Sri Lanka unexpectedly raised interest rates for the first time since 2007 to curb credit growth in the nation and ensure inflation stays low.
The Central Bank of Sri Lanka raised the reverse repurchase rate to 9 percent from 8.5 percent and the repurchase rate to 7.5 percent from 7 percent, the Colombo-based bank said in a statement on its website today. All seven economists in a Bloomberg News survey predicted rates would be unchanged.
Central bank Governor Ajith Nivard Cabraal
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An Italian coast guard official vehemently demanded that the captain go back to his crippled cruise ship to oversee its evacuation, but the captain repeatedly resisted, according to a shocking audiotape made public Tuesday.
Prosecutors have accused Capt. Francesco Schettino of manslaughter, causing a shipwreck and abandoning his ship before all passengers were evacuated during the grounding of the Costa Concordia cruise ship off the Tuscan coast on Friday night.
The death toll nearly doubled to 11 on Tuesday when divers extracted five more bodies from the ship’s wreckage. All were adults wearing life jackets and were found in rear of the ship near an emergency evacuation point, according to Italian Coast Guard Cmdr. Cosimo Nicastro. He said they were thought to have been passengers.
Prior to that discovery, the coast guard had raised the number of missing to 25 passengers and four crew. Italian officials gave the breakdown as 14 Germans, six Italians, four French, two Americans, one Hungarian, one Indian and one Peruvian. But there was still confusion over the numbers, with the German Foreign Ministry in Berlin listing 12 Germans as confirmed missing.
The Costa Concordia was carrying more than 4,200 people when it hit a reef off the Tuscan island of Giglio after Schettino made an unauthorized deviation from the cruise ship’s programmed course, apparently as a favor to his chief waiter, who hailed from the island.
Schettino has insisted that he stayed aboard until the ship was evacuated. However, a recording of his conversation with Italian Coast Guard Capt. Gregorio De Falco indicates he fled before all passengers were off _ and then resisted De Falco’s repeated orders to return.
“You go on board and then you will tell me how many people there are. Is that clear?” De Falco shouted in the audio tape.
Schettino resisted, saying the ship was tipping and it was dark. At the time, he and his second-in-command were in a lifeboat and the captain said he was coordinating the rescue from there. He also said he was not going back on board the ship “because the other lifeboat is stopped.” Passengers have said many lifeboats on the exposed port side of the ship didn’t winch down after the ship had capsized.
De Falco shouted back: “And so what? You want to go home, Schettino? It is dark and you want to go home? Get on that prow of the boat using the pilot ladder and tell me what can be done, how many people there are and what their needs are. Now!”
“You go aboard. It is an order. Don’t make any more excuses. You have declared ‘Abandon ship,’ now I am in charge,” De Falco shouted.
At one point, De Falco vowed “I’m going to make sure you get in trouble. …I am going to make you pay for this. Go on board, (expletive)!”
Schettino was finally heard agreeing to reboard on the tape. But the coast guard has said he never went back, and had police arrest him on land.
The 52-year-old Schettino, described by the Italian media as a genial, tanned ship’s officer, has worked for 11 years for the ship’s owner and was made captain in 2006. He hails from Meta di Sorrento, in the Naples area, which produces many of Italy’s ferry and cruise boat captains. He attended the Nino Bixio merchant marine school near Sorrento.
Schettino recounted his version of events before prosecutors and a judge at a preliminary hearing Tuesday as to whether he should stay jailed, as requested by prosecutors. The judge deferred an immediate decision. The captain could face up to 12 years in prison on the abandoning ship charge alone free online credit report.
Schettino’s attorney, Bruno Leporatti, said in the hearing, the captain had insisted that after the initial crash into the reefs, he had maneuvered the ship close to shore in a way that “saved hundreds if not thousands of lives.”
Passengers, however, described the evacuation as chaotic.
Steve and Kathy Ledtke, who live in Fort Gratiot, Michigan, said they were sitting down to a late dinner Friday when they realized something had gone wrong. Kathy Ledtke told WDIV-TV that it seemed no one was in charge.
“It was complete chaos and it was every man for himself,” Kathy Ledtke said. “Nobody knew where to go.”
Earlier Tuesday, Italian naval divers exploded holes in the hull of the grounded cruise ship, trying to speed up the search for the missing while seas were still calm. Navy spokesman Alessandro Busonero told Sky TV 24 the holes would help divers enter the wreck more easily.
“We are rushing against time,” he said.
The divers set four microcharges above and below the surface of the water, Busonero said. Video showed one hole above the waterline less than two meters (6 feet) in diameter.
Mediterranean waters in the area were relatively calm Tuesday with waves of just 12 inches (30 centimeters) but they were expected to reach nearly 6 feet (1.8 meters) Wednesday, according to meteorological forecasts.
A Dutch shipwreck salvage firm, meanwhile, said it would take its engineers and divers two to four weeks to extract the 500,000 gallons of fuel aboard the ship. The safe removal of the fuel has become a priority second only to finding the missing, as the wreckage site lies in a maritime sanctuary for dolphins, porpoises and whales.
Preliminary phases of the fuel extraction could begin as early as Wednesday if approved by Italian officials, the company said.
Smit, a Rotterdam, Netherlands-based salvage company, said no fuel had leaked from any of the ship’s tanks and that the tanks appeared intact. While there is a risk the ship could shift in larger waves, to date it has been relatively stable perched on top of rocks near Giglio’s port.
Smit’s operations manager, Kees van Essen, said the company was confident the fuel could safely be extracted using pumps and valves to vacuum the oil out to waiting tanks.
“But there are always environmental risks in these types of operations,” he told reporters.
The company said any discussion about the fate of the ship _ whether it is removed in one piece or broken up _ would be decided by Italian ship operator Costa Crociere and its insurance companies.
The Miami-based Carnival Corp., which owns the Italian operator, estimated that preliminary losses from having the Concordia out of operation at least through 2012 would be between $85 million and $95 million, along with other costs. The company’s share price slumped more than 16 percent Monday.
It was not yet clear if the ship _ which was completed in 2006 _ would ever be able to return to service.
Carnival said its deductible on damage to the ship was approximately $30 million. In addition, the company faces a deductible of $10 million for third-party personal injury liability claims.
Carnival said other costs related to the grounding can’t yet be determined.
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The price of natural gas is plummeting at a pace that has caught even the experts off guard.
A 35 percent collapse in the futures price over the past year has been a boon to homeowners who use natural gas for heat and appliances and to manufacturers who power their factories and make chemicals and materials with it.
The country is flush with natural gas as a result of new drilling techniques that have enabled energy companies to tap vast supplies that were out of reach not so long ago. The country’s natural gas surplus has been growing even as the country burns record amounts.
This winter’s warm weather slowed the growth in demand, however, and created a glut. In the Northeast, December was the fourth warmest in the last 117 years. Winter supplies are 17 percent above their five-year average.
The natural gas futures price fell 13 percent last week, to $2.67 per 1,000 cubic feet. That’s the lowest winter-time level in a decade.
“The market has been overwhelmed with gas,” says Anthony Yuen, a commodities analyst at Citibank.
He and other analysts expect the price to average near $3 for all of 2012. If the weather stays mild, the price could even dip below $2, a level not seen since 2002.
Cheap natural gas is mainly a good thing for the economy:
_ More than half of U.S. households use natural gas for heat, and a quarter of the nation’s electricity is made from it. Falling heating and electric costs are offsetting the impact of high gasoline prices and enabling families and small businesses to spend on other things. Residential gas and electric customers are saving roughly $200 a year, according to a study by Navigant Consulting.
_ For companies that make plastics, fertilizer and other chemicals derived from natural gas, the falling prices are nothing short of a windfall. The same goes for makers of products from steel to bricks to beer. All use a lot of natural gas to heat their furnaces. U.S. manufacturers are becoming more competitive globally as a result of the country’s cheap natural gas, industry officials say.
Some industries aren’t cheering, though.
With electricity prices falling, the profits of all electric power producers _ whether they rely on coal, nuclear or wind _ are shrinking.
Companies that drill solely for natural gas are earning less these days, too. That’s prompting some to hunt instead for oil, whose price is near $100 a barrel.
Still, drillers aren’t reducing natural gas production as much as they would have during previous periods of low prices. They’ve found ways to produce the fuel at much lower cost so they can be profitable at much lower prices. And, in many cases, natural gas is a byproduct of oil drilling, which is so profitable that companies are going after every barrel they can find.
Analysts say in some oil and gas fields, drillers could give the gas away and still be hugely profitable just from selling the oil.
The benefit of falling natural gas prices to homeowners is not as big as a major drop in oil and gasoline prices would provide. The average household’s annual gasoline bill is about $4,000, roughly double the average annual gas and electric bill.
Also, the fuel cost is only half of a customer’s bill. The rest is transmission and delivery charges, which don’t change along with fuel prices. Homeowners are paying $10 Payday advance.18 per 1,000 cubic feet of gas on average, including transmission and delivery charges, according to the Energy Information Administration. Over a year, a customer will burn an average of 75,000 cubic feet, or about $760 worth.
The multi-year drop in natural gas prices caught most industry experts by surprise.
In the middle of the last decade, natural gas looked to be in short supply. Production in the U.S. was slowing, imports from Canada were rising and plans for importing liquefied natural gas from the Middle East and elsewhere were drawn up.
Natural gas futures hit nearly $15 in 2005. Chemical and metals manufacturers were shutting U.S. factories and moving overseas, where gas was abundant and cheaper. Farmers in need of fertilizer were turning to inexpensive imports from Canada, Trinidad and Asia.
But over the next few years, drillers perfected methods first tried in 1981 that now allow them to profitably extract gas trapped in shale formations _ layers of fine-grained rock that in some cases have trapped ancient organic matter that has cooked into oil and natural gas.
Engineers combined the ability to drill horizontally into shale with a technique called hydraulic fracturing. Millions of gallons of water, sand and chemicals are pumped into wells to break rock and create escape routes for the gas. In doing so they unlocked natural gas deposits deep underground across the East, South and Midwest that are large enough to supply the U.S. for decades.
This eventually turned the shortage into a glut, and reversed the fortunes of some industries.
An ammonia plant owned by CF Industries in Donaldsville, La., that was shuttered by its former owner in 2004 is running again. Steel maker Nucor Corp. is building a factory in Louisiana; Shell Oil Co. is planning a petrochemical plant in Appalachia; and Dow Chemical is building a type of chemical feedstock plant it hasn’t built in the U.S. since 1995.
“A whole slice of American industry is benefiting,” says Steve Wilson, the CEO of CF Industries, which makes ammonia and other fertilizer ingredients. CF Industries, which is based in Deerfield, Ill., has seen its daily natural gas costs fall from $6 million to $2 million over the past few years. The company is planning to spend more than $1 billion expanding its U.S. plants.
While industrial customers are betting on low prices for years to come, things could change if demand increases sharply because of extreme weather or faster-than-expected economic growth, or if the U.S. begins exporting gas. It’s also possible that natural gas drilling could be curtailed by environmental regulations designed to protect drinking water from hydraulic fracturing.
Legislators in New York and New Jersey have banned hydraulic fracturing temporarily, and the Environmental Protection Agency is studying it and may propose national regulations.
The most likely near-term scenario is that prices keep falling, according to Rusty Braziel, an analyst at Bentek Energy.
“This ain’t the bottom,” he says.
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Jonathan Fahey can be reached at http://twitter.com/JonathanFahey.
Federal Reserve Governor Sarah Bloom Raskin said the central bank should fine mortgage servicing companies that broke the law and are partly to blame for the current
Richard Cordray
Bakers Footwear Group sold its Wild Pair trademark to Steven Madden Ltd. for $4 million and will continue to offer the brand of footwear in its stores through a licensing agreement.
St. Louis-based Bakers signed the non-exclusive, royalty free license deal Wednesday. Bakers said it will use the proceeds from the deal to reduce its debt.
“The structure of this transaction allows for Bakers to benefit from the future expansion of Wild Pair,” Bakers’ CEO and Chairman Peter Edison said in a statement. Bakers has 233 stores in the U.S.
New York-based Madden, which operates 84 retail stores worldwide, owns 19.9 percent of Bakers’ common stock.
The average rate on the 30-year fixed mortgage fell back down to 3.94 percent, the record low set earlier in the fall.
Low rates offer a historic opportunity for those who can afford to buy or refinance. Still, few people are able to take advantage of the record-low rates or have already done so.
The rate on the 30-year home loan fell from 3.99 percent the previous week, Freddie Mac said Thursday. The 3.94 percent average is the lowest on records dating to the 1950s.
The average on the 15-year fixed mortgage fell to 3.21 percent from 3.27 percent. That’s also a record.
Rates have been below 5 percent for all but two weeks this year. Even so, this year could end up as the worst for home sales in 14 years.
Low mortgage rates have failed to energize sales. Sales of previously occupied homes are just slightly ahead of last year’s dismal sales figures _ and those were the worst in 13 years. New-home sales appear headed for their worst year on records dating back half a century.
Mortgage applications have risen slightly in recent weeks but are up from extremely low levels, according to the Mortgage Bankers Association.
High unemployment and scant wage gains have made it harder for many people to qualify for loans. Many Americans don’t want to sink money into a home that could lose value over the next three to four years.
The average on the 30-year fixed loan has been below 5 percent for all but two weeks in the past year instant payday loans. And many homeowners who have the necessary credit and home equity to refinance already have.
To calculate average the rates, Freddie Mac surveys lenders across the country Monday through Wednesday of each week.
Some lenders have reported an increase in applications through the Obama administration’s refinancing program. That program was broadened in October to allow up to 1 million more homeowners lower their mortgage payments. But the MBA said such government-assisted loans account for just a small portion of refinancings.
The average rates don’t include extra fees, known as points, which most borrowers must pay to get the lowest rates. One point equals 1 percent of the loan amount.
The average fee for the 30-year loan rose to 0.8 from 0.7; the average on the 15-year fixed mortgage was unchanged at 0.8.
For the five-year adjustable loan, the average rate fell to 2.86 percent from 2.93 percent. The average on the one-year adjustable loan ticked up to 2.81 percent from 2.8 percent.
The average fee on the five-year loan rose from 0.5 to 0.6. And the fee on the one-year adjustable loan was unchanged at 0.6.
Toyota Motor Corp. on Friday sharply downgraded its earnings forecast for this fiscal year through March, blaming a strong yen and the massive flooding in Thailand.
Japan’s biggest automaker expects to book a net profit of 180 billion yen ($2.3 billion), down 54 percent from the 390 billion yen it projected in August. It estimates leaner revenue of 18.2 trillion yen ($234.36 billion) from 19 trillion yen.
Toyota expects to sell 7.38 million vehicles worldwide this year instead of 7.6 million it predicted four months ago.
The maker of the Camry and Corolla sedans is on track to lose its title as the world’s largest automaker this calendar year. Toyota sank to No. 3 in vehicle sales during the first six months, trailing U.S. rival General Motors Co. and Volkswagen AG of Germany.
Toyota held off from releasing new earnings forecasts when it announced its first-half earnings results last month, citing uncertainties from the Thai floods that disrupted parts supplies.
It’s been a rough year for Japanese car makers, who were first hit with the earthquake and tsunami in March. They had largely rebounded from the disaster when they confronted the immense flooding in Thailand this autumn. Car production as far away as North America was scaled back as the creeping floodwaters put suppliers out of action.
The flooding, which was Thailand’s worst in half a century, will result in an output loss of 230,000 vehicles, said Executive Vice President Satoshi Ozawa at a news conference in Tokyo.
He told reporters the company had learned from its experience this year and that it would study ways to ensure that such unforeseen events “never again” lead to paralysis of supply chains.
But among Japan’s car makers, Honda Motor Co. has been the worst hit by the floods. It has yet to release forecasts as a result.
Compounding the pain is a strong yen, which hit multiple historic highs against the dollar this year. With jitters about European and U.S. economies, global investors have turned to the yen as a relative safe haven.
For exporters like Toyota, a strong yen reduces the value of overseas profits when repatriated and makes Japanese products less competitive on prices in markets outside Japan. Exports are a key driver of economic growth in a country that faces a rapidly aging and shrinking population at home.
Japanese manufacturers, including car and high-tech makers, responded by shifting more production abroad _ a trend that has government officials and the business community concerned about a hollowing out of Japanese industry.
“Because of the strong yen, the collapse of the foundation of Japanese manufacturing has begun,” Ozawa said.
Toyota’s new forecasts incorporate a 120 billion yen hit on operating profit from the Thai floods and another 190 billion yen from the negative impact of currency levels.
It now sees operating profit of 200 billion yen, compared with 450 billion yen in its August forecast.
The company lowered its foreign exchange assumptions to account for the yen’s appreciation over the last several months. It expects the yen to average 78 to the dollar this year, from 80 yen to the dollar in its previous estimate. It assumes 109 yen against the euro, down from 116 yen to the euro.
Toyota reports earnings based on U.S. accounting standards.
In its 26-year history, Gateway Greening has helped transform the city’s landscape, building nearly 200 community and youth gardens, beautifying street medians and venturing into urban farming.
Now the organization has a new leader in Michael Sorth, who is trading his “old” life as an investment banker with Stifel Nicolaus & Co. for a new one in community gardening.
The transition, he says, will be drastic in some ways. Instead of millions, he’ll be dealing in smaller sums: Gateway Greening’s budget is about $800,000. But he views the position as a prime chance to make the city more self-sufficient, more sustainable, and a greener, more farm-friendly place to live
Bank of America agreed to pay $315 million to settle claims by investors that they were misled about mortgage-backed investments sold by its Merrill Lynch unit.
The settlement was disclosed in court papers filed late Monday in U.S. District Court in Manhattan and requires the approval of a judge.
The class action lawsuit was led by the Public Employees’ Retirement System of Mississippi pension fund. The fund claimed that the investments were backed by poor quality mortgages written by subprime lenders Countrywide Financial Corp., First Franklin Financial, and IndyMac Bancorp, a bank that failed in 2008.
The settlement represents another attempt by Charlotte, N.C.-based Bank of America Corp. to put its legal issues behind it. In the first half of the year alone the bank put up $12.7 billion to settle similar claims from different groups of investors.
U.S. District Judge Jed Rakoff has to approve the settlement, something that could prove difficult since the settlement includes no admission of guilt from Bank of America no fax cash advance.
Just last week, Rakoff struck down a $285 million settlement that Citigroup Inc. reached with the Securities and Exchange Commission. The settlement would have imposed penalties on Citigroup even as it allowed the company to deny allegations that it misled investors.
Rakoff said the public has a right to know what happens in cases that touch on “the transparency of financial markets whose gyrations have so depressed our economy and debilitated our lives.” In such cases, the SEC has a responsibility to ensure that the truth emerges, he wrote.
In 2009, Rakoff had rejected a $33 million settlement between the SEC and Bank of America on similar grounds, calling it a breach of “justice and morality.”
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