WASHINGTON (Reuters) - The U.S. economy showed surprising signs of resilience in November despite the approach of the so-called fiscal cliff as consumer spending rose by the most in three years and a gauge of business investment jumped.
Consumer spending rose 0.6 percent when adjusted for inflation, while new factory orders for capital goods outside the defense and aerospace sectors - a proxy for business spending plans - jumped 2.7 percent, the Commerce Department said on Friday.
Economists had pinned earlier weakness in investment plans on worries lawmakers and the White House might fail to strike a deal to avoid the brunt of tax hikes and government spending cuts scheduled to begin in January.
They also worried consumers would hold back as the end-of-the-year deadline approached with both parties far apart on how to avoid the potential hit to the economy. But Friday's data suggested both consumers and businesses had mostly shrugged off the cliff, at least in November.
"It appears that the looming fiscal cliff hasn't been nearly as disruptive as we had feared," said Paul Ashworth, an economist at Capital Economics in Toronto.
Still, another report provided ample reason for caution as U.S. consumer sentiment slumped in December, with households apparently rattled by on-going negotiations to lessen the fiscal tightening that could easily trigger a recession next year.
The Thomson Reuters/University of Michigan's final index of consumer sentiment in December tumbled more than expected to 72.9 from 82.7 a month before.
U.S. stocks fell sharply after a Republican proposal for averting the fiscal cliff was abandoned late on Thursday, eroding optimism that a deal could be reached quickly. At the same time, U.S. government debt prices rallied and the dollar gained ground as investors sought a safe haven.
Economists still expect economic growth to cool in the fourth quarter as companies slow the pace at which they have been re-stocking their shelves, but the data on Friday suggested consumers are offsetting some of that drag.
Consumer spending is on track to grow at a 2.2 percent annual rate in the fourth quarter, faster than during the prior three months, said Michael Feroli, an economist at JPMorgan in New York.
Forecasting firm Macroeconomic Advisers raised its forecast for fourth-quarter economic growth by four tenths of a point to a 1.4 percent annual rate. In the third quarter, the economy expanded at a 3.1 percent rate.
"The economy is holding in here at the end of the year despite the concerns about the fiscal cliff," said Gary Thayer, an economic strategist at Wells Fargo Advisors in St. Louis.
WORRIES AHEAD
Those concerns are not going away.
In November, many analysts on Wall Street said they expected Washington would largely avert the fiscal cliff, and optimism had grown over the last week that a deal was within reach. Since Wednesday, however, negotiations have fallen into disarray.
If Congress and the White House do not reach a deal in time, taxes will go up for all Americans beginning in January and the government will cut spending on a host of programs. Running off the fiscal cliff would slash the nation's trillion-dollar budget deficit nearly in half in just one year.
The impact would only come gradually, but economists expect it would be enough to knock the country into recession in the first half of the year.
So far, uncertainty over the talks appears to have had only a limited impact on the economy.
New orders for durable goods, items meant to last three years or more, rose a greater-than-expected 0.7 percent in November due to gains in machinery, fabricated metal products, and computer and electronic products. Those increases were offset by a decline in volatile aircraft orders.
The report also showed a rise in shipments, brightening the prospects for fourth-quarter economic growth.
Shipments of non-defense capital goods orders excluding aircraft, used to calculate equipment and software spending in the government's measures of gross domestic product, gained 1.8 percent, after rising by a softer 0.6 percent in October.
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IMF extends zero interest loans to poor nations
Labels: BusinessWASHINGTON (Reuters) - Poor countries with loans from the IMF can continue to pay no interest until the end of 2014, the Fund's board said on Friday, as their economies are still recovering from the global economic crisis.
The IMF's zero-interest loan program for low-income countries had been set to expire at the end of this year.
"The executive board decision to keep interest rates at zero ... is testament to the Fund's continued support for low-income countries since the global economic crisis hit in 2009," IMF Managing Director Christine Lagarde said in a statement.
The IMF decided in 2009 to allow countries eligible for its anti-poverty loan program to pay zero interest on loans in light of the financial crisis.
The Fund also set a target to raise $17 billion to lend to the poorest countries, which are threatened by the risk of euro-zone contagion and by a drop-off in foreign aid after the global recession.
IMF's Lagarde has pushed to meet that goal, seeking to ease concerns that the IMF and donor nations may turn a blind eye to the world's poor as they focus on containing the euro zone crisis.
In September, the IMF said it would distribute a $3.8 billion windfall from gold sales to its 188 member countries if they agreed to commit most of the money to the anti-poverty loan program.
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Top business story in '12: Sluggish global economy
Labels: BusinessThis would be the year when the global economy finally regained its vigor. At least that's what many had hoped.
It didn't happen.
The three largest economies — the United States, China and Japan — struggled again in 2012. The 17 countries that use the euro endured a third painful year in their financial crisis and slid into recession. Emerging economies slowed.
President Barack Obama defied predictions by sailing to re-election. And his landmark health care plan surprisingly survived Supreme Court review. Obama's re-election triggered a face-off with Republicans over averting the "fiscal cliff" — the drastic spending cuts and tax increases that were set to kick in Jan. 1.
The tech world dueled over smartphones and tablets and saw Facebook's IPO sour as fast as it had sizzled. The housing market inched toward recovery. And Americans suffered both a catastrophic drought and a catastrophic superstorm.
Least surprisingly, perhaps, another gallery of rogues brought investigative scrutiny to Wall Street.
The achingly slow global economic recovery was chosen as the top business story of the year by business editors at The Associated Press. The U.S. presidential election came in second, followed by the Supreme Court's upholding Obama's health-care plan.
1. THE GLOBAL ECONOMY: Worldwide growth was slack again in 2012. The global economy grew just 3.3 percent, down from 3.8 percent in 2011 and 5.1 percent in 2010, the International Monetary Fund estimates. The U.S. economy, the world's largest, failed to gain traction. Five years after a recession seized the economy and more than three years after it ended, growth in the United States was only about 2 percent. Unemployment remained a high 7.7 percent.
Europe fared worse. Its financial crisis did stabilize, thanks in part to the European Central Bank's plan to buy government bonds to help countries manage their debts. But the euro alliance sank into recession. Europeans, in turn, held back China, the world's No. 2 economy, by cutting back on Chinese goods. China's economy grew at a 7.4 percent annual rate in the July-September quarter. Though a scorching pace for developed countries, that marked a 3½-year low for China. And at year's end, Japan's economy, the world's third-largest, was shrinking.
2. U.S. PRESIDENTIAL ELECTION: Obama vaulted to a re-election victory over Mitt Romney, who had staked his bid on the weakest U.S. economic rebound since the Great Depression and had pledged to slash taxes. Unemployment under Obama topped 8 percent for 43 straight months.
Yet he won despite the highest unemployment rate of any president seeking re-election since World War II. Voters assigned him higher marks on the economy as the year progressed, perhaps encouraged by job gains. As the fiscal cliff neared, Obama fought to raise taxes on the highest-earning Americans. He also demanded aid for the long-term unemployed and money for roads, bridges and other infrastructure. Economists raised hopes that if the fiscal cliff was averted, the gloom would lift in Obama's second term.
3. OBAMA HEALTH CARE PLAN UPHELD: The Supreme Court caught many by surprise when it backed Obama administration's health care reform in a 5-4 vote. The law requires Americans to buy insurance or pay a tax, while subsidizing the needy. Hospitals and health insurers will likely benefit from 30 million new customers. Medical device makers, though, will face a new sales tax. And some small businesses say the law will discourage hiring because it requires companies to provide health care once they employ more than 50.
4. THE FISCAL CLIFF: A dreaded package of tax increases and deep spending cuts to domestic and defense programs loomed over the economy in the year's final months. Negotiators struggled to forge a budget deal to avert those measures. If they failed, the tax increases and spending cuts would kick in Jan. 1. That threat was intended to be so chilling that it would force Congress and the White House to take the painful budgetary steps needed to avoid it. Economists warned that if the fiscal cliff measures remained in place for much of 2013, they would cause a recession.
5. FACEBOOK's IPO: Years of anticipation led to Facebook's initial public offering of stock — the hottest Internet IPO since Google's in 2004. Many of the billion or so users of the world's largest online social network craved a chance to buy in early. On the eve of its first trading day, Facebook's market value was $104 billion — more than Amazon.com's or McDonald's at the time. Yet the IPO bombed. Its debut was marred by technical glitches with the Nasdaq exchange, allegations that a revenue gap wasn't publicly disclosed and complaints that the IPO had been priced too high. Traders lost confidence fast. Within three months, Facebook's stock had shed more than half its IPO value.
6. HOUSING RECOVERY: After a six-year slump that sent more than 4 million homes into foreclosure and shrank home prices about one-third nationwide, the U.S. housing market began to recover in mid-year. Modest job gains and record-low mortgage rates fueled demand. And the supply of available homes sank. By June, prices began rising. And builders broke ground on the most homes in four years. Housing boosted economic growth this year for the first time since 2005.
7. THE RETURN OF BIG OIL: Domestic crude oil production achieved its biggest one-year gain since 1951, driven by output in North Dakota and Texas. The United States is on pace to pass Saudi Arabia as the world's top oil producer within two years. Credit goes to drilling improvements, like those that have fed a boom in domestic natural-gas production — horizontal drilling combined with hydraulic fracturing, or fracking. The new production helped cut natural gas prices to their lowest levels in more than a decade. Higher oil production helped reduce oil imports to 1992 levels and hand record profits to U.S. refiners. Gasoline prices declined in the last three months of the year. But for all of 2012, the average gallon was a record $3.63.
8. BANKS BEHAVING BADLY: It was a banner year for bank drama. JPMorgan Chase lost $6 billion in a complex series of trades. And one of its bankers in London grew famous for big bets and became known as the "London whale." Morgan Stanley was accused of botching Facebook's IPO. An ex-banker trashed Goldman Sachs for putting profits ahead of customers and for mocking clients as "muppets." Barclays and UBS were fined for their roles in manipulating a key global interest rate. And HSBC agreed to pay $1.9 billion to settle charges that it enabled money laundering by Mexican drug traffickers.
9. MOTHER NATURE: There wasn't enough rain in much of the nation. Then, suddenly there was much too much. The nation suffered its worst drought since the 1950s, covering 80 percent of U.S. farmland. Grain and food prices soared. Then a storm so destructive it was dubbed a "superstorm" walloped the Northeast. Sandy blasted coastal New Jersey and New York and put 8.5 million customers in 21 states in the dark. Sandy will likely end up as the second-costliest U.S. storm ever after Hurricane Katrina.
10. MOBILE-GADGET WARS: Competition in mobile technology intensified. Apple maintained its worldwide dominance. But the use of Google's Android software on competing smartphones and tablets spread faster than Apple's market share. Forty-four percent of U.S. adults own smartphones, up from about 35 percent a year ago. Tablet ownership doubled in 2012. Taking on Apple's iPad, Microsoft unleashed its Surface tablet and began selling Windows 8, a tablet-friendly operating system. Amazon and Barnes & Noble rushed out high-definition-screen tablets. Each priced its premium model less than the entry-level iPad. Apple struck back with the iPad Mini. Struggling to compete, once-formidable Nokia and BlackBerry-maker Research In Motion floundered.
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Russia clashes over energy with Belarus, Ukraine, EU
Labels: BusinessMINSK/MOSCOW (Reuters) - Russia plunged back into the disputes over energy with Ukraine and Belarus that have repeatedly disrupted oil and gas supplies to European Union countries, and it also termed EU energy policy as "uncivilized".
Russia on Friday denied remarks by Belarussian President Alexander Lukashenko that it had agreed to increase its crude oil supplies to Minsk, vital for the Belarus economy, and said that it still intended to cut them next year.
On Thursday, Russian President Vladimir Putin criticized Ukraine for failing to agree on a deal, in return for cheaper gas, under which it would lease its pipeline network to Moscow and the European Union.
Russia, the world's top energy producer, supplies over a quarter of Europe's gas and oil needs. Ukraine ships around two thirds of Europe's imports of Siberian gas through pipelines across its territory, while Belarus is mainly responsible for oil deliveries
Clashes over energy pricing and pipeline transit with Ukraine and Belarus have led over the past decade to cuts or halts in Russian oil and gas supplies to Central and Western Europe. These have most often happened over the New Year, when Russia failed to agree on energy supply terms with the two countries.
The European Union has accused the Kremlin of using its energy might as a political tool, while Moscow has argued it wants its neighbors to pay fair prices promptly for energy.
On Friday, Belarussian state news agency BelTA quoted Lukashenko as saying Russia had agreed to increase oil supplies next year to 23 million tonnes (460,000 barrels per day) from 21.5 million this year.
"We have really agreed on the supply ... We will get the oil without any issues," he said.
Moscow was quick to deny the report, insisting it was offering 18.5 million tonnes, an effective cut in supplies.
"As of today, an agreement on supplies to Belarus in 2013 has not been signed," Russia's Energy ministry said in a statement. "The Russian side's offer is supplying 18.5 million tonnes of oil. Supplies in the first quarter of 2013 will be based on the suggested volume."
Russian oil is crucial for the economy of Belarus and is supplied free of Russia's normally hefty export duties as Moscow seeks to keep the country within its political orbit.
Belarus has two large oil refineries that process Russian crude and export gasoline and diesel to the West.
The refining business earns vital hard currency, but Moscow has occasionally bridled over supply terms, part of a complex arrangement that also covers pipeline supplies of Russian oil and gas to Europe via Belarussian pipelines.
Belarus, which suffered from a balance-of-payments crisis in 2011, faces a foreign debt repayment crunch next year when about $3 billion of its liabilities fall due.
UNCIVILISED DECISION
The stand-off with Belarus comes as Moscow is struggling to reach a deal with Ukraine over gas deliveries. Ukraine's reluctance to strike a deal on its gas transit system led to the last-minute cancellation of a visit to Moscow by its President Viktor Yanukovich this week.
Although Moscow has regularly been at odds with both neighbors, it has never faced a situation of simultaneous cuts through both countries to Europe.
At the same time tensions between Moscow and the European Union have risen over economic, political and human rights issues.
Putin, in Brussels on Friday for a Russian-EU summit, said it was unacceptable that EU rules were applied retroactively. He was particularly referring to the Third Energy Package of EU legislation to create a single energy market and prevent those that dominate supply from also dominating distribution.
An EU antitrust case against Russia's gas export monopoly Gazprom as well as EU attempts to diversify its energy suppliers away from Russia and legislation to encourage competition have angered Moscow.
"Of course the EU has the right to take any decisions, but ... we are stunned by the fact that this decision is given retroactive force," Putin told reporters in Brussels.
"It is an absolutely uncivilized decision."
Russia presented the European Commission with new proposals on the legal status of its gas pipeline infrastructure to accommodate its export projects in Europe, Energy Minister Alexander Novak told reporters.
Russia has been seeking exemptions from EU regulation that would allow it to make full use of pipelines bringing gas to Europe by routes that skirt around Ukraine.
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Two killed as looters raid supermarkets in Argentina
Labels: BusinessBUENOS AIRES (Reuters) - Two people were killed in Argentina on Friday as looters broke into supermarkets in several cities, stirring memories of the country's devastating economic crisis 11 years ago.
Police fired teargas and rubber bullets to stop dozens of stone-throwing youths from looting a supermarket owned by French retailer Carrefour near the capital, a day after the unrest erupted in the Patagonian ski resort of Bariloche.
Government officials condemned the violence and sent 400 military police to the southern city, where raiders stormed a supermarket owned by the local unit of Wal-Mart and made off with flat-screen televisions and other goods.
The violence spread to the central city of Rosario, where two people were killed, and to the northern province of Chaco. About 250 people were arrested in total in four different provinces and police battled to avert fresh incidents in the urban sprawl that encircles Buenos Aires.
"When you see that they're taking flat-screens, you know it's not hunger," said Daniel Scioli, governor of Buenos Aires province and an ally of President Cristina Fernandez.
Fernandez often contrasts the country's current economic stability with the 2001/02 crisis that plunged millions of Argentines into poverty and unleashed a wave of looting for food in supermarkets.
She was re-elected by a landslide just over a year ago, but her approval ratings have since plunged due to sluggish economic growth, surging prices, and middle-class anger over currency controls and her combative style.
Fernandez's administration blamed the violence on opposition trade union leaders, who rallied in the capital this week to demand wage rises and lower taxes due to double-digit inflation.
"There are elements in Argentina that want to provoke havoc and violence and stain our holiday season with blood," national security secretary Sergio Berni said. "Argentina is not the same as it was in 2001."
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Andersen changes directions, heads to Wisconsin
Labels: SportsGary Andersen publicly pledged his allegiance to Utah State not long ago. Now he's on the verge of becoming Wisconsin's coach.
Wisconsin reportedly will hire Andersen to replace Bret Bielema, who left the Badgers earlier this month to take the Arkansas job.
The news about Andersen broke Tuesday night and neither Utah State nor Wisconsin had anything official to announce about Andersen on Wednesday. The delay is at least in part tied to laws in Wisconsin that require a state job to be posted for at least two weeks before it can be filled. The two-week posting was up at the end of business on Wednesday.
The school was expected to introduce Andersen at a news conference Thursday, but a snowstorm might change those plans.
The 48-year-old Andersen just completed his fourth and best season at Utah State. The 18th-ranked Aggies finished 11-2 with a bowl victory against Toledo and won the Western Athletic Conference.
It's been a remarkable rise for a program that had been near the bottom of major college football for years, and stuck in distant third in its own state behind BYU and Utah. The Aggies won nine games in the previous four seasons before Andersen took over. The last football coach to finish his tenure in Logan, Utah, with a winning record was Phil Krueger who went 21-12 from 1973-75.
Andersen drew interest from California, Colorado and Kentucky last month, but decided to pass on those opportunities and received a contract extension from Utah State.
"The interest I have received is a compliment to the quality young men in this program," Andersen said in the statement released Nov. 30. "I love Cache Valley, this university and these young men, and I am humbled and excited to continue to be the coach here. The leadership of President (Stan) Albrecht and Mr. Barnes, as well as the support from the fans and community, are big reasons why this is the right place for myself and my family at this time."
That was before Wisconsin had an opening. Bielema announced he was leaving on Dec. 4, three days after the Badgers won their third straight Big Ten title and trip to the Rose Bowl.
As late as last week, before Utah State played in the Famous Idaho Potato Bowl, Andersen was saying he was committed to the Aggies.
"I love the kids I get to coach here. ... The kids I have in the program, it just was not time. I look them in the eye and I need to be where I'm at," he told the Idaho Statesman newspaper.
When Wisconsin called, Andersen changed his mind.
It's a tough spot in which many coaches find themselves. It's imperative for recruiting purposes to show unwavering commitment to your current school. But when a coach does jump to another job, he looks like a liar.
"If you can, it's good to not say anything," former Arkansas and Mississippi coach Houston Nutt said. "It's almost now impossible because there's so much information out there."
Washington State coach Mike Leach said he felt his only obligation was to his employer and his team.
"I think you handle it honestly with the people you work for, but by the same token you don't let the media or public into your personal business," he said.
Apparently, many in Utah were caught off guard by the Andersen-to-Wisconsin news.
"I can't believe this..." Utah State receiver Alex Wheat posted on his Twitter account when word started to spread.
"I hate rumors.." tight end DJ Tialavea tweeted.
A few hours later, that changed.
"Coach A just called me. Explained the situation. No hard feelings. I have nothing but respect for the man. We must fight on. (hash)AggieNation," Wheat posted.
"Just got that phone call always have and always will love ya coach!" Tialavea tweeted.
The Wisconsin State Journal, which first reported that the Andersen would be the next Badgers' coach, reported Wednesday that Andersen spent Tuesday night calling his Utah State players.
The should buy plenty of good will for Andersen as he heads from his old job to his new one.
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Wisconsin reportedly will hire Andersen to replace Bret Bielema, who left the Badgers earlier this month to take the Arkansas job.
The news about Andersen broke Tuesday night and neither Utah State nor Wisconsin had anything official to announce about Andersen on Wednesday. The delay is at least in part tied to laws in Wisconsin that require a state job to be posted for at least two weeks before it can be filled. The two-week posting was up at the end of business on Wednesday.
The school was expected to introduce Andersen at a news conference Thursday, but a snowstorm might change those plans.
The 48-year-old Andersen just completed his fourth and best season at Utah State. The 18th-ranked Aggies finished 11-2 with a bowl victory against Toledo and won the Western Athletic Conference.
It's been a remarkable rise for a program that had been near the bottom of major college football for years, and stuck in distant third in its own state behind BYU and Utah. The Aggies won nine games in the previous four seasons before Andersen took over. The last football coach to finish his tenure in Logan, Utah, with a winning record was Phil Krueger who went 21-12 from 1973-75.
Andersen drew interest from California, Colorado and Kentucky last month, but decided to pass on those opportunities and received a contract extension from Utah State.
"The interest I have received is a compliment to the quality young men in this program," Andersen said in the statement released Nov. 30. "I love Cache Valley, this university and these young men, and I am humbled and excited to continue to be the coach here. The leadership of President (Stan) Albrecht and Mr. Barnes, as well as the support from the fans and community, are big reasons why this is the right place for myself and my family at this time."
That was before Wisconsin had an opening. Bielema announced he was leaving on Dec. 4, three days after the Badgers won their third straight Big Ten title and trip to the Rose Bowl.
As late as last week, before Utah State played in the Famous Idaho Potato Bowl, Andersen was saying he was committed to the Aggies.
"I love the kids I get to coach here. ... The kids I have in the program, it just was not time. I look them in the eye and I need to be where I'm at," he told the Idaho Statesman newspaper.
When Wisconsin called, Andersen changed his mind.
It's a tough spot in which many coaches find themselves. It's imperative for recruiting purposes to show unwavering commitment to your current school. But when a coach does jump to another job, he looks like a liar.
"If you can, it's good to not say anything," former Arkansas and Mississippi coach Houston Nutt said. "It's almost now impossible because there's so much information out there."
Washington State coach Mike Leach said he felt his only obligation was to his employer and his team.
"I think you handle it honestly with the people you work for, but by the same token you don't let the media or public into your personal business," he said.
Apparently, many in Utah were caught off guard by the Andersen-to-Wisconsin news.
"I can't believe this..." Utah State receiver Alex Wheat posted on his Twitter account when word started to spread.
"I hate rumors.." tight end DJ Tialavea tweeted.
A few hours later, that changed.
"Coach A just called me. Explained the situation. No hard feelings. I have nothing but respect for the man. We must fight on. (hash)AggieNation," Wheat posted.
"Just got that phone call always have and always will love ya coach!" Tialavea tweeted.
The Wisconsin State Journal, which first reported that the Andersen would be the next Badgers' coach, reported Wednesday that Andersen spent Tuesday night calling his Utah State players.
The should buy plenty of good will for Andersen as he heads from his old job to his new one.
Cowboys trusting Bryant to make call on finger
Labels: SportsIRVING, Texas (AP) — The Dallas Cowboys couldn't trust receiver Dez Bryant to even run the right routes less than two months ago.
Now they're letting him dictate whether he plays with a broken left index finger. They are also drawing inspiration from Bryant's insistence on waiting until after the season for a surgery serious enough for owner Jerry Jones to startle his emerging star by mistakenly saying it would involve taking bone from his hip.
"Finding a way to play shows a lot of toughness because that's not easy to do," said tight end Jason Witten, who would know because he once ran 30 yards downfield without a helmet before getting tackled and played in the opener this season with a lacerated spleen. "He earned my respect."
Bryant broke the finger on a catch against Cincinnati two weeks ago. He scored a critical touchdown in the 20-19 win after the injury and made it clear early last week that he would play against Pittsburgh.
Playing with a padded glove that exposed the tip of the broken finger, Bryant looked like a decoy in the first quarter because Tony Romo kept throwing to Miles Austin, but he still scored a touchdown for the sixth straight game — catching a ball away from his body, fingers first — and finished with four catches for 59 yards.
The Cowboys (8-6) beat the Steelers 27-24 in overtime last weekend and emerged with control of their playoff hopes. Dallas moves on with wins over New Orleans (6-8) at home on Sunday and at Washington in the finale.
"I just wanted to be out there and I felt like I needed to," Bryant said. "Miles came up to me and said, 'We're all really inspired by you playing.' I can tell from the guys that it meant a lot."
Seven weeks earlier — in that same locker room — Bryant had to acknowledge that his route-running wasn't precise enough, and that it cost Romo one of four interceptions in a 29-24 loss to the New York Giants. He also botched a punt return so badly that coach Jason Garrett took those duties away from him.
Bryant did have 110 yards receiving that day — a season high at the time — and made a spectacular catch that appeared to win the game in the final seconds. But a replay showed that his fingers came down first out of bounds, so he still had just two touchdowns through seven games.
The third-year pro was on his way to another mediocre season, and still didn't know whether Dallas County prosecutors would pursue family violence charges against him over an altercation with his mother during the summer. That incident came after his first two years were marred by lawsuits over unpaid bills for tickets and jewelry and a scene at the mall for wearing sagging pants.
Just as his career-best touchdown streak started, though, Bryant got word that a deal had been reached that could lead to dismissal of the family violence charges. He celebrated by having the same career high in receiving yardage twice — 145 against Cleveland and Washington. With eight touchdowns in six games, Bryant is now tied for the among NFL receivers with 10 scores.
"I'm proud of him," Witten said. "You talk about him dealing with all the stuff he's dealt with the three years he's been here. He's almost like a little brother. You keep offering him support and encouragement. He's a good kid. It kind of seemed like he's put it all behind him."
Jones, ever the optimist, has been guarded as Bryant kept stringing together good games. He gushed about the receiver after beating the Steelers, but scared Bryant a little by offering the possibility of a bone graft involving Bryant's hip ("You're not touching my hip," Bryant told reporters Sunday after hearing the Jones diagnosis). Turns out Jones just misunderstood the doctors. The bone will come from the hand. But Jones' point was clear: the injury is serious.
"He certainly is playing with some risks, but he was inspirational out there to everybody involved in the organization," Jones said. "He meant it because we were still playing for all the marbles, and he wanted to give everything he could."
While Dallas coach Jason Garrett said medical opinions did factor in the decision, Bryant said his reasoning was simple: The Cowboys were still in the playoff hunt. Had Dallas been eliminated, he said he might have gone ahead with surgery. There's some personal incentive, too. Two more 100-yard games would give him six for the season and probably push him past 1,300 yards. With that kind of production, he could end up leading the league in touchdowns. He might go to his first Pro Bowl.
"I know that you go by catches and yards and touchdowns, but I go by how many times he does the right thing, makes the right choice, runs the right route, the depth that he's at, the timing that he came out, his ability to read the coverage," Romo said. "You know there's a lot of stuff involved and he didn't do as well in the beginning of the year, but he's really come on as of lately."
Bryant's come so far, the Cowboys are trusting him to call the shots.
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Now they're letting him dictate whether he plays with a broken left index finger. They are also drawing inspiration from Bryant's insistence on waiting until after the season for a surgery serious enough for owner Jerry Jones to startle his emerging star by mistakenly saying it would involve taking bone from his hip.
"Finding a way to play shows a lot of toughness because that's not easy to do," said tight end Jason Witten, who would know because he once ran 30 yards downfield without a helmet before getting tackled and played in the opener this season with a lacerated spleen. "He earned my respect."
Bryant broke the finger on a catch against Cincinnati two weeks ago. He scored a critical touchdown in the 20-19 win after the injury and made it clear early last week that he would play against Pittsburgh.
Playing with a padded glove that exposed the tip of the broken finger, Bryant looked like a decoy in the first quarter because Tony Romo kept throwing to Miles Austin, but he still scored a touchdown for the sixth straight game — catching a ball away from his body, fingers first — and finished with four catches for 59 yards.
The Cowboys (8-6) beat the Steelers 27-24 in overtime last weekend and emerged with control of their playoff hopes. Dallas moves on with wins over New Orleans (6-8) at home on Sunday and at Washington in the finale.
"I just wanted to be out there and I felt like I needed to," Bryant said. "Miles came up to me and said, 'We're all really inspired by you playing.' I can tell from the guys that it meant a lot."
Seven weeks earlier — in that same locker room — Bryant had to acknowledge that his route-running wasn't precise enough, and that it cost Romo one of four interceptions in a 29-24 loss to the New York Giants. He also botched a punt return so badly that coach Jason Garrett took those duties away from him.
Bryant did have 110 yards receiving that day — a season high at the time — and made a spectacular catch that appeared to win the game in the final seconds. But a replay showed that his fingers came down first out of bounds, so he still had just two touchdowns through seven games.
The third-year pro was on his way to another mediocre season, and still didn't know whether Dallas County prosecutors would pursue family violence charges against him over an altercation with his mother during the summer. That incident came after his first two years were marred by lawsuits over unpaid bills for tickets and jewelry and a scene at the mall for wearing sagging pants.
Just as his career-best touchdown streak started, though, Bryant got word that a deal had been reached that could lead to dismissal of the family violence charges. He celebrated by having the same career high in receiving yardage twice — 145 against Cleveland and Washington. With eight touchdowns in six games, Bryant is now tied for the among NFL receivers with 10 scores.
"I'm proud of him," Witten said. "You talk about him dealing with all the stuff he's dealt with the three years he's been here. He's almost like a little brother. You keep offering him support and encouragement. He's a good kid. It kind of seemed like he's put it all behind him."
Jones, ever the optimist, has been guarded as Bryant kept stringing together good games. He gushed about the receiver after beating the Steelers, but scared Bryant a little by offering the possibility of a bone graft involving Bryant's hip ("You're not touching my hip," Bryant told reporters Sunday after hearing the Jones diagnosis). Turns out Jones just misunderstood the doctors. The bone will come from the hand. But Jones' point was clear: the injury is serious.
"He certainly is playing with some risks, but he was inspirational out there to everybody involved in the organization," Jones said. "He meant it because we were still playing for all the marbles, and he wanted to give everything he could."
While Dallas coach Jason Garrett said medical opinions did factor in the decision, Bryant said his reasoning was simple: The Cowboys were still in the playoff hunt. Had Dallas been eliminated, he said he might have gone ahead with surgery. There's some personal incentive, too. Two more 100-yard games would give him six for the season and probably push him past 1,300 yards. With that kind of production, he could end up leading the league in touchdowns. He might go to his first Pro Bowl.
"I know that you go by catches and yards and touchdowns, but I go by how many times he does the right thing, makes the right choice, runs the right route, the depth that he's at, the timing that he came out, his ability to read the coverage," Romo said. "You know there's a lot of stuff involved and he didn't do as well in the beginning of the year, but he's really come on as of lately."
Bryant's come so far, the Cowboys are trusting him to call the shots.
Red Sox look for innings in Dempster
Labels: SportsBOSTON (AP) — The Boston Red Sox have the reliable starter they sought in Ryan Dempster.
He's pitched at least 200 innings in four of the past five seasons, impressive to general manager Ben Cherington but not so special to Dempster.
"That's your responsibility as a starting pitcher in the big leagues," Dempster said Wednesday at a news conference after his $26.5 million, two-year deal was finalized. "The norm used to be 300 and somehow we worked it down to like 200. Even 180 seems to suffice."
He said he works hard to stay in shape "so that I can take on that workload."
Boston had just one starter reach the 200-mark this year, with Jon Lester pitching 205 1-3 innings.
"It's important," Cherington said. "Ryan's got a history of being very effective and a really good pitcher. The consistency he's shown in taking the ball every fifth day was important to us. I think as a team when you start having to fill in for guys, if we don't have a reliable rotation and you start filling in with guys from down below or guys from the bullpen or whatever, it's not so much that move but you've inevitably weakened another area of your team."
Dempster gets $13.25 million a year and would earn an additional $250,000 each season for pitching 190 innings.
"We went into this offseason wanting to add a proven starter to the rotation, someone that has a history of success, reliability and someone who we thought would embrace coming to Boston and everything that comes with pitching and playing in Boston, on and off the field," Cherington said. "We think Ryan is the perfect fit for that."
The 35-year-old right-hander adds experience to a rotation that underachieved this year as the Red Sox went 69-93 and finished last in the AL East in their only season under manager Bobby Valentine. He was fired and replaced by John Farrell.
"Obviously there's a lot of room to go up," Dempster said. "Ben and the organization have done an incredible job of adding a lot of really good players and good baseball guys. So we're just going to go into spring training and work as hard as we can and go out there every day and leave it all on the field and play as hard as we can to get the best out of each other."
Lester and Clay Buchholz had disappointing years and John Lackey returns after missing the season following elbow-ligament replacement surgery. Left-hander Felix Doubront was in the rotation for most of the season.
Dempster reached the major leagues in 1998 with the Florida Marlins and has a 124-124 record with a 4.33 ERA. A Canadian, he said he is undecided about playing in the World Baseball Classic.
But he is confident the Red Sox can reach the playoffs for the first time since 2009.
"That's why we play," he said. "The money and things like that in baseball are great. But I came here because I believe this team has a chance of winning as much as anybody else. I've always believed that should be your mentality going into any season. Because it's proven day in, day out every team's going to win 50 games, every team's going to lose 50 games. It's what you do with the other 62 that matter."
He went 12-8 with a 3.38 ERA this year. After starting 5-5 with a 2.25 ERA in his ninth season with the Chicago Cubs, he was traded to the Texas Rangers and went 7-3 with a 5.03 ERA. That was his first stint in the American League.
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He's pitched at least 200 innings in four of the past five seasons, impressive to general manager Ben Cherington but not so special to Dempster.
"That's your responsibility as a starting pitcher in the big leagues," Dempster said Wednesday at a news conference after his $26.5 million, two-year deal was finalized. "The norm used to be 300 and somehow we worked it down to like 200. Even 180 seems to suffice."
He said he works hard to stay in shape "so that I can take on that workload."
Boston had just one starter reach the 200-mark this year, with Jon Lester pitching 205 1-3 innings.
"It's important," Cherington said. "Ryan's got a history of being very effective and a really good pitcher. The consistency he's shown in taking the ball every fifth day was important to us. I think as a team when you start having to fill in for guys, if we don't have a reliable rotation and you start filling in with guys from down below or guys from the bullpen or whatever, it's not so much that move but you've inevitably weakened another area of your team."
Dempster gets $13.25 million a year and would earn an additional $250,000 each season for pitching 190 innings.
"We went into this offseason wanting to add a proven starter to the rotation, someone that has a history of success, reliability and someone who we thought would embrace coming to Boston and everything that comes with pitching and playing in Boston, on and off the field," Cherington said. "We think Ryan is the perfect fit for that."
The 35-year-old right-hander adds experience to a rotation that underachieved this year as the Red Sox went 69-93 and finished last in the AL East in their only season under manager Bobby Valentine. He was fired and replaced by John Farrell.
"Obviously there's a lot of room to go up," Dempster said. "Ben and the organization have done an incredible job of adding a lot of really good players and good baseball guys. So we're just going to go into spring training and work as hard as we can and go out there every day and leave it all on the field and play as hard as we can to get the best out of each other."
Lester and Clay Buchholz had disappointing years and John Lackey returns after missing the season following elbow-ligament replacement surgery. Left-hander Felix Doubront was in the rotation for most of the season.
Dempster reached the major leagues in 1998 with the Florida Marlins and has a 124-124 record with a 4.33 ERA. A Canadian, he said he is undecided about playing in the World Baseball Classic.
But he is confident the Red Sox can reach the playoffs for the first time since 2009.
"That's why we play," he said. "The money and things like that in baseball are great. But I came here because I believe this team has a chance of winning as much as anybody else. I've always believed that should be your mentality going into any season. Because it's proven day in, day out every team's going to win 50 games, every team's going to lose 50 games. It's what you do with the other 62 that matter."
He went 12-8 with a 3.38 ERA this year. After starting 5-5 with a 2.25 ERA in his ninth season with the Chicago Cubs, he was traded to the Texas Rangers and went 7-3 with a 5.03 ERA. That was his first stint in the American League.
Angels swap hitting for pitching with Mariners
Labels: Sports(Reuters) - The bulked-up Los Angeles Angels swapped some hitting for pitching on Wednesday by sending first baseman/designated hitter Kendrys Morales to the Seattle Mariners for starting pitcher Jason Vargas.
The Angels, who signed power-hitting Josh Hamilton to a free agent contract last week, sent some much-needed punch to Seattle to add lefthander Vargas to a rotation that includes Jered Weaver, C.J. Wilson, Tommy Hanson and Joe Blanton.
"We have been focused on adding offense this offseason, and feel that Kendrys will be a middle-of-the-order bat for us," Seattle General Manager Jack Zduriencik said in a report on Major League Baseball's website.
"He's a switch-hitter with power who has played - and hit - in the AL West. He's familiar with the teams and parks and is a proven run-producer."
Seattle was last in the American League in runs scored with 619, 148 fewer runs than third-best Los Angeles.
The Cuban-born Morales, 29, hit .273 with 22 home runs and 73 RBIs last year in 134 games in his first season back after missing all of 2011 with a broken left leg.
Before his injury, suffered when he landed awkwardly while jumping into a group of team mates after hitting a walk-off grand slam homer, Morales was one of MLB's emerging sluggers after hitting .306 with 34 home runs and 108 RBIS in 2009.
The trade of Morales freed up some lineup space for 26-year-old Mark Trumbo, who hit 32 home runs with 95 RBIs for the Angels last season bouncing between the outfield, first base, third base and designated hitter.
Vargas, also 29, pitched the last four seasons with Seattle, posting a 36-42 record with a 4.09 ERA. The lefty, who went 14-11 with a 3.85 ERA last season, was a Mariners workhorse, logging more than 200 innings in each of the last two years.
He has pitched well in the past at Angel Stadium, registering a 3-1 record with a 2.27 ERA in seven career outings in the ball park.
The deal involved two players entering their final season of arbitration eligibility, with both set to become free agents after the 2013 season.
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The Angels, who signed power-hitting Josh Hamilton to a free agent contract last week, sent some much-needed punch to Seattle to add lefthander Vargas to a rotation that includes Jered Weaver, C.J. Wilson, Tommy Hanson and Joe Blanton.
"We have been focused on adding offense this offseason, and feel that Kendrys will be a middle-of-the-order bat for us," Seattle General Manager Jack Zduriencik said in a report on Major League Baseball's website.
"He's a switch-hitter with power who has played - and hit - in the AL West. He's familiar with the teams and parks and is a proven run-producer."
Seattle was last in the American League in runs scored with 619, 148 fewer runs than third-best Los Angeles.
The Cuban-born Morales, 29, hit .273 with 22 home runs and 73 RBIs last year in 134 games in his first season back after missing all of 2011 with a broken left leg.
Before his injury, suffered when he landed awkwardly while jumping into a group of team mates after hitting a walk-off grand slam homer, Morales was one of MLB's emerging sluggers after hitting .306 with 34 home runs and 108 RBIS in 2009.
The trade of Morales freed up some lineup space for 26-year-old Mark Trumbo, who hit 32 home runs with 95 RBIs for the Angels last season bouncing between the outfield, first base, third base and designated hitter.
Vargas, also 29, pitched the last four seasons with Seattle, posting a 36-42 record with a 4.09 ERA. The lefty, who went 14-11 with a 3.85 ERA last season, was a Mariners workhorse, logging more than 200 innings in each of the last two years.
He has pitched well in the past at Angel Stadium, registering a 3-1 record with a 2.27 ERA in seven career outings in the ball park.
The deal involved two players entering their final season of arbitration eligibility, with both set to become free agents after the 2013 season.
RB Richardson thinks Saban will stay at Alabama
Labels: SportsBEREA, Ohio (AP) — Trent Richardson would be surprised if Nick Saban followed him from Alabama to the Cleveland Browns.
Saban, who will lead the Crimson Tide against Notre Dame in the BCS national championship game in Miami on Jan. 7, has been mentioned as returning to the NFL, perhaps with the Browns if second-year coach Pat Shurmur is fired at season's end.
"I can't see him coming to the NFL," Richardson said Wednesday. "I would be very shocked."
And Richardson knows the coach quite well. After all, he was a standout running back for Saban at Alabama before being selected in the first round by Cleveland in April. Richardson ran for 1,679 yards last season for the Crimson Tide.
"How can you get tired of winning," Richardson asked. "He's got so much going there. He has no reason to leave. He gets what he needs and he treats his program like the NFL (anyway). He makes sure his players are prepared for the game and prepared for the next level when the time comes."
Any exit to the NFL wouldn't be foreign to Saban, who led Alabama to national titles in 2009 and 2011. He left his post at LSU, in fact, to become coach of the Miami Dolphins in 2005. After going 15-17 in two seasons there, he went back to the SEC, this time in Tuscaloosa, Ala.
"I can see him staying at Alabama," Richardson said, "and retiring at Alabama."
Saban, who played and coached at Kent State, has Cleveland roots, as well. He was the Browns defensive coordinator from 1991-94, which has helped to spark the speculation.
"I don't believe it," Richardson said. "Rumors are rumors. I don't buy into it and that's one thing he taught me to do — not buy into rumors."
Richardson is more concerned with playing the playoff-bound Denver Broncos (11-3) on Sunday. The No. 3 overall pick is 46 yards shy of surpassing Hall of Fame standout Jim Brown's 55-year-old team rookie rushing record of 942 yards for the Browns (5-9).
"I'm ready for a big day," Richardson said. "Anytime Jim Brown's name is mentioned, it is big for me. Huge."
Richardson, who missed all of training camp after having minor surgery on his left knee in July, has already set a new franchise rookie mark with 11 rushing touchdowns. Overall, he has 258 carries for 897 yards.
"I'm good to go," he said. "No issues with the knee. None. With the ribs, I am not going to stop playing ball. I am going to keep on going no matter what."
All that said, he did reveal for the first time that he occasionally had trouble breathing in his first few games with the injury. He has adjusted his mindset to ignore the pain. He doesn't anticipate difficulty in Denver's mile-high thin air.
"I've never played there, but I'll be OK," he said. "If I need oxygen, I'll take it and go play."
Shurmur has not considered resting Richardson, either.
"He'll play," he said. "None of us are 100 percent right now. I think that's fair to say at this time of year. Guys are playing through things."
___
NOTES: DB Dmitri Patterson, released by Cleveland on Monday, landed with Miami. Shurmur declined to say why Patterson was cut: "I'm not going to talk about the whys or what-fors there. I will say this though, I'm happy for him that he's going to be able to finish out the year in Miami. That will be great for him." ... TE Jordan Cameron (head) and DL Frostee Rucker (groin) did not practice. ... WR Jordan Norwood practiced for the first time since sustaining a foot injury Oct. 7. He's not on the active roster. ... TE George Bryan was signed to the practice squad. He played at N.C. State (2008-11) and was in camp with Dallas last spring. ... The Browns are 3-0 vs. the AFC West, with the first-place Broncos on deck.
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Saban, who will lead the Crimson Tide against Notre Dame in the BCS national championship game in Miami on Jan. 7, has been mentioned as returning to the NFL, perhaps with the Browns if second-year coach Pat Shurmur is fired at season's end.
"I can't see him coming to the NFL," Richardson said Wednesday. "I would be very shocked."
And Richardson knows the coach quite well. After all, he was a standout running back for Saban at Alabama before being selected in the first round by Cleveland in April. Richardson ran for 1,679 yards last season for the Crimson Tide.
"How can you get tired of winning," Richardson asked. "He's got so much going there. He has no reason to leave. He gets what he needs and he treats his program like the NFL (anyway). He makes sure his players are prepared for the game and prepared for the next level when the time comes."
Any exit to the NFL wouldn't be foreign to Saban, who led Alabama to national titles in 2009 and 2011. He left his post at LSU, in fact, to become coach of the Miami Dolphins in 2005. After going 15-17 in two seasons there, he went back to the SEC, this time in Tuscaloosa, Ala.
"I can see him staying at Alabama," Richardson said, "and retiring at Alabama."
Saban, who played and coached at Kent State, has Cleveland roots, as well. He was the Browns defensive coordinator from 1991-94, which has helped to spark the speculation.
"I don't believe it," Richardson said. "Rumors are rumors. I don't buy into it and that's one thing he taught me to do — not buy into rumors."
Richardson is more concerned with playing the playoff-bound Denver Broncos (11-3) on Sunday. The No. 3 overall pick is 46 yards shy of surpassing Hall of Fame standout Jim Brown's 55-year-old team rookie rushing record of 942 yards for the Browns (5-9).
"I'm ready for a big day," Richardson said. "Anytime Jim Brown's name is mentioned, it is big for me. Huge."
Richardson, who missed all of training camp after having minor surgery on his left knee in July, has already set a new franchise rookie mark with 11 rushing touchdowns. Overall, he has 258 carries for 897 yards.
"I'm good to go," he said. "No issues with the knee. None. With the ribs, I am not going to stop playing ball. I am going to keep on going no matter what."
All that said, he did reveal for the first time that he occasionally had trouble breathing in his first few games with the injury. He has adjusted his mindset to ignore the pain. He doesn't anticipate difficulty in Denver's mile-high thin air.
"I've never played there, but I'll be OK," he said. "If I need oxygen, I'll take it and go play."
Shurmur has not considered resting Richardson, either.
"He'll play," he said. "None of us are 100 percent right now. I think that's fair to say at this time of year. Guys are playing through things."
___
NOTES: DB Dmitri Patterson, released by Cleveland on Monday, landed with Miami. Shurmur declined to say why Patterson was cut: "I'm not going to talk about the whys or what-fors there. I will say this though, I'm happy for him that he's going to be able to finish out the year in Miami. That will be great for him." ... TE Jordan Cameron (head) and DL Frostee Rucker (groin) did not practice. ... WR Jordan Norwood practiced for the first time since sustaining a foot injury Oct. 7. He's not on the active roster. ... TE George Bryan was signed to the practice squad. He played at N.C. State (2008-11) and was in camp with Dallas last spring. ... The Browns are 3-0 vs. the AFC West, with the first-place Broncos on deck.
French employers head sees mixed chance of labor reform success
Labels: BusinessPARIS (Reuters) - French company bosses and trade unions have a good chance of reaching a deal to overhaul rigid labor rules, the head of the main employers' federation said on Tuesday as a deadline neared.
The reforms are crucial to President Francois Hollande's efforts to revive the euro zone's second-biggest economy, which has been shedding jobs and struggling to generate the growth and revenue needed to bring the national debt burden into line with European Union rules.
With the last labor negotiating sessions due on Wednesday and Thursday, employers and unions are struggling to compromise on how to make hiring and firing easier while giving workers more security at the low end of the job market.
Hollande has told the two sides to reach an agreement before the end of the year or he would order his Socialist government to draft legislation without taking their recommendations into account.
"I think that we have at least a one in two chance of succeeding," Laurence Parisot, head of the MEDEF employers federation, told journalists.
The government can legislate on labor reform if talks collapse. But failing to sign up unions and employers means that this deal will lack crucial support from their constituents and likely face attempts to block or water it down in parliament.
"Never before have investors like Goldman Sachs or JPMorgan called me to ask whether I hoped we would succeed," Parisot said. "It's obvious that this negotiation is in the spotlight because investors know that it's very important."
France has been steadily losing ground on export markets, notably to other EU countries including Germany, for a decade and credit rating agencies say they are closely monitoring France's efforts to reform.
It has lost two of its three AAA rankings from the major agencies and the third, Fitch, warned last week that an expected peak in national debt of 94 percent of GDP in 2014 was "at the limit" for the credit grade.
To sign up to an agreement, Parisot said that employers need to see greater flexibility on moving workers within companies and reducing work time to adapt when demand is weak.
They also want workers' legal recourse in lay-offs to be reined in and reject union demands for short-term job contracts of as little as one week or one month to be taxed more heavily.
All unions are clinging to taxation of short contracts as a condition for signing a deal. The government needs at least three out of the five main unions to back an accord in order to use it as the basis to redraft labor laws early next year.
However, with unemployment already running at a 14-year high, unions are wary of anything that would make firing easier. One major union has rejected any deal imposing more flexibility.
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The reforms are crucial to President Francois Hollande's efforts to revive the euro zone's second-biggest economy, which has been shedding jobs and struggling to generate the growth and revenue needed to bring the national debt burden into line with European Union rules.
With the last labor negotiating sessions due on Wednesday and Thursday, employers and unions are struggling to compromise on how to make hiring and firing easier while giving workers more security at the low end of the job market.
Hollande has told the two sides to reach an agreement before the end of the year or he would order his Socialist government to draft legislation without taking their recommendations into account.
"I think that we have at least a one in two chance of succeeding," Laurence Parisot, head of the MEDEF employers federation, told journalists.
The government can legislate on labor reform if talks collapse. But failing to sign up unions and employers means that this deal will lack crucial support from their constituents and likely face attempts to block or water it down in parliament.
"Never before have investors like Goldman Sachs or JPMorgan called me to ask whether I hoped we would succeed," Parisot said. "It's obvious that this negotiation is in the spotlight because investors know that it's very important."
France has been steadily losing ground on export markets, notably to other EU countries including Germany, for a decade and credit rating agencies say they are closely monitoring France's efforts to reform.
It has lost two of its three AAA rankings from the major agencies and the third, Fitch, warned last week that an expected peak in national debt of 94 percent of GDP in 2014 was "at the limit" for the credit grade.
To sign up to an agreement, Parisot said that employers need to see greater flexibility on moving workers within companies and reducing work time to adapt when demand is weak.
They also want workers' legal recourse in lay-offs to be reined in and reject union demands for short-term job contracts of as little as one week or one month to be taxed more heavily.
All unions are clinging to taxation of short contracts as a condition for signing a deal. The government needs at least three out of the five main unions to back an accord in order to use it as the basis to redraft labor laws early next year.
However, with unemployment already running at a 14-year high, unions are wary of anything that would make firing easier. One major union has rejected any deal imposing more flexibility.
Euro zone rescuer Draghi faces daunting 2013
Labels: BusinessFRANKFURT (Reuters) - With two short sentences, the head of the European Central Bank took the heat out of the euro zone crisis this year. In 2013 Mario Draghi has to live up to even bigger expectations.
The ECB's own forecasts suggest the euro zone economy will shrink 0.3 percent next year and markets remain skeptical that the bloc's weaker members, such as Spain and Italy, can fund ballooning government deficits without formal aid programs.
Progress towards closer economic and fiscal union -- deemed essential by policymakers to solve the euro zone crisis -- is likely to be painfully slow in 2013 because two of the bloc's top three economies, Germany and Italy, hold elections.
Draghi's inbox will fill up quickly.
"There will be a lot of focus on preparation for the ECB as the new single supervisor," said Nick Matthews, economist at Nomura, referring to new plans for the ECB to take over supervision of the bloc's biggest banks.
"The other big challenge is the performance of the real economy - does confidence return as the ECB is expecting?"
Draghi had only been in office eight months when he pulled the euro zone back from the brink of break-up by saying in July: "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough."
Although he began 2012 relatively untried at the European level, with Berlin suspicious, the new ECB president won support from German Chancellor Angela Merkel and her nominee on the ECB board, Joerg Asmussen, for his bold plan to save the euro.
That involved the ECB standing ready to buy government bonds in secondary markets to bring down borrowing costs for stricken countries, provided they signed up to a tough program of economic targets.
Draghi's stroke of genius - or luck - was that during 2012 the mere threat of ECB action sufficed to push borrowing costs down by a critical two percentage points for Spain and Italy, without the need to actually intervene.
This was just as well, since the most influential single ECB council member - Germany's Jens Weidmann - opposed the plan.
Clemens Fuest, research director at Oxford University's Said Business School and an adviser to the German Finance Ministry, explained that Draghi's vow to "do whatever it takes" to save the euro and the development of his plan came at a time when Berlin was under intense pressure to hold the bloc together.
"They didn't like (being pushed to do more) and they knew this would take the pressures away from that area," he added.
For a man who likes to say "the proof is in the eyes of the beholder", Draghi will need to deliver on his pledge next year but without triggering another ECB internal schism that would blow the market confidence he has restored.
The first test is already looming. In Draghi's native Italy, the reforming government of technocrat Mario Monti has collapsed and there is no guarantee that elections early next year will deliver a strong government committed to economic reform.
This threatens to take the three-year-old crisis to a new level and further test Draghi's ability to get a convincing policy response from a fractured ECB Governing Council.
The ECB will likely need to activate its new bond-purchase program - dubbed Outright Monetary Transactions (OMT) - in 2013 to ease Spain's borrowing costs. Any intervention will have to be strong enough to show Draghi's pledge is credible.
Bundesbank chief Weidmann would rather not use the OMT at all. Others at the ECB would, and sooner rather than later.
"We would prefer them to apply," one member of the policymaking Governing Council, speaking on condition of anonymity, said with reference to the request for aid from Europe's bailout fund Madrid must make before the ECB can act.
If juggling these pressures is not enough, Draghi also faces the managerial challenge of building up a banking supervisory body at the ECB next year that is both credible but separate from the bank's main business of setting interest rates.
BANKING BEHEMOTH
The ECB's new supervisory role is part of a vision for a more integrated euro zone that Draghi has pushed for since he succeeded Frenchman Jean-Claude Trichet as ECB president in November, 2011.
Under a landmark deal last week, the ECB will have new powers from 2014 that will give it automatic oversight of around 150 of the euro zone's 6,000-odd banks, and the authority to intervene in smaller banks if there are signs of trouble.
The establishment of this single supervisory mechanism is a first step towards a banking union that will lay a cornerstone for closer economic integration.
The Governing Council member, speaking on condition of anonymity, described the banking union as being of "existential importance for the euro zone". It will later include a fund to wind down problem banks and a deposit guarantee scheme,
But he and others at the ECB still worry about how the central bank will handle its new supervisory role without compromising its independence on setting interest rates - for instance by keeping rates low to keep banks alive.
"This institution is starting to be overburdened," said the Council member, who wanted tight rules to delineate the bank's new supervisory role and to separate it from monetary policy.
Draghi's challenge here is two-fold: he needs to put the right structures and people in place to ensure the supervisor operates effectively. But he must also separate it from ECB monetary policy business or risk losing the bank's independence.
Draghi's solution is to keep himself out of the supervision business - a strategy that poses a risk of its own as the ECB must make the new body credible without the authority he brings.
"It's not going to be me who is going to take care of this," he told European lawmakers on Monday. "We have to make sure that monetary policy and supervision are rigorously separated."
TIGHTROPE WALK
One tightrope walk Draghi cannot opt out of its monetary policy: in the past this was mainly the business of setting interest rates to keep inflation in check. This year, Draghi took ECB's monetary policy to a new level with his OMT plan.
In Germany, however, the OMT plan has led to worries that Draghi is moving the ECB away from the Bundesbank model of fierce independence. Before the ECB can intervene under the program, a country must seek help from Europe's bailout fund.
"This means the ECB becomes dependent on fiscal policy decisions, and gives up its independence to a degree," said Fuest, who in March takes over as head of German think tank ZEW.
These concerns echo the views of Weidmann. The resignations last year of his predecessor, Axel Weber, and German chief economist Juergen Stark in protest at the ECB's previous bond-buying plan rocked the young central bank.
While Weidmann has indicated he will not resign, 65-year-old Draghi was only able to secure his OMT plan by isolating the Bundesbank chief. Draghi needs to keep him in a minority of one, or else risk his signature policy plan losing value.
This means Draghi may have to forgo the interest rate cut some at the ECB would like in 2013 to help the euro zone's recession-hit southern economies, just to avoid other hardliners - or hawks - joining Weidmann in opposing use of the OMT.
Euro zone rates are currently at 0.75 percent, higher than Britain's 0.5 percent and the Fed's rate of close to zero.
"Draghi's key task for 2013 is keeping the sharpest weapon the ECB has - the OMT - as sharp as possible by keeping as many of the Governing Council hawks on his side as possible," said Christian Schulz at Berenberg Bank, a former ECB economist.
"If there is a gradual recovery, as expected, his chances are good because another rate cut, which the hawks would not like, would not be needed."
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The ECB's own forecasts suggest the euro zone economy will shrink 0.3 percent next year and markets remain skeptical that the bloc's weaker members, such as Spain and Italy, can fund ballooning government deficits without formal aid programs.
Progress towards closer economic and fiscal union -- deemed essential by policymakers to solve the euro zone crisis -- is likely to be painfully slow in 2013 because two of the bloc's top three economies, Germany and Italy, hold elections.
Draghi's inbox will fill up quickly.
"There will be a lot of focus on preparation for the ECB as the new single supervisor," said Nick Matthews, economist at Nomura, referring to new plans for the ECB to take over supervision of the bloc's biggest banks.
"The other big challenge is the performance of the real economy - does confidence return as the ECB is expecting?"
Draghi had only been in office eight months when he pulled the euro zone back from the brink of break-up by saying in July: "Within our mandate, the ECB is ready to do whatever it takes to preserve the euro. And believe me, it will be enough."
Although he began 2012 relatively untried at the European level, with Berlin suspicious, the new ECB president won support from German Chancellor Angela Merkel and her nominee on the ECB board, Joerg Asmussen, for his bold plan to save the euro.
That involved the ECB standing ready to buy government bonds in secondary markets to bring down borrowing costs for stricken countries, provided they signed up to a tough program of economic targets.
Draghi's stroke of genius - or luck - was that during 2012 the mere threat of ECB action sufficed to push borrowing costs down by a critical two percentage points for Spain and Italy, without the need to actually intervene.
This was just as well, since the most influential single ECB council member - Germany's Jens Weidmann - opposed the plan.
Clemens Fuest, research director at Oxford University's Said Business School and an adviser to the German Finance Ministry, explained that Draghi's vow to "do whatever it takes" to save the euro and the development of his plan came at a time when Berlin was under intense pressure to hold the bloc together.
"They didn't like (being pushed to do more) and they knew this would take the pressures away from that area," he added.
For a man who likes to say "the proof is in the eyes of the beholder", Draghi will need to deliver on his pledge next year but without triggering another ECB internal schism that would blow the market confidence he has restored.
The first test is already looming. In Draghi's native Italy, the reforming government of technocrat Mario Monti has collapsed and there is no guarantee that elections early next year will deliver a strong government committed to economic reform.
This threatens to take the three-year-old crisis to a new level and further test Draghi's ability to get a convincing policy response from a fractured ECB Governing Council.
The ECB will likely need to activate its new bond-purchase program - dubbed Outright Monetary Transactions (OMT) - in 2013 to ease Spain's borrowing costs. Any intervention will have to be strong enough to show Draghi's pledge is credible.
Bundesbank chief Weidmann would rather not use the OMT at all. Others at the ECB would, and sooner rather than later.
"We would prefer them to apply," one member of the policymaking Governing Council, speaking on condition of anonymity, said with reference to the request for aid from Europe's bailout fund Madrid must make before the ECB can act.
If juggling these pressures is not enough, Draghi also faces the managerial challenge of building up a banking supervisory body at the ECB next year that is both credible but separate from the bank's main business of setting interest rates.
BANKING BEHEMOTH
The ECB's new supervisory role is part of a vision for a more integrated euro zone that Draghi has pushed for since he succeeded Frenchman Jean-Claude Trichet as ECB president in November, 2011.
Under a landmark deal last week, the ECB will have new powers from 2014 that will give it automatic oversight of around 150 of the euro zone's 6,000-odd banks, and the authority to intervene in smaller banks if there are signs of trouble.
The establishment of this single supervisory mechanism is a first step towards a banking union that will lay a cornerstone for closer economic integration.
The Governing Council member, speaking on condition of anonymity, described the banking union as being of "existential importance for the euro zone". It will later include a fund to wind down problem banks and a deposit guarantee scheme,
But he and others at the ECB still worry about how the central bank will handle its new supervisory role without compromising its independence on setting interest rates - for instance by keeping rates low to keep banks alive.
"This institution is starting to be overburdened," said the Council member, who wanted tight rules to delineate the bank's new supervisory role and to separate it from monetary policy.
Draghi's challenge here is two-fold: he needs to put the right structures and people in place to ensure the supervisor operates effectively. But he must also separate it from ECB monetary policy business or risk losing the bank's independence.
Draghi's solution is to keep himself out of the supervision business - a strategy that poses a risk of its own as the ECB must make the new body credible without the authority he brings.
"It's not going to be me who is going to take care of this," he told European lawmakers on Monday. "We have to make sure that monetary policy and supervision are rigorously separated."
TIGHTROPE WALK
One tightrope walk Draghi cannot opt out of its monetary policy: in the past this was mainly the business of setting interest rates to keep inflation in check. This year, Draghi took ECB's monetary policy to a new level with his OMT plan.
In Germany, however, the OMT plan has led to worries that Draghi is moving the ECB away from the Bundesbank model of fierce independence. Before the ECB can intervene under the program, a country must seek help from Europe's bailout fund.
"This means the ECB becomes dependent on fiscal policy decisions, and gives up its independence to a degree," said Fuest, who in March takes over as head of German think tank ZEW.
These concerns echo the views of Weidmann. The resignations last year of his predecessor, Axel Weber, and German chief economist Juergen Stark in protest at the ECB's previous bond-buying plan rocked the young central bank.
While Weidmann has indicated he will not resign, 65-year-old Draghi was only able to secure his OMT plan by isolating the Bundesbank chief. Draghi needs to keep him in a minority of one, or else risk his signature policy plan losing value.
This means Draghi may have to forgo the interest rate cut some at the ECB would like in 2013 to help the euro zone's recession-hit southern economies, just to avoid other hardliners - or hawks - joining Weidmann in opposing use of the OMT.
Euro zone rates are currently at 0.75 percent, higher than Britain's 0.5 percent and the Fed's rate of close to zero.
"Draghi's key task for 2013 is keeping the sharpest weapon the ECB has - the OMT - as sharp as possible by keeping as many of the Governing Council hawks on his side as possible," said Christian Schulz at Berenberg Bank, a former ECB economist.
"If there is a gradual recovery, as expected, his chances are good because another rate cut, which the hawks would not like, would not be needed."
Dassault Aviation names Trappier as next CEO
Labels: BusinessPARIS (Reuters) - Dassault Aviation said the head of its international operations, Eric Trappier, would take over as chief executive when Charles Edelstenne reaches retirement age in January.
His deputy will be Loik Segalen, currently director of economic affairs at the maker of French warplanes and business jets, Dassault said in a statement on Tuesday.
Trappier and Segalen, both 52, had been identified in press reports as possible successors to Edelstenne, who will step down on January 8 ahead of his 75th birthday.
Industry sources say Edelstenne, who will stay on the board, is expected to remain an influential figure.
He joined Dassault Aviation in 1960 and became its chief executive in 2000, succeeding Serge Dassault, the son of company founder Marcel Dassault.
Dassault is seen as a key player in possible French defense industry consolidation involving Thales and Safran .
Aerospace and defense group EADS controls 46.3 percent of Dassault Aviation.
Dassault shares were little changed at 745 euros at 1326 GMT. The stock is up almost a third this year and has more than quadrupled in value in the 12 1/2 years since Edelstenne became CEO.
Read More..
His deputy will be Loik Segalen, currently director of economic affairs at the maker of French warplanes and business jets, Dassault said in a statement on Tuesday.
Trappier and Segalen, both 52, had been identified in press reports as possible successors to Edelstenne, who will step down on January 8 ahead of his 75th birthday.
Industry sources say Edelstenne, who will stay on the board, is expected to remain an influential figure.
He joined Dassault Aviation in 1960 and became its chief executive in 2000, succeeding Serge Dassault, the son of company founder Marcel Dassault.
Dassault is seen as a key player in possible French defense industry consolidation involving Thales and Safran .
Aerospace and defense group EADS controls 46.3 percent of Dassault Aviation.
Dassault shares were little changed at 745 euros at 1326 GMT. The stock is up almost a third this year and has more than quadrupled in value in the 12 1/2 years since Edelstenne became CEO.
Canadian dollar edges weaker as commodity currencies dip
Labels: BusinessTORONTO (Reuters) - The Canadian dollar weakened slightly against its U.S. counterpart in early trade on Monday as commodity-linked currencies dipped after the Reserve Bank of Australia said mining investment had likely peaked.
While the euro strengthened against the greenback and global shares approached a three-month high on signs of compromise in U.S. talks to stop automatic tax hikes and spending cuts hurting the economy next year, the Canadian dollar dipped.
"CAD has weakened off a little since yesterday's close, it's been a bit of a volatile morning," said Camilla Sutton, chief currency strategist at Scotiabank.
"Interesting because the euro touched a new high overnight but CAD is failing to make new gains."
At 9:14 a.m. (1414 GMT), the Canadian dollar stood at C$0.9846 versus the U.S. dollar, or $1.0156, slightly below Monday's North American close at C$0.9837 versus the U.S. dollar, or $1.0166.
"All the other commodity currencies are also slightly weaker partially on the RBA's minutes, which highlighted that the investment boom in the mining industry is likely peaking, as well as a focus on employment, so that seems to be pulling down commodity currencies a little bit," Sutton said.
Australia's central bank said it decided to cut interest rates this month rather than wait because it saw further evidence that the peak in the mining investment boom was near, while the non-resource sector showed no signs of picking up.
The Reserve Bank of Australia expects the mining investment boom to peak sometime next year, according to minutes of the bank's December 4 meeting, released on Tuesday.
Canadian government bond prices were mixed, slipping across the long end. The two-year bond was down 0.5 Canadian cents to yield 1.155 percent, while the benchmark 10-year bond shed 16 Canadian cents to yield 1.841 percent.
Read More..
While the euro strengthened against the greenback and global shares approached a three-month high on signs of compromise in U.S. talks to stop automatic tax hikes and spending cuts hurting the economy next year, the Canadian dollar dipped.
"CAD has weakened off a little since yesterday's close, it's been a bit of a volatile morning," said Camilla Sutton, chief currency strategist at Scotiabank.
"Interesting because the euro touched a new high overnight but CAD is failing to make new gains."
At 9:14 a.m. (1414 GMT), the Canadian dollar stood at C$0.9846 versus the U.S. dollar, or $1.0156, slightly below Monday's North American close at C$0.9837 versus the U.S. dollar, or $1.0166.
"All the other commodity currencies are also slightly weaker partially on the RBA's minutes, which highlighted that the investment boom in the mining industry is likely peaking, as well as a focus on employment, so that seems to be pulling down commodity currencies a little bit," Sutton said.
Australia's central bank said it decided to cut interest rates this month rather than wait because it saw further evidence that the peak in the mining investment boom was near, while the non-resource sector showed no signs of picking up.
The Reserve Bank of Australia expects the mining investment boom to peak sometime next year, according to minutes of the bank's December 4 meeting, released on Tuesday.
Canadian government bond prices were mixed, slipping across the long end. The two-year bond was down 0.5 Canadian cents to yield 1.155 percent, while the benchmark 10-year bond shed 16 Canadian cents to yield 1.841 percent.
Global shares at three-month high on U.S. "fiscal cliff" optimism
Labels: BusinessNEW YORK (Reuters) - Signs of compromise in U.S. talks to stop automatic tax hikes and spending cuts hurting the economy next year pushed world shares to their highest level since September on Tuesday and weakened investor appetite for safe-haven bonds and the dollar.
Wall Street opened slightly higher as investors continued to expect a deal would be reached to avert the "fiscal cliff," though caution remained in the absence of any concrete progress.
Gains were limited following a steep rally in the previous session, which lifted the S&P 500 to its highest in nearly two months, but hopes for a deal grew on signs of compromise between the major political parties in Washington.
"We've been getting a series of snippets suggesting accommodation from both Boehner and Obama, which is feeding the sense in markets that we could get a deal," said Michael Holland, chairman of Holland & Co in New York.
Investors have been reluctant to make big bets in the face of the uncertainty over the budget.
"You can never discount the possibility that the government will do something dumb and screw this up, but right now the market is happy over the prospects for a deal," said Holland, who oversees $4 billion in assets.
The political divide narrowed on Monday night when President Barack Obama proposed leaving lower tax rates in place for those earning under $400,000, moving closer to the $1 million threshold favored by Republican House of Representatives Speaker John Boehner.
The Dow Jones industrial average <.dji> was up 52.22 points, or 0.39 percent, at 13,287.61. The Standard & Poor's 500 Index <.spx> was up 7.60 points, or 0.53 percent, at 1,437.96. The Nasdaq Composite Index <.ixic> was up 21.77 points, or 0.72 percent, at 3,032.37.
European shares rose close to 2012 highs on Tuesday, with the FTSEurofirst 300 index <.fteu3> up 0.48 percent at 1,138.01. The rally pushed the MSCI index of global stocks <.miwd00000pus> up 0.5 percent, its highest level since September, with an 18-month peak also in sight.
The euro hovered near a 7-1/2-month high against the dollar on the signs of progress in the U.S. budget talks and generally improving investor sentiment on euro zone assets, while market players sold the safe-haven dollar.
The euro was last up 0.1 percent on the day at $1.31808, near a 7-1/2 month high of $1.3191 hit on Monday. The dollar index <.dxy> slipped to a two-month low of 79.606.
Brent crude rose 68 cents to $108.32 a barrel while U.S. crude oil gained 54 cents to $87.74 a barrel. It climbed above the 50-day moving average, a key technical indicator watched by traders, for the first time since early December.
BUNDS FADE
In bond markets, trading remained subdued ahead of the year-end. U.S. and German government bonds futures slipped as increasing signs of progress in the U.S. budget talks eased demand for low-risk assets.
The benchmark 10-year U.S. Treasury note was down 6/32, with the yield at 1.7926 percent.
Sweden cut its interest rates back to 1 percent and Turkey cut rates for the first time in more than a year, while India's central bank reiterated its guidance of further easing in the first quarter of 2013.
Concerns that new fiscal stimulus could seriously increase the country's debt burden pushed the benchmark 10-year Japanese government bond yield to a one-month high of 0.750 percent.
With thin trade accentuating moves, Spanish debt extended gains after a final bill sale of the year raised more than the target amount.
Spanish 10-year bond yields fell 7.5 basis points to 5.38 percent while the equivalent Italian debt fell 8 bps to 4.49 percent, back to where it was before Prime Minister Mario Monti sparked a wave of selling earlier this month by announcing he would resign early.
Read More..
Wall Street opened slightly higher as investors continued to expect a deal would be reached to avert the "fiscal cliff," though caution remained in the absence of any concrete progress.
Gains were limited following a steep rally in the previous session, which lifted the S&P 500 to its highest in nearly two months, but hopes for a deal grew on signs of compromise between the major political parties in Washington.
"We've been getting a series of snippets suggesting accommodation from both Boehner and Obama, which is feeding the sense in markets that we could get a deal," said Michael Holland, chairman of Holland & Co in New York.
Investors have been reluctant to make big bets in the face of the uncertainty over the budget.
"You can never discount the possibility that the government will do something dumb and screw this up, but right now the market is happy over the prospects for a deal," said Holland, who oversees $4 billion in assets.
The political divide narrowed on Monday night when President Barack Obama proposed leaving lower tax rates in place for those earning under $400,000, moving closer to the $1 million threshold favored by Republican House of Representatives Speaker John Boehner.
The Dow Jones industrial average <.dji> was up 52.22 points, or 0.39 percent, at 13,287.61. The Standard & Poor's 500 Index <.spx> was up 7.60 points, or 0.53 percent, at 1,437.96. The Nasdaq Composite Index <.ixic> was up 21.77 points, or 0.72 percent, at 3,032.37.
European shares rose close to 2012 highs on Tuesday, with the FTSEurofirst 300 index <.fteu3> up 0.48 percent at 1,138.01. The rally pushed the MSCI index of global stocks <.miwd00000pus> up 0.5 percent, its highest level since September, with an 18-month peak also in sight.
The euro hovered near a 7-1/2-month high against the dollar on the signs of progress in the U.S. budget talks and generally improving investor sentiment on euro zone assets, while market players sold the safe-haven dollar.
The euro was last up 0.1 percent on the day at $1.31808, near a 7-1/2 month high of $1.3191 hit on Monday. The dollar index <.dxy> slipped to a two-month low of 79.606.
Brent crude rose 68 cents to $108.32 a barrel while U.S. crude oil gained 54 cents to $87.74 a barrel. It climbed above the 50-day moving average, a key technical indicator watched by traders, for the first time since early December.
BUNDS FADE
In bond markets, trading remained subdued ahead of the year-end. U.S. and German government bonds futures slipped as increasing signs of progress in the U.S. budget talks eased demand for low-risk assets.
The benchmark 10-year U.S. Treasury note was down 6/32, with the yield at 1.7926 percent.
Sweden cut its interest rates back to 1 percent and Turkey cut rates for the first time in more than a year, while India's central bank reiterated its guidance of further easing in the first quarter of 2013.
Concerns that new fiscal stimulus could seriously increase the country's debt burden pushed the benchmark 10-year Japanese government bond yield to a one-month high of 0.750 percent.
With thin trade accentuating moves, Spanish debt extended gains after a final bill sale of the year raised more than the target amount.
Spanish 10-year bond yields fell 7.5 basis points to 5.38 percent while the equivalent Italian debt fell 8 bps to 4.49 percent, back to where it was before Prime Minister Mario Monti sparked a wave of selling earlier this month by announcing he would resign early.
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