Saturday, July 13, 2013
QUOTE OF THE DAY “All things being equal, [interest] rates going up is a good thing, as long as the economy keeps growing.” Jamie Dimon, chief executive officer, JPMorgan Article, 1DFed official: Bond buying must continue Federal Reserve Bank of St. Louis President James Bullard said the Fed shouldn’t trim its $85 billion in monthly bond purchases until inflation accelerates toward the central bank’s 2 percent goal.
“Pulling back on accommodation as inflation is sinking is not the right combination,” Bullard, who votes on monetary policy this year, said in a Bloomberg Television interview with Michael McKee to air Monday. “I’d like to see us do more” to ensure inflation doesn’t continue to slow.
Bullard last month dissented when the Federal Open Market Committee pledged to maintain its current level of bond buying, saying the panel should “signal more strongly its willingness to defend its inflation goal in light of recent low inflation readings.”
Price gains have been “very low,” Bullard said Friday.
“I’d at least like to see inflation tick up a little or get some kind of reassurance” that it “will come back toward our target.”
Inflation as measured by the personal consumption expenditures price index rose 1 percent for the year ending in May, below the central bank’s 2 percent goal.
Bullard, 52, became president of the regional bank in 2008. His district includes all of Arkansas and parts of Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee.
Panel delays derivative-oversight rules
WASHINGTON - A policy allowing a U.S. agency to regulate derivatives trading overseas to help reduce risks to the global financial system will be delayed after a vote Friday.
The Commodity Futures Trading Commission voted 3-1 to stagger the effective dates for the policy. The delay marks a middle ground between Chairman Gary Gensler, who wanted to extend the commission’s regulation to overseas markets now, and Wall Street banks, which opposed extending its reach.
President Barack Obama’s administration favored a delay to allow foreign regulators to finalize their own rules for derivatives oversight.
A derivative is an investment that’s based on the value of an underlying asset, such as oil, corn or dollars. Bad bets on risky derivatives, and lax regulation of them, were a leading cause of the 2008 financial crisis.
The policy applies new rules governing the $700 trillion derivatives market to U.S. banks’ foreign affiliates that trade derivatives and to U.S. trading operations of foreign banks.
The agency’s new oversight rules were mandated by the 2010 financial overhaul law.
China buys boatloads of U.S. grain
China, the world’s biggest hog producer, bought 2.24 million tons of grain from U.S. exporters this week to bolster inventory of livestock feed amid a shortfall in domestic supplies and increasing meat demand.
China’s corn consumption in the 12 months that begin Oct. 1 will exceed the nation’s production for the fourth time in five years, the U.S. Department of Agriculture said Thursday. Chinese imports will more than double to a record 7 million tons next season from this year, the agency said. U.S. exporters reported sales of 840,000 tons of wheat to China on Monday for delivery before May 31, 2014. Rising incomes are increasing consumption of meat.
“Chinese prices of wheat and corn are substantially higher than world prices, increasing demand for imported grain supplies,” said William Tierney, the chief economist at AgResource Co. in Chicago. “These purchases are an indication that the Chinese government wants to build inventories.” - Bloomberg NewsRaytheon wins Navy radar-jamming work
Raytheon Co.’s win this week of a $279 million contract to continue developing the U.S. Navy’s new radar-jamming system holds promise for more: It clears the way for as much as $7.4 billion in future work, according to Navy officials.
Raytheon beat a bid from Northrop Grumman Corp., in tandem with Exelis Inc., and another led by BAE Systems Plc to advance into a “technology demonstration” phase for the Next Generation Jammer.
The equipment will be carried on all 135 Boeing Co.
EA-18G Growler aircraft the Navy plans to buy this decade.
The jammer is designed to defeat the radar of integrated air-defense systems, such as those fielded by Iran, China, North Korea and Syria, that detect aircraft and direct surface-to-air missiles. It’s also intended to jam ground communications. The Navy wants the jammer in operation by 2020.
“Raytheon provided the U.S. Navy with an innovative and efficient design capable of jamming current and future threats,” Rick Yuse, president of the company’s space and airborne systems business, said in a statement this week. Raytheon also is the world’s largest maker of missiles.
NEW YORK - Billionaire investor Carl Icahn is offering shareholders a chance to own a bigger stake in Dell Inc., seeking to force Michael Dell to sweeten his $24.4 billion buyout offer for the personal-computer maker.
Icahn, who holds 8.7 percent of Dell, is adding a warrant to his $14-a-share offer that holders could exchange for additional stock, he said in a letter Friday. The value to shareholders would be about $15.50 to $18 a share, according to the letter.
Icahn’s latest move is the fourth effort to scuttle the buyout offer of $13.65 a share from Chief Executive Officer Dell and Silver Lake Management. Their proposal won key endorsements this week ahead of a shareholder vote Thursday. Dell is seeking to take the company he founded in 1984 private to turn it into a contender in tablets and cloud computing.
Icahn has said Dell can still compete in the personal computer market as a public company. His proposal remains risky because the benefit depends on the shares rising to $20, and there’s no guarantee that will happen, said Jeff Fidacaro, an analyst at Monness Crespi Hardt & Co. in New York.
“This deal is not a home run,” said Fidacaro.
David Frink, a spokesman for Dell, declined to comment.
Business, Pages 28 on 07/13/2013