On the cracked grey clay of an ancient lake bed on the edge of Australia’s outback, Guy Kingwill is at the frontier of a global rush to commercialize water.
Despite a long-running drought, Kingwill, who runs the vast Tandou farm, 142km southeast of the mining town of Broken Hill, has just sold his property’s critical water on a national market rather than pump it into irrigated cereal crops.
“The return on the water is higher,” Kingwill told Reuters. “Where we are it’s broadacre cropping. But the market now is driving significantly more per megaliter from horticulture than you can get a profit margin out of wheat and barley,” he says.
Across the world, speculators are increasingly looking to water as a new profit engine as supplies dwindle, caught between booming populations demanding more access and climate warming threatening its very availability.
Australia, the most parched inhabited continent, has for 25 years had an internationally unique water market to better share supplies among farmers and reverse years of allocating more water than the country’s rivers and dams could spare http://payday-badcredit.com no fax payday loan.
That market last year traded $1.1 billion in permanent and seasonal water rights, according to Mark Siebentritt, the Operations Manager for national water broker Waterfind, who says business last year grew by 20 percent.
But Kingwill, whose corporatized farm lists on the Australian Stock Exchange, says prices are being pushed up by a metaphorical gold rush, luring bankers and speculators both at home and internationally to a new and waterlogged Elysian field.
With drought gripping some areas for a decade, prices for one megaliter of seasonal water — enough for an Olympic-size pool — are peaking at A$600 ($517), while permanent water entitlements are less volatile, but still pricey at up to A$2,500 a megaliter.
The former owner of one of the world’s biggest commodities brokerages was sentenced to 10 years in prison Thursday for a fraud that cost investors more than $2 billion.
Tone N. Grant, 64, of Chicago, was convicted in April in a scheme to defraud investors at Refco Inc., a large financial services company that offered securities, derivatives and commodities brokerage services to investors.
Prosecutors said Grant conspired with former Chief Executive Phillip R. Bennett and others to transfer debts to accounts that made it seem as if they were debts owed to Refco. Bennett was sentenced last month to 16 years in prison after apologizing for the fraud.
Grant offered no apology, telling U.S. District Court Judge Naomi Reice Buchwald that he had "always done everything in my power and control to protect the law … and be a positive influence on the lives of others."
His lawyer, Roger Zuckerman, blamed Bennett for the fraud and argued for no more than three-and-a-half years in prison, saying his client’s wrongdoing was minimal.
"By any rational measure, the conduct of Phillip Bennett dwarfed the conduct of Mr pay day loans free credit reports. Grant," he said.
The judge said Grant had clearly lied to the public about the troubled state of Refco’s finances. She called it a "gross understatement of the facts" to portray Grant as out of the loop since the pivotal transactions in the fraud could not be carried out without his signature.
Buchwald said the "staggering losses" to Refco investors still exceed $1.5 billion.
The plot unraveled in October 2005, just two months after Refco went public, when the brokerage announced it had discovered it was owed $430 million by a company controlled by Bennett. Refco’s stock value plummeted, and it was forced into bankruptcy proceedings a week later.
Prosecutors say Bennett and Grant directed a series of transactions every year from 1999 through 2005 to hide losses from Refco’s auditors and others.
Before its fall, Refco was one of the world’s biggest commodities brokerages, employing some 2,400 employees in 14 countries.
Italy's economy unexpectedly shrank in the second quarter, edging it closer to the fourth recession in a decade as households and businesses struggle to cope with more expensive oil.
The economy, first of the three biggest in the euro region to report second-quarter growth, contracted 0.3 percent after expanding 0.5 percent in January to March, Istat, the Rome-based statistics office, said today. Economists expected stagnation, according to the median of 22 forecasts in a Bloomberg News survey. From the same period a year earlier, the economy didn't grow at all.
European Central Bank President Jean-Claude Trichet yesterday said economic growth will be “particularly weak'' through the third quarter after policy makers left borrowing costs at 4.25 percent. Italy is a bellwether for the effect record oil prices are having on the region.
“It's hard to imagine Italy doing better in the coming quarters,'' David Mackie, an economist at JPMorgan Chase & Co in London, said in a note. “It is difficult to escape the conclusion that Italy will experience a recession.''
Confidence Slump
Consumer confidence slumped to the lowest since 1993 as rising energy prices drove the inflation rate to the highest level in six years and borrowing costs rose. Manufacturing also stalled.
The price of crude, down by a fifth from a July record of $147.27 a barrel, is 65 percent more expensive than a year ago.
“The outlook for the euro zone isn't good at all,'' Neil Mackinnon, chief economist at ECU Group Plc in London, said on Bloomberg Television. “Higher interest rates aren't on the agenda, and I think the next ECB move is down. A recession is looming.''
ECB council member Nout Wellink said in an interview with Dutch RTL television today that second-quarter growth in the euro area “won't look that good.''
Gross domestic product in Germany, the region's biggest economy, declined 0.8 percent in the second quarter, according to the median forecast of 11 economists surveyed by Bloomberg. That would be the country's first contraction in four years. The GDP report is due Aug. 14.
Italy's economy will expand a mere 0.4 percent this year, the slowest pace since 2003, the Bank of Italy and the Isae research institute said last month paydayloans.com freecreditreport.
Lucky Escape?
Some economists, such as Morgan Stanley's Vladimir Pillonca, predicted the country would enter a recession as soon as the first quarter after a contraction in the final three months of 2007. That didn't happen, though predictions are still gloomy.
The government and the European Commission forecast growth of 0.5 percent, which would make Italy the laggard among the Group of Seven leading industrial countries and the 15 nations sharing the euro. Italy's expansion has already trailed the European Union average for more than a decade.
“The outlook for the Italian economy has deteriorated at an alarming pace,'' Jonathan Loynes, an analyst at London-based Capital Economics, said in a research note. “Unless Italy can quickly implement much-needed economic reforms it may start to lose ground to the rest of the euro zone.''
Unpopular Measures
To stimulate growth, Prime Minister Silvio Berlusconi has pledged unpopular measures such as reducing the state bureaucracy and raising the average pension age from 58.
Italian industrial production stagnated in June as oil prices were edging toward an all-time high. Indesit Co., a maker of washing machines, said on July 30 that 2008 earnings will be lower than last year's and Fiat SpA, the country's biggest automaker, idled four car factories last month in the face of slowing demand.
On the consumer side, Italians are cutting back on spending on everything from new cars to clothes. New auto sales fell for a seventh month in July. Italian retail sales declined for the 17th month in July, the Bloomberg purchasing managers index showed.
Italy has slipped to 46th in the World Economic Forum's 2007- 2008 competitiveness ranking, trailing Latvia and Bahrain. The country came last in terms of labor productivity — a key measure of economic growth and competitiveness — among the 30-member Organization for Economic Cooperation and Development.
The Italian statistics office didn't provide a breakdown of the GDP figure. Istat will release its final report on Sept. 10.
Manufacturing in the U.S. stagnated in July as orders slumped to the lowest level in almost seven years, signaling higher raw material costs and slower spending are hurting producers.
The Institute for Supply Management's factory index fell to 50, a higher reading than forecast, from 50.2 in June, the Tempe, Arizona-based group said today. A reading of 50 is the dividing line between expansion and contraction.
Manufacturers are scaling back to protect profits and prevent inventories from growing as demand weakens. The drop in the value of the dollar has made U.S. goods more affordable overseas, leading to gains in exports that are keeping factories from sinking.
“The economy is essentially stalled,'' David Resler, chief economist at Nomura Securities International Inc. in New York, said in a Bloomberg Television interview. “It will remain that way for the time being. We will see bigger job losses down the road.''
Economists forecast the index would decrease to 49 from 50.2 in June, according to the median of 75 projections in a Bloomberg News survey. Estimates ranged from 47.8 to 52.5.
A separate report from the Labor Department today showed U.S. employers cut jobs in July for a seventh consecutive month. Payrolls fell by 51,000, less than forecast, and the jobless rate increased to 5.7 percent, the highest level in four years.
The purchasing managers' gauge of new orders for factories decreased to 45, the lowest level since October 2001, from 49.6. The production measure rose to 52.9 from 51.5.
Exports Cool
A shrinking trade deficit has helped some companies withstand slower U.S. sales. Still, the ISM report showed exports, while still growing, are starting to cool. The group's export measure fell to 54 from 58.5 in June.
“Were it not for exports at this point, I think I would take the position that manufacturing, overall, would be in a significant recession,'' Norbert Ore, chairman of the ISM survey, said on a conference call. “But the export market has held up quite well for us.''
The trade gap narrowed to a $395.2 billion annual pace in the second quarter, the smallest in seven years, the Commerce Department said yesterday. The reduction added 2.4 percentage points to growth, the most since 1980.
The employment index increased to 51.9 from 43.7 in June credit reports http://payday-badcredit.com. BorgWarner Inc., the world's biggest maker of automatic- transmission parts, said yesterday it will cut 1,000 jobs in North America because of declining auto production in the region.
The Auburn Hills, Michigan-based company also said that second-quarter profits rose to $87.5 million, bolstered by overseas demand.
Europe, Asia
“In Europe and Asia, our businesses are expected to experience sustained growth,'' Chief Executive Officer Tim Manganello said in a statement. “In North America, our operations will remain focused on fuel efficiency and cost management.''
Today's jobs report showed manufacturers cut 35,000 workers from payrolls.
Auto-industry figures today showed purchases of car and light trucks in the U.S. fell to a 12.5 million annual rate in July, the lowest level since March 1993. Separately, General Motors Corp. reported a second-quarter loss of $15.5 billion, its fourth consecutive quarterly decline.
The purchasing managers' index of prices paid fell to 88.5 last month from a three-decade high of 91.5 in June. Economists surveyed by Bloomberg News forecast the gauge would decrease to 88.
Costs Rising
“In North America, our input costs are going up faster than our prices,'' John Faraci, chief executive officer of International Paper Co. in Memphis, Tennessee, said yesterday in a Bloomberg Television interview. “Inflation's a real issue.''
U.S. consumers also face inflation concerns. Prices surged 5 percent in the past year, the biggest jump since 1991, the Labor Department said July 16. The increase was led by surging expenses for food and fuel.
A gauge of supplier deliveries was unchanged at 55.1. The inventory index dropped to 45 from 51.2, and the group's measure of order backlogs decreased to 43, from 47.5.
Even with the challenges, manufacturing is faring better than during prior recessions. While the Institute's manufacturing index fell to a five-year low of 48.3 in February, it was still well above the 42.1 reading reached in February 2001, a month before the start of the 2001 recession.
Investors piled out of Russian stocks Friday after the abrupt departure from the country of a foreign oil boss and the prime minister’s unexpected severe criticism of a large steel firm.
MICEX, the exchange where the bulk of trading in Russian stocks takes place, plunged 5.5% by the close of markets, while the RTS Index lost 5.6% to sink to its lowest point since March.
After Prime Minister Vladimir Putin’s scathing attack on Mechel late Thursday, heavy trading in New York sent the steel and coal maker’s stock down nearly 40%, wiping more than $5 billion off its value - though shares rose around 20% in early trading in New York on Friday.
The losses were mirrored Friday in Russian trading.
Putin criticized the company, which is the largest supplier of coal for steelmakers in Russia, for charging much higher prices for raw materials domestically than it does for its exports. He called for an antitrust investigation into Mechel’s activities.
Earlier Thursday Robert Dudley, CEO of the embattled Anglo-Russian oil producer TNK-BP, left the country three days before his visa was due to expire. Russia has not renewed the visa on the grounds that he allegedly does not have a valid work contract.
Dudley, who said in a statement his departure follows a sustained assault on the company in the past several months, vowed to run the company from abroad.
The developments rattled investors, leading to a heavy sell-off in Russian equity, which is dominated by oil stocks.
"Sentiment is moving against Russia," said James Fenkner, managing partner at Red Star Asset Management in Moscow faxless online payday advances no fax payday advance. "If oil has any kind of bounce, the market will look kindly on Russia. If oil [prices] begin to slip, there will be a great unwind."
Observers say soaring oil prices have largely masked the political tensions bubbling beneath the surface, and investors are tensely watching how the corporate conflict plays out at TNK-BP, widely seen as a test case for foreign investment under new President Dmitry Medvedev.
Medvedev, who campaigned on an anti-corruption ticket, has insisted the conflict is a matter between the shareholders. Many analysts are convinced, however, that the state wants to take a controlling stake in the company at a later date via a state-owned entity.
While the TNK-BP dispute has spooked investors, observers were skeptical that the onslaught on Mechel heralded a politically motivated attack of the type that brought Yukos oil company to its knees and caused lasting harm to Russia’s investment image.
"I think the probability of this becoming a Yukos-style asset grab is relatively small," said Red Star’s Fenkner. "But if it’s an asset distribution, then all bets are off."
In a research note, Chris Weafer, chief strategist at UralSib, said, "The last train carrying the optimists out of Russian equities has just left the station. Let’s hope it’s just for a vacation rather than emigration."
The RTS is now down more than 20% from its mid-May high, pushing it into technical bear territory.
A key measure of the nation’s manufacturing activity rose unexpectedly in June, reaching a level that indicated expansion in the sector for the first time since January.
But economists saw negative signs in readings about new orders, employment and prices paid.
The Institute for Supply Management’s (ISM) manufacturing index rose to 50.2 in June, up from the May reading of 49.6. Economists were expecting a reading of 48.6, according to a consensus estimate compiled by Briefing.com.
The tipping point for the index is 50, with a reading below that reflecting contraction in the sector.
"The manufacturing sector showed a slight improvement in June as the PMI registered above 50% after four months of decline," said Norbert Ore, chair of the ISM’s Manufacturing Business Survey Committee.
But the relatively modest change belies some of the more severe moves in the index’s components.
"When viewed from the manufacturer’s perspective, they are experiencing higher prices for their inputs while demand for their products is slowing," Ore added.
New orders The index showed that new orders for manufactured goods fell in June, the seventh consecutive month, to 49.6 from a reading of 49.7 in May.
"New orders is one of the key components of the index," said Keith Hembre, chief economist at First American Funds. "It gives a sense of underlying demand."
June’s reading for new orders puts the index in the bottom third of its range over the last decade, according to Bob Brusca, an economist at FAO Economics.
"That’s a pretty weak number," he said no fax payday loans free instant credit score estimator.
Price inflation The index’s measure of prices that manufacturers pay for materials rose to a reading of 91.5 in June, up 4.5% from May. This is the highest reading for the index since it registered 93.2 in July 1979.
Hembre said the prices paid number is very high and "indicative of a likely profit squeeze."
Higher input costs may also be impacting jobs in the sector.
"Labor is a bigger component of total costs and there may be an effort to squeeze some labor costs to offset non-labor costs," he said.
Employment The index’s employment measure fell in June to 43.7 from 45.5 the month before. It was the eighth month in a row that the measure has declined.
"That’s disturbing in light of the upcoming jobs report," Brusca said in reference to the Labor Department’s monthly report on nonfarm payrolls due Thursday.
"It looks like we’re beginning to get some indication that the job market is getting worse," he said.
Exports On the bright side, the index showed that exports in June remained in the range of expansion.
The ISM’s measure of exports in June slipped to 58.5 from 59.5 in May. That’s still a healthy reading and the export index has been growing for more than 5 years.
Imports, on the other hand, fell 3.5% to a reading of 46 from 49.5 the month before.
"The imports number suggests that domestic demand is still a problem," Brusca said.
Top fund executives meeting in Barcelona this week will debate how to attract assets from sovereign wealth investors and the merits of absolute return funds as they face up to a tough environment of lower inflows.
The Fund Forum International 2008, taking place from July 1-3, comes during the asset management industry’s toughest period since the bear market of 2000-2003, as the credit crisis that began last summer and choppy markets hit investor confidence.
“It’s not a great time for new business. People are sitting on their hands,” said Robert Lloyd George, chief executive of Lloyd George Management, which runs $12 billion in Asian and emerging market assets.
“There is a lot of … fear about where the UK economy is going.”
Fund firms profit during bull markets because investors tend to put more money into funds while overall assets, on which they earn fees, rise with markets.
During bear periods fund firms are often hit as markets fall and investors withdraw cash.
Retail fund sales have been poor in recent months creditscore bad credit payday advance. Sales of UK tax-advantaged Individual Savings Accounts (ISAs) in the traditionally busy ISA season were the worst on record this year, although retail fund sales rebounded in April.
Shares of listed fund firms have been battered.
Rates on 30-year fixed mortgages have surged nearly a quarter percentage point to an 8-month high on growing concerns about inflation, mortgage backer Freddie Mac said Thursday.
Freddie Mac (FRE, Fortune 500) said 30-year fixed-rate mortgages averaged 6.32% with an average of 0.7 point in the week ending Thursday, up from 6.09% last week. Last year at this time, the 30-year loan averaged 6.74%.
The last time the 30-year fixed rate mortgage was higher was the week ended Oct. 25, when it averaged 6.33%.
"Mortgage rates jumped this week after a number of Federal Reserve officials, most notably Chairman (Ben) Bernanke and Vice Chair (Donald) Kohn, expressed concern over a threat of inflation," said Frank Nothaft, Freddie Mac vice president and chief economist, in a statement.
"This led some market participants to believe that the Fed will raise rates more aggressively over the year than previously thought," Nothaft added.
The 15-year fixed-rate mortgage this week averaged 5.93% with an average 0.6 point, up from last week when it averaged 5.65%. A year ago at this time, the 15-year fixed rate mortgage averaged 6.43%.
The last time the 15-year fixed-rate mortgage was higher was the week ended Oct. 25, when it averaged 5.99%.
"Inflation concerns are still continuing, so that would suggest some upward pressure on interest rates," said Keith Gumbinger, Vice President of HSHAssociates.com, an online publisher of consumer loan information no fax payday loans cheap payday loans.
Five-year adjustable-rate mortgages (ARMs) averaged 5.70% this week, with an average 0.7 point, up from last week when it averaged 5.51%. A year ago, the 5-year ARM averaged 6.37%.
One-year ARMs averaged 5.09% this week with an average 0.6 point, up from last week when it was 5.06%. At this time last year, the 1-year ARM averaged 5.75%.
Other news in the housing market has been more mixed. The number of homes under contract to be sold rose 6.3% in April, according to National Association of Realtors, showing that buyers were out shopping for bargains.
As interest rates move higher, buyers leave the market, and the lack of demand pushes home prices lower, according to Gumbinger. "The higher interest rates put renewed pressure on home prices," he said.
Single-family home prices dropped 7.7% in the first quarter, according to the National Association of Realtors. The year-over-year drop was the largest decline since the association began reporting on home prices in 1982.
"Serious delinquencies (loans overdue 90 days or more or in foreclosure) for both prime and subprime conventional mortgages nearly doubled between first quarter of 2007 and 2008, according to the Mortgage Bankers Association," added Nothaft.
EnCana Corp (ECA.TO: Quote, Profile, Research), Canada’s biggest energy company, said on Sunday it plans to split into two separate oil and natural gas firms in an effort to wring out more value with crude prices at record highs.
EnCana, a $65 billion gas and oil sands producer formed in a merger six years ago, said the move should help investors better gauge the parts of its business and remove a discount it says it suffers in the stock market.
The new producers will be evaluated against “pure play” companies that are rewarded with higher stock market values, Chief Executive Randy Eresman told reporters.
“The expectation of us and the advice that we’ve gotten from our financial advisers suggests there’s a likelihood that, with time, we would see an increase in our overall multiples,” Eresman said.
The new oil firm, worth about a third of the enterprise value, will operate Alberta oil sands and U.S cash advance today payday loans. refining assets, which EnCana holds as part of a joint venture with ConocoPhillips (COP.N: Quote, Profile, Research). It will also hang onto Canadian plains natural gas assets.
The natural gas firm will operate Canadian foothills and U.S. properties, located mainly in the Rocky Mountain states and Texas. It will be North America’s second-largest natural gas producer, EnCana said.
Eresman acknowledged investors in the new gas firm will be exposed to higher commodity-price risk. But he said he expects prices to stay at recent high levels.
Investors will get one share in each new company for each EnCana share they have. The split is scheduled to be completed in early 2009.
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.
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