FACTBOX-What’s ahead in the U.S. debt limit fight

July 29 | Sat Jul 30, 2011 12:32am EDT

(Reuters) – Congress has just days to raise the U.S. debt ceiling before the government starts running out of money to pay all its bills, but lawmakers spent Friday engaged in parliamentary maneuvers rather than constructive negotiations.

Congress will need to have a deal in place by Monday morning to avoid further disruption to financial markets.

Here is a rundown of how a deal could work. As with everything in Congress, this scenario could change dramatically.

* The Senate is scheduled to hold a procedural vote at 1 a.m. EDT Sunday (0500 GMT) on a revised debt-ceiling proposal offered by Senate Democratic Leader Harry Reid.

* Sixty votes would be needed to clear that hurdle — which means at least seven Republican votes are needed if all 53 Democrats back it.

* If that vote succeeds, a vote on final passage would come around 7:30 a.m. EDT (1130 GMT) on Monday, unless all 100 senators agree to vote before then.

* The House is due to vote on the measure as well — presumably to kill it. That vote is expected on Saturday between 1 p.m. EDT (1700 GMT) and 3 p.m. EDT (1900 GMT). If the House kills the bill before the Senate acts, will the Senate still go ahead with its vote?

* Senate Republican Leader Mitch McConnell wants to work out a deal, but not with Reid. Republican aides say he wants the White House involved to assure that Democrats will be on board with any final product.

* McConnell shares a rapport with Vice President Joe Biden, and the two were central players in last year’s tax-cut deal. Biden could be a key player over the weekend.

* Senate Democrats don’t want a vote any later than Monday morning. Presumably any deal that gets worked out will ensure that the Senate can waive its arcane procedural rules to ensure quick action. (Reporting byAndy Sullivan; editing by Eric Beech)

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Macquarie, IFM eyeing Sydney desalination bid: sources

SYDNEY | Thu Jul 28, 2011 7:51am EDT

(Reuters) – Australia’s Macquarie Group (MQG.AX) has teamed up with investment manager Industry Funds Management to bid in the privatization of a Sydney desalination plant, in a deal potentially worth $2.1 billion, sources said on Thursday.

The sale is also expected to attract interest from General Electric (GE.N), France’s Suez Environment (SEVI.PA), Hong Kong’s Cheung Kong Infrastructure (1038.HK) and pension funds, sources familiar with the matter told Reuters and Reuters Basis Point.

The New South Wales state government earlier this week appointed investment bank Goldman Sachs (GS.N) to advise on the sale. The government was still working out the timetable for the sale process, one source said, though bidders are expecting it to kick off later in the year.

Deutsche Bank’s (DBKGn.DE) asset management firm RREEF and Canadian pension funds such as Ontario Teachers’ Pension Plan and Canada Pension Plan Investment Board are also expected to take a look at the asset, the sources said.

Foreign investors have eyed a wave of infrastructure privatizations by Australian state governments in recent months. Hong Kong’s CLP Holdings (0002.HK) and Origin Energy (ORG.AX) agreed to buy $5.3 billion in energy assets from New South Wales state last December.

(1 = 0.907 Australian Dollars)

(Reporting by Sharon Klyne, additional reporting by Michael Smith; Editing by Balazs Koranyi)

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June durable goods orders fall on transportation

WASHINGTON | Wed Jul 27, 2011 9:00am EDT

(Reuters) – New orders for long-lasting U.S. manufactured goods fell in June and a gauge of business spending plans slipped, supporting views that the economy will not emerge quickly from its current soft patch.

The Commerce Department said on Wednesday durable goods orders dropped 2.1 percent, weighed down by weak receipts for transportation equipment, after a 1.9 percent increase in May.

Excluding transportation, orders edged up 0.1 percent after gaining 0.7 percent in May.

Durable goods are items ranging from toasters to aircraft that are meant to last three years or more.

Economists had expected overall orders to rise 0.3 percent.

“It is indicative of the lingering effects of this soft patch that we’ve had here recently where businesses remain very cautious with regard to building any kind of stocks in anticipation of increasing final sales,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia.

Treasuries prices pared earlier losses on the data, while the dollar extended losses against the yen.

Durable goods orders are a leading indicator of manufacturing. Though orders tend to be volatile, last month’s unexpected decline could add to fears of a slowdown in factory activity.

Manufacturing has been the bright spot in the economy, whose recovery has faltered since the start of the year.

Data on Friday is expected to show the economy grow at a 1.8 percent annual rate in the second quarter, according to a Reuters survey, after expanding 1.9 percent in the January-March period.

Orders last month were pulled down by an 8.5 percent drop in orders for transportation equipment. That reflected a 28.9 percent plunge in aircraft orders.

Boeing received 48 aircraft orders, up from 27 in May, according to information posted on the plane maker’s website. However, the bulk of the orders were for its less expensive models.

Motor vehicle orders dropped 1.4 percent as manufacturers continue to deal with disruptions to production following the earthquake in Japan. Motor vehicle orders rose 0.3 percent in May.

Outside of transportation, orders for machinery fell 2.3 percent, while primary metals rose 1.0 percent. Capital goods orders fell 4.1 percent, while computers and electronic products edged up.

Non-defense capital goods orders excluding aircraft, a closely watched proxy for business spending, slipped 0.4 percent last month after a revised 1.7 percent rise in May.

Economists had expected a 0.8 percent gain from a previously reported 1.6 percent increase.

Shipments of non-defense capital goods orders excluding aircraft, which go into the calculation of gross domestic product, rose 1.0 percent after increasing 1.7 percent in May.

A separate report showed demand for loans to purchase houses fell for a third straight week to the lowest since late February, suggesting home sales will remain weak.

The Mortgage Bankers Association said its mortgage purchase index fell 3.8 percent last week.

(Reporting by Lucia Mutikani, Editing by Andrea Ricci)

 

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Chrysler Q2 net loss widens after debt repayment

DETROIT | Tue Jul 26, 2011 9:39am EDT

(Reuters) – Chrysler Group LLC, controlled by Fiat SpA (FIA.MI), reported a second-quarter net loss on Tuesday after the U.S. automaker repaid $7.6 billion in loans to the U.S. and Canadian governments.

In May, Chrysler repaid the government debt stemming from its 2009 federal bailout. Excluding a $551 million charge related to the debt repayment, Chrysler reported an adjusted profit of $181 million.

“We are changing both the image and substance of our company in order to regain the faith of consumers,” Chief Executive Sergio Marchionne, who also leads Fiat, said in a statement.

Chrysler, whose brands include Jeep, reported a net loss for the second quarter of $370 million, compared with a net loss of $172 million a year earlier.

The company’s revenue rose 30 percent from a year earlier to $13.7 billion. Average transaction prices jumped 7 percent in the quarter.

The Auburn Hills, Michigan-based company reported a 19 percent increase in worldwide vehicle sales, helped by sales of the Jeep Grand Cherokee, Chrysler 200 and the Dodge Durango in the company’s biggest market, the United States.

Those vehicles were part of Chrysler’s 16 new and revamped products that it unveiled in late 2010. The U.S. automaker is now in the midst of developing a smaller sedan that will compete with Honda Motor Co’s (7267.T) Civic and Toyota Motor Co’s (7203.T) Corolla.

Chrysler emerged from a federally funded bankruptcy more than two years ago under management of Fiat. The Italian automaker, which is also reporting quarterly results Tuesday, last week took majority control of Chrysler.

No. 2 U.S. automaker Ford Motor Co (F.N) also reported second-quarter earnings on Tuesday, beating Wall Street expectations by 5 cents a share. Ford’s net income fell to $2.4 billion in the quarter, or 59 cents per share, from $2.6 billion or 61 cents per share a year ago.

(Reporting by Deepa Seetharaman, editing by Gerald E. McCormick and Matthew Lewis)

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Obama calls for compromise on debt

WASHINGTON, July 25 | Mon Jul 25, 2011 9:17pm EDT

(Reuters) – President Barack Obama said on Monday a temporary six-month extension of debt ceiling does not solve the problem and might not be enough to avoid credit downgrade.

Obama said he has told leaders of both parties they must come with a fair compromise in the news few days that can pass Congress. (Reporting byJoAnne Allen; editing by Christopher Wilson)

 

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SCENARIOS-Dwindling options left for debt limit talks

By Tim Reid

WASHINGTON, July 22 | Fri Jul 22, 2011 9:04pm EDT

(Reuters) – Talks between President Barack Obama and Republicans to raise the U.S. debt limit collapsed on Friday after John Boehner, the top Republican in Congress, walked out of negotiations.

With just 11 days before an Aug. 2 deadline, when the Treasury Department says the United States will run out of ways to service government debt without an increase in the borrowing cap, options to avert a devastating default are narrowing.

Obama and Boehner both said on Friday night they are confident the United States will not default. Here are some scenarios for raising the limit by the August deadline.

MCCONNELL “FALLBACK” PLAN

A backup “failsafe” plan first proposed by Mitch McConnell, the top Senate Republican, has reemerged as perhaps the most realistic option that will allow the debt limit to be raised in time.

Through a complex back-and-forth between the White House and Congress, it would allow Obama to raise the debt limit by $2.4 trillion in three installments through November 2012, when Obama and most lawmakers are up for re-election.

The Obama administration says the borrowing cap needs to be extended by $2.4 trillion to let the U.S. government meet its obligations through that time period.

Under the McConnell plan, Republicans would not have to vote to raise the debt limit.

Obama said on Friday that “at a minimum” the debt has to be raised and that he will take responsibility for that if the McConnell plan passes Congress.

AN ALL SPENDING CUTS, NO REVENUES PLAN

The great sticking point in the debt talks has been the question of taxes. Obama has wanted a “balanced” approach to deficit reduction — a combination of spending cuts and revenue increases. Obama said on Friday he had been seeking $1.2 trillion in revenues by closing tax loopholes, but not hiking tax rates.

The House Republican leadership has insisted that any deal that involves revenue increases will not have the votes to pass the chamber, and it was the issue of revenues that led to the collapse of talks on Friday.

One package that could pass the House is a deal that contains just spending cuts. Yet whether that could pass the Democratic-controlled Senate is far from clear.

TALKS RESUME

Friday night saw Obama and Boehner both hold press conferences. Boehner blamed Obama’s demands for more revenues on the impasse. Obama blamed House Republican intransigence.

It offered both the chance to claim how far they had been willing to go to reach a deal. It is not inconceivable that after the drama of Friday night — and the shock of negotiations breaking down — the air could be cleared and Obama-Boehner talks could resume.

Remarkably, it emerged on Friday night — after insisting for weeks that revenue increases were out of the question — that Boehner had been looking at $800 billion in revenue increases through tax loophole closures before the talks collapsed, suggesting a deal was closer at hand than thought.

Boehner said he had accepted an invitation to return to the White House on Saturday for more talks with Obama, along with the top Democrats in the House and Senate and the top Senate Republican.

OBAMA INVOKES THE CONSTITUTION

Some have argued that Obama could ignore Congress and order continued borrowing, by relying on the 14th Amendment of the U.S. Constitution, if it fails to raise the debt limit.

The fourth section of the 14th Amendment states the United States’ public debt “shall not be questioned”.

Former Democratic president Bill Clinton said this week that if it came to averting default, he would invoke the 14th Amendment, raise the debt ceiling and “force the courts to stop me”.

Obama said on Friday White House lawyers had explored the option and they are “not persuaded” that it is a winning argument. But he did not rule it out. (Reporting by Tim Reid)

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India’s monsoon rains 7 pct above normal in past week

NEW DELHI, July 21 | Thu Jul 21, 2011 3:45am EDT

(Reuters) – India’s key monsoon rains were 7 percent above normal in the week to July 20, improving from about a fifth below average rains in the previous week, the weather office said on Thursday.

India’s June to September monsoon rains are crucial to crop production in 60 percent of the country that does not have adequate irrigation. (Reporting by Ratnajyoti Dutta; editing by Malini Menon)

 

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AFTRA Board Says Yes to Proposals for Sound Recordings, Network TV Contracts

By Joshua L. Weinstein at TheWrap

Wed Jul 20, 2011 2:10pm EDT

The American Federation of Television and Radio Artists national board of directors approved two packages of proposals during meetings Tuesday and Wednesday, the union announced Wednesday.

The board gave its nod to proposals for the renegotiation of the AFTRA Sound Recordings Code and its National Television Code.

Here’s the union’s announcement:

AFTRA National Board Approves Proposals for

Sound Recordings and Network Television Contracts

Explores Schedule Adjustment to Prioritize Sound Code Negotiations

and New Union Discussions

Seattle, Wash. (July 20, 2011) — The National Board of Directors of the American Federation of Television and Radio Artists, AFL-CIO – a national union of more than 70,000 recording artists, broadcasters, actors, singers, dancers and other performers and professionals who work across the spectrum of media industries including television, radio, cable, sound recordings and digital media – convened its July 19-20 face-to-face plenary meeting prior to the 63rd AFTRA National Convention which starts on Thursday.

The AFTRA National Board approved a package of proposals for the renegotiation of the AFTRA Sound Recordings Code, the Union’s second largest national contract, which covers recordings on all media and all music formats, as well as audiobooks, comedy albums and cast albums. The Sound Code will expire on Dec. 31, 2011, and negotiations with the major music labels are scheduled to commence on Aug. 15 in New York City. The negotiations are conducted between AFTRA and the major record labels (SONY, BMG, EMI, Warner Music, and Universal Music Group) as well as the Disney family of record labels

The Board also approved a package of proposals for the renegotiation of the AFTRA Network Television Code “Front of the Book,” the Union’s largest national contract which is currently scheduled to expire on Nov. 15, 2011.

The “Front of the Book” covers all types of programming in television, except for local and national news broadcasts and primetime dramatic programs on the networks and The CW. It includes dramas in first-run syndication, morning news shows, talk shows, daytime serials (soap operas), variety, reality, contest and sports. Current programs covered by this contract include “Good Morning America,” “The View,” “The Price is Right,” “Days of Our Lives,” “Saturday Night Live,” “Dancing with the Stars,” “American Idol,” “Monday Night Football,” “Survivor,” “20/20,” “Deal or No Deal,” “Late Show with David Letterman,” among many others.

The members of the National Board unanimously authorized AFTRA’s negotiators to explore an adjustment to the negotiating schedule of the Network Television Code. The adjustment would enable AFTRA members to focus on their immediate bargaining of the Sound Recordings Code. Further, it would permit the new union discussions with members of the Screen Actors Guild to continue in the early fall, and with the full participation of AFTRA member leaders and professional staff.

“The Sound Recordings Code is an important contract for thousands of AFTRA recording artists in large, small and emerging markets across the nation,” said AFTRA National Executive Director Kim Roberts Hedgpeth, who serves as the Union’s Chief Negotiator on both contracts. “A slight adjustment to our negotiating schedule for the Network Television Code is a reflection of AFTRA National Board’s commitment to take care of AFTRA members’ business. It will help ensure that as the music industry continues its tumultuous evolution, our recording artists’ Sound Code negotiations receive our full attention. We are making clear that AFTRA is coming to the bargaining table in three weeks fully prepared and ready to advocate strongly for our recording artist members’ needs.”

The National Board approved a recommendation by staff to continue the AFTRA Television and Radio Commercials contracts for a period of one year which would move the expiration dates both contracts from March 31, 2012 to March 31, 2013. The same action was previously approved by the SAG National Board for the SAG Television Commercials contract.

Board members today approved a new, landmark Organizing Incentive Program to provide AFTRA Locals additional support to continue building organizing programs to increase union density in local markets. In 2009, Delegates the 62nd AFTRA National Convention in Chicago approved an increase to the Union’s initiation fee with all new funds directed to support the AFTRA organizing initiative.

Phil Denniston, AFTRA National Director of Organizing, who developed the new program, presented it to the Board saying, “The 2009 Convention Resolution was a good start towards building the organizing capacity within AFTRA to carry out the type of organizing campaigns needed to survive and thrive in the future. Member mobilization is inherently the jurisdiction of AFTRA Locals and for new organizing to be effective, Local members must be full participants. This new incentive program will better position this Union to embrace new organizing opportunities and mobilize local members throughout the country for upcoming contract negotiations.”

A key feature of the Organizing Incentive Program is an annual “matching fund” from the dedicated organizing revenue raised by the initiation fee increase with earmarks for both local and national organizing campaigns.

The members of the National Board unanimously approved sending a Resolution to the AFTRA National Convention affirming its “commitment to the process of uniting AFTRA and SAG” into a “strong, unified successor union committed to organizing,” and further, confirming that “all prior Convention Resolutions regarding previous merger attempts will have no further applicability.”

President Reardon said: “We are working to build a new successor union and this effort is critically important to union members who work in our industries, as evidenced by the fact that the universe of our work is reflected in the members who were appointed (in May 2011) to the AFTRA New Union Committee. We are not building this new house out of sand. We’re building it out of rock, and you are that rock.”

At its previous meeting on May 14, the AFTRA National Board instructed the AFTRA New Union committee to begin meeting with SAG no later than June 30, 2011 in order to develop a merger agreement, a constitution and a dues structure for presentation to the AFTRA National Board by the end of January 2012.

The AFTRA National Board of Directors unanimously passed a motion expressing support for the national Joining Forces initiative which was launched earlier this year by First Lady Michelle Obama and Dr. Jill Biden to support American service members and their families. The Board’s motion formally endorsed the Joining Forces Inter-Guild Task Force which was created by AFTRA, DGA, SAG, WGA-West and the Producers Guild of America to provide creative and production support for the initiative, and to inform and inspire their memberships about the service and sacrifice of America’s military families.

In other action, the Board approved a Finance Committee request for an expenditure to facilitate several upgrades and enhancements to AFTRA’s award-winning website, AFTRA.com.

The next meeting of the National Board will take place on the morning of Sunday, July 24 following the conclusion of the 63rd AFTRA National Convention, when the newly elected Board will be formally seated.

About AFTRA

The American Federation of Television and Radio Artists, AFL-CIO, are the people who entertain and inform America. In 32 Locals across the country, AFTRA members work as actors, broadcasters, singers, dancers, announcers, hosts, comedians, disc jockeys, and other performers across the media industries including television, radio, cable, sound recordings, music videos, commercials, audio books, non-broadcast industrials, interactive games, the Internet and other digital media. The 70,000 professional performers, broadcasters, and recording artists of AFTRA are working together to protect and improve their jobs, lives, and communities in the 21st century. From new art forms to new technology, AFTRA members embrace change in their work and craft to enhance American culture and society. Visit AFTRA online at http://www.aftra.com.

Related Articles:  AFTRA Agrees to Pact With Videogame Maker

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US STOCKS-Wall Street gains on earnings, eyes Apple

Tue Jul 19, 2011 1:15pm EDT

 

* IBM rallies on strong new services business

* Apple at yearly high before reporting results

* Goldman, BofA hit 52-week lows after earnings

* Indexes up: Dow 1 pct, S&P 0.9 pct, Nasdaq 1.5 pct

* For up-to-the-minute market news see [STXNEWS/US] (Updates with comments on Apple in paragraphs 4-5)

By Aleksandra Michalska

NEW YORK, July 19 (Reuters) – U.S. stocks jumped 1 percent on Tuesday on strong earnings from IBM and Coca-Cola, offsetting investor disappointment in results from big financial firms.

The turnaround from Monday’s losses over debt worries also came from unexpectedly strong U.S. housing data.

Dow component International Business Machines Corp (IBM.N) added 4.3 percent to $182.84 a day after it said new business at its services division was up more than expected, raising hopes for the technology sector.

The S&P information technology sector .GSPT gained 1.9 percent, the top gainer among S&P sectors. Shares of Apple (AAPL.O) hit a 52-week high ahead of its report due after the closing bell. For details, see [ID:nN1E76H1DO]

“I don’t think it’s going to be a surprise that Apple earnings are going to be very good,” said Michael James, senior trader at regional investment bank Wedbush Morgan in Los Angeles. “The stock might have a significant move tomorrow. How big it’s going to be will depend on the guidance commentary that they give.”

The Dow Jones industrial average .DJI was up 123.40 points, or 1.00 percent, at 12,508.56. The Standard & Poor’s 500 Index .SPX was up 11.65 points, or 0.89 percent, at 1,317.09. The Nasdaq Composite Index.IXIC was up 42.21 points, or 1.53 percent, at 2,807.32.

The market has been preoccupied with corporate earnings, putting on the back burner wrangling in Washington over a deal to raise the debt ceiling. There is a growing sense that a last-ditch plan taking shape in Congress may be the only way to avoid a U.S. default. [ID:nN1E76H1Y0]

However, all 10 S&P 500 sectors rose on Tuesday, even financials despite by declines in Goldman Sachs Group Inc (GS.N) and Bank of America following their results. After advancing in the morning, Bank of America (BAC.N) fell 3 percent to $9.43. Goldman lost 2 percent, to $126.68.

“Goldman is a bellwether of the rest of the banks, and it should set the tone for the rest of them, but I wouldn’t be too pessimistic,” said Robert Francello, head of equity trading for Apex in San Francisco.

Those losses were offset by a 4 percent rise in shares of Wells Fargo (WFC.N) to $27.95 after it said profit rose 30 percent. [ID:nN1E76H058].

Housing starts topped forecasts in June to touch a six-month high, and permits for future construction unexpectedly increased, the government reported. Homebuilder D.R. Horton Inc (DHI.N) climbed 4.16 percent to $11.76 and the PHLX Housing Index .HGX rose 2 percent. [ID:nLDE76I14Y]

Goldman’s second-quarter net income fell short of lowered expectations as fixed income trading revenue dropped sharply. Bank of America recorded a second-quarter net loss of $8.8 billion after a big settlement with mortgage bond investors. [ID:nLDE76I122] [ID:nN1E76H0D0]

Coca-Cola Co (KO.N) posted slightly higher-than-expected profit on strength in emerging markets. Johnson & Johnson’s (JNJ.N) earnings topped estimates on a turnaround in its prescription medicines and stabilizing sales of over-the-counter medicines. [ID:nN1E76I03V] [ID:nN1E76I03I]

Coke rose 3 percent to $69.36, while J&J was 1 percent lower at $66.37. Both stocks are Dow components. (Additional reporting by Caroline Valetkevitch and Ryan Vlastelica; Editing by Kenneth Barry)

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Air France unions call for mid-summer strike

PARIS, July 18 | Mon Jul 18, 2011 1:17pm EDT

(Reuters) – Trade unions at Air France called on Monday for a four-day strike by flight attendants at the end of July, raising the threat of disruption for travellers over a peak holiday period.

The walkout, scheduled for July 29, 30, 31 and Aug. 1, is to be held in protest against a reorganisation of flight attendants’ work at regional hubs that Air France is setting up to counter competition from low-cost airlines.

“We refuse to become victims of productivity,” representatives of seven unions, including the CGT and CFDT, said in a statement.

“More than 80 percent of cabin crew say they are tired and any increase in workload is absolutely unacceptable.”

Air France plans to start operating connecting flights at its first provincial hub, in Marseille, in October, as part of efforts to regain market share on short- and mid-haul flights.

The opening of three further regional hubs — in Nice, Toulouse and Bordeaux, due by Spring, 2012 — should cut costs by 15 percent and allow for new routes to be opened toward destinations in France and Europe, the airline says.

The end of July and start of August is traditionally one of the busiest periods for French travellers, with thousands of families heading off for their summer holidays, and many others returning home after taking their annual break in July. (Reporting by Vicky Buffery)

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