Sunday, June 27, 2010
Sunday, June 20, 2010
Cricket-mad Indian touted as next Deutsche Bank CEO
Jain, 47, has just been appointed sole head of the German lender's most powerful division, its corporate and investment banking division, which accounts for the lion's share of group revenues and profits.
Previously Jain, who until recently owned a stake in the Mumbai Indians, the all-star Indian Premier League cricket team owned by the super-rich Mukesh Ambani, ran the division in tandem with Michael Cohrs, who is retiring.
He will run all Deutsche's sales and trading operations, including government and corporate bonds, commodities, emerging markets, equities, foreign exchange, money markets, interest rate and credit derivatives.Armed with a degree from Delhi University and an MBA in finance from University of Massachusetts Amherst, Jain first cut his teeth at Merrill Lynch in New York before moving to his present employer in London in 1995.
And despite running a division that earned its crust using the kind of opaque investment bets that brought the global financial system close to collapse in 2008, Jain is generally seen as having had a "good" crisis.
He is credited with having managed rapidly to re-organise his division post-crisis and get it back to making money. In the first quarter of 2010, it generated 2.7 billion euros (3.3 billion dollars) in pre-tax profits.
Since 2002 he has been on the bank's executive committee and since April 2009 a member of the management board, earning an estimated 9.7 million euros last year, 200,000 euros more than the man he might succeed, Josef Ackermann.
"Of all the internal candidates, Jain has the best chances," Konrad Becker, analyst at private German bank Merck Finck, told AFP.
But Deutsche Bank is no ordinary bank, and being selected to fill the Swiss Ackermann's shoes will not be easy. And a strong candidate from outside the bank, which employs 77,000 people worlwide, may yet emerge.
For one thing, Germany's biggest bank also has significant private and retail banking operations, not least in Germany, areas which are being expanded via acquisitions and which the investment banker Jain would also have to run.
More importantly, though, the position of Deutsche Bank boss is a highly visible one in Germany, a high-profile job that requires its holder to hobnob with politicians and business leaders.
Ackermann, 62, is perhaps one of Germany's best-known chief executives, dining with Chancellor Angela Merkel and appearing on television chat shows.
Fluent German is indispensable and Jain's is thought to be weak at best.
"The extent to which Mr. Jain is able and willing to perform this role is a question mark," Becker said.
"His Indian origins are an issue. It wouldn't be a problem with Deutsche Bank's customers or with employees ... The problem might be with the German public."
Michaele Salahi, White House gate crasher, to appear on 'Real Housewives'
The White House gate crasher is shown here meeting President
Obama after crashing a State Dinner last year.
China says no major changes in exchange rate
In a commentary on Saturday's announcement, the People's Bank of China attempted to assuage fears of a major strengthening of the yuan, also known as the renminbi, or "people's money."
"There is at present no basis for major flucuation or change in the renminbi exchange rate," the bank said on its website.
Keeping the rate at a "reasonable, balanced level" would contribute to economic stability and help restructure the Chinese economy with greater emphasis on services and consumption, the statement said.
The yuan's value has been pegged to the U.S. dollar for two years, a major source of friction with countries who say the yuan is undervalued to China's own benefit. The bank's statement said it would rely more on a basket of currencies that includes the U.S. dollar to determine the exchange rate.
Chinese officials have long said reforms to the currency would be gradual. While no specific policy changes were mentioned, financial markets will be watched closely Monday for any effects.
President Barack Obama said China's move would help protect the economic recovery, while the European Commission said it would benefit "both the Chinese economy and the global economy."
The announcement, timed just before President Hu Jintao's trip to the G-20 summit in Toronto, Canada, follows warnings from Beijing last week against making its currency policies a main focus of the meeting. China has come under heavy pressure to reform from G-20 member countries, including South Africa and Brazil as well as the United States and those in Europe, who argue that the yuan is deliberately undervalued to keep Chinese exports unfairly cheap.
Industrial Bank economist Jiang Shu said the timing of the announcement marked an attempt to divert criticism of China at the meeting.
"It's a way of throwing out the carpet for the G-20, displaying again to international society the Chinese government's determination on the exchange rate issue," Jiang was quoted as saying on the website of the National Business Daily, a leading financial newspaper.
However, some Chinese experts and commenters on Internet message boards criticized the announcement as a cave-in to foreign pressure that would ultimately damage China's crucial export sector.
"From an economic angle, the appreciation of the renminbi will have a definite effect on exports, but in terms of politics and macroeconomic policy, it can be seen as a result of the need for balance," said Zhao Xijun, deputy dean of the School of Finance of Renmin University.
Also writing on the National Business Daily website, economist Ye Tan said the move would pile pressure on exporters already contending with a roughly 15 percent appreciation of the renminbi against the euro, as well as rising labor costs.
"China's exports are unstable and this is having a major impact on the actual economy," Ye wrote. "Appreciation of the renminbi needs to wait until economic readjustment is certain and China's domestic demand has truly expanded," Ye said.
On the message boards at the popular Sohu.com portal, commentators vilified the move as a sellout that betrayed long-standing government claims that the exchange rate was not a problem. Some commentaries on there and other forums were quickly removed by censors drilled to stymie criticism of the government or discussion of sensitive topics.
Beijing has kept the yuan frozen against the dollar to help Chinese manufacturers compete amid weak global demand. Under pressure from its trading partners, China began letting the yuan appreciate gradually against the U.S. dollar in 2005, but halted that abruptly in 2008 as the global financial crisis took effect.
Since then, the yuan's value has remained at roughly 6.83 to $1.
Santos highly favored in Colombia vote
Santos, who oversaw a major weakening of leftist rebels, had a 37-point advantage in pre-election polls over former Bogota Mayor Antanas Mockus, who was neck-and-neck with him in some surveys before a series of gaffes torpedoed his eccentric campaign.
Santos won 47 percent of the vote in the May 30 first round — just shy of the simple majority needed for victory. Since then, he has gained the endorsement of most of Colombia's political establishment.
Santos, a 58-year-old economist, promises to build on the security gains of outgoing President Alvaro Uribe, who remains hugely popular but was barred from seeking a third consecutive term.
The former defense chief also may benefit from the military's recent rescue of three police officers and an army sergeant who had been held for nearly 12 years by the leftist Revolutionary Armed Forces of Colombia, the country's main rebel band.
But he is also trying to broaden his appeal by vowing to help the poor in a nation notorious for income inequality, where more than four of every 10 of its 44 million people live on less than $2 a day.
"I'm going to give priority to the social aspect, to employment, to the fight against poverty since I don't need to prioritize security," Santos told The Associated Press in a pre-election interview. Colombia's annual per-capita social spending is about $400, less than half that of Mexico or Chile.
Mockus' clean-government campaign, a steamrolling sensation three months ago, lost its luster after he won just 21 percent of the vote in the first round.
The Green Party candidate, a former university rector and son of Lithuanian immigrants, made a series of comments that led Colombians to question his ability to manage the military and foreign relations of a country still mired in a half-century-old conflict with guerrillas.
Mockus at one point suggested Colombia should dissolve its military, then backtracked. He also suggested he would have no choice but to extradite Uribe if an Ecuadorean court convicted him of wrongdoing in a 2008 cross-border raid. In fact, presidents can deny extradition requests.
The mathematician and philosopher also alienated voters by promising a tax increase.
"The general sensation that he leaves is that he is not as well prepared to lead the country as Santos," said Andes University political scientist Arlene Tickner.
Being a political outsider was Mockus' strength — but also proved his weakness, said Michael Shifter, president of the Washington think tank Inter-American Dialogue.
"He challenged politics as usual but also needed to play the political game to build support. He wasn't willing or able to do that," Shifter said.
Santos, who was educated in the U.S., is a Colombian political blueblood despite making his first run for elected office. He was a Cabinet minister in three administrations and is a great-nephew of a president whose family long ran the country's leading newspaper, El Tiempo.
Santos may have benefited politically from a government welfare payment program called Accion Social that grew under Uribe from 320,000 recipient families to 2.2 million.
But Santos said no one can prove a gain in votes for him or other candidates from his National Unity party — which dominated March 14 legislative elections — resulted from Accion Social's growth.
"People are very grateful — above all in the most poor sectors — that we have decreased the violence, from which the poor suffer most," he said. Indeed, Santos has polled better among Colombia's poor than its rich.
As Uribe's defense minister in 2006-09, he helped knock the wind out of the FARC, Latin America's last remaining major rebel army. He also clashed often with leftist Presidents Hugo Chavez of Venezuela and Rafael Correa of Ecuador.
Last month, a judge in Ecuador ordered Santos' arrest for authorizing the 2008 cross-border raid on a FARC base inside Colombia's southern neighbor that killed the rebel group's No. 2 commander, Raul Reyes.
Santos called the arrest warrant absurd because the Colombian state — not him individually — carried out the raid.
He said it wouldn't prevent him from visiting Ecuador as president if invited. Further, Santos said he would invite Chavez and the Venezuelan leader's leftist allies to his Aug. 7 inauguration if he won the presidency.
"We're going to invite all the countries with which we have relations. I want good relations with all our neighbors," Santos said.
Gulf Coast residents brace for more oil
BURAS, Louisiana (Reuters) – Residents of the Gulf Coast braced for more oil from a ruptured BP Plc well to hit their beaches on Sunday as oil washed ashore at Panama City, a popular Florida tourist destination.
The city's beaches remained open after clean-up crews removed the tar balls from shore, authorities said. Even so, the sight is a worry for a state with an annual tourism industry worth $60 billion.
"The vast majority (of tar balls) disappeared with the tide. Our beaches are open and clean," said Valerie Lovett, spokeswoman for Florida's Bay County.
The largest spill in U.S. history threatens the coastal economies of four states including hard-hit Louisiana. It has also severely dented the British energy giant's finances and reputation and tarnished President Barack Obama's popularity.
The White House criticized BP CEO Tony Hayward for taking time off from dealing with the leak's consequences to watch a yacht race on Saturday off the south coast of Britain. BP said he was taking some much needed downtime.
To minimize the leak's environmental impact, BP is capturing as much as 24,000 barrels (1.008 million gallons/3.81 million liters) a day of crude using two containment systems but that is a fraction of the 35,000-60,000 barrels the U.S. Coast Guard says is pouring from the well.
BP restarted its containment effort on Saturday after one system was shut down for 10 hours to fix a technical issue and to let a storm pass. It was the latest in a series of problems to bedevil attempts to halt the oil flow now in its 62nd day.
A second system remained running. BP's long-term solution is to drill a relief well that will relieve pressure on the leak, thus stopping its flow, but that is not due for completion until August.
Under pressure from the White House, BP has set up a $20 billion damages fund but that figure could be increased if it proves insufficient, said Kenneth Feinberg, the fund's federal administrator.
After falling 6.8 percent in a volatile week driven by Washington politics, BP's shares are down 26 percent so far in June, their worst month since the October 1987 market crash.
And in a further complication, Anadarko Petroleum Corp, part owner of the well, accused BP of "reckless" conduct leading up to the accident.
BP said it "strongly disagrees" with the accusation of gross negligence but would keep focusing on cleaning up the spill, which has triggered a huge response from federal, state and local authorities to try to protect the Gulf coastline.
Hayward was conspicuously absent from a gathering of global oil industry leaders on Saturday in St Petersburg, Russia, where his company's woes were a constant topic of discussion.
In fact, he was spending time with his teenage son watching a yacht race around the Isle of Wight, off the south coast of Britain, after almost two months away from home and family, according to BP spokeswoman Sheila Williams.
So far, Louisiana's wetlands and its fishing industry have suffered the worst damage from the spill and downcast fishermen say times are harder than in the aftermath of Hurricane Katrina, which battered the Gulf Coast in 2005.
(Additional reporting by Kristen Hays in Houston, Vladimir Soldatkin in Russia, Tom Bergin in London and Jane Ross and Robert Green in Florida;)
The city's beaches remained open after clean-up crews removed the tar balls from shore, authorities said. Even so, the sight is a worry for a state with an annual tourism industry worth $60 billion.
"The vast majority (of tar balls) disappeared with the tide. Our beaches are open and clean," said Valerie Lovett, spokeswoman for Florida's Bay County.
The largest spill in U.S. history threatens the coastal economies of four states including hard-hit Louisiana. It has also severely dented the British energy giant's finances and reputation and tarnished President Barack Obama's popularity.
The White House criticized BP CEO Tony Hayward for taking time off from dealing with the leak's consequences to watch a yacht race on Saturday off the south coast of Britain. BP said he was taking some much needed downtime.
To minimize the leak's environmental impact, BP is capturing as much as 24,000 barrels (1.008 million gallons/3.81 million liters) a day of crude using two containment systems but that is a fraction of the 35,000-60,000 barrels the U.S. Coast Guard says is pouring from the well.
BP restarted its containment effort on Saturday after one system was shut down for 10 hours to fix a technical issue and to let a storm pass. It was the latest in a series of problems to bedevil attempts to halt the oil flow now in its 62nd day.
A second system remained running. BP's long-term solution is to drill a relief well that will relieve pressure on the leak, thus stopping its flow, but that is not due for completion until August.
Under pressure from the White House, BP has set up a $20 billion damages fund but that figure could be increased if it proves insufficient, said Kenneth Feinberg, the fund's federal administrator.
After falling 6.8 percent in a volatile week driven by Washington politics, BP's shares are down 26 percent so far in June, their worst month since the October 1987 market crash.
And in a further complication, Anadarko Petroleum Corp, part owner of the well, accused BP of "reckless" conduct leading up to the accident.
BP said it "strongly disagrees" with the accusation of gross negligence but would keep focusing on cleaning up the spill, which has triggered a huge response from federal, state and local authorities to try to protect the Gulf coastline.
Hayward was conspicuously absent from a gathering of global oil industry leaders on Saturday in St Petersburg, Russia, where his company's woes were a constant topic of discussion.
In fact, he was spending time with his teenage son watching a yacht race around the Isle of Wight, off the south coast of Britain, after almost two months away from home and family, according to BP spokeswoman Sheila Williams.
So far, Louisiana's wetlands and its fishing industry have suffered the worst damage from the spill and downcast fishermen say times are harder than in the aftermath of Hurricane Katrina, which battered the Gulf Coast in 2005.
(Additional reporting by Kristen Hays in Houston, Vladimir Soldatkin in Russia, Tom Bergin in London and Jane Ross and Robert Green in Florida;)
For U.S., yuan talk is good, action is better
Unless Beijing swiftly follows up talk with action, however, the vow will not defuse a fight brewing in the U.S. Congress over whether to penalize China for what some lawmakers see as unfair trade practices.
China's central bank said it would gradually make the yuan's exchange rate more flexible, indicating it was ready to break a 23-month-old dollar peg that had become a growing source of friction with the United States.
Washington wants a stronger yuan to make its own exports more competitive with China's. Many economists say the yuan is undervalued by as much as 40 percent, giving China a trading advantage and swelling its reserves to more than $2 trillion.
"This is an important step but the test is how far and how fast they let the currency appreciate," U.S. Treasury Secretary Timothy Geithner said in a statement.
Some private analysts doubted China would act quickly.
"Just these words are not going to be enough to satisfy the U.S. Congress and Treasury," said Marc Chandler, head of global currency strategy at Brown Brothers Harriman & Co in New York.
"I am skeptical. I am not convinced that these words mean what they seem to mean."
U.S. Democratic Senator Charles Schumer, who has led a congressional charge to get tougher on China, called the move "vague and limited" and typical of China's response to pressure.
Al Qaeda network severely degraded: U.S. envoy
ISLAMABAD (Reuters) – Al Qaeda's network had been "severely degraded" by joint U.S.-Pakistani efforts, the U.S. special envoy for Afghanistan and Pakistan said on Saturday.
A few hours before Richard Holbrooke spoke, a U.S. drone killed 12 militants in Pakistan's North Waziristan region on the Afghan border which Washington says is used by the Afghan Taliban to attack U.S.-led NATO troops in Afghanistan.
"The al Qaeda network has been severely degraded in recent years in efforts that both our countries work on," Holbrooke told a joint news conference with Pakistani Foreign Minister Shah Mehmood Qureshi.
Asked whom he would hold responsible if al Qaeda leader Osama bin Laden and the Afghan Taliban chief, Mullah Mohammad Omar, were hiding somewhere along the border between Pakistan and Afghanistan, Holbrooke demurred.
"Many of their associates have been apprehended or killed. Even those two people ... are still at large but they are under intense pressure," he said.
Holbrooke praised Pakistan's sacrifices in the fight against militants on its soil and said he hoped more would be achieved.
"In regard to the war itself, Pakistan has made progress, but it doesn't mean that we've reached the end of the road. This is a tough, long struggle and much more needs to be done," he said.
Pakistani action against militants on the border is seen as important for bringing stability to Afghanistan, where U.S. forces are leading a major NATO offensive against the Taliban.
Pakistan, fighting its own home-grown Taliban, is under growing U.S. pressure to crack down harder on Afghan Taliban using Pakistani sanctuaries to attack NATO forces in Afghanistan.
U.S. officials said this week the United States had given Pakistan evidence about the growing threat and reach of a militant faction, the Haqqani network, which Washington suspects has ties to Pakistani intelligence.
A few hours before Richard Holbrooke spoke, a U.S. drone killed 12 militants in Pakistan's North Waziristan region on the Afghan border which Washington says is used by the Afghan Taliban to attack U.S.-led NATO troops in Afghanistan.
"The al Qaeda network has been severely degraded in recent years in efforts that both our countries work on," Holbrooke told a joint news conference with Pakistani Foreign Minister Shah Mehmood Qureshi.
Asked whom he would hold responsible if al Qaeda leader Osama bin Laden and the Afghan Taliban chief, Mullah Mohammad Omar, were hiding somewhere along the border between Pakistan and Afghanistan, Holbrooke demurred.
"Many of their associates have been apprehended or killed. Even those two people ... are still at large but they are under intense pressure," he said.
Holbrooke praised Pakistan's sacrifices in the fight against militants on its soil and said he hoped more would be achieved.
"In regard to the war itself, Pakistan has made progress, but it doesn't mean that we've reached the end of the road. This is a tough, long struggle and much more needs to be done," he said.
Pakistani action against militants on the border is seen as important for bringing stability to Afghanistan, where U.S. forces are leading a major NATO offensive against the Taliban.
Pakistan, fighting its own home-grown Taliban, is under growing U.S. pressure to crack down harder on Afghan Taliban using Pakistani sanctuaries to attack NATO forces in Afghanistan.
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