up by the Federal Reserve Bank of New York to resolve CDSs from AIG, according to the FCIC.

"Thus, unlike the $14 billion received from AIG on trades in which Goldman owed money to its own counterparties, this $2 payday loan lenders.9 billion was retained by Goldman," the report says.

AIG was one of the largest purveyors of credit default swaps, or CDSs, during the financial crisis. At one point, it had written $79 billion worth of CDSs on pools of mortgage-backed securities, or credit default obligations, according to the FCIC.

Goldman (GS, Fortune 500), once one of the most respected firms on Wall Street, paid $550 million to settle charges brought by the Securities and Exchange Commission last year that it misled investors in the sale of a credit default obligation.

However, a source familiar with the trades said the report misuses the term "proprietary." The source said Goldman had "equivalent hedges" that would have offset any losses, and that it was acting as a "market maker" for AIG and other undisclosed market participants.

"The notion that Goldman received this great windfall from these transactions is inaccurate," the source claimed. 

Source

Japan’s export growth accelerated for a second month in December, signaling the nation’s recovery will gain traction as global demand picks up.

Overseas shipments rose 13.0 percent in December from a year earlier, from November’s 9.1 percent gain, the Finance Ministry said in Tokyo today. The median estimate of 21 economists surveyed by Bloomberg News was for a 9.3 percent gain.

Signs of faster growth in the U.S. and China, the destination of more than a fifth of Japanese exports, indicate that overseas demand may propel the economy’s expansion into 2011. A global revival may also help Japan withstand a yen appreciation that has threatened exporters’ earnings.

“Japan’s recovery is starting to move forward after its lull,” said Kyohei Morita, Tokyo-based chief economist at Barclays Capital in Tokyo, who provided the most accurate prediction on exports of the analysts surveyed. “Solid demand from Asia and the U.S. recovery have combined to create a chemical reaction that is boosting Japan’s exports and will keep supporting the economy.”

The yen traded at 82.14 against the dollar at 10:56 a.m. in Tokyo. The Nikkei 225 Stock Average rose 0.3 percent.

China’s Growth

The Bank of Japan raised its growth forecast for the year through March and predicted faster inflation as strength in overseas demand bolsters exports and pushes up commodity prices. Governor Masaaki Shirakawa said on Jan. 25 that “the economy will probably emerge from its slump soon and return to a moderate recovery path,” after the bank boosted the economic expansion projection to 3.3 percent from 2.1 percent.

China’s growth accelerated to 9.8 percent in the fourth quarter, and industrial production and retail sales rose in December, government reports showed last week. Manufacturing in the U.S. expanded in December at the fastest pace in seven months, an industry group report showed.

Shipments to the U.S. increased 16.5 percent, the fastest since July, led by automobiles, the report showed. Demand from China, Japan’s largest market, advanced 20.1 percent to a record high and exports to Europe increased 9.7 percent.

Stronger Yen

Japan’s imports climbed 10.6 percent in December from a year earlier and the trade surplus widened 34.1 percent to 727.7 billion yen.

“A robust economic expansion among Japan’s trade partners is boosting demand and helping Japan overcome the perils of a stronger yen,” said Yoshimasa Maruyama, a senior economist at Itochu Corp. in Tokyo.

The yen is still trading near a 15-year against the dollar, risking eroding the value of Japanese companies’ overseas earnings and international competitiveness. The Japanese currency has climbed more than 9 percent in the past year.

Toyota Motor Corp., the world’s largest automaker, may move more production outside of Japan if the strength of the yen weighs on its profits.

Relocating factories “is not something I want to do,” President Akio Toyoda said in a statement on the company’s website on Jan. 14. “If we are simply unable to make a profit, however, we may be forced to move our production elsewhere.”

Japan’s gross domestic product probably contracted at a 2 percent annual pace in the three months ended December, according to the average forecast of 42 economists in a survey by the government-affiliated Economic Planning Association released on Jan. 13. Growth was 4.5 percent in the third quarter as incentives to buy cars and electronics encouraged consumer spending.

Exports rose 24 percent in 2010, the first increase in three years, today’s report showed.

“The rebound of Japan’s economy depends on foreign demand. That pattern hasn’t changed since the 1980s,” said Itochu’s Maruyama. “Given that the country’s population is decreasing, how much Japan can export to its trade partners, particularly to emerging economies, determines the pace of its expansion.”

Source

Emerging-market consumer companies are valued at the most expensive levels on record just as surging food and energy costs curb household spending from Sao Paulo to Shanghai.

Shares in the MSCI Emerging Markets Consumer Discretionary Index traded at a 15-year high of 2.6 times net assets last week, data compiled by Bloomberg show. Wynn Macau Ltd., owned by billionaire Stephen Wynn’s casino company, fetched a record 28 times forecast profit. Mahindra & Mahindra Ltd., India’s biggest sport-utility vehicle maker, has a price-to-book ratio 53 percent higher than global peers, while Brazil’s Cia. Hering, producer of Hering brand apparel, commands a 15 percent premium.

Emerging markets are “where the risks lie at this point, because those economies are farther along in the overheating stage, and you’re starting to see tightening,” Michael Aronstein, president of Marketfield Asset Management in New York whose Marketfield Fund beat 94 percent of peers the past year, said in a Jan. 14 interview with Bloomberg Radio fast cash advance.

Surging Chinese demand and Russia’s worst drought in a half-century sent an index of 55 food commodities tracked by the UN to a 25 percent gain last year. Rising milk and flour costs triggered protests in Algeria this month that left three people dead and 420 injured. Tunisian President Zine El Abidine Ben Ali was forced to hand over power to his prime minister on Jan. 14 and leave the country after failing to end a month of protests by promising lower prices for bread and sugar.

Still Bullish

McDonald’s Corp., the world’s biggest restaurant chain, will probably raise prices this year to offset rising ingredients costs, Chief Financial Officer Peter Bensen said on a conference call with analysts. Meat prices may climb as much as 3.5 percent this year, according to the U.S. Department of Agriculture.

Inflation in seven of the 10 biggest developing nations accelerated during the most recent month that government data were available, fueled by a rally in oil prices to above $85 a barrel.

Many professional money managers are still bullish on emerging-market consumer discretionary stocks, with a net 50 percent saying they hold more shares in the group than are represented in benchmark indexes. The ratio is the biggest proportion of any industry in developing countries, the U.S., Japan or Europe, according to a Bank of America survey of managers with $562 billion of assets that was published Jan. 18.

Premium Valuations

Consumer purchases in the so-called BRIC countries may climb by more than $500 billion a year, according to Goldman Sachs Asset Management Chairman Jim O’Neill. Spending in the four countries was about $4 trillion in 2009, Goldman’s data show. Companies that sell to emerging-market shoppers are some of the best investments “of our lifetime,” O’Neill, who created the BRIC acronym in 2001, said on Bloomberg Television last month.

“We’ve found a lot of profitable investments in consumer- oriented stocks — in consumer goods and retailing,” Mattias Westman, who helps oversee about $4.7 billion as a founding partner of Prosperity Capital Management in London, said in a Jan. 6 interview on Bloomberg Television. “There you have really good growth.”

The MSCI emerging-market consumer discretionary index is valued at a 22 percent premium to the same industry gauge for developed markets, compared with an average discount of 29 percent since the start of 1996, according to price-to-book ratios compiled by Bloomberg.

‘Losing Luster’

Mahindra & Mahindra of Mumbai trades at a 98 percent premium to Dearborn, Michigan-based Ford Motor Co., the second- largest U.S. carmaker, price-earnings ratios show. Hering, based in Blumenau, Brazil, is 81 percent more expensive than New York- based Phillips-Van Heusen Corp., the apparel company that owns the Calvin Klein brand.

Source

Treasuries fell, pushing up 10-year note yields the most in six weeks, as economic reports in the U.S. and Europe bolstered speculation the global recovery is building momentum and damped government debt’s refuge appeal.

Thirty-year bond yields rose to an eight-month high after European officials pledged to strengthen the safety net for debt-strapped countries and a record sale of U.S. inflation- linked notes drew lower-than-average demand. The Treasury will sell $99 billion of notes next week as the Federal Reserve meets and President Barack Obama gives his State of the Union speech.

“We’ve seen the continuation of positive economic data and some confidence in the European sovereign crisis, which have both weighed on Treasuries,” said Sean Simko, who oversees $8 billion at SEI Investments Co. in Oaks, Pennsylvania. “We are still range-bound and in a tug of war in rates ahead of a potential big news week that includes the Fed meeting and the State of the Union address.”

Benchmark 10-year note yields rose eight basis points in New York yesterday, or 0.08 percentage point, to 3.41 percent, from 3.33 percent on Jan. 14, according to BGCantor Market Data. It was the most since the five days ended Dec. 10. They touched 3.47 percent on Jan. 20, the highest level since Jan. 5. The 2.625 percent securities due in November 2020 fell 5/8, or $6.25 per $1,000 face amount, to 93 17/32.

Thirty-year yields increased four basis points to 4.57 percent after touching 4.63 percent on Jan. 20, the highest level since April 29.

Yields on 10-year notes have been in a 31 basis-point range since climbing to 3.56 percent on Dec. 16, the highest level since May 2010.

Housing Sales

Treasuries fell to their lows of the week on Jan. 20 after the National Association of Realtors said sales of existing homes increased 12 percent last month to a 5.28 million annual rate, the most since May. Claims for jobless benefits fell 37,000 last week, the biggest decline since February 2010, to 404,000, Labor Department figures showed. Building permits jumped 17 percent in December to an annual rate of 635,000, more than forecast, Commerce Department data showed on Jan. 19.

German business confidence unexpectedly rose to a record high in January as booming exports to Asia and stronger household spending bolstered growth in Europe’s biggest economy. The Munich-based Ifo institute said its business climate index increased to 110.3 from 109.8 in December.

TIPS Auction

Treasuries also tumbled Jan. 20 after a $13 billion 10-year Treasury Inflation Protected Securities auction drew a yield of 1.17 percent, higher than the average forecast of 1.108 percent in a Bloomberg survey of nine of the Fed’s 18 primary dealers, which are obligated to bid at U.S. government debt sales.

The bid-to-cover ratio, which gauges demand by comparing the amount offered with the amount sold, was 2.37, the lowest since April 2009. It averaged 2.73 at the previous 10 sales. The auction was the largest 10-year TIPS offering since the U.S. began issuing inflation-indexed debt in 1997.

“The TIPS auction surprised a lot of people,” said Sergey Bondarchuk, an interest-rate strategist in New York at primary dealer BNP Paribas SA. “Buyers didn’t show and the dealers ended up with more than they bargained for, so all of a sudden dealers are very long, and that’s not good for the market. Buyers are not bullish at TIPS on these levels.” Long positions are bets a security will increase in value.

The difference between yields on 10-year notes and comparable TIPS, a gauge of trader expectations for consumer prices over the life of the securities, narrowed as much as 15 basis points yesterday, the most since May. It was 2.18 percentage points yesterday, compared with 2.33 a day earlier.

Steepest Slope

The gap between yields on 2- and 30-year Treasuries narrowed to 3.96 percentage points yesterday after widening to 4.02 percentage points on Jan. 20. That was the steepest slope to the so-called yield curve since Bloomberg records on the data began in 1977.

The Treasury will sell $99 billion in 2-, 5- and 7-year notes in daily auctions that begin on Jan. 25. The amounts match those at the last three monthly auctions of the maturities.

Fed policy makers meet Jan. 25-26. They will keep the benchmark interest rate in a range of zero to 0.25 percent, where it’s been since December 2008, according to all 98 economists in a Bloomberg News survey.

Investors also will watch for what the Fed’s policy statement may say about the $600 billion U.S. bond-buying program the central bank began in November to try to lower interest rates and spur economic growth.

Treasury 30-year yields are poised to breach a so-called bullish trend channel that may indicate the end of a more-than two decade bull market in U.S. government debt, according to Royal Bank of Scotland Group Plc.

A rise above 4.71 percent would break a trend channel the security has been in for 24 years, according to technical analysis by William O’Donnell, managing director in Stamford, Connecticut, at the bank’s RBS Securities unit.

Source

Stocks are heading higher Friday after General Electric and other companies reported strong quarterly profits.

General Electric Co. and oil company Schlumberger Ltd. posted earnings that beat expectations. Google Inc. also reported strong earnings late Thursday. Bank of America Corp., the country’s largest bank, reported a loss related to bad mortgages.

The Dow Jones industrial average rose 77 points, or 0.6 percent, to 11,899 in morning trading.

The Standard & Poor’s 500 index rose 10 points, or 0.8 percent, to 1,290. The Nasdaq composite index rose 16 points, or 0.6 percent, to 2,720.

General Electric is up 5.8 percent in early trading, leading the 30 stocks that make up the Dow. The conglomerate’s earnings rose 52 percent on growth in equipment orders and lending.

Schlumberger’s income rose 31 percent as drilling increased. Demand for the company’s oilfield services surged around the world along with energy prices. Schlumberger rose 1.5 percent.

Bank of America edged up 0.4 percent after reporting a $1.6 billion loss in the fourth quarter as the bank set aside more money to buy back faulty home loans from investors.

Google reported a 29 percent rise in income after the market closed Thursday. The Internet search giant said that co-founder Larry Page will take over as chief executive, replacing Eric Schmidt. Google’s stock rose 1.5 percent.

Source

President Barack Obama, in another move to smooth frayed ties with corporate America, ordered a far-reaching review of federal regulations Tuesday with the goal of weeding out rules that hurt job growth and creation. Republicans and business groups welcomed the step but suggested he do even more.

Business groups have bitterly complained that new regulations carrying out health care and financial overhaul, among others, are holding back hiring and economic growth.

Despite Obama’s directive, there was no indication that the White House will pull back from the biggest regulatory fights ahead: the Environmental Protection Agency’s plans to regulate greenhouse gases and rules carrying out Obama’s health care overhaul.

Obama said his executive order would “strike the right balance” between economic growth and regulations protecting the environment and public health and safety. Agencies have 120 days to submit a plan for how they intend to review existing regulations.

The move was the latest outreach by the president to repair relations with the business community following last November’s midterm congressional elections, in which Republicans gained control of the House and increased their numbers in the Senate. Some of Obama’s critics have accused him of overstepping his federal power via rules and regulations and of being anti-business.

The president announced the regulatory review in an opinion piece in The Wall Street Journal. Sometimes rules and regulations “have gotten out of balance, placing unreasonable burdens on business__ burdens that have stifled innovation and have had a chilling effect on growth and jobs,” Obama wrote.

“Regulations do have costs; often as a country, we have to make tough decisions about whether those costs are necessary. But what is clear is that we can strike the right balance.”

The executive order instructed federal agencies to scour their books for rules that place an unreasonable burden on businesses. Specifically, Obama said regulations must reduce uncertainty, be written in plain language, be built upon public participation, and identify the “least burdensome tools” for achieving the goals of the new government rules.

Still, the executive order, similar to one former President Bill Clinton signed in 1993, doesn’t cover independent agencies, including those that oversee the financial services industry such as the Securities and Exchange Commission and the Federal Reserve

The president said the review “will help bring order to regulations that have become a patchwork of overlapping rules, the result of tinkering by administrations and legislators of both parties and the influence of special interests in Washington over decades.”

Obama issued the order on the eve of a vote by the House to repeal his landmark health care law. The repeal is expected to pass the GOP-led House but not the Senate, which is still controlled by Democrats.

White House spokesman Robert Gibbs said Tuesday’s order was not tied to GOP action on Capitol Hill, and said the proposal had been in the works for several months.

Gibbs said that, while there will be those in Washington that want to “add a political label to this or that,” the president’s decision to seek the regulatory review were “a common-sense” based rather than politically motivated.

Both Republican leaders and business groups praised the president _ but in cautious tones, perhaps expressing misgivings that such a review might wind up with even tougher regulations in some instances.

Obama’s action is “a positive first step,” said Thomas J. Donohue, president of the U.S. Chamber of Commerce, the nation’s biggest business organization.

But, Donohue added, “a robust and globally competitive economy requires fundamental reform of our broken regulatory system.” He called on Congress to “reclaim some of the authority it has delegated to agencies.”

Obama plans to give a speech to the chamber, with whom he has frequently locked horns over health care and financial regulation, on Feb. 7.

The National Association of Manufacturers said it “appreciated” Obama’s call for a regulatory review, but called for Obama to demonstrate results by “delaying poorly thought-out proposals that are costing jobs,” listing the EPA’s proposals to regulate greenhouse gases as a prime example.

“Manufacturers have been saying for some time that overregulation is harming job creation and stifling economic growth,” said NAM spokesman Aric Newhouse.

House Majority Leader Eric Cantor, R-Va., said Obama’s executive order “shows that he heard the same message I did in the last election _ that Americans are sick and tired of Washington’s excessive overreach and overspending.

“While I applaud his efforts . we must go further,” Kantor added. He proposed more aggressive steps to strike down “needless and burdensome” regulations that plague businesses and stifle job growth.

Rep. Darrell Issa, the California Republican who chairs the House Committee on Oversight and Government Reform, applauded Obama “for joining what must be an effort that stretches beyond ideological entrenchments to identify the regulatory impediments that have prevented real and sustained job growth in the private sector.”

Brendan Buck, spokesman for House Speaker John Boehner, called Obama’s review a welcome acknowledgment that government regulations have economic consequences. But he said the president should take bolder steps immediately.

David Walker, former U.S. comptroller general, said in an interview that it was “fully appropriate to engage in a baseline review of existing federal regulations.”

But Walker, head of a balanced-budget advocacy group called Comeback America Initiative, questioned having the agencies themselves hunt for harmful regulations. “We need to have an independent review process that has transparency,” he said.

Walker said many of today’s regulations date back to the 1950s and need to be revamped.

Obama’s executive order is partly a political gesture, said Cary Coglianese, a regulatory expert and law professor at the University of Pennsylvania.

“This is a statement to Republicans in Congress as much as it is to the American people and to the president’s own Cabinet officials,” he said.

The proposal could cause a backlash among liberals, already upset over Obama’s appointment earlier this month of Chicago power broker William Daley, a Democrat centrist who was a top official for JPMorgan Chase and a former commerce secretary in the Clinton years. Obama’s courtship of the business community has produced some grumbling from the liberal Democratic base.

Obama said federal agencies won’t shy away from addressing regulatory gaps, such as new safety rules for infant formula and procedures that stop preventable infections from spreading in hospitals.

“We are also making it our mission to root out regulations that conflict, that are not worth the cost, or that are just plain dumb,” the president wrote.

Different interest groups read their own interpretation into Obama’s executive order.

Scott Slesinger, legislative director for the Natural Resources Defense Council, focused on Obama’s specific mention of the Clean Air Act , on the books since 1970, as a “common sense” measure that has worked to the benefit of society.

“The president is right,” Slesinger said. “We need a balanced approach, but not one that responds to those who would put short-term corporate profits above the public health.”

Obama was “acting in the nation’s best interests” by calling for the review, said Charles T. Drevna, president of the National Petrochemical and Refiners Association. A spokesman for the group, David Egner, said the first economy-strangling rules to go should be new regulations aimed at reducing global warming pollution.

Just last month, Drevna said plans by the EPA to reduce heat-trapping gases at oil refineries _ due to be proposed this summer _ were “all pain and no gain” and “exactly the opposite” of Obama’s stated priorities for job creation and economic recovery.

Source

Stocks suffered their largest one-day decline since November after financial companies reported steep drops in profits.

Goldman Sachs Group Inc. said Wednesday its earnings fell 53 percent in the last quarter because of a slowdown in its investment banking business. Northern Trust and State Street also reported lower profits.

Losses are spread across the market. All ten industry groups that make up the Standard and Poor’s 500 index fell.

At the market close, the Dow Jones industrial average is down 13 points, or 0 flat iron.1 percent, to 11,825. The S&P 500 is down 13, or 1 percent, to 1,282. The Nasdaq composite is down 41, or 1.5 percent, to 2,725.

Four stocks fell for every one that rose on the New York Stock Exchange. Volume came to 1.1 billion shares.

Source

Australian Assistant Treasurer Bill Shorten urged companies to donate to flood-devastated Queensland state as Australia & New Zealand Banking Group Ltd. estimated rebuilding may cost as much as $A20 billion ($19.8 billion).

“We’d like business people to open up their pocketbooks a bit,” Shorten said in an interview today in Hong Kong. “The private sector generates the wealth in Australia and there’s not going to be reconstruction without business.”

Shorten’s call echoed Prime Minister Julia Gillard’s announcement today of a business task force that includes Linfox Group founder Lindsay Fox to leverage corporate donations. She also reiterated that the government intended to return Australia’s budget to surplus.

ANZ economists said today that given the federal government is “likely to foot a big proportion of this rebuild, the 2012- 13 budget surplus is, as expected, under significant threat.” The bank’s A$20 billion estimate of flood reconstruction costs is equivalent to about 1.5 percent of gross domestic product.

When asked about the surplus projection, Shorten said “there’s no doubt there will be hard decisions. We’ll have to look hard at our priorities” to maintain the surplus target and fund reconstruction. He also said he expects a “V-shaped recovery” after the deluge.

The Australian newspaper today reported, without citing anyone, that one option to help pay for reconstruction is an addition to the 1 payday loan lenders.5 percent Medicare levy that helps fund public health and raises A$10 billion a year.

“The damage bill will be noteworthy,” Melbourne-based ANZ Bank said. “The Queensland premier’s statement that 28,000 homes will need to be rebuilt will alone come at a cost of around A$8 billion on our estimates, suggesting the total rebuild effort could be in the order of A$20 billion.”

Wesfarmers Ltd. today contributed A$5 million to the flood relief appeal and Xstrata Plc doubled its donation to A$2 million. Flight Centre Ltd. pledged A$2 million.

Source