Zynga Seeks $1B in Biggest Web IPO Since Google

By Douglas MacMillan, Brian Womack and Lee Spears - Dec 2, 2011 8:31 PM GMT+0700
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Zynga is selling about 14 percent of its common stock, a larger portion than some Web companies have sold this year in offerings. Photographer: Jeff Chiu/AP Photo

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Dec. 2 (Bloomberg) -- Alex Bangash , managing director of Rumson Consulting Group, talks about Zynga Inc.'s initial public offering. Zynga is seeking to raise as much as much as $1 billion and is offering 100 million shares for $8.50 to $10 apiece, according to a regulatory filing today. Bangash speaks with Scarlet Fu on Bloomberg Television's "InsideTrack." (Source: Bloomberg)

(Corrects to show what existing holders may sell if over- allotment option is exercised, starting in seventh paragraph.)

Zynga Inc. is seeking to raise as much as $1 billion in the biggest initial public offering by a U.S. Internet company since Google Inc. (GOOG)

The company is offering 100 million shares for $8.50 to $10 apiece, according to a regulatory filing today. The high end of the range would value San Francisco-based Zynga, the biggest developer of games for Facebook Inc., at $7 billion.

Zynga had originally planned a larger IPO, scaling back after Internet companies including Groupon Inc. and Pandora Media Inc. sank following their debuts this year, a person familiar with the plans said yesterday. Zynga is selling about 14 percent of its common stock, a larger portion than some Web companies have sold this year in offerings.

“It’s a reflection of what we’ve seen in Groupon,” said David Dillon, a San Francisco-based portfolio manager at HighMark Capital Management, which oversees about $17 billion. “If you price yourself too high, you do yourself a disservice in the long term.”

The top end of Zynga’s price range would value the company at 6.8 times trailing 12-month sales, according to the filing. Game maker Electronic Arts Inc. (ERTS) had a market value of $7.73 billion at yesterday’s close, or about 2 times sales in the same period, Bloomberg data show.

Facebook IPO?

Facebook may raise about $10 billion in an IPO next year that would value the world’s largest social-networking site at more than $100 billion, a person with knowledge of the matter said Nov. 29. Google, operator of the world’s biggest search engine, raised $1.9 billion in its 2004 IPO, including an over- allotment option.

Zynga is selling all of the 100 million shares in the offering. If underwriters exercise an option to buy 15 million additional shares in the over-allotment, then venture backer Avalon Ventures would sell the largest portion at more than 2.5 million. Founder and Chief Executive Officer Mark Pincus, who isn’t selling any shares in the offering, will have about 37 percent voting control once the offering is complete.

If the over-allotment is exercised, Foundry Group and Institutional Venture Partners would each sell about 2.5 million shares, while Union Square Ventures would offer 2.2 million. Venture firm Kleiner Perkins Caufield & Byers, Zynga’s biggest shareholder after Pincus, isn’t selling shares in the IPO.

Google and buyout firm Silver Lake would trim their stakes by about 1.7 million shares each. Mail.ru Group Ltd. and Digital Sky Technologies, both managed by Russian billionaire Yuri Milner, would sell more than 1 million shares combined. Investment firm Tiger Global Management would offer about 554,000 shares.

Popular Games

Zynga aims to capitalize on the popularity of social networks and virtual goods. The company lets users play games for free and then makes money by selling items, such as a townhouse in “CityVille” or a shipyard in “Empires & Allies.”

Founded in 2007, Zynga has hired Morgan Stanley and Goldman Sachs Group Inc. (GS) to manage the IPO. Zynga’s shares will trade on the Nasdaq Stock Market under the symbol ZNGA.

About 6.7 million of Zynga users were paying customers in the first nine months of the year, up from 5.1 million in the year-earlier period, according to the filing. Revenue more than doubled to $828.9 million. The worldwide virtual-goods market will more than double to $22.5 billion in 2015 from $9.27 billion last year, according to Lazard Capital Markets.

In October, Zynga announced a new service, called Project Z, geared toward reducing its dependence on Facebook users. The company also introduced new games, including “Zynga Bingo” and “Hidden Chronicles.”

Diversifying

Ninety-three percent of Zynga’s third-quarter revenue was generated on Facebook, the world’s most popular social network. That number has ranged from 91 percent to 94 percent since the beginning of last year, according to Zynga filings.

Adding more mobile games is part of Zynga’s plan to diversify. The company said in November that the number of daily active users on mobile devices increased more than 10-fold from November 2010 to September 2011, reaching 9.9 million. By October, the number was 11.1 million.

Sunil Paul, a founding partner of venture capital firm Spring Ventures, recently joined Zynga’s board. Paul, who started software companies Brightmail Inc. and FreeLoader, was brought on because of “his extensive experience with Internet companies,” Zynga said on Nov. 17.

Groupon’s Offering

Groupon went public earlier this month, helping revive the IPO market after the European debt crisis and stock-market volatility hampered deals. The shares of the Chicago-based company, which leads the Internet-coupon industry, have dropped 5.3 percent through yesterday.

Angie’s List, a site that rates plumbers, contractors and other service providers, has seen its shares decline 3.5 percent since their debut on the Nasdaq on Nov. 17.

Yelp Inc., which features user reviews of restaurants and businesses, also is planning an IPO. The San Francisco-based company filed on Nov. 17 to raise as much as $100 million in a 2012 offering. The $100 million amount is typically used as a placeholder to calculate fees and may change.

To contact the reporters on this story: Douglas MacMillan in San Francisco at dmacmillan3@bloomberg.net; Brian Womack in San Francisco at bwomack1@bloomberg.net; Lee Spears in New York at lspears3@bloomberg.net

To contact the editors responsible for this story: Tom Giles at tgiles5@bloomberg.net; Jennifer Sondag at jsondag@bloomberg.net

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Euro Central Banks May Provide $270B Through IMF to Fight Debt Crisis

By James G. Neuger - Dec 2, 2011 7:24 PM GMT+0700

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Dec. 2 (Bloomberg) -- Eric Upin, chief investment officer at Makena Capital Management LLC, talks about a European proposal to channel central bank loans through the International Monetary Fund to fight the debt crisis. Upin, speaking with Erik Schatzker and Sara Eisen Bloomberg Television's "InsideTrack," also discusses the outlook for global markets and investment strategy. (Source: Bloomberg)

A European proposal to channel central bank loans through the International Monetary Fund may deliver as much as 200 billion euros ($270 billion) to fight the debt crisis, two people familiar with the negotiations said.

At a Nov. 29 meeting attended by European Central Bank President Mario Draghi, euro-area finance ministers gave the go- ahead for work on the plan, said the people, who declined to be named because the talks are at an early stage. The need for a new crisis-containment tool emerged as the effort to boost the 440 billion-euro rescue fund to 1 trillion euros fell short.

Under the proposal, national central banks would recycle funds through the IMF, potentially to underwrite precautionary lending programs for Italy or Spain, the two countries judged to be the most vulnerable now, the people said.

“We’re looking for a maximum reinforcement with the IMF and the central bank,” Belgian Finance Minister Didier Reynders told reporters Nov. 30.

For governments in rich countries such as Germany that are unwilling to lend more to high-debt states, the idea would unlock a fresh source of funds without violating European rules that bar central banks from offering direct budget financing, the people said.

The euro area’s 17 national central banks operate under the umbrella of the ECB. Draghi yesterday hinted at a stepped-up crisis-fighting role as long as governments take steps toward a ‘‘fiscal compact’’ that ensures healthy long-term public finances.

Merkel’s Strategy

German Chancellor Angela Merkel laid out elements of that strategy today, calling for European treaty amendments to create automatic, court-enforced sanctions on countries that overstep limits of 3 percent of gross domestic product on deficits and 60 percent of GDP on debt.

Bonds of Italy and Spain rose today amid optimism that European leaders will piece together a tighter fiscal framework at a Dec. 8-9 summit that would prompt a greater central bank commitment.

One option is the lending via the IMF, which specializes in aid programs. The sums being discussed by finance officials range from 100 billion to 200 billion euros, the people said. Bilateral loans through the Washington-based lender would also spare the euro-area central banks from conflicts of interest that could arise from enforcing conditions on countries where they also set interest rates, the people said.

‘‘If we could see the proposed combination of IMF and ECB action, obviously that would be very, very credible to the market,’’ Swedish Finance Minister Anders Borg said Nov. 30.

Such a program wouldn’t be a substitute for the increase in ECB bond purchasing that countries such as Spain have clamored for. The central bank has bought 203.5 billion euros of bonds of three countries receiving financial aid -- Greece, Ireland and Portugal -- plus Italy and Spain since May 2010.

To contact the reporter on this story: James G. Neuger in Brussels at jneuger@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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Big Lots, H&R Block, Lululemon, RIM, Western Refining: U.S. Equity Preview

By Kaitlyn Kiernan - Dec 2, 2011 8:44 PM GMT+0700

Shares of the following companies may have unusual moves in U.S. trading. Stock symbols are in parentheses and prices are as of 8:30 a.m. in New York.

Avago Technologies Ltd. (AVGO) erased 1.4 percent to $29.50. The maker of semiconductor components forecast first- quarter sales may fall as much as 14 percent from the fourth quarter. Analysts estimated revenue will slip 5 percent on average.

Big Lots Inc. (BIG) fell 5.6 percent to $37.50. The discount retailer reported third-quarter earnings excluding some items of 6 cents a share, missing the average analyst estimate by 29 percent, according to Bloomberg data.

Groupon Inc. (GRPN US): The largest Internet daily-deal site is being investigated by Britain’s competition regulator over concerns including unfair promotions and exaggerated savings.

H&R Block Inc. (HRB) slid 4.1 percent to $15.40. The biggest U.S. tax preparer reported a second-quarter loss excluding some items of 38 cents a share, missing the average analyst estimate by 9.2 percent, according to Bloomberg data.

Lululemon Athletica Inc. (LULU) rose 3.7 percent to $48.91. The Canadian yoga-wear retailer was raised to “overweight” from “equal weight” at Barclays Plc, which said the shares have declined to an attractive price.

PVH Corp. (PVH) gained 2.8 percent to $69.50. The clothing retailer that owns labels such as Calvin Klein and Tommy Hilfiger forecast 2012 earnings of at least $5.23 a share, up from a previous projection of no more than $5.12 and exceeding the average analyst estimate of $5.11.

Research In Motion Ltd. (RIM) fell 5 percent to $17.65. The BlackBerry maker reported revenue missed its forecast last quarter amid market-share losses to Apple Inc. (AAPL) , signaling its smartphones and tablets are continuing to lose ground.

Ulta Salon, Cosmetics & Fragrance Inc. (ULTA) rose 1.5 percent to $69.53. The beauty-products retailer forecast fourth- quarter revenue between $552 million to $562 million. Analysts estimated sales of $558.7 million.

Western Digital Corp. (WDC) climbed 9.4 percent to $32.01. The U.S. maker of disk drives and networking products raised its quarterly revenue forecast to at least $1.8 billion from at most $1.25 billion after rebounding from a flood in Thailand that devastated factories and constrained supplies.

Western Refining Inc. (WNR) jumped 4.3 percent to $13.28. Credit Suisse raised the refineries operator to “outperform” from “neutral.” The 12-month target price is $20.50 a share.

Zumiez Inc. (ZUMZ) surged 11 percent to $26. The retailer forecast fourth-quarter earnings may be as much as 54 cents a share, compared with the average analyst estimate of 52 cents.

To contact the reporter on this story: Kaitlyn Kiernan in New York at kkiernan2@bloomberg.net

To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.

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European Stocks Rise Before U.S. Jobs Data

By Julie Cruz - Dec 2, 2011 7:24 PM GMT+0700

European stocks climbed, with the Stoxx Europe 600 Index extending its largest weekly rally since November 2008, before a report that may show the U.S. economy added workers at a faster pace last month. U.S. index futures and Asian shares also gained.

Commerzbank AG (CBK) rose 5.5 percent after a report that the lender has a plan to shore up its capital without state aid. Home Retail Group Plc (HOME) surged following a report that private- equity firms CVC Capital Partners and Bridgepoint Capital Holdings may be considering a cash bid.

The Stoxx 600 (SXXP) rose 1.2 percent to 241.42 at 12:22 p.m. in London. Standard & Poor’s 500 Index futures expiring this month climbed 1.1 percent, while the MSCI Asia Pacific Index increased 0.4 percent.

The Stoxx 600 has rallied 9 percent this week, its biggest advance in three years, as the European Central Bank and five other central banks lowered the cost of dollar funding, China cut its reserve-requirement ratio for banks and U.S. consumer confidence unexpectedly rose in November.

“Overall, we have positive U.S. economic data,” said Heinz-Gerd Sonnenschein, an equity strategist at Deutsche Postbank AG in Bonn. “I don’t expect disappointing payrolls data. The market is still very nervous, but I am optimistic for the end of the year.”

The Labor Department report at 8:30 a.m. in Washington today may show payrolls climbed by 125,000 workers in November, following the 80,000 increase in October, according to the median forecast of 90 economists surveyed by Bloomberg News. The jobless rate held at 9 percent, economists said.

Budget Monitoring

German Chancellor Angela Merkel said that only fiscal union will tackle the euro area’s debt crisis at its roots, as she used a speech to lawmakers in Berlin today to outline her position before a European Union summit on Dec. 9. The euro area needs fiscal oversight that’s “binding” and punishes states that persistently breach debt and deficit rules, Merkel said.

French President Nicolas Sarkozy called for “more discipline” and automatic penalties for nations that break fiscal rules late yesterday. In his speech in Toulon, France, Sarkozy said the 17-nation euro area, bound by a currency introduced a decade ago and intended to be permanent, risked “exploding” if members failed to converge.

ECB President Mario Draghi signaled yesterday that the European Central Bank could do more to fight the sovereign-debt crisis in return for closer fiscal union.

Commerzbank Shares Rally

Commerzbank gained 5.5 percent to 1.43 euros as Die Welt said Germany’s second-biggest bank could generate about 1 billion euros ($1.4 billion) by retaining profit through June 30. The lender could boost its core capital by 3 billion euros by offloading some 30 billion euros in risk-weighted assets, the newspaper said, citing options that its supervisory board will discuss today. The lender could also generate as much as 6 billion euros by converting hybrid capital, according to Die Welt. The German newspaper cited banking officials.

Banking shares were the best-performing industry today, soaring 3.7 percent. HSBC Holdings Plc (HSBA) rose 3 percent to 510.6 pence in London, while BNP Paribas (BNP) SA surged 7.9 percent to 31.15 euros.

Home Retail jumped 8.5 percent to 98.1 pence, its highest price in a month. CVC and Bridgepoint are working on a deal that would value the owner of the Argos chain at a “significant premium” to its market price, the Daily Mail said today. Spokesmen for Home Retail, Bridgepoint and CVC declined to comment.

Mining Companies Climb

BHP Billiton Ltd. (BHP) and Rio Tinto Group (RIO), the world’s biggest mining companies, led gains in commodity stocks, rising 4.6 percent to 2,010.5 pence and 2.3 percent to 3,379 pence, respectively. The industry was among the best performers in the Stoxx 600 this week, surging 13 percent. Aluminum, copper, lead, nickel and zinc all climbed on the London Metal Exchange today.

Bayerische Motoren Werke AG (BMW) and Daimler AG advanced 2.7 percent to 56.68 euros and 3.3 percent to 34.44 euros, respectively. A report from Autodata Corp. yesterday showed that U.S. light-vehicle sales accelerated to their fastest pace in 2011. Daimler sells more than 17 percent of its vehicles in the U.S., Bloomberg data shows.

Separately, Daimler plans to cut production costs by 10 percent annually in 2012 and 2013, Reuters reported, citing Wolfgang Nieke, a works council member.

Neopost SA gained 1.8 percent to 52.51 euros as it said after the market close yesterday that its third-quarter revenue (NEO) rose to 242 million euros from 233.7 million euros a year earlier. Neopost also confirmed its full-year outlook.

ThyssenKrupp AG (TKA) fell 2.3 percent to 18.58 euros after Germany’s biggest steelmaker posted a fiscal full-year loss because of 2.9 billion euros of impairments charges, mostly after construction of a plant in Brazil was delayed.

-- Editors: Will Hadfield, Srinivasan Sivabalan

To contact the reporter on this story: Julie Cruz in Frankfurt at jcruz6@bloomberg.net

To contact the editor responsible for this story: Andrew Rummer at arummer@bloomberg.net

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Europe Demand Falling Fifth Year as Fiat Makes Last Lancia in Sicily: Cars

By Tommaso Ebhardt and Alex Webb - Dec 2, 2011 8:31 PM GMT+0700
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Car demand in Europe may decline for the fifth straight year in 2012 to 12.9 million vehicles, down 1 percent from this year and 17 percent from the 2007 peak. Photographer: Kostas Tsironis/Bloomberg

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Dec. 2 (Bloomberg) -- For the first time since before the 2008 financial crisis, a European automaker will close down a production plant in its own country. Fiat SpA will close its Termini Imerese factory in Sicily, where the Lancia Ypsilon was made, at the end of the year. Poppy Trowbridge reports on Bloomberg Television's "The Pulse" with Maryam Nemazee. (Source: Bloomberg)

For the first time since before the 2008 financial crisis, a European automaker will close down a production plant in its own country.

Fiat SpA (F) will shutter its Termini Imerese factory in Sicily at the end of the year. The plant’s last Lancia Ypsilon subcompact rolled off the assembly line on Nov. 24.

The decision comes amid a growing car glut across the continent as most automakers continue to churn out vehicles in the face of slumping sales and growing concerns over the sovereign debt crisis and an economic slowdown in Europe. Overcapacity in the region may surge 41 percent to 2.92 million vehicles next year, according to forecasts from IHS Automotive.

“The global auto sector has been suffering for years from chronic overcapacity,” Fiat Chief Executive Officer Sergio Marchionne said last week in London. “In Europe, the situation has now reached suffocation point.”

The Fiat boss joined other auto executives, including Daimler AG (DAI) CEO Dieter Zetsche and Ford Motor Co. (F)’s European chief Stephen Odell, in a meeting in Brussels today to discuss the outlook for the auto industry with the European Commission.

The region’s auto lobby ACEA, which elected Marchionne as its president today, called on political leaders to act quickly to restore confidence in the region.

“One of my hopes is to find a will to achieve the economic stability in Europe, which will lessen the burden on the industry,” Marchionne said today in Brussels. “We need a healthy market” to be able to address the industry‘s “structural overcapacity.”

Five-Year Slump

Car demand in Europe may decline for the fifth straight year in 2012 to 12.9 million vehicles, down 1 percent from this year and 17 percent from the 2007 peak. Production in the region may slip 2.9 percent to 16.4 million vehicles, compared with a 1.8 percent increase in capacity to 19.3 million, IHS estimates.

Until the Fiat closure, European automakers had been unable to take bold steps to scale back production. Political interference has thwarted industry restructuring as governments propped up demand in 2009 with sales incentives and hindered efforts to trim capacity to protect local jobs. With strapped public budgets restraining the scope for aid, European mass- market automakers may face years of losses as idle workers and equipment cost money without generating revenue.

Marchionne’s decision to pull the plug on the 41-year-old factory in Sicily will cut capacity by as many as 140,000 vehicles a year.

‘Failure to Act’

Europe’s volume carmakers are the region’s worst performers. Fiat shares have posted the second-biggest decline on the Stoxx 600 Automobiles & Parts Index this year, dropping 41 percent. PSA Peugeot Citroen has posted the steepest decline, falling 49 percent, while French rival Renault SA (RNO) is down 34 percent.

“I doubt there is a single European player today that can make money on the strength of the European market alone,” Marchionne said last week during a speech in London. “The lack of a common intervention strategy in Europe, and a failure to act, has forced Fiat to find its own solution.” A new round of aid is unlikely.

“The probability of governments providing incentives is about zero,” said Christoph Stuermer, an analyst with IHS in Frankfurt. “There’ll be no backing” for a repeat of 2009 sales incentives, when Germany committed 5 billion euros ($6.7 billion) to boost demand by offering money to scrap old cars.

Interference

Efforts to prevent job losses continue. French President Nicolas Sarkozy, faced with an election in six months and the highest unemployment claims in more than a decade, summoned Peugeot CEO Philippe Varin on Nov. 17, asking him to reconsider plans to cut as many as 6,800 jobs, including temporary staff employed by partners.

Peugeot, Europe’s second-largest carmaker after Volkswagen AG (VOW), earlier this year distanced itself from a leaked proposal to close a French plant after the government described it as “unacceptable.” Renault CEO Carlos Ghosn pledged in May to make building upscale cars in France a priority in return for support from the government, which owns 15 percent of the manufacturer, to appoint a new chief operating officer.

“It becomes increasingly difficult to see any meaningful restructuring actions at PSA or Renault ahead of French elections in 2012,” said Erich Hauser, an analyst with Credit Suisse in London. Sarkozy’s meeting with Varin “illustrates once again just how hard it is to restructure industrial assets in France.”

GM’s German Woes

France isn’t alone in actively shaping its auto industry. German Chancellor Angela Merkel brokered the sale of General Motors Co. (GM)’s Opel unit, which is based near Frankfurt, tying state aid for the money-losing unit to a change in ownership. The deal fell apart when GM backed out in November 2009 after exiting bankruptcy.

GM, which hasn’t turned an annual profit in Europe in more than a decade, continues to struggle to turn around Opel. The company had $900 million in restructuring and early-retirement costs in Europe and cut 5,800 jobs in the region through Sept. 30. Last month, Detroit-based GM abandoned its goal of breaking even in Europe this year.

“When you’re running your plants at a utilization of anything less than 100 percent -- and in most of Europe they run at 85 percent -- you’re trying to bend the demand curve to meet the supply curve,” GM Chief Executive Officer Dan Akerson said at a Nov. 17 event hosted by the Detroit Economic Club.

No Profit Before 2014

Morgan Stanley estimates that European carmakers are utilizing about 70 percent of their capacity, with Renault, Opel and Fiat the least productive. The region’s mass-market carmakers may not return to a profitable rate of more than 80 percent until 2014, according to a Nov. 30 research note.

Before Fiat’s move to halt production in Sicily, GM was the only other carmaker to shut a factory since 2008, closing its facility in Antwerp, Belgium, at the end of last year. It was the first plant shut in Europe since 2006.

Fiat’s plans in Italy are aimed at ending losses estimated at 800 million euros a year, leading Marchionne to risk opposition. Fiom Cgil, Fiat’s biggest union, has called for a general strike on Dec. 16, its second in less than two months.

Workers at the Termini Imerese plant blocked the last car from leaving the factory until Fiat agreed with unions and the government on Nov. 26 to pay about 21 million euros to support early retirements for about 640 workers. Other staff will be hired by Dr Motor Co SpA, which will pay 1 euro for the plant and will continue to assemble vehicles there.

‘Great Attention’

Fiat, which has threatened to stop production in Italy, canceled labor contracts after withdrawing from Italian employers’ group Confindustria earlier this year in order to have a free hand in negotiating wage agreements. Talks on new Italian contracts started this week.

“The government is following with great attention” Fiat’s plan for Italy “and it’s ready to offer its constructive contribution,” Labor Minister Elsa Fornero said last week. “As a Turin citizen, I can’t stay quiet about Fiat. Big companies shouldn’t leave the country.”

To contact the reporters on this story: Tommaso Ebhardt in Milan at tebhardt@bloomberg.net; Alex Webb in Frankfurt at awebb25@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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JPMorgan Follows UBS Cutting Carbon Jobs

By Ben Sills - Dec 2, 2011 3:26 PM GMT+0700

Investment banks are cutting traders and analysts in climate-related businesses as a slump in shares and carbon emission permits coincides with a deadlock in international climate talks.

JPMorgan Chase & Co. (JPM) Managing Director for Environmental Markets Odin Knudsen left his post in New York by mutual accord after his team was shrunk, while UBS Securities LLC fired Vice Chairman Jon Anda and his Climate Policy Group co-workers, Anda and Knudsen said in interviews. Ben Lynch left his London job as an alternative-energy analyst for Commerzbank AG (CBK) and it was taken over by a utilities analyst, company spokeswoman Claire Tappenden said. The departures took place since September.

The biggest banks, trying to recover from trading losses and a clampdown on investing their own money, are clipping resources from emissions-related businesses as United Nations talks have failed for years to extend Kyoto Protocol greenhouse- gas curbs beyond their expiration in 2012. The International Emissions Trading Association, the main carbon-market trade group, has seen its membership slide about 6 percent this year.

“People are leaving the industry because they’ve been fired or because they see no prospects,” said Emmanuel Fages, head of energy research for Europe at Societe Generale SA in Paris. “That is the sad story.”

Climate Talks

Fages said he used to work full-time on carbon at the French bank’s emissions trading unit Orbeo and the industry now occupies about 20 percent of his time.

JPMorgan spokesman Brian Marchiony declined to comment.

UBS officials confirmed Anda’s departure and declined to give details about his department. “Jon Anda has left the bank and is seeking new opportunities,” UBS’s New York-based spokesman Christiaan Brakman said in an e-mailed response to questions. “UBS remains committed to address climate change.”

The Kyoto emissions caps for industrialized nations, which underpin carbon trading, are set to end in December 2012 unless United Nations-led talks under way in South Africa produce an extension.

Clean-power stocks and emission permits have plunged as the European Union, the biggest advocate for climate action among developed nations, is ravaged by its own sovereign debt crisis.

Benchmark EU carbon permits lost 44 percent in the year through yesterday and fell to a record last week while the Bloomberg Industry solar energy index (BISOLAR) plunged 65 percent, damping investor demand for research and advisory services.

EU allowances for delivery this month fell 0.4 percent to 7.90 euros a metric ton today as of 8:14 a.m. on London´s ICE Futures Europe exchange. The Bloomberg Industry Global Leaders Large Solar Energy index fell 0.6 percent, headed for its first decline this week.

‘Shakeouts, Departures’

“There are shakeouts and departures happening as you would expect to be the case during any market that was a little bit unsure about where it was going,” Henry Derwent, president of the International Emissions Trading Association, said in a telephone interview. Carbon trading “is currently suffering, as so many other markets are, from low economic activity in the main area which is the European Union.”

About 10 institutions have withdrawn from the Geneva-based trade group this year, cutting membership to about 150 companies, spokeswoman Noria Mezlef said.

EU countries, which subsidize clean energy and bought more than 80 percent of solar panels last year as well as running the biggest carbon market, are facing pressure to rein in budget deficits as investors dump their sovereign debt. The turmoil wracking the bloc has hurt photovoltaic equipment stocks and businesses that service that industry.

‘Little Companies’

“It been a tough time for everyone doing solar,” John Hardy, who lost his job in New York as an alternative energy analyst at Gleacher & Co. in August, said in an interview. “Market capitalizations have dropped to a point where funds can’t touch these little companies.”

He said he expects some of his colleagues and competitors will also be let go because the market valuation of the industry can no longer sustain their research.

Dennis Mignon left his job as a carbon trader at First Climate in Bad Vilbel, Germany, to trade government bonds at DZ Bank AG in Frankfurt, he said last week.

The value of carbon trading fell 8 percent to 23.7 billion euros ($32 billion) in the third quarter from the previous three months as the price of European emission permits tumbled, according to New Energy Finance data.

ClimateCare

UBS shut its climate-change advisory practice and fired its staff after theSwiss bank lost $2.3 billion from unauthorized trading this year.

JPMorgan, which sold its ClimateCare carbon offset developer to the unit’s management in August, tied for second place producing new credits last year, behind Vitol Group and alongside Climate Change Capital Ltd., according to Bloomberg New Energy Finance data.

The New York bank cut back its environmental markets team to just “a few” people compared with several “tens” of people around the world at its height, Knudsen said in an interview.

Societe Generale said Nov. 25 it agreed to sell its 50 percent stake in carbon trading joint venture Orbeo to its partner Solvay SA. The Paris-based lender will develop emissions trading as part of its gas and power business, deputy head of commodities Jonathan Whitehead said in a telephone interview.

“The emissions market, whatever shape or form it ends up continuing in, is going to be an important part of our offering for our clients,” he said Nov. 25. “The emissions market goes hand in hand with the power market in Europe.”

A record 1.5 billion tons of EU carbon permits was traded on the ICE Futures Europe exchange from July to September even as the price slump cut the value of the transactions, exchange data show. Trade in UN carbon credits was a record 348 million tons in the same period.

To contact the reporter on this story: Ben Sills in Madrid at bsills@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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U.S. Jobless Rate Unexpectedly Declines to 8.6%

By Shobhana Chandra - Dec 2, 2011 8:36 PM GMT+0700

Unemployment in the U.S. unexpectedly dropped in November to a two-year low, while employers added fewer workers than projected and earnings eased, indicating the labor market is making limited progress.

The jobless rate declined to 8.6 percent, the lowest since March 2009, from 9 percent, Labor Department figures showed today in Washington. Payrolls climbed 120,000, with more than half the hiring coming from retailers and temporary help agencies, after a revised 100,000 rise in October that was more than initially estimated. The median estimate in a Bloomberg News survey called for a gain of 125,000.

Companies like DirecTV (DTV) have said they will keep a tight rein on spending and employment in 2012, reflecting concern over the outlook for demand, Europe’s debt crisis and the U.S. deficit. The scant number of jobs is limiting wage gains and restraining consumers’ ability to boost spending, which accounts for about 70 percent of the economy.

“The labor market is showing very gradual progress, but it is progress,” Stephen Stanley, chief economist for Pierpont Securities LLC in Stamford, Connecticut, said before the report. “Things are getting a little bit better on the economy. Firms are hiring but staying trim.”

Bloomberg survey estimates ranged from increases of 75,000 to 175,000.

Stock-index futures maintained gains after the figures. The contract on the Standard & Poor’s 500 index expiring this month rose 1.3 percent to 1,259.6 at 8:33 a.m. in New York. The yield on the benchmark 10-year Treasury note rose to 2.13 percent from 2.09 percent late yesterday.

Unemployment Rate

The unemployment rate, derived from a separate survey of households, was forecast to hold at 9 percent, according to the survey median. The decrease in the jobless rate reflected a 278,000 gain in employment at the same time 315,000 Americans left the labor force.

The labor participation rate declined to 64 percent from 64.2 percent.

Private hiring, which excludes government agencies, rose 140,000 after a revised gain of 117,000. It was projected to rise by 150,000, the survey showed.

Revisions to prior reports added a total of 72,000 jobs to payrolls in September and October.

Stanley estimates sustained gains of 125,000 a month on average are needed to keep the unemployment rate stable.

Factory Employment

Factory payrolls increased by 2,000, less than the survey forecast of a 9,000 increase and following a 6,000 gain in the previous month.

Employment at service-providers increased 126,000, including a 50,000 gain in retail trade at companies hired for the holiday shopping season. The number of temporary workers increased 22,300.

Macy’s Inc. (M), the second-biggest U.S. department-store chain, increased mostly part-time staff by 4 percent for the November-December shopping season. See’s Candies Inc., a chocolate maker owned by Berkshire Hathaway Inc., said it would add 5,500 mostly temporary workers.

Construction companies shed 12,000 workers. Government payrolls decreased by 20,000. State and local governments employment dropped by 16,000, while the federal government trimmed 4,000 positionss.

Average hourly earnings fell 0.1 percent to $23.18, today’s report showed. The average work week for all workers held at 34.3 hours.

Underemployment Rate

The so-called underemployment rate -- which includes part- time workers who’d prefer a full-time position and people who want work but have given up looking -- decreased to 15.6 percent from 16.2 percent.

The report also showed an increase in long-term unemployed Americans. The number of people unemployed for 27 weeks or more increased as a percentage of all jobless, to 43 percent from 42.4 percent.

The jobless rate has exceeded 8 percent since February 2009, the longest stretch of such levels of unemployment since monthly records began in 1948.

Federal Reserve Chairman Ben S. Bernanke and his colleagues last month cut economic growth forecasts for 2012 and said unemployment will average 8.5 percent to 8.7 percent in the final three months of next year, up from a prior range of 7.8 percent to 8.2 percent.

Fed’s Yellen

Growth in the U.S. and other advanced economies “has been proceeding too slowly to provide jobs for millions of unemployed people,” Fed Vice Chairman Janet Yellen said in a Nov. 29 speech in San Francisco. She called for “urgent” international action to combat a “dearth” of global demand.

Six central banks led by the Fed acted on Nov. 30 to make more funds available to lenders to preserve the global expansion. The move came after European leaders said they failed to boost the region’s bailout fund as much as planned, fueling concern about a possible breakup of the euro bloc.

The crisis in Europe and presidential election in the U.S. make it difficult to predict the level of economic expansion, causing DirecTV to “slow our growth rate,” Michael White, chief executive officer of the largest U.S. satellite-TV provider, said in an interview last week.

“We’re tightening our belts in terms of spending,” White said in the Nov. 21 interview. “We’ll cut back on overhead, hiring and programming.”

Payrolls may pick up as more businesses benefit from increased demand. Boeing Co. (BA), the largest U.S. aircraft maker, is hiring about 100 machinists a week as it boosts production by about 60 percent over three years to whittle down a backlog that now stretches to nearly 4,000 aircraft.

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net

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Stocks Climb, U.S. Futures Advance After Jobs Report; Italian Bonds Rally

By Stephen Kirkland and Lynn Thomasson - Dec 2, 2011 8:37 PM GMT+0700

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Dec. 2 (Bloomberg) -- James Shugg, a senior economist at Westpac Banking Corp., discusses the performance of the U.S. economy and the outlook for "catastrophe" in Europe. He speaks from Sydney with Linzie Janis on Bloomberg Television's "First Look." (Source: Bloomberg)

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Dec. 2 (Bloomberg) -- Mikio Kumada, a global strategist at LGT Capital Management in Singapore, talks about the global economy and stock markets. Kumada also discusses Europe's sovereign debt crisis, China's economy and central bank monetary policy. He speaks with John Dawson on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

Dec. 2 (Bloomberg) -- Stocks rose, poised for the best week in three years, and U.S. futures climbed as America’s jobless rate unexpectedly dropped and investors speculated the International Monetary Fund will play a larger role in fighting the debt crisis. Treasuries fell.

The MSCI All Country World Index added 0.6 percent at 8:34 a.m. in New York, bringing its five-day advance to 8.7 percent. The Stoxx Europe 600 Index gained 1.5 percent, and Standard & Poor’s 500 Index futures increased 1.2 percent. The euro strengthened for a third day against the dollar and the yen. The yield on Spain’s 10-year bonds fell 18 basis points, and Italy’s yield slipped eight basis points. Ten-year U.S. Treasury yields advanced five basis points to 2.14 percent. Gasoline jumped 2.8 percent and nickel rose 2.2 percent.

The jobless rate dropped to 8.6 percent, the lowest since March 2009, from 9 percent, Labor Department figures showed. Two people familiar with the negotiations said a proposal to channel loans through the IMF may deliver as much as 200 billion euros ($270 billion), while German Chancellor Angela Merkel renewed her push for European fiscal union.

“The U.S. economy isn’t as weak as investors feared,” said Kenji Sekiguchi, general manager at Tokyo-based Mitsubishi UFJ Asset Management Co., which oversees about $75 billion. “The focus has shifted temporarily away from Europe and toward the U.S., while investors wait for Europe to come up with policies.”

About $3 trillion was added to the value of global stocks this week and bond risk fell the most on record after central banks added liquidity to stimulate lending and support economic growth.

Banks Rally

The Stoxx 600 has rallied 9 percent this week. Banks led gains, with BNP Paribas SA, France’s largest lender (BNP), and Credit Suisse Group AG, Switzerland’s second-biggest (CSGN), adding more than 5 percent. Volkswagen AG, Bayerische Motoren Werke AG and Daimler AG jumped more than 2 percent after Autodata Corp. reported U.S. light-vehicle sales increased at the fastest pace since August 2009.

The increase in U.S. futures indicated the S&P 500 will extend its best weekly performance since March 2009. today in Washington. Payrolls climbed 120,000, with more than half the hiring coming from retailers and temporary help agencies, after a revised 100,000 rise in October that was more than initially estimated. The median estimate in a Bloomberg News survey called for a gain of 125,000.

James Bullard, president of the Federal Reserve Bank of St. Louis, said yesterday recent reports point to stronger growth and the central bank shouldn’t rush to ease monetary policy further.

Best Week on Record

The euro strengthened 0.6 percent versus the dollar and 0.9 percent against the yen. The Dollar Index (DXY) declined 0.4 percent, leaving the gauge 2.1 percent lower this week. Canada’s currency pared gains after a government report showed employers unexpectedly cut jobs in November and the unemployment rate rose.

Spanish 10-year government bonds rose for a fifth day, sending yields down more than 100 basis points in the week, the most since the euro-region was created in 1999. German 10-year bund yields rose one basis point to 2.19 percent.

The Markit iTraxx SovX Western Europe Index of credit- default swaps on 15 governments slipped seven basis points to 328, taking the drop this week to 57 basis points. The Markit iTraxx Financial Index of default swaps linked to the senior bonds of 25 banks and insurers fell 11 basis points to 285.5, making a weekly decline of 72.5. Both gauges were at record highs on Nov. 25.

Gasoline rose to $2.6295 a gallon. Copper increased 2.2 percent. The U.S. is the second-biggest user of copper, after China. West Texas Intermediate oil advanced 0.9 percent to $101.11 a barrel.

----With assistance from, Claudia Carpenter, Emma Charlton, Will Hadfield and Abigail Moses in London. Editors: Stephen Kirkland, Michael Regan

To contact the reporters on this story: Stephen Kirkland in London at skirkland@bloomberg.net;

To contact the editor responsible for this story: Stuart Wallace at swallace6@bloomberg.net

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Merkel Says Joint Euro Bonds Unthinkable

By Tony Czuczka and Rainer Buergin - Dec 2, 2011 5:56 PM GMT+0700
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German Chancellor Angela Merkel delivers her so-called Europe speech next to Bundestag President Norbert Lammert (2dL) at the Bundestag lower house of parliament in Berlin December 2, 2011. Photographer: John Macdougall/AFP/Getty Images

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Dec. 2 (Bloomberg) -- Gerard Lyons, chief economist at Standard Chartered Plc, the No. 1 firm for economic forecasting according to data compiled by Bloomberg, talks about the outlook for the euro zone and the European Central Bank's role in backing indebted nations. Lyons speaks with Francine Lacqua and David Tweed on Bloomberg Television's "On the Move." Louise Cooper, an analyst at BGC Partners, also comments in this report. (Source: Bloomberg)

German Chancellor Angela Merkel likened solving Europe’s debt crisis to a marathon, shunning investor calls for quick action while pushing for stricter budget enforcement and overhauling the region’s governance.

Addressing lawmakers in Berlin today before a Dec. 9 summit of European leaders, Merkel rejected joint euro-area bonds or trying to make the European Central Bank the lender of last resort as quick fixes. The ECB’s role is different from that of the Federal Reserve or the Bank of England, she said.

“Marathon runners often say that a marathon gets especially tough and strenuous after about 35 kilometers (22 miles),” Merkel told the lower house of parliament in a speech previewing the European Union summit. “But they also say you can last the whole course if you’re aware of the magnitude of the task from the start.”

Germany and France are leading the push for closer economic ties among euro nations and locking in tougher enforcement of budget rules to counter the debt crisis now in its third year. Merkel welcomed French President Nicolas Sarkozy’s “important” speech yesterday in which he warned that the euro region’s fissures threaten to blow the 17-nation shared currency apart. She is due to hold talks with the French leader in Paris on Dec. 5 to coordinate their approach to next week’s summit.

Cameron and Sarkozy

With financial markets and world leaders including President Barack Obama pressing Europe to end the crisis, Merkel said that while she favored involving all EU countries, fiscal union could be limited to the euro area. That would avoid the task of getting all 27 EU members to agree. U.K. Prime Minister David Cameron was due in Paris about 1 p.m. today for talks with Sarkozy.

Europe needs fiscal oversight that’s “binding” and includes “real automaticity” to punish states that persistently breach debt and deficit rules, Merkel said. European Union President Herman van Rompuy will make proposals on closer economic union on Dec. 9, when Germany will push for EU treaty change, she said.

Euro-area limits of keeping debt within 60 percent of gross domestic product and deficits within 3 percent of GDP must be enforced, she said. Merkel has said that countries that breach the limits could be sued in the European Court of Justice.

“The lessons are very simple: Rules must be adhered to, adherence must be monitored, non-adherence must have consequences,” she said today. Leaders have to “overcome fundamental flaws in the construction of the euro area.”

‘Exploding’ Euro Area

Merkel’s prescription echoed Sarkozy, who said late yesterday in a speech in Toulon, France, that the euro area risks “exploding” if members fail to converge on fiscal policies. Countries sharing the currency must prepare their budgets in common, narrow gaps in competitiveness and face tougher automatic penalties for rule-breaking, Sarkozy said.

ECB President Mario Draghi, who has criticized European leaders’ response to the debt crisis, signaled yesterday that the central bank could do more to help if governments push the euro area toward fiscal union.

“A new fiscal compact” is needed to start restoring credibility,” Draghi said in Brussels. “Other elements might follow, but the sequencing matters.” He didn’t specify what more the ECB could do and said its purchases of euro-area sovereign bonds to stem the crisis “can only be limited.”

Merkel said the ECB has to be free to move in any direction and that she won’t comment on what it does or doesn’t do. The ECB’s independence to take decisions “in any direction” must be guarded, Merkel told lawmakers.

No Praise, Criticism

The ECB is independent and must choose its own method of ensuring the euro’s stability “without being praised or criticized” and states must protect that independence by improving their finances, the Westdeutsche Zeitung quoted Merkel as saying in an interview released yesterday.

Sarkozy agreed at a meeting with Merkel and Italian Prime Minister Mario Monti on Nov. 24 to stop pressuring the ECB to step up its response to the debt crisis. Sarkozy retreated after Draghi criticized French calls for the ECB to use its unlimited power to backstop euro-area bond markets, something that Merkel has also repeatedly rejected.

Joint euro-area bonds are also “unthinkable” as long as governments retain national control over budgets, Merkel said today.

“You have to differentiate between credible enforcement powers and joint European control over revenue and spending,” she said. “And as long as this is so, joint liability for the debt of others is unthinkable. That also takes care of the debate over so-called euro bonds for now.”

To contact the reporters on this story: Tony Czuczka in Berlin at aczuczka@bloomberg.net; Rainer Buergin at rbuergin1@bloomberg.net

To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net

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Apple Win Threatens Samsung Christmas in Australia

By Joe Schneider - Dec 2, 2011 8:30 AM GMT+0700

Apple Inc. (AAPL) won a one-week extension of a ban on Samsung Electronics Co.’s sales of its latest tablet computer in Australia, delaying pre-Christmas sales, in a battle that began in April in the U.S. and spread to four continents.

High Court Justice John Dyson Heydon today extended the ban on the release of Samsung’s Galaxy Tab 10.1 to Dec. 9. On that day, the country’s top court will consider Apple’s request for permission to appeal a lower court’s order issued earlier this week, which lifted a ban on the product that has been in place since mid-October.

“A stay for one week will cost Samsung, in effect, one week’s trade,” Heydon said, following a 90-minute hearing in Sydney. The extension will hurt Samsung “but not to extend the status quo is likely to be injurious to Apple,” he said.

The decision scuttles Samsung’s plan to begin importing the Galaxy Tab 10.1 into Australia this weekend and take advantage of the pre-Christmas shopping season. The company had said if it can’t sell the tablet in Australia before Christmas it would scrap its release in the country.

“This is a critical period of time,” Katrina Howard, Samsung’s lawyer, told Heydon today. “Even one day can make a difference.”

Samsung had planned to release the tablet for sale today at 4 p.m. Sydney time, import the product over the weekend and begin a marketing campaign, Howard said.

“Samsung believes Apple has no basis for its application for leave to appeal,” the Suwon, South Korea-based company said in an e-mailed statement distributed in Sydney.

Widening Battle

The “high-velocity” unveiling of the Galaxy Tab into the Australian market “confirms the need for a stay,” Apple’s lawyer Stephen Burley told the judge. “Even a short release of the product can cause irreversible harm to Apple” and Samsung won’t be able to compensate Apple for those damages, he said.

Samsung fell 0.7 percent to 1.06 million won as of 10:06 a.m. in Seoul trading.

The Australian dispute is part of a battle between the companies on at least four continents that began in April, when Apple sued Samsung in the U.S. and accused it of “slavishly” copying the designs of iPhones and iPads.

The patent disputes began when Samsung released its Android-based Galaxy smartphones in 2010. Steve Jobs, the co- founder of Apple who died Oct. 5, initiated contact with Samsung in July 2010 over his concerns that the Galaxy phones copied the iPhone, according to Richard Lutton, Apple’s patent attorney, who testified in Sydney on Sept. 29.

Samsung was the world’s biggest maker of smartphones in the last quarter, with Apple being second. The maker of Mac computers dominates the tablet market.

The appeal case is Samsung Electronics Co. (005930) v. Apple Inc. NSD1792/2011. Full Court of the Federal Court of Australia (Sydney).

To contact the reporter on this story: Joe Schneider in Sydney at jschneider5@bloomberg.net

To contact the editor responsible for this story: Douglas Wong at dwong19@bloomberg.net

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Apple’s Executive in Charge of Government Sales Is Said to Depart Company

By Adam Satariano - Dec 2, 2011 5:05 AM GMT+0700

Apple Inc. (AAPL)’s vice president in charge of sales to the U.S. government, who helped get its devices into more federal agencies, has left the company, according to a person with knowledge of the move.

Ron Police, who had run the government sales force since 2004, left in October, said the person, who asked not to be named because the departure hasn’t been disclosed. Police’s LinkedIn profile indicates that he’s no longer at the company.

Police, who couldn’t be reached for comment, helped Apple’s iPhone and iPad gain a foothold at government agencies, a market traditionally dominated by technology products from companies such as Microsoft Corp. (MSFT), Dell Inc. (DELL) and Research In Motion Ltd. (RIM) To further that effort, Apple is seeking security certification from the National Institute of Standards, the agency that provides technology recommendations to the federal government.

While President Barack Obama has said he uses an iPad, government sales still only account for a small part of Apple’s revenue. In the fiscal year ended in September 2010, the latest period with complete data available, the federal government spent $50.8 million on Apple products, either directly or through resellers and integrators, according to information compiled by Bloomberg Government. Apple’s total sales in that period were $65.2 billion.

Even so, government agencies are starting to use Apple’s products more. The U.S. Defense Department has purchased iPads for trial use, and the U.S. Veterans Affairs Department has said its employees will be able to use iPhones and iPads to conduct official work.

Kristin Huguet, a spokeswoman for Cupertino, California- based Apple, declined to comment.

Police’s departure creates another senior job opening for Chief Executive Officer Tim Cook to fill. Apple also is seeking executives for its retail operations and the iAd mobile- advertising platform.

Apple shares rose 1.5 percent to $387.93 at the close in New York. The stock has climbed 20 percent this year.

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Payroll Increase in November Probably Failed to Reduce U.S. Unemployment

By Shobhana Chandra - Dec 2, 2011 12:01 PM GMT+0700

The pace of hiring in November probably failed to reduce unemployment in the U.S., showing employers are concerned the world’s largest economy may cool, economists said before a report today.

Payrolls climbed by 125,000 workers after an 80,000 increase in October, according to the median forecast of 90 economists surveyed by Bloomberg News. The jobless rate may have held at 9 percent.

Companies like DirecTV (DTV) have said they will keep a tight rein on spending and employment in 2012, reflecting concern over the outlook for demand, Europe’s debt crisis and political wrangling over the U.S. deficit. The scant number of jobs will limit wage gains and deprive consumers of the means to boost spending, which accounts for about 70 percent of the economy.

“We’re seeing job gains that are positive though not impressively so,” said Guy LeBas, chief fixed-income strategist at Janney Montgomery Scott LLC in Philadelphia. “Consumer and business demand is very uncertain. Hiring managers need proof of sales before they’re willing to add workers.”

The Labor Department’s report is due at 8:30 a.m. in Washington. Bloomberg survey estimates ranged from increases of 75,000 to 175,000.

The projected gain in payrolls would bring the average for July through November to 119,000, compared with 131,000 in the first six months of the year.

The jobless rate has exceeded 8 percent since February 2009, the longest stretch of such levels of unemployment since monthly records began in 1948.

Fed Forecasts

Federal Reserve Chairman Ben S. Bernanke and his colleagues last month cut economic growth forecasts for 2012 and said unemployment will average 8.5 percent to 8.7 percent in the final three months of next year, up from a prior range of 7.8 percent to 8.2 percent.

Growth in the U.S. and other advanced economies “has been proceeding too slowly to provide jobs for millions of unemployed people,” Fed Vice Chairman Janet Yellen said in a Nov. 29 speech in San Francisco. She called for “urgent” international action to combat a “dearth” of global demand.

Six central banks led by the Fed acted on Nov. 30 to make more funds available to lenders to preserve the global expansion. The move came after European leaders said they failed to boost the region’s bailout fund as much as planned, fueling concern about a possible breakup of the euro bloc.

Shares Rally

Stocks dropped yesterday after the action by the central banks helped cap the biggest three-day rally in the Standard & Poor’s 500 Index (SPX) since March 2009. The gauge fell 0.2 percent after climbing 7.6 percent from Nov. 28 through Nov. 30.

The crisis in Europe and presidential election in the U.S. make it difficult to predict the level of economic expansion, causing DirecTV to “slow our growth rate,” Michael White, chief executive officer of the largest U.S. satellite-TV provider, said in an interview last week.

“We’re tightening our belts in terms of spending,” White said in the Nov. 21 interview. “We’ll cut back on overhead, hiring and programming.”

The payrolls report may also show private employment, which excludes government jobs, climbed 150,000 after an October gain of 104,000, economists forecast.

Employment may have gotten a boost from holiday hiring. Macy’s Inc. (M), the second-biggest U.S. department-store chain, increased mostly part-time staff by 4 percent for the November- December shopping season. See’s Candies Inc., a chocolate maker owned by Berkshire Hathaway Inc., said it would add 5,500 mostly temporary workers.

Payrolls may pick up as more businesses benefit from increased demand. Boeing Co. (BA), the largest U.S. aircraft maker, is hiring about 100 machinists a week as it boosts production by about 60 percent over three years to whittle down a backlog that now stretches to almost 4,000 aircraft.

Manufacturing, one area of the economy that continues to grow, may have added 9,000 workers, the most in four months, according to the survey median.

                         Bloomberg Survey  ==============================================================                            Nonfarm  Private     Manu Unemploy                           Payrolls Payrolls Payrolls     Rate                             ,000’s   ,000’s   ,000’s        % ============================================================== Date of Release              12/02    12/02    12/02    12/02 Observation Period            Nov.     Nov.     Nov.     Nov. -------------------------------------------------------------- Median                         125      150        9     9.0% Average                        126      150        8     9.0% High Forecast                  175      190       15     9.1% Low Forecast                    75      110        0     8.9% Number of Participants          90       51       22       84 Previous                        80      104        5     9.0% -------------------------------------------------------------- 4CAST                          140      160     ---      9.0% ABN Amro                       120      135     ---      9.0% Action Economics               130      150        5     9.0% Aletti Gestielle               125      150     ---      9.0% Ameriprise Financial           145      165        8     9.0% Banca Aletti                   123      146        6     9.0% Banesto                        115     ---      ---      --- Bank of Tokyo-Mitsubishi       130      150     ---      8.9% Bantleon Bank AG               130     ---      ---      9.0% Barclays Capital               125      150     ---      8.9% Bayerische Landesbank          110     ---      ---      9.0% BBVA                           110      130        7     9.0% BMO Capital Markets            100     ---      ---      9.1% BNP Paribas                    150      175     ---      9.0% BofA Merrill Lynch             110      130     ---      9.0% Briefing.com                    75      110     ---      9.0% Capital Economics              140     ---         9     --- CIBC World Markets             110     ---      ---      9.0% Citi                           130      150        9     --- ClearView Economics             90      115       10     9.1% Comerica                       114     ---      ---      --- Commerzbank AG                 125     ---      ---      9.0% Credit Agricole CIB            175     ---      ---      9.0% Credit Suisse                  170      190     ---      9.0% Daiwa Securities America       110     ---      ---      --- DekaBank                       140     ---      ---      9.0% Desjardins Group               150     ---      ---      9.0% Deutsche Bank Securities       150      175     ---      9.0% Deutsche Postbank AG           150     ---      ---      9.0% DZ Bank                         85     ---      ---      9.0% Exane                          100     ---      ---      9.0% Fact & Opinion Economics       160      180     ---      8.9% First Trust Advisors           100      125        5     9.0% Goldman, Sachs & Co.           100     ---      ---      9.0% Helaba                         120     ---      ---      9.0% High Frequency Economics       125      150     ---      9.0% HSBC Markets                   165      185     ---      9.0% Hugh Johnson Advisors          130      150       10     9.0% IDEAglobal                     125      150       10     9.0% IHS Global Insight             125      150     ---      9.0% Informa Global Markets         135     ---         0     9.0% ING Financial Markets          130      160       10     9.0% Insight Economics              100     ---      ---      9.1% Intesa-SanPaulo                125      145     ---      9.0% Iur Capital                    105     ---      ---      8.9% J.P. Morgan Chase              130      150       10     9.0% Janney Montgomery Scott        132      152       10     9.0% Jefferies & Co.                130      145       10     8.9% Landesbank Berlin              100     ---      ---      9.1% Landesbank BW                  130     ---      ---      9.0% Laurentian Bank                160      180     ---      9.0% Maria Fiorini Ramirez          150      175     ---      9.0% Market Securities              145     ---      ---      8.9% MET Capital Advisors           110     ---      ---      9.0% Mizuho Securities              125     ---      ---      9.1% Moody’s Analytics              105      120       10     9.0% Morgan Keegan & Co.            132     ---      ---      9.0% Morgan Stanley & Co.           120     ---      ---      9.0% National Bank Financial        150     ---      ---      9.0% Natixis                        150     ---      ---      9.0% Newedge                        130      145     ---      --- Nomura Securities              140      150       15     9.0% Nord/LB                         90      120        5     9.0% OSK Group/DMG                  100     ---      ---      9.1% Paragon Research               175     ---      ---      8.9% Parthenon Group                149     ---      ---      9.0% Pierpont Securities            110      135     ---      9.0% PineBridge Investments         125      155     ---      8.9% PNC Bank                       110      135     ---      9.0% Prestige Economics             100      130     ---      9.0% Raiffeisenbank International   135      160     ---      9.0% Raymond James                  110      135     ---      9.0% RBC Capital Markets            100      120     ---      9.0% RBS Securities                 125     ---      ---      9.0% Schneider Foreign Exchange     120      145        9     9.0% Scotia Capital                 100     ---      ---      9.0% SMBC Nikko Securities          150      180     ---      8.9% Societe Generale               170      190     ---      9.1% Standard Chartered             115      140     ---      9.0% State Street Global Markets    146      170        8     9.0% Stone & McCarthy Research      130      145        6     9.0% TD Securities                  155      175     ---      9.0% UBS                            150      175     ---      9.0% UniCredit Research             110     ---      ---      9.0% Union Investment               120     ---      ---      9.0% University of Maryland         112      132        5     9.1% Wells Fargo & Co.              133     ---      ---      9.0% WestLB AG                      110     ---      ---      9.0% Westpac Banking Co.            120     ---      ---      9.1% Wrightson ICAP                 100      130     ---      9.0% ============================================================== 

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz in Washington at cwellisz@bloomberg.net

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Apple Exec for Gov’t Sales Said to Depart

By Adam Satariano - Dec 2, 2011 5:05 AM GMT+0700

Apple Inc. (AAPL)’s vice president in charge of sales to the U.S. government, who helped get its devices into more federal agencies, has left the company, according to a person with knowledge of the move.

Ron Police, who had run the government sales force since 2004, left in October, said the person, who asked not to be named because the departure hasn’t been disclosed. Police’s LinkedIn profile indicates that he’s no longer at the company.

Police, who couldn’t be reached for comment, helped Apple’s iPhone and iPad gain a foothold at government agencies, a market traditionally dominated by technology products from companies such as Microsoft Corp. (MSFT), Dell Inc. (DELL) and Research In Motion Ltd. (RIM) To further that effort, Apple is seeking security certification from the National Institute of Standards, the agency that provides technology recommendations to the federal government.

While President Barack Obama has said he uses an iPad, government sales still only account for a small part of Apple’s revenue. In the fiscal year ended in September 2010, the latest period with complete data available, the federal government spent $50.8 million on Apple products, either directly or through resellers and integrators, according to information compiled by Bloomberg Government. Apple’s total sales in that period were $65.2 billion.

Even so, government agencies are starting to use Apple’s products more. The U.S. Defense Department has purchased iPads for trial use, and the U.S. Veterans Affairs Department has said its employees will be able to use iPhones and iPads to conduct official work.

Kristin Huguet, a spokeswoman for Cupertino, California- based Apple, declined to comment.

Police’s departure creates another senior job opening for Chief Executive Officer Tim Cook to fill. Apple also is seeking executives for its retail operations and the iAd mobile- advertising platform.

Apple shares rose 1.5 percent to $387.93 at the close in New York. The stock has climbed 20 percent this year.

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How Gingrich Landed on Love Seat With Pelosi

By Julie Hirschfeld Davis - Dec 2, 2011 8:00 AM GMT+0700

The phone call came from Al to Newt.

Al Gore, the Democratic Party presidential nominee in 2000, wanted to know whether Newt Gingrich, the former Republican U.S. House speaker, would appear in a 2008 television ad calling for action to address climate change.

Gingrich, who was promoting his latest book “Contract With the Earth” and urging “green conservatism,” agreed. In an e- mail obtained by Bloomberg News that he wrote to the former vice president, Gingrich thanked Gore “for the opportunity to participate in the Protect Climate ad campaign.” He signed the March 2008 note, “Your friend, Newt.”

Those exchanges led Gingrich, now a Republican presidential candidate, to a chilly, rainy commercial set in April 2008, sitting side-by-side, knee-to-knee on a love seat with then- Democratic House Speaker Nancy Pelosi, with the cameras rolling. It’s an event he describes today as “the dumbest single thing I’ve done.”

Gingrich’s primary opponents already are pouncing on the ad as evidence that the former speaker’s record on such core conservative principles as opposing government regulations to curb global warming makes him unsuited for the nomination and less-equipped to defeat President Barack Obama.

‘Serial Hypocrisy’

Texas Representative Ron Paul released a Web video Nov. 30 that accused Gingrich of “serial hypocrisy,” which prominently featured an excerpt from the Gingrich-Pelosi climate ad.

While the climate-change ad is the highest-profile bipartisan event Gingrich engaged in between his 1999 retirement from Congress and his presidential campaign, it isn’t the only one. He’s also appeared with marquee Democrats, such as then- Senator Hillary Clinton, in gatherings highlighting health care, global warming and education.

The former speaker’s willingness to become the Republican headliner at such events helped keep him in the news and at the center of national debates as he was also building his post- political brand and a multi-million dollar consulting and publishing business.

Gingrich was warned by his aides at the time that participating in Gore’s “We Can Solve It” ad campaign could have dire political consequences.

‘Political Mistake’

“It was a political mistake,” Rick Tyler, a former Gingrich spokesman, said he told his boss at the time. Gingrich “wanted to do the ad and felt it was more important to be proactive on issues than it was to be reactive to political expediency.”

Gingrich did have reservations about pairing with Pelosi, who was viewed as a liberal icon by leaders of his party. In the e-mail about a month before the commercial was filmed, Gingrich told Gore that “appearing with Speaker Pelosi in the current political environment is simply too problematic,” and suggested approaching Massachusetts Senator John Kerry, the 2004 Democratic presidential nominee, as an alternative.

Meanwhile, Gingrich’s staff balked at what Gore’s Alliance for Climate Protection wanted the former speaker to say in the ad. They refused to clear the words “crisis” to describe climate change or for him to say -- “We need new laws” -- to address it, according to one person familiar with the making of the commercial who spoke on condition of anonymity.

Script Negotiations

“We rejected the initial script because it stated positions that we just didn’t believe were true,” said Tyler. “They wanted Newt to basically talk about global warming, which we would not do. At the time, ‘climate change’ was seen as a safe thing to say.”

Gingrich’s staff and Gore’s negotiated intensely over the commercial’s script, up until midnight the day of the shooting at the foot of the Capitol in April 2008. There, with temperatures in the 40’s and rain falling steadily as aides looked on sipping warm soup, Gingrich and Pelosi took their places on the love seat placed under a tarp and spoke their lines.

“We don’t always see eye-to-eye, do we Newt?” says a smiling Pelosi. “No,” says Gingrich, smiling back, “but we do agree we must take action to address climate change.”

Gore declined through a spokeswoman to comment for this story, as did a spokesman for his Climate Reality Project.

Pushing Back

About a month after the commercial began airing, Gingrich’s now defunct political action group, American Solutions for Winning the Future, began its own advertising campaign -- a pro- oil “Drill Here, Drill Now, Pay Less,” mantra aimed at blocking legislation co-sponsored by Senators Joseph I. Lieberman, a Connecticut independent, and John Warner, a Virginia Republican, to combat climate change by curbing carbon emissions.

Today, most of Gingrich’s primary competitors deny climate change is happening or that humans have a role in it. Gingrich now says he’s “agnostic” on the issue.

As for his staff’s reasoning that “climate change” would be politically safe language, they missed the mark for a 2012 Republican presidential primary candidate.

A poll released Sept. 22 by the Public Religion Research Institute found that while almost 7 in 10 Americans overall say there is solid evidence that the Earth is warming and two-thirds believe it is due to human activity, less than half of Republicans and only 41 percent of those who identify with the Tea Party believe in climate change, and only 18 percent of both groups attribute it to human activity.

Defending His Role

“I was trying to do something I failed to do. I do think it’s important for conservatives to be in the middle of the debate over the environment,” Gingrich told Fox News Nov. 8, when he called his participation in the ad dumb.

Gingrich said in the interview he doesn’t “know whether global warming is occurring,” and had appeared in the ad only to advocate “finding innovative new ways to get cleaner energy.”

Former Massachusetts Governor Mitt Romney, working to slow Gingrich’s momentum, is now turning those words against his primary rival.

In a Nov. 29 interview on Fox News, Romney suggested that while he’s willing to weather criticism for standing behind the Massachusetts health-care law he signed -- a liability with Republican base voters who liken its mandate for individual coverage to the one in a new national law -- the former House speaker has tried to dodge his own political albatross.

Romney Attack

“If I were willing to say anything to get elected, wouldn’t I just say, ‘Oh, it was a mistake?,’ because I’ve watched other people on the stage,” Romney said. “When someone says, ‘Oh, I did this ad on global warming -- that was a mistake.’ So, they just dust it aside, and that makes them more attractive in a primary. I’m standing by what I did.”

R.C. Hammond, Gingrich’s spokesman, said yesterday the candidate has acknowledged that participating in the ad “was stupid,” and that it didn’t accomplish his objective.

“It turned out to be a bad way to engage the with opposition and, instead of ceding the issue completely to the liberal left, to engage, and say, ‘Hey, conservatives care about the environment too,’” Hammond said.

He said Gingrich has teamed with Democrats on such efforts in recent years because his “goal is to solve the problem. It’s to get across the finish line, and to do that you have to have a coalition.”

Health Care

Gingrich’s opponents will have other bipartisan appearances to use as weapons.

In 2005, he appeared with then-Senator Hillary Clinton at an event called “Cease-fire on Health Care” at American University in Washington, where he called for “100 percent coverage,” and a system that involves a “transfer of finances” to help low-income people afford medical insurance.

“I know I risk sounding not quite as right-wing as I should to fit the billing,” Gingrich said at the event sponsored by Pfizer Inc. (PFE), a drug company and paying member of Gingrich’s Center for Health Transformation.

A year before his ad with Pelosi, Gingrich partnered with Kerry for a debate on carbon-reduction methods in which Gingrich said, “My message is that the evidence is sufficient that we should move towards the most effective possible steps to reduce carbon loading of the atmosphere.”

And in 2009, Gingrich appeared with Obama and the Reverend Al Sharpton at the White House to promote changes in education policy, which followed with a Philadelphia appearance on the same issue with Sharpton and Obama’s Education Secretary Arne Duncan.

“There’s no doubt Gingrich has got more of a track record of policy sins in the minds of conservatives than the other candidates” for the Republican nomination, said Greg Mueller, a party strategist who served as a senior aide on Steve Forbes’s 2000 presidential campaign. If his rivals decide to try to exploit them, he added, “those could be a liability.”

To contact the reporter on this story: Julie Hirschfeld Davis in Washington at or Jdavis159@bloomberg.net.

To contact the editor responsible for this story: Mark Silva at msilva@bloomberg.net

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