Shares of Canadian mining companies with operations in Ecuador were pounded yesterday as an assembly that’s writing the country’s new constitution overwhelmingly approved a decree to revoke most mining concessions there.
Ninety-five members of the 130-member body voted for the measure, which also calls for creation of a state-run mining company.
The assembly is controlled by the party of leftist President Rafael Correa. When he took office last year, he vowed to increase state control of natural resources and the economy.
A number of large Canadian mining companies have concessions in the South American country and could be affected.
Shares of Aurelian Resources Inc., which holds the 950-square-kilometre Fruta del Norte discovery, fell $2.22, or more than 30 per cent, to $5.14. Dynasty Metals & Mining Inc. shares fell $2.11, or 34 per cent, to $4.05.
Shares of Corriente Resources Inc. fell 50 cents, or more than 10 per cent, to $4.10 before trading in the shares was halted pending the news from Ecuador.
"The company has requested an official version of this mining mandate and will advise further as to the impact of this mandate on the company’s operations in Ecuador when the company’s analysis is completed," Corriente said in a statement.
Corriente holds the Mirador copper-gold operation.
Miners and industry observers bemoaned the situation, calling the government’s move a blow to junior miners, particularly those such as Aurelian with a fat stable of concessions in the Andean country.
"It sends a message that this administration is not fully aware of what mining can do for their economy, and what modern mining is like," said Patrick Anderson, Aurelian’s chief executive.
The decree revokes hundreds of concessions and limits the amount any company can hold to three free credit report.com. Toronto-based Aurelian currently has 38 concessions in Ecuador.
Mining companies will not be allowed to appeal the government’s decision in courts and no compensation will be granted for expropriated holdings.
Alberto Acosta, head of the assembly that is rewriting Ecuador’s constitution, said recently he was concerned about the effects mining could have on the country’s pristine environment.
With files from Associated Press and Reuters News Agency
The U.S. Treasury wants hedge fund managers to improve disclosure of hard-to-value assets and adopt audited public company-style performance reports for investors, a summary of recommendations, obtained by Reuters on Monday, shows.
They did not propose any new regulation, but chose instead to rely on market-driven due diligence and improved disclosure.
The Treasury on Tuesday is due to release hedge fund best practices guides from two committees it commissioned last year — one for hedge fund managers and one for hedge fund investors.
They were among a number of steps that the Treasury-led President’s Working Group on Financial Markets recommended in September 2007 to protect investors and reduce systemic risks posed by the growth of hedge funds while not restraining financial innovation bad credit payday advance.
The two committees started their work as financial market stress from subprime mortgage defaults were gathering steam, creating worries about investments made by the nearly $2 trillion hedge funds sector.
Among the thorniest problems in the global credit crisis is
establishing valuations for largely illiquid mortgage-backed securities lodged on bank and hedge fund balance sheets.
The Treasury group’s Asset Managers’ Committee, headed by Eric Mindich, chief executive of Eton Park Capital Management, calls on hedge funds to put in place more robust procedures for the valuation of assets, including written policies, segregation of responsibilities and other measures.
Anxiety about the economy extends to concern about the ability of corporate employers to pay promised pension benefits. And well it might.
The threat is greater than most people realize. Few know that ERISA Industry Committee (ERIC) advocates a plan that would enable employers to cut loose existing defined benefit pensions with insufficient funding.
Many companies have terminated retiree health care plans, shrunk employee insurance coverage and shifted health care costs to workers.
The recent General Motors/United Auto Workers agreement transferred GM’s retiree health care program to a new "trust" operated by the union, but its funding may be inadequate.
ERIC’s "New Benefit Platform for Life Security" comes wrapped in cotton-candy rhetoric about promoting retirement and health security. But here’s what’s "new" — companies with defined benefit pension plans would have the option to off-load those plans to outside "administrators."
Company assets no longer would back pension plan promises; instead the administrator would pay from company contributions plus whatever they earned — or lost. Since 2000, they’ve lost billions.
The "New Benefit Platform" proposes that the U.S. Pension Benefit Guarantee Corporation (PBGC) stand behind plan promises. Unfortunately, PBGC already is in the red.
Reports of plan underfunding and PBGC insolvency often elicit suggestions that the government "bail out" PBGC. They invoke the economy-shaking bailout of federal savings and loans insured by the Federal Deposit Insurance Corporation as a precedent.
The two situations are not analogous: FDIC guaranteed money that account holders had deposited; but PBGC "guarantees" benefits that have not been funded faxless payday loans. Further, "The (Senate and House) expect the (PBGC) program … to be self-sustaining."
That means that fees paid by participating companies and earnings on them would fuel the program. A bailout would dishonor that rationale.
Employer-sponsored medical care and retirement plans receive more tax forgiveness than those for charitable contributions and mortgage payments.
ERIC’s justification for this "new" proposal: Pension regulations are so intricate that employers who sponsor plans can’t master them.
But the new "administrators," who specialize in plans, could. It will amaze people that companies like DuPont, FedEx, GE, GM, Hewlett-Packard, IBM, Motorola, Tyco and Wells Fargo cannot muster adequate staffs and consultants equal to the task.
The economy faces daunting problems: The disintegration of defined benefit pension plans, the collapsed earnings and employer manipulation of 401(k)s, the meltdown of employment-based health insurance and out-of-control medical care prices.
It is puzzling that so high-powered a group as ERIC has fielded so unappealing a proposal, to abandon pension obligations, with the rationale that the largest corporations in American cannot understand requirements.
The "New Platform" offers no help to the workers and retirees.
Merton C. Bernstein is Coles Professor of Law Emeritus at Washington University.
Monsanto Co. on Tuesday boosted its fiscal 2008 earnings expectation, excluding extraordinary items, by about 16 percent as a result of strong seed and herbicide sales coupled with fiscal discipline.
It is the second time this year that the Creve Coeur-based company has increased its earnings guidance.
Monsanto now says it expects full-year earnings from ongoing operations in the range of $3.15 to $3.25 a share, up from February’s guidance of $2.70 to $2.80. It will report second-quarter results on April 2, and projects earnings, excluding one-time gains, in that period of $1.75. The second quarter ended Feb. 29.
In addition, the company will receive a payout of 23 cents a share on claims in the recently completed bankruptcy case of corporate cousin Solutia Inc. That will bring annual reported earnings to $3.38 to $3.48 a share.
The news drove up Monsanto’s shares by nearly 10 percent Tuesday, to $114.54 from Monday’s close of $104.26.
Monsanto said gross profit from its seeds and traits business will be in the range of $3.6 billion to $3.7 billion this year, up 20 percent from 2007 instant cash advance. It is selling more soybean seeds than last year, and use of its biotech corn traits also is increasing.
Global demand for Roundup herbicide is outpacing supply, and that business should deliver between $1.7 billion and $1.8 billion in gross profit this year, Monsanto said.
The company also noted it is holding spending on sales and general and administrative items to 20 percent of sales; and research and development costs at 9 percent.
Looking ahead, Monsanto said it expects to reach in 2010 its targeted gross margin in the range of 52 to 54 percent — two years ahead of schedule.
"Our growth over the next five years will be built on our seeds-and-traits platform, and we’ve already exceeded a number of milestones that put us ahead of our plan to deliver consistent, sustainable growth," said Hugh Grant, chairman, president and chief executive, in a statement.
rmelcer@post-dispatch.com | 314-340-8394
U.S. sales of video game hardware and software hit $1.33 billion in February, up 34 percent from a year earlier, with Sony Corp’s (6758.T: Quote, Profile, Research) PlayStation 3 topping Microsoft Corp’s(MSFT.O: Quote, Profile, Research) Xbox 360 for the second month in a row.
Nintendo Co Ltd’s (7974.OS: Quote, Profile, Research) Wii was still the best-selling console, moving 432,000 units and topping the 281,000 PlayStation 3s and 255,000 Xbox 360s, according to market research firm NPD.
“With several marquee titles still to come in the front half of the year, the industry is poised to achieve another year of record-breaking sales despite difficult economic conditions,” NPD analyst Anita Frazier said in a statement.
Software sales in February were up 47 percent year-on-year while hardware sales rose 19 percent, NPD said.
Microsoft, which outsold Sony every month up until January, blamed its weak showing on inventory shortages caused by stronger-than-expected demand over the holidays.
“Our manufacturing team guesses five months out bad credit payday loans. They made their forecast and didn’t have as high a forecast as they should have,” said Microsoft spokesman David Dennis.
“We’re doing everything we can, pulling all the levers” to boost output, he said.
Microsoft said it expects to have a healthy supply of Xbox 360s by April, when Take-Two Interactive Software Inc’s (TTWO.O: Quote, Profile, Research) “Grand Theft Auto 4″ hits shelves in what is widely expected to be the biggest game of the year.
The government’s pick to head Japan’s central bank said on Tuesday he would be an independent governor at a critical time for the economy, but a senior opposition lawmaker warned that his appointment could be vetoed.
Toshiro Muto, currently a deputy governor at the Bank of Japan (BOJ), appeared in parliament after being nominated to replace governor Toshihiko Fukui, who retires next week.
Opposition parties who control parliament’s upper house have threatened to block the former finance ministry bureaucrat because of his ties to the government, raising the risk of a monetary policy vacuum at a time of financial market volatility.
Muto’s comments echoed those of cabinet ministers on Tuesday and supported the government’s argument that its nominees for the posts of governor and two deputies should be confirmed without delay as fears grow of a U.S americashadvance. recession.
“Japan’s economy is at a critical stage as it faces various risks at home and abroad,” Muto told a hearing in parliament’s lower house. “Signs of a U.S. economic slowdown are intensifying and downside risks for the global economy are rising.
“I would strive to gain the public’s trust and ensure the BOJ’s independence,” he said.
But Yoshito Sengoku, a senior lawmaker in the main opposition Democratic Party, told reporters Muto had not persuaded those planning to reject his appointment to change their minds.
“He answered as if he was an honor student, and it did not dispel our concerns,” said Sengoku.
A state banking regulator raised a warning flag about soaring agricultural land values on Tuesday, telling a congressional hearing that the U.S. farm land bubble could burst and unleash a fresh set of economic problems.
“If there has been too much leveraged or loaned against the inflated value of farm land, the bubble will burst, and we will once again experience an economic crisis similar to that of the 1980s,” Iowa Superintendent of Banking Thomas Gronstal told the Senate Banking Committee.
Gronstal, who represented the Conference of State Bank Supervisors, was one of several regulators who testified about the subprime mortgage and credit problems that banks are facing.
“My fellow state supervisors and I are closely watching the agricultural sector,” he said.
Gronstal warned that the current agricultural conditions appear similar to the conditions seen in the 1970s that led to the economic and financial collapse of the 1980s.
“The dramatic increase of farm land value in the last few years makes the agricultural sector look strong,” Gronstal said payday loan. “In the future, should the price of corn, soybeans and other commodities decrease, the price of farm land would most likely also fall.”
The average value of U.S. crop land hit a record high of $2,700 per acre in 2007, compared with $1,340 per acre in 1998, according to U.S. Agriculture Department data. The value of crop land in some key Midwestern states was much higher, with Illinois averaging $4,460 per acre in 2007, the data showed.
Gronstal also said that smaller or community banks have felt the impact of the declining U.S. housing market due to the subprime mortgage crisis.
AT&T Mobility, the nation’s largest cell phone carrier, has agreed to pay thousands of Florida consumers who were billed for third-party services such as ringtones and text messaging that were advertised as free.
The settlement announced Friday between Florida Attorney General Bill McCollum and AT&T Mobility could result in refunds of more than $10 million in all, depending on how many consumers seek compensation.
McCollum said the main culprits are third-party companies that advertise ringtones and other services on the Internet, often promising that the service will be free. When customers - often teenagers - sign up, they or their parents are then surprised to find charges on their wireless bill.
"They will download this thinking it’s free because the advertising on the Internet says it’s free," McCollum said. And when the charge shows up on the bill, it’s not always clear what it is, either, he added.
"This advertising is wrong, it’s deceptive … and it’s all over the Internet," he said.
AT&T Mobility has agreed in the settlement to police such agreements with third-party providers and make it clear what the charges are for.
"It’s going to say ‘ringtones,’ and it’s going to give them an opportunity to cancel," McCollum said.
McCollum said his office is in the process of investigating other cell phone companies to determine the extent to which they’re allowing fraudulent third-party billing, and plans to push for refund agreements with all the major providers.
Atlanta-based AT&T Mobility also noted in a statement that the problem is an industrywide one, and also emphasized that it didn’t sell the ringtones or other phone content, but simply billed its customers for third-party services that they had purchased.
AT&T said it has put safeguards in place to help customers understand what they’ll be billed for.
Under its practices, "the customer must take an affirmative action - sending a text message - before a third-party provider can sell the customer ringtones, graphics, games, or other content," AT&T said payday loans. "Third-party providers must also make clear the pricing for these services and how to unsubscribe.
"Said another way, our goal is no surprises," the company said.
While praising AT&T for agreeing to provide refunds and better police its third-party agreements, and noting that the fraudulent advertising was done by other companies, McCollum said the wireless giant wasn’t entirely blameless.
"They did have misleading billing," McCollum said. He also noted that AT&T got about 40% of the charges for third-party services billed to their customers.
AT&T Mobility, formerly Cingular Wireless, will also pay the state $2.5 million and contribute $500,000 toward consumer education on safe Internet use under the agreement.
McCollum said it was easier for the state to go after AT&T and pressure it to better police its contracts with third parties than to go after the actual companies selling the ringtones and other content - because there are so many of them.
"As soon as you close one of them down, another one of them is going to pop up," McCollum said.
McCollum’s office had received a few hundred complaints about the billing practice, but in investigating the issue found that AT&T (ATT) had received thousands of similar complaints.
Brad Ashwell, a spokesman for the consumer organization Florida Public Interest Research Group, praised McCollum for taking on the telecom giant and said the complicated nature of sales of services over the Internet and how they are billed needs to be carefully policed.
"The digital marketplace is sort of a Wild West right now," Ashwell said.
Societe Generale launched a deeply discounted 5.5 billion euros ($8 billion) capital increase on Monday to prop up its finances and heal scars from the world’s biggest rogue trading scandal.
The one-for-four rights issue at 47.50 euros per share gives its existing shareholders a bigger-than-expected discount of 38.9 percent to Friday’s price as a reward for sticking with the bank and filling a 4.9 billion euro hole blamed on one trader.
Investors and analysts, who had predicted a discount of 30 percent, said SocGen appeared anxious to guarantee a maneuver that could be crucial to its hopes of staying independent.
“The price is very low. The feedback from the market cannot have been very encouraging. As they can’t miss this deal they decided to strike very low,” said Landsbanki Kepler banking analyst Pierre Flabbee.
Takeover talk has swirled around SocGen since January 24 when executive chairman Daniel Bouton unveiled the multi-billion-euro trading losses and pinned the blame on unauthorized stock market gambling by one junior trader, 31-year-old Jerome Kerviel.
Kerviel spent the weekend in a Paris prison after prosecutors succeeded in overturning his bail credit report. But a Paris broker who was quizzed by police for 48 hours over his links with Kerviel was released by judges without charge on Saturday.
Top contender to bid for SocGen is domestic rival BNP Paribas. But a source familiar with BNP’s thinking told Reuters on Monday it was not preparing a hostile bid. BNP failed to buy SocGen in a three-way takeover battle in 1999.
“The idea of a bid has not been raised at all at board level,” the source said. “What one could think about is a friendly approach. If at a certain stage Societe Generale management considers it intelligent to bolster the bank with a natural partner there could be something to do.”
Amazon.com Inc. said its fourth-quarter profit more than doubled, helped by fast-growing international sales.
The Web retailer also issued better-than-expected guidance and appeared unconcerned about a possible recession.
Amazon’s earnings in the crucial holiday quarter climbed to $207 million, or 48 cents per share, from $98 million, or 23 cents per share, in the same period last year payday advance low fees.
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