The United States and China have pledged to cooperate in developing renewable energy but accuse each other of violating free-trade pledges by subsidizing their own manufacturers.

“Tariffs are disruptive and destructive for the entire solar industry,” said chairman Miao Liangsheng of Yingli Green Energy Holdings Ltd., one of China’s biggest solar equipment manufacturers, in a statement.

Yingli and two other manufacturers, Suntech Power Holdings Co. and Trina Solar Ltd., rejected Thursday’s preliminary Commerce Department ruling that they sold solar cells and panels below fair price in the United States and hurt American producers.

The Chinese Ministry of Commerce issued an announcement labeled “Warning” to solar equipment makers with details of the U.S. ruling but made no comment on it. The ministry did not respond to questions about how Beijing might respond.

If the ruling is upheld, tariffs averaging 31 percent could be imposed on Chinese solar-panel imports.

Such duties “are not justified by fact,” said Andrew Beebe, Suntech’s chief commercial officer, in a statement.

China’s producers of solar cells and equipment grew to be among the world’s biggest over the past decade as they supplied demand from Germany, Spain and other markets that promoted solar power.

Foreign competitors complain Chinese manufacturers get improper government support in the form of low-cost access to land, bank loans and other resources low interest rate personal loans. Beijing acknowledges giving research grants and tax breaks but says those are in line with its free-trade commitments and practices by other governments.

“These duties are unwarranted and serve as an impediment to the broader adoption of solar energy in a time of rising fuel costs,” said Trina’s chief commercial officer, Mark Kingsley, in a statement.

The Commerce Department launched its investigation in November following complaints by a group of U.S. producers led by Oregon-based SolarWorld Industries America Inc., a unit of Germany’s SolarWorld AG.

The complaints were amplified by attention surrounding the bankruptcy of solar-panel maker Solyndra LLC after the California-based company received a $528 million U.S. government loan. Solyndra cited Chinese competition as one of the reasons behind its failure.

The Chinese government responded by launching its own probe last November into whether U.S. government support for producers of wind, solar and other renewable energy technology is an improper trade barrier.

Chinese solar equipment manufacturers warned earlier that sanctions could result in a loss of American jobs because U.S. companies are both buyers of Chinese products and suppliers of materials. They said Chinese manufacturers spend some $2 billion a year to buy materials such as polysilicon from U.S. suppliers.

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Output at factories, mines and utilities increased 1.1 percent last month, the most since December 2010, after a 0.6 percent decline in March that was revised from no change, the Federal Reserve reported today in Washington. Economists forecast a 0.6 percent gain, according to the Bloomberg News survey median. Manufacturing, which makes up about 75 percent of total production, rose 0.6 percent. Utility output climbed the most in two years.

Motor vehicles sales in the first quarter that were the strongest in four years have buoyed manufacturing, helping make up for a slowdown in corporate equipment purchases. While U.S. exports accelerated during the first three months of 2012, weaker economies in Europe and parts of Asia remain a hurdle for American factories.

]]> http://finbonanza.com/industrial-production-in-us-climbs-more-than-forecast-bloomberg/feed/ http://finbonanza.com/world-stocks-drop-as-worries-over-greece-intensify/ http://finbonanza.com/world-stocks-drop-as-worries-over-greece-intensify/#comments Tue, 15 May 2012 02:48:04 +0000 Pascal http://finbonanza.com/world-stocks-drop-as-worries-over-greece-intensify/ World stock markets dropped Monday as worries intensified over the condition of the eurozone and whether Greece is edging towards leaving the single currency union.

In Athens, Greek party leaders were scheduled to resume talks aimed at forming a government. But as the political wrangling dragged into its second week, markets contemplated the threat that the crisis-stricken country would not meet the terms of its bailout and drop out of the currency club.

`’Markets continue to feel the pressure and the stakes continue to rise as what was declared unthinkable a year ago or so now starts to permeate mainstream thinking in Europe,” said Michael Hewson of CMC Markets.

Britain’s FTSE 100 fell 1.7 percent and Germany’s DAX tumbled 1.95 percent. France’s CAC-40 lost 2.27 percent. Wall Street also appeared set for a lower opening, with Dow Jones industrial futures down 0.8 percent to 12,686 and S&P 500 futures losing 0.9 percent to 1,337.30.

Taking the hardest hits were the Athens Stock Exchange, which saw shares drop 3.5 percent, and Spain’s Ibex, which fell 3.06 percent on continuing concerns that the country’s crippled economy would not be able to keep a handle on its borrowing costs.

Problems in Europe _ which also included a loss for Chancellor Angela Merkel’s party and by extension her austerity policies in a state election _ overshadowed news that China’s central bank cut bank reserve requirements by 50 basis points to encourage lending.

Asian stocks also endured losses, although one notable exception was Japan, where the benchmark Nikkei 225 index rose 0 payday loans.2 percent to close at 8,973.84.

Investors’ concern about China’s economic outlook did not appear to ease despite the Chinese central bank’s decision to reserve requirement, which is expected to free over 400 billion yuan ($63.4 billion) in financing.

“The market will remain unstable in the near term,” said Zhang Yang, an analyst at Sinolink Securities, based in Shanghai.

Investor nervousness remains rampant because of political uncertainty in Greece and a possible fallout to the rest of the region.

President Karolos Papoulias’ efforts to broker a deal among party leaders have so far failed after May 6 elections failed to decide an outright winner. More talks to form a coalition were set for Monday.

Chances of success have been diminished after one leftist party pulled out of the talks, leading the country one step closer to new elections _ and bringing its continued membership in the euro into serious doubt.

Wall Street ended last week with a decline after JPMorgan said it lost $2 billion on poorly-thought-out trades.

Benchmark oil for June delivery was down $1.72 to $94.42 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 95 cents to settle at $96.13 in New York on Friday.

In currencies, the euro fell to $1.2869 from $1.2925 late Friday in New York. The dollar sank to 79.87 yen from 79.90 yen.

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The group that suffered the losses is part of the bank’s so-called corporate unit, and had been making trades designed to hedge against risk.

Net losses, after factoring in other securities gains, are expected to exceed $800 million by the end of the second quarter. And losses could increase depending on market conditions and the bank’s actions moving forward, CEO Jamie Dimon said.

The unit had been expected to post a net gain of $200 million.

Shares of JPMorgan (, Fortune 500) fell 9% in early trading Friday.

Dimon, speaking to analysts and reporters on a conference call, said the losses were caused by "errors," "sloppiness" and "bad judgment."

"This was a unique thing we did," Dimon said. "Obviously it had a lot of problems. It was a bad strategy. It became more complex, it was poorly managed."

Last month, rumors swirled around a JPMorgan employee based in London who had, according to the Wall Street Journal, been taking large positions in credit default swaps, the insurance-like bets that blew up in the 2008 financial crisis. The employee was said to work in the bank’s Chief Investment Office.

Dimon was extremely agitated on the call Thursday with analysts. In response to repeated questioning, he said: "I don’t know how many times I can say this."

Banking analyst Mike Mayo at investment firm CLSA asked whether the losses were due merely to "terrible execution" or also broader market forces.

"In hindsight, this was bad execution, bad strategy, but also the environment — because this is mark to market," Dimon said. "But I just don’t want to make excuses."

Mayo pushed on whether market conditions were to blame, asking Dimon whether he thought other banks could be in the same situation.

"I don’t know," Dimon replied, sighing audibly. "Just because we’re stupid doesn’t mean everyone else was." Still, investors appeared on edge as shares of Wells Fargo (, Fortune 500), Goldman Sachs (, Fortune 500), Bank of America (, Fortune 500) and Morgan Stanley (, Fortune 500) were all down around 2% after hours.

Finally, Mayo asked Dimon what he should have paid more attention to in hindsight.

"Trading losses," Dimon said simply. "Newspapers."

Another analyst asked about the "terrible" timing of the loss, given the debate over the Volcker Rule.

That rule, a part of the Wall Street reform law passed in response to the financial crisis, aims to ban risky trading by banks for their own profit, a strategy sometimes referred to as proprietary trading.

"It’s very unfortunate … it plays right into the hands of pundits out there, but that’s life," Dimon said. Earlier in the call, he said: "It didn’t violate the Volcker rule; it violated the Dimon principle."

But Dimon was quick to defend JPMorgan’s overall track record: "When you look at all the things we’ve done, we’ve been very careful. And we’ve been quite successful. This obviously wasn’t."

Still, the loss could weigh heavily on the bank’s net profits, especially if losses in the CIO unit accelerate, something Dimon said is quite possible.

Last quarter, the bank earned $5.4 billion and hauled in revenue of $27.4 billion. 

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The Dow Jones industrial average fell 14 points in afternoon trading after bouncing back from a 76-point decline and then waffling around with small against and losses. The Standard & Poor’s 500 index fell a fraction of one point to 1,357. The Nasdaq composite index, which is heavily weighted with technology stocks, was up 12 points at 2,945.

Financial stocks in the S&P fell 0.8 percent, the biggest decline among the 10 industry groups in the S&P 500. For that, the other investment banks could thank JPMorgan, America’s biggest bank. The stock plunged 9.3 percent, dragging other banks with big Wall Street operations down with it. Morgan Stanley fell 3.7 percent and Goldman Sachs fell 3.3 percent. Citigroup fell 3.8 percent.

Retail-focused banks fared better, with Bank of America and Wells Fargo nearly flat.

JPMorgan’s blunder comes in the midst of a political battle over how closely to regulate banks, though JP Morgan’s CEO Jamie Dimon said the trades would not have been affected by the so-called Volcker rule, expected to take effect this summer. Still, the $2 billion loss is sure to be used as ammunition by those pushing for tighter regulation of investment banks.

“It’ll definitely have a political impact,” said Randy Warren, chief investment officer for Warren Financial Service.

The Dow had declined six days in a row before notching a small gain Thursday. “It’s time for a little rebound, so it wouldn’t be surprising to see it bounce back a little bit, even with the JPMorgan news,” Warren said.

Tech stocks did well. Intel rose almost 2 percent after it told analysts that it is on track to meet sales expectations. Tech investors were relieved to hear that one day after Cisco Systems prompted selling in tech shares by being pessimistic about sales. Microsoft shares rose 1.8 percent. Semiconductor maker Nvidia jumped 7.4 percent, the most in the S&P 500, after reporting revenue that was higher than analysts were expecting guaranteed payday loans.

Consumer discretionary stocks were also up. Retailer Bed Bath & Beyond jumped 4.6 percent, one of the biggest gains in the S&P 500 index, and video streaming and DVD-by-mail company Netflix rose 6.8 percent.

Pharmacy benefits manger Express Scripts rose 2.3 percent after it reported prescription growth in its first quarter since splitting with drugstore chain Walgreen.

Verizon and AT&T each rose about 1.5 percent after Credit Suisse analyst Jonathan Chaplin raised his earnings estimates for this year and next. They’re making phone upgrades more expensive for customers, which should help the phone companies’ bottom lines, Chaplin wrote.

Also Friday, the Labor Department said that the producer price index, which measures price changes before they reach the consumer, dropped 0.2 percent last month. It was the first decline since December and the biggest drop since October. Declines were driven by gas and energy prices. That’s good news for consumer spending.

Separately, a closely watched measure of consumer confidence from the University of Michigan released Friday morning was better than analysts had expected. The index was at its highest level since January 2008.

Oil prices fell 84 cents to $96.24 per barrel. Gold prices fell almost 1 percent to $1,580.00 per ounce.

In Europe, France’s CAC 40 index recovered from a slump and closed with a minuscule loss. Other markets also rallied into the close. Britain’s FTSE 100 ended up 0.6 percent and Germany’s DAX rose 1 percent; both were lower earlier in the day. Borrowing costs for Germany and France fell, while costs for Italy and Spain rose as investors remain focused on Greece, where another general election is expected for next month following the failure of attempts to form a government.

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Updated official projections Sunday show conservative New Democracy head Antonis Samaras leading with 18.9 percent and 108 seats in the 300-member parliament, far less than the 151 needed to form a government. Leftist Syriza head Alexis Tsipras was second with 16.8 percent and 51 seats, while the former majority PASOK was projected third with 13.4 percent and 41 seats.

Samaras called for a coalition government with two aims: for Greece to remain in the euro and to amend the terms of its international bailout. Tsipras called for the overturning of the bailout.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.

ATHENS, Greece (AP) _ Greece’s former finance minister and Socialist party leader called for a broad coalition government of pro-European parties, ruling out a two-party government with his conservative rivals after his party received a drubbing in Sunday’s parliamentary elections.

Official projected results showed Evangelos Venizelos’ PASOK party plunging to third place with 13.6 percent and 42 seats in the 300-member parliament. The conservative New Democracy was projected in the lead with 19 credit reports free.18 percent and 109 seats, far below the 151 needed to form a government. The margin of error was 0.5 percentage point.

“A coalition government of the old two-party system would not have sufficient legitimacy or sufficient domestic and international credibility if it would gather a slim majority,” Venizelos said. “A government of national unity with the participation by all the parties that favor a European course, regardless of their positions toward the loan agreements, would have meaning.”

If borne out by final results, the outcome is devastating for PASOK, which won a landslide victory in 2009 with more than 43 percent of the vote.

Voters outraged by Greece’s protracted financial crisis and the austerity measures imposed in return for international bailouts punished both main parties, turning to smaller anti-bailout groups instead. The leftist Syriza, which was projected in second place with 16.3 percent and 50 seats, has been strongly opposed to Greece’s bailout agreements.

“For us in PASOK, today is particularly painful,” Venizelos said. “We knew the price would be heavy and we had undertaken for a long time to bear it.”

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The boost came through lower catastrophe claims, after the tsunami disaster in Japan ate into insurers’ profits early last year, as well as investment gains. AIG (, Fortune 500) booked earnings from its stakes in Asian insurer AIA and in Maiden Lane III, a holding company controlled by the Federal Reserve that comprises AIG-related assets and was created as part of the insurer’s bailout.

Overall for the first quarter, AIG posted net income of $3.1 billion and earnings per share of $1.65, outpacing analyst expectations. Shares slipped 1.4% in after-hours trading.

AIG was near bankruptcy at the height of the financial crisis in 2008 and needed a government bailout worth $85 billion, a total that later rose to $182 billion. The firm has since been working to pay down this sum.

The Treasury Department still has $36 billion invested in AIG from the original bailout, and the New York Fed is still owed $8.7 billion from a loan to Maiden Lane III.

At $45 billion in total, these remaining investments represent a 75% drop from the government’s original $182 billion commitment saving account pay day loan.

AIG bailout: What’s left

"AIG has again delivered another strong quarter with our core insurance businesses all posting profits," AIG CEO Robert Benmosche said in a statement accompanying the firm’s earnings. "We also continue to make good on our promise to help the U.S. government profit from its investment in AIG."

The U.S. government now owns roughly 70% of AIG, down from 92% last year, and officials are hoping to wind this holding down as quickly as possible by selling shares at or above the break-even price of $28.72. AIG’s stock has been on a tear this year, closing Thursday at $34.14, though the government can’t cash out its whole stake at once without driving that price down.

In March, the Treasury Department sold roughly 207 million shares at $29 each, reducing its total stake to about 1.3 billion shares. AIG itself bought back 103 million of these shares. 

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The St. Louis-based company said its wholesale power generation unit, Ameren Energy Resources Co., simply can’t afford the equipment to scrub out sulfur dioxide from its coal plant emissions right now.

“Current market prices (for power) simply do not allow further investment in pollution control equipment at this time,” Ameren Energy Resources President Steven R. Sullivan said in a statement.

Ameren filed a formal petition with the Illinois Pollution Control Board on Thursday seeking to push back the deadline for cutting sulfur dioxide emissions to Dec. 31, 2020. The current deadline for meeting stricter emissions standards is Jan. 1, 2015.

The company had previously announced plans to slow installation of sulfur dioxide controls at its Newton power plant in Jasper County. That project would have satisfied the 2015 sulfur dioxide standard.

Sullivan said the requested delay would give time for power markets to recover. And unless regulators approve the company’s request, Ameren may be forced to idle two of three coal-fired plants in Illinois that don’t have scrubbers.

Rebecca Stanfield of the Natural Resources Defense Council’s Chicago office said Ameren’s proposal isn’t acceptable, and that the utility will have had eight years to make the needed investments.

“The public shouldn’t have to tolerate another five years of unscrubbed coal pollution or the health consequences that result from operating an ancient plant with last-century technology,” Stanfield said. “If it turns out that there are more cost-effective and cleaner ways of meeting our electricity needs, the market will allow those solutions to replace the existing coal fleet.”

Ameren said it’s also working on another possible solution to the problem. It’s asking regional grid operators to remove barriers that prevent the company from moving power from its downstate coal plants to northern Illinois, where market prices for electricity are higher.

“Solving this singular issue would be a first step in resolving our financial challenges,” Sullivan said.

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