Microsoft Corp (MSFT.O: Quote, Profile, Research) wants to stick with its original takeover offer for Yahoo Inc (YHOO.O: Quote, Profile, Research), but is not ruling out News Corp joining its bid or other options, a source close to the company said on Friday.
Separately, a source familiar with the matter said News Corp (NWSa.N: Quote, Profile, Research) continues to talk directly with Yahoo on reaching a deal without Microsoft. The source declined to provide details on what a potential deal structure would look like.
The source close to Microsoft said the company’s preference all along has been to retain the original deal structure that would involve paying $31 per share in cash and stock to acquire Yahoo. But Microsoft has not ruled out bidding with partners.
Earlier, the Wall Street Journal, which is owned by News Corp, reported that people close to Microsoft said the software maker plans to pursue Yahoo alone rather than with News Corp, which had held talks with Microsoft on a joint bid for Yahoo same day payday loans pay day loans.
The Journal also said Yahoo’s board of directors met on Friday to assess their options, including deepening their negotiations with Time Warner Inc’s (TWX.N: Quote, Profile, Research) AOL on a deal to merge Yahoo and AOL, but that no decisions were reached.
Spokesmen for Microsoft, News Corp, Time Warner and Yahoo were not immediately available to comment.
The newspaper’s Web site cited unnamed sources as saying that Time Warner had been expecting Yahoo’s board to move closer to backing an AOL deal and that Yahoo’s delays suggested that the company was hesitant to proceed.
A source familiar with the situation was unwilling to confirm to Reuters the Journal’s characterization of Time Warner’s thinking, but said that talks continue between Time Warner and Yahoo.
U.S. Treasury Secretary Henry Paulson reiterated support for a strong dollar and said changes in today's statement by Group of Seven policy makers about currencies reflects recent market movements.
“I reiterated in very strong terms our commitment to a strong dollar,'' Paulson said at a press conference after G-7 talks in Washington.
Finance ministers and central bankers signaled concern over the slump in the dollar, citing “sharp fluctuations in major currencies.'' The U.S. currency has fallen about 8 percent against the euro and 6 percent versus the yen since the last G-7 meeting in Tokyo on Feb. 9, and reached a record low of $1.5913 per euro this week.
“All I'm going to say is that if you never changed the communiqué language no matter what happened around the world, it would be pretty meaningless,'' Paulson said. “This communiqué reflects market developments and changes in the markets.''
Policy makers from the U.S., U.K., France, Canada, Italy, Germany and Japan made the first significant change to their language on currencies since February 2004 in Boca Raton, Florida.
“Since our last meeting, there have been at times sharp fluctuations in major currencies, and we are concerned about their possible implications for economic and financial stability,'' the communiqué said. “We continue to monitor exchange markets closely, and cooperate as appropriate.''
$245 Billion in Losses
The officials met to address a credit crisis sparked by losses on U.S. mortgage securities that have caused financial institutions to write down $245 billion in assets. The International Monetary Fund said two days ago that there is a 25 percent chance of a global contraction.
Paulson said he explained to his colleagues the housing downturn in the U.S. that has sent foreclosures soaring and made credit harder to get for consumers and companies alike, noting that the economy has “sharply slowed down and the risks are to the downside.''
Concern that the impact from the U.S. economic slowdown would spread to the rest of the world was shared by his counterparts, he said. “There isn't anyone in that room that believes in decoupling,'' he said cashadvance payday advance.
He reiterated that he hasn't seen any plan in Congress that calls for the use of public funds to alleviate the housing crisis that wouldn't do “more harm than good.'' Congressional proposals to use government money aren't “gaining traction,'' he said.
Market Oversight
In a statement issued after the talks, Paulson said the policy makers agreed to cooperate to address the financial market turmoil that threatens to slow growth worldwide.
“We have worked, and will continue to work, closely to address global challenges and take concrete actions,'' he said. “Most of our discussion focused on the ongoing challenges in the global economy and the international financial system, and the policy responses to these challenges.''
The ministers' joint statement after the meetings said the global economic slowdown may worsen amid an “entrenched'' credit squeeze.
Paulson said he “welcomed'' the report by the Financial Stability Forum, chaired by Bank of Italy Governor Mario Draghi, that urged regulators to strengthen accounting rules, tighten bank oversight and require more corporate disclosure.
The FSF also said central banks should consider taking collateral in currencies other than their own to boost liquidity in times of crisis.
`Rapid' Implementation
“We discussed the importance of rapid and effective implementation of the FSF findings,'' Paulson said.
The Treasury chief said the ministers discussed efforts by the International Monetary Fund to streamline its operations and cut expenses while improving its monitoring of financial markets.
“I underscored the need for firm implementation of the IMF's new framework for exchange rate surveillance,'' he said.
Paulson reiterated that the financial market turmoil, the fall in housing prices and rising energy costs, were weighing on the U.S. economy.
“I have the greatest confidence in the resiliency, flexibility and strength of our economy and our capital markets,'' he said.
The U.K. trade deficit narrowed in February as record oil sales and the weakness of the pound kept exports close to the highest in 1 1/2 years.
The goods trade gap was 7.5 billion pounds ($14.8 billion), compared with 7.9 billion pounds in January, the Office for National Statistics said in London today. The result matched the median forecast of 24 economists in a Bloomberg News survey. Exports fell 0.2 percent and imports declined 1.7 percent.
Manufacturing reached the strongest level since 2001 in February, buoyed by a drop in the pound against foreign counterparts including the euro. The British currency has fallen on speculation the Bank of England will cut its benchmark interest rate for a third time since December as soon as today to shore up economic growth.
“The impact of the weaker currency is positive,'' said Peter Dixon, an economist at Commerzbank AG in London. “Looking forward, trade conditions are going to be pretty poor with global growth slowing. We are approaching a period where exporters will find it difficult in spite of the weaker pound.''
Oil sales climbed to 2.5 billion pounds, the highest since monthly records began in 1980, as the price of crude increased, the statistics office said. The cost of a barrel of crude reached an all-time high of $112.21 yesterday. The oil balance was in surplus for the first time since April 2006.
Goods Exports
Total goods exports were little changed at 20.5 billion pounds in February, the statistics office said. Apart from oil, overseas sales of cars and basic materials rose.
The pound fell to a record 80.29 pence against the euro after the report today. The British currency has fallen 11 percent in the past year on a trade-weighted index compiled by the central bank. U.K. exporters sell about half their goods to the euro region.
Sales to the European Union fell 4 percent, less than the 4.2 percent drop in imports. Exports to the rest of the world increased 5.4 percent to a record 8.6 billion pounds, outpacing the 1.5 percent gain in imports electronic check payday advance http://paydayloans-on.com.
U.K. manufacturing unexpectedly rose for a second month in February to the strongest level since March 2006, data from the statistics office showed yesterday.
A narrowing deficit may support economic expansion, helping to offset weakening consumer spending and service industries.
“Most people are looking for a turnaround in the contribution of net trade to the U.K. economy, which has been a sizable drag on growth,'' said Nick Bate, an economist at Merrill Lynch & Co. in London and a former Treasury official.
Slowing Growth
Slowing economic expansion overseas may still curb demand for British goods. The International Monetary Fund yesterday estimated a 25 percent chance of a worldwide economic downturn and lowered its forecast for global growth to 3.7 percent this year from a 4.1 percent prediction in January.
The IMF also reduced its forecast for U.K. growth this year to 1.6 percent from 1.8 percent and said that the Bank of England has scope to lower interest rates. Central bank Executive Director Paul Tucker said last week there was a risk that economic growth will slow “considerably'' because of turmoil in credit markets.
“Two fairly sluggish years lie ahead of us,'' Geoffrey Dicks, chief U.K. economist at Royal Bank of Scotland Group Plc, said in Bloomberg Television interview. “It's a more difficult climate for business.''
Fifty-two of 61 economists in a Bloomberg survey predict the central bank will reduce the rate to 5 percent today, with the remainder forecasting it will keep it unchanged at the current 5.25 percent.
Neil Mackinnon, chief economist at London-based hedge-fund ECU Group Plc, said policy makers may vote for a half-point cut.
“No central bank regardless of their mandate can ignore what's going on in the real economy,'' he said in a Bloomberg Television interview.
South Korea's voters choose a new legislature today in an election that will determine whether President Lee Myung Bak can achieve his plans to double South Korea's wealth and build an inland waterway across the peninsula.
Lee, who won a landslide victory in December on a pledge to increase foreign investment, cut corporate taxes and deregulate business, needs his Grand National Party to win a majority in the 299-seat National Assembly to enact those changes. Polls show a decline in the GNP's popularity since the presidential election, when its favorability ratings were above 50 percent.
Polls are open 6 a.m. to 6 p.m. Seoul time.
If the GNP fails to win a majority of seats, Lee, South Korea's first president from a corporate background, may face the same fate as his predecessor, Roh Moo Hyun. Roh didn't control the legislature and wasn't able to enact his programs, and cost his Uri Party the presidency for the first time in 10 years.
“Without a majority in the National Assembly, President Lee will have to spend a lot of time making deals with minority party members, which would slow down the process for the economic growth that he has in mind,'' Jaung Hoon, a political science professor at Chung-Ang University in Seoul, said.
The decline in GNP's support is partly because some GNP members close to former Chairwoman Park Geun Hye quit after they weren't chosen as candidates and are now running as independents. The UDP currently has the power to block Lee's programs because it has 136 seats in the Assembly compared with the GNP's 112.
Economic Plan
Lee, 66, won in December largely because of his pledge to increase South Korea 's economic growth to 7 percent and double per capita income to $40,000 by 2017. While South Korean presidents serve only one five-year term, Lee has said his programs would pave the way to accomplish his goals by then.
Asia's fourth-largest economy expanded 4.9 percent in 2007 from a year earlier, and Lee is aiming for growth of about 6 percent this year, higher than forecasts by the Ministry of Finance and the Bank of Korea.
The president also is banking on non-government investment to fund housing loans and a 16 trillion won ($16.4 billion) project to build a “Great Waterway,'' a network of canals through South Korea and branching up to the North Korean capital of Pyongyang cash advance payday loans.
Diminished Support
In a March 29 Korea Gallup survey, 38.1 percent of respondents said they approved of Lee, down from 52 percent immediately after he took office. The poll, published by Chosun Ilbo newspaper, queried 1,014 likely voters nationwide and had a margin of error of 3 percentage points. Support for the GNP slid to 42.1 percent from more than 50 percent. The National Election Commission banned new polls after April 3 until election day.
Still, GNP support is about three times that for the United Democratic Party, formed Feb. 18 by a merger of Roh's Uri Party and Kim's Democratic Party. The UDP had a 14.5 percent approval rating in the Gallup poll. The labor-activist Democratic Labor Party had 6.1 percent, and former GNP chairwoman Park's supporters had 4.4 percent.
Tensions with North Korea, which have risen over the past few weeks, probably won't affect the outcome of today's elections, analysts said.
North Korea increased its criticism of South Korea and the U.S. after their governments stepped up pressure on the Kim Jong Il regime for missing a Dec. 31 deadline to disclose all its nuclear programs.
North Korea Ties
Lee has said a lack of progress on nuclear disarmament would harm ties. North Korea on April 1 called Lee a “traitor'' and a “sycophant toward the U.S.,'' criticizing him by name for the first time since he took office, and days later threatened to cease all contact with South Korea.
“The rhetoric seems more geared for North Korea's domestic audience, rather than toward South Korea or the international community,'' said Kim Yong Hyun, a North Korean studies professor at Dongguk University in Seoul. “The South Korean public is aware of this, and also that neither South Korea nor North Korea can afford to sever ties abruptly with one another.''
In an April 3 poll conducted by Real Meter public polling company and CBS Radio, about 72 percent of 700 people said they won't be swayed by the issue.
Three years after Toyota Motor Corp. and PSA Peugeot Citroen opened their Czech auto plant, Jiri Cerny, the venture's vice president, says it's getting harder to find workers and he may have to import them from Mongolia.
Companies that were attracted to formerly communist nations in eastern Europe by the promise of cheap and plentiful labor are finding less of both, as faster growth drives up wages and open borders encourage emigration. That is leading some businesses to rely more on automation and others to look for employees abroad or even quit the region.
“We are already seeing salaries going up,'' so the “advantage is going down,'' European Union Regional Policy Commissioner Danuta Huebner, a former Polish minister who helped steer her country into the EU, said in an April 1 interview in Prague. “That's why you also have companies moving towards cheaper locations.''
Accelerating inflation may cause eastern Europe's investment- led boom to fizzle, with the Baltics and Balkans regions threatened by a “hard landing,'' the International Monetary Fund and Standard & Poor's warn. As higher costs drive foreign capital elsewhere, governments face a loss of tax revenue and export earnings that they need to rein in current-account and budget deficits, a prerequisite for them to join the euro.
“These countries are unfortunately in a very vulnerable position,'' says Thomas Mayer, chief economist at Deutsche Bank AG in London. Governments “are very much constrained about what they can do, hoping people will keep investing fresh money.''
Foreign Investment
Direct foreign investment in the 10 new EU members in eastern Europe totaled 39.3 billion euros ($61.7 billion) last year, up 60 percent from 24.5 billion euros in 2000, according to Vienna's Institute for International Economic Studies.
TPCA, the Toyota-Peugeot joint venture about an hour outside of Prague, shows the strains created by this new investment. Along with average wage growth of more than 40 percent since the Czech Republic joined the EU in 2004, managers like Cerny also face a labor shortage that means they can't recruit all the workers they need just by offering higher pay.
“It's difficult; we are always looking for employees,'' says Cerny, wearing the plant's trademark gray overalls as he bounces between budget meetings and the factory floor. To find qualified workers, “we're thinking about Vietnam right now, as well as Mongolia,'' he says.
Fastest Growth
The Czech economy and those of most other former East Bloc countries expanded in the fourth quarter at several times the 2.2 percent rate of the 15 EU members that use the euro. Neighboring Slovakia had the fastest annual pace, at 14.3 percent. Bulgaria, the EU's poorest member, and the former Soviet states of Latvia and Lithuania grew at rates above 6 percent.
Four years ago, “most economists never expected such a big uptick in growth,'' says Katinka Barysch, the deputy director of the London-based Centre for European Reform, who has advised the European Commission on eastern European affairs. “They were more aware that the economic integration was a long-term process.''
The region's hottest economies also have some of the highest inflation rates, led by Latvia's, at 16.7 percent in February, and Bulgaria, with a rate of 13.2 percent http://payday-z.com fast cash.
Such costs helped drive Niels Larsen, a Dane who founded Amber Furniture in Riga, Latvia, out of business. His company was the Baltic nation's largest furniture maker until it went bust late last year.
Affordable Labor
Since 2001, the average monthly gross wage in Latvia has soared 139 percent. At the same time, wood costs rose and finding affordable labor became almost impossible, Larsen said in an interview in Riga.
“Latvia went from being one of the cheapest places in east Europe to do business to one of the most expensive,'' he said. “We just couldn't cope. What we had in the last three years was what we call the perfect storm.''
Even though wages in the region are rising, workers are leaving for still-higher pay in richer western European nations such as Ireland and the U.K. In Latvia, the average monthly gross wage of 403.9 lati ($908) is a fraction of the 2,915 euros ($4,575) in the 15 euro nations, according to Eurostat, the EU's statistical office.
In Poland, with a population of almost 39 million, about 1.5 million mainly working-age people have left, according to Krystyna Iglicka-Okólska, a professor at Warsaw University.
Robots
Some companies, such as Skoda Auto, the Czech Republic-based unit of Volkswagen AG, are turning to robots and more streamlined assembly lines to get around labor shortages and rising wages.
Further automation goes along with the VW subsidiary's strategy of “growth without growth,'' former Skoda Vice President Martin Jahn said in a interview last month at Skoda headquarters in Mlada Boleslav.
“We want to increase the number of cars and do it with the same amount of employees,'' said Jahn, who now heads Russian sales operations for Wolfsburg, Germany-based VW, Europe's largest automaker.
Flextronics International Ltd., one of Hungary's top 10 employers, is also trying to substitute technology for workers by modernizing its assembly lines. “We have to come up with something under this twin pressure'' of higher costs and scarcer labor, says Peter Papp, human-resources chief for the Singapore- based electronics manufacturer's Hungarian unit.
Moving East
Some companies will just keep moving east in search of cheaper labor. Hatfield, England-based International Greetings Plc, which makes greeting cards and gift wrap, opened a factory in the seaside resort of Liepaja, Latvia, three years ago in a cavernous communist-designed warehouse.
The printing presses and other equipment are now being dismantled as the subsidiary prepares to move to China, general manager David McArthur said in a March interview.
“People are jumping too quickly for the easy dollar,'' says McArthur, who will leave the company once he sets up operations in China.
The local government of Lodz, Poland, is trying to head off such an exodus by offering incentives including tax breaks to keep workers and companies in the country, says Jacek Rodziewicz, who's in charge of the city's foreign-investor relations.
Just a few years ago, “Germans were worrying that companies will go to Romania,'' says the EU's Huebner. Now “in Poland, they are worrying that companies will move to Ukraine, Belarus or further east.''
Thousands of protesters took to the streets of Slovenia’s capital on Saturday to denounce low pay and corporate greed across Europe as politicians and central bankers called for wage restraint to combat inflation.
At a time of surging food and energy prices worldwide, the European Trade Union Confederation organized what it described as a show of anger and determination to improve on the “poverty wages” of more than 30 million workers across the continent.
“This is a protest against the situation in the whole of Europe,” said Reinhard Dombre, head of Germany’s trade union federation. He was one of a crowd that police estimated at 10,000 and organizers at 35,000.
“We only want higher wages, the inflation we can’t stop,” said Elmer Zubrovic, 41, a Ljubljana worker.
Company profits have risen for more than a decade, but the share of wealth going into wages has shrunk and the divide has widened between those at the top and bottom, ETUC, an umbrella body for unions across the continent, said.
John Monks, head of the European Trade Union Confederation, said Saturday’s rally was a show of anger and determination on pay and also the injustice of top managers earning as much as 300 times the wage of their workers.
“We cannot accept the sermons and lectures of European central bankers and finance ministers,” Monks said payday advance online no fax payday loans. “Europe’s workers want their fair share.”
MINISTERS SOUND INFLATION ALARM
Turkish Economy Minister Mehmet Simsek said the government would accept close International Monetary Fund monitoring of its economic program after its current $10 billion loan agreement expires next month.
Turkey may sign an accord with the IMF that would make loans available should the country need them, entailing “significant conditionality'' and sending “almost as strong a message'' to investors as renewing the present credit accord, Simsek said in an interview in Ankara today.
A fresh agreement with the fund will signal that the ruling Justice and Development Party remains committed to IMF-backed economic policies such as selling government industries, even as prosecutors try to close the party, Simsek said.
Prosecutors are seeking to shut down Prime Minister Recep Tayyip Erdogan's party for Islamist activities. That is raising investor concerns that the political conflict will deflect government attention from an IMF-backed economic program to contain inflation and restrict public spending that's helped attract record foreign investment.
Standard & Poor's yesterday cut its outlook on Turkey's credit rating citing “fraught'' domestic politics as well as global market conditions.
Slower Pace
“It's business as usual: it may be relatively slower or more difficult but reforms are always difficult,'' Simsek said, citing the overhaul of the pension system that's currently in parliament. “The fact that we are passing an unpopular but fundamentally good and right reform is the single best proof.''
IMF officials are due to start talks in Ankara today on releasing a final $3.6 billion loan under Turkey's current agreement quick payday loan paydayloans.com.
The alternative to the precautionary standby agreement with the IMF that Turkey is considering is an accord under which the fund inspects the economies of countries that owe it more than their normal borrowing allowances. Such an arrangement would be a “relatively weaker commitment,'' Simsek said.
Simsek said the overhaul of the pensions system was “fundamentally intact'' even after the government softened some of the planned changes to avert a strike by labor unions. The reform is still “first rate,'' he said.
Without the measures, which raise the retirement age to 65 for men and women and increase workers' contributions, the pension system would accumulate a deficit of $1.8 trillion by 2075, Simsek said. The reform as originally drafted aimed to reduce the gap to less than a third of that and the revised version of the law will come close to that target, he said.
The government will press ahead with a program of asset sales this year, he said. Turkey is offering electricity distribution and generation networks, rights to operate bridges and highways and a stake in telephone company Turk Telekomunikasyon AS.
The sale of Turkiye Halk Bankasi AS may be more difficult to complete because of the financial troubles of global banks, Simsek said.
“It takes two to tango,'' Simsek said of the Halk Bank sale. “Market conditions are of course relevant.''
Construction spending fell in February, according to a government report released Tuesday, but the decline was less than expected.
The Commerce Department reported that total spending fell by 0.3%.
A consensus of economists polled by Briefing.com predicted a decline of around 0.9%.
"I wouldn’t want to characterize this as a ‘good news’ report," but it won’t significantly drag down the gross domestic product "unless consumer spending slows a lot more," said Robert Brusca, economist with FAO Economics.
Spending on private construction projects fell 0.5%, led by a decline in residential spending, while money put toward public projects rose 0.4%.
Spending on residential construction fell 0.9%, reflecting homebuilder losses due to plunging home prices.
In late March, the Census Bureau reported that new construction on privately owned homes fell to a 17-year low.
Homebuilder KB Home (KBH, Fortune 500) reported $223.9 million in writedowns due to lower home prices and a sharp decline in orders paydayloan cashadvance.com. Rivals Lennar Corp. (LEN, Fortune 500), Hovnanian Enterprises (HOV, Fortune 500) and Pulte Homes (PHM, Fortune 500) also saw losses.
"The pace of decline [in residential spending] is starting to ease," said Aaron Smith, senior economist with Moody’s Economy.com. However, it has yet to show any improvement, he added.
Growth in private business construction, which has offset the declining housing market, is starting to slow as businesses try to keep spending low, said Smith.
Spending on private non-residential projects fell 0.1% in February, according to the Commerce Department.
"The weakness that was in private residential seems to have leaked out into the private non-residential [sector]," added Brusca. "We have lost the growth," he warned.
Indonesia's central bank will probably refrain from raising its benchmark interest rate as it seeks to balance the risk of slowing growth with inflation at an 18-month high.
Governor Burhanuddin Abdullah and his colleagues will maintain the rate used as a reference for bill sales at 8 percent for a fourth month, according to all nine economists surveyed by Bloomberg News. The decision is due in Jakarta tomorrow.
Bank Indonesia, faced with prospects of a slowing economy, may keep borrowing costs at a three-year low even as inflation accelerates. The World Bank yesterday cut its 2008 growth estimate for Southeast Asia's biggest economy to 6 percent from its previous forecast of 6.4 percent on concern higher prices will slow consumption. Indonesia's gross domestic product expanded 6.3 percent last year.
“Bank Indonesia will have to deliver very clear explanations why it won't'' raise rates, Michael Spencer, chief economist for Asia at Deutsche Bank AG in Hong Kong, said in a note to clients yesterday. “Our call remains for a tightening of policy in the second half of the year.''
Consumer prices increased 8.2 percent in March from a year earlier, the Central Statistics Bureau said yesterday, the fastest pace in 18 months 500 fast cash payday loans. The inflation rate is faster than the central bank's policy rate of 8 percent.
Food prices in Asia's third-most populated nation increased 13.6 percent last month, the fastest pace in Southeast Asia outside Vietnam.
The central bank may also be forced to raise interest rates as the rupiah weakens, said Michael Buchanan, an economist with Goldman Sachs Group Inc. The currency has declined 1.7 percent in the past month.
“The government is losing the battle to achieve its dual goals of keeping inflation low while sustaining economic growth,'' Kenny Soejatman, Jakarta-based head of research at ABN Amro Holdings NV, said in a note to clients. Increasing interest rates will “help Indonesia relieve pressure on the rupiah.''
Powered by WordPress -- XHTML 1.0