Economic Calendar

Monday, May 14, 2012

Obama Pitches Equal Pay to Win Women Even as Charges Drop

By Kate Andersen Brower - May 14, 2012 7:00 AM GMT+0700

Some days, it may seem that President Barack Obama’s running mate is Lilly Ledbetter.

Ledbetter is a former Goodyear Tire & Rubber Co. manager who sued the firm after discovering near the end of a 19-year career that she was being paid more than $13,000 less than three male colleagues. Her case was thrown out after the U.S. Supreme Court ruled she missed a deadline for filing the lawsuit.

U.S. President Barack Obama and Lilly Ledbetter before signing the Lilly Ledbetter Fair Pay Act in at the White House on Jan. 29, 2009. Photographer: Mark Wilson/Getty Images

In eight of his last 18 campaign events, Obama reminded voters that the Lilly Ledbetter Fair Pay Act, which provides employees more time to file such lawsuits, was the first piece of legislation he signed into law when he took office in 2009, and its namesake is now campaigning for his re-election.

Yet there were fewer cases charging sex-based wage discrimination last year than the year before the law was signed, and the wage gap was wider in 2010 than it was in 2007.

“The bill did not change the fact that women make 77 cents on the dollar that a man makes,” said Ledbetter, who is working with the White House to pass the Paycheck Fairness Act that would enable employees to find out what their colleagues are earning.

At a Washington hotel on April 5 Obama told 250 donors: “Change is the first legislation that I signed into law, the Lilly Ledbetter Act that has a very simple principle -- women should get paid an equal day’s pay for an equal day’s work, and our daughters should be treated just like our sons when it comes to the workplace.”

Front Row Seat

Ledbetter, 74, had a front row seat at an April 27 Obama fundraiser hosted by the Women’s Leadership Forum and Women in Washington for Obama, at which the president called her his “dear friend” and a “courageous woman.”

First Lady Michelle Obama told donors May 1 in Las Vegas that her husband “signed this bill because he knows that closing that pay gap will mean the difference between women losing $50, $100, $500 for each paycheck, or having that money in their pockets to buy gas and groceries and put clothes on the backs of their kids.”

Obama is using the Ledbetter law to shore up his lead among women -- an advantage crucial to his re-election prospects. Female voters made up 53 percent of the electorate in 2008 and Obama carried their vote by 13 points. Obama led presumptive Republican nominee Mitt Romney 49 to 39 percent among women, according to an April 11 - 17 Quinnipiac University survey of 2,577 registered voters.

Gender Gap

Among all those polled, 52 percent said Obama would do a better job handling women’s issues, compared with 32 percent who picked Romney. The poll had an error margin of plus or minus 1.9 percentage points for its overall sample.

Romney’s campaign is seeking to shift the focus from Ledbetter to economic troubles women are experiencing under Obama. While women lost fewer jobs during the recession that ended in June 2009, the jobless rate for males 16 years old or older improved by 2.3 percentage points since then and barely budged for women during the same period.

In an April 16 interview with ABC News, Romney said he has no “intention of changing” Ledbetter if elected.

The law reversed the 2007 Supreme Court decision in Ledbetter v. Goodyear Tire & Rubber Co. (GT) to extend the time a worker can sue an employer for sex-based wage discrimination to as many as 180 days from the last discriminatory paycheck, instead of 180 days since the first paycheck reflecting unequal wages.

Cases Decline

In 2009, when Obama signed the legislation, there were 2,268 sex-based wage discrimination complaints filed with the Equal Employment Opportunity Commission either under the Equal Pay Act, Title VII of the Civil Rights Act of 1964, which was amended by the Ledbetter Act, or both. Because the law was retroactive, the EEOC reviewed pending cases at the time of the Supreme Court decision and reinstated claims for more than 1,100 people. In 2011, the number of complaints went down to 2,191.

Meanwhile, the pay gap in 2010 showed that women earned 77.4 percent of men’s salaries, down from 77.8 percent in 2007 before the recession hit.

“The White House is not disingenuous about their equal pay bona fides but I think sometimes Ledbetter is overstated,” said Lisa Maatz, the director of Public Policy and Government Relations at Washington-based American Association of University Women. Maatz said that while Obama is “right to claim this as part of his legacy,” whenever “anyone says the Ledbetter bill ensures that women get equal pay for equal work, that’s not accurate.”

Narrow Interpretations

Judges who are narrowly interpreting the Ledbetter law, the lack of transparency about pay, and a sluggish economy are reasons why Ledbetter hasn’t had more of an impact, said lawyers and advocates.

Women are afraid of losing their jobs if they complain, especially as the economy recovers from the worst economic downturn since the Great Depression, said Charles A. Sullivan, a professor at Seton Hall Law School who has represented employees in pay discrimination suits.

“If you’ve got a job and things are going pretty well except you think you may be the victim of pay discrimination, maybe this is not the best time in the world to rattle that cage,” Sullivan said.

Despite the White House pitches, the law does little to put money back in women’s pockets, said advocates of the measure.

Income Privacy

“Even with the Ledbetter Act, I’ve found many employees lack information with which to compare their compensation,” said Joseph Sellers, who served as co-lead counsel for the plaintiffs in Beck v. Boeing Co. (BA), which included more than 28,000 women employees at Boeing facilities in Washington charging sex discrimination.

To fill that information void, the administration is seeking passage of the Paycheck Fairness Act, created the National Equal Pay Enforcement Task Force to coordinate the federal government’s efforts to enforce existing protections, and developed a Labor Department contest for a computer application to provide workers with more information about equal pay and negotiating their salaries.

Tina Tchen, executive director of the White House Council on Women and Girls and the first lady’s chief of staff, said the administration has successfully delivered a “nuanced” message when talking about Ledbetter.

“A lot of times you hear the president and the first lady talking about the Lilly Ledbetter Act helping women get equal pay and people sometimes skip over the fact that he said ‘help,’ versus saying it ‘gets equal pay,’” she said.

To contact the reporter on this story: Kate Andersen Brower in Washington at

To contact the editor responsible for this story: Jeanne Cummings at


Asian Stocks Rise as China Easing Outweighs Europe Debt

By Kana Nishizawa - May 14, 2012 9:02 AM GMT+0700

Asian stocks swung between gains and losses after China cut the amount of cash banks must set aside as reserves to boost economic growth, and as speculation heightened Greece may exit from the single European currency.

China Overseas Land and Investment Ltd., the mainland’s biggest developer by market value, rose 1.4 percent in Hong Kong. Nippon Sheet Glass Co. (6954), a glassmaker that counts Europe as its No. 1 market, slid 1 percent in Tokyo. NGK Insulators Ltd. jumped 11 percent after a report the company plans to resume sodium battery production. Celltrion Inc. (068270), a biopharmaceutical company, surged for a second day in Seoul, climbing 9.2 percent after saying it plans to issue bonus shares to shareholders.

China’s reserve ratio rate cut is “an efficient means of them pushing liquidity into the market,” Timothy Riddell, head of global markets research in Singapore at Australia & New Zealand Banking Group Ltd., said on Bloomberg television. “We will be looking for more cuts through the reserve ratio rate through the rest of this year.”

The MSCI Asia Pacific Index (MXAP) slid 0.3 percent to 118.28 as of 10:55 a.m. in Tokyo, after rising as much as 0.2 percent. About four stocks fell for every three that rose. The measure posted its worst week in five months last week, falling 4.4 percent, amid concern Greece will be forced out of the euro and that austerity plans needed to contain the Europe’s debt crisis will be derailed.

Japan’s Nikkei 225 Stock Average (NKY) increased 0.2 percent, while Australia’s S&P/ASX 200 Index gained 0.1 percent. South Korea’s Kospi Index (KOSPI) slid 0.7 percent. Hong Kong’s Hang Seng Index lost 0.4 percent, while China’s Shanghai Composite Index slid 0.4 percent.

Annual Gain

The Asian regional index rose 4.2 percent this year through May 11, compared with a 7.6 percent gain by the S&P 500 and a 3 percent advance by the Stoxx Europe 600 Index. Stocks in the Asian benchmark are valued at 12.2 times estimated earnings on average, compared with a multiple of 12.9 for the S&P 500 and 10.5 times for the Stoxx 600.

The People’s Bank of China said May 12 that it is cutting the amount of cash that banks must set aside as reserves for the third time in six months, pumping money into the financial system to support lending after data showed a slowdown in economic growth is deepening. Reserve ratios will fall 50 basis points, effective May 18.

To contact the reporter on this story: Kana Nishizawa in Hong Kong at

To contact the editor responsible for this story: Nick Gentle at


Apple Founder Wozniak to Buy Facebook Regardless of Price

By David Fickling and Shraysi Tandon - May 14, 2012 8:45 AM GMT+0700

Apple Inc. (AAPL) co-founder Steve Wozniak said he will buy shares in Facebook Inc. (FB) when the social networking company sells stock to the public in what may be a record initial public offering for an Internet business.

Wozniak, who built the first Apple computer with Steve Jobs and co-founded the company with him in 1976, said he would buy Facebook’s stock regardless of its valuation.

Stephen "Steve" Wozniak, co-founder of Apple Inc., speaks on "Innovation and Creativity in the 21st Century," in Singapore. Photographer: Norman Ng/Bloomberg

Facebook plans to raise as much as $11.8 billion in an IPO scheduled for May 17 in what would be the biggest in history for an Internet company. The company is offering 337.4 million shares to the public at $28 to $35, giving it a market value at the top of the range of $96 billion.

“I would invest in Facebook,” Wozniak said in an interview with Bloomberg Television in Sydney yesterday. “I don’t care what the opening price is.”

Wozniak is chief scientist at Fusion-io Inc. (FIO), a maker of flash-memory technology. The Salt Lake City-based company counts Facebook as its biggest customer.

Menlo Park, California-based Facebook makes up 36 percent of Fusion-io’s revenue, according to data compiled by Bloomberg, followed by 24 percent coming from Apple and 14 percent from Hewlett-Packard Co. (HPQ)

Facebook’s founder Mark Zuckerberg is a “real acute” businessman who mixes technical ability with the vision and corporate acumen of Steve Jobs, Wozniak said.

“I was thankful to have a partnership with Steve Jobs and I see Mark Zuckerberg closer to the combination of us,” he said. “When he speaks he speaks with a lot of idealism for the users and a lot of good ideas for the product overall.”

Holding Out

Wozniak said Zuckerberg’s decision to hold out as long as possible before selling shares to the public was the right strategy for the social networking company.

“I’m glad they held out so long,” he said. “You don’t have to think that your only goal can be an IPO.”

Facebook announced last January that it would start filing public financial reports this year because it expected to breach a regulatory threshold on the number of its shareholders.

U.S. companies with more than 500 shareholders have historically had to publish their financial data under investor- protection laws, removing many of the attractions of being structured as a closely-held company. The 500-shareholder limit was raised to 2,000 under an act which passed the U.S. Senate March 22.

‘Laboratory Scientist’

Describing himself as a “laboratory scientist” more than a businessman, Wozniak said he had mixed feelings about a potential takeover of Fusion-io amid speculation the company may become a target.

Rajesh Ghai, a San Francisco-based analyst for ThinkEquity, describes the company as a “strong acquisition candidate” and estimates its shares could fetch as much as $40 in a takeover.

Fusion-io shares closed May 11 at $21.41 and have risen 13 percent since the company first sold shares to the public in June. The stock has declined 47 percent from its Nov. 17 peak of $40.34.

“Once you have an IPO like Fusion-io did, oh my gosh you’ve now got to look at targets that you can add to your base,” he said. “You’ve also got to worry about who might acquire you. And is that good or bad? It’s sort of a sell-out in my mind.”

After the IPO, Facebook shares will trade on the Nasdaq Stock Market under the symbol FB.

To contact the reporter on this story: Shraysi Tandon in Sydney at

To contact the editor responsible for this story: Michael Tighe at


JPMorgan Unit's London Staff May Go as Loss Prompts Exits

By Dawn Kopecki - May 14, 2012 7:45 AM GMT+0700

The entire London staff of JPMorgan Chase & Co. (JPM)’s chief investment office is at risk of dismissal as a $2 billion trading loss prompts the first executive departures as soon as this week, a person familiar with the situation said.

The firm is examining whether anyone in the unit, which employs a few dozen people in London, sought to hide risks, said the person, who requested anonymity because the deliberations are private. Ina Drew, who oversees the unit, is among three people set to leave, the Wall Street Journal reported yesterday, citing unidentified people familiar with the situation. Joseph Evangelisti, a bank spokesman, said Drew would have no comment.

The offices of JPMorgan Chase & Co. are seen in the business and financial district of Canary Wharf in London. Photographer: Simon Dawson/Bloomberg

May 14 (Bloomberg) -- The entire London staff of JPMorgan Chase & Co.’s chief investment office is at risk of dismissal as a $2 billion trading loss prompts the first executive departures as soon as this week, a person familiar with the situation said. Ina Drew, who oversees the unit, is among three people set to leave, the Wall Street Journal reported yesterday, citing unidentified people familiar with the situation. John Dawson reports on Bloomberg Television's "On the Move Asia." (Source: Bloomberg)

May 10 (Bloomberg) -- Thursday's "Bloomberg Rewind" includes a discussion of the biggest news of the day and wrap-up of the markets. (Source: Bloomberg)

Signage stands outside JP Morgan Chase & Co. headquarters in New York. Photographer: Peter Foley/Bloomberg

JPMorgan Chase & Co. Chief Investment Officer Ina Drew. Source: JPMorgan Chase & Co. via Bloomberg

Chief Executive Jamie Dimon, 56, announced the loss May 10, assailing his firm’s handling of trading in synthetic credit securities as “flawed, complex, poorly reviewed, poorly executed and poorly monitored.” Initially, he resisted accepting Drew’s resignation, the person said. The incident has given ammunition to proponents of stricter bank regulations.

Drew, 55, is one of two women on the operating committee at JPMorgan, the biggest and most profitable U.S. bank. Her office oversees about $360 billion, the difference between money from deposits and what the bank lends. Dimon had encouraged her unit to boost earnings by buying higher-yielding assets, including structured credit, equities and derivatives, in an expansion of risk-taking led by Achilles Macris, ex-employees said in April.

Macris, 50, and a trader on his team, Javier Martin-Artajo, also are leaving the New York-based firm, the Wall Street Journal reported, citing the unidentified people. Macris and Martin-Artajo didn’t respond to messages left outside of regular business hours.

To contact the reporter on this story: Dawn Kopecki in New York at

To contact the editor responsible for this story: Peter Eichenbaum at


Euro Officials Begin to Weigh Greek Exit

By Patrick Donahue - May 14, 2012 5:01 AM GMT+0700

Greece’s possible exit from the euro area moved to the center of Europe’s debt-crisis debate, with officials beginning to weigh the fallout of a withdrawal even as authorities in Athens struggled to form a government.

Meetings brokered by Greek President Karolos Papoulias are set to continue today after Syriza, the largest anti-bailout party, rejected a unity government following last week’s inconclusive elections. The country where the 2 1/2-year-old crisis began moved closer to a new vote, and to the possibility of a euro-area exit that was once a taboo among policy makers.

Graffiti, depicting the Euro symbol as a grenade about to be thrown by a soldier, sits on a wall in Athens, Greece. Photographer: Simon Dawson/Bloomberg

Greek withdrawal “is not necessarily fatal, but it is not attractive,” European Central Bank Governing Council member Patrick Honohan said in Tallinn on May 12. An exit was “technically” possible yet would damage the euro, he said. German Finance Minister Wolfgang Schaeuble reiterated in an interview in Sueddeutsche Zeitung that member states seeking to hold the line on austerity for Greece could not force the country to stay.

The debate between growth and austerity will form the centerpiece of talks tomorrow between the newly installed French President Francois Hollande and German Chancellor Angela Merkel, who has championed an agenda of spending cuts. Euro finance ministers meet today and may discuss the international bailout for Greece, as well as the situation in Spain, where the government last week made a fourth attempt to clean up the country’s banks.

The euro-area finance ministers will convene in Brussels at 5 p.m. local time.

Euro Dip

The euro dipped below $1.30 last week for the first time since January and bond yields of indebted states rose to new highs, with Spain’s 10-year yield climbing 27 basis points to 6.01 percent.

“Syriza won’t betray the Greek people,” party leader Alexis Tsipras said in a statement yesterday as Papoulias began a final bid to coax parties into a coalition. The failure to form a government has prompted concern that Greece may backtrack on pledges to cut spending as part of the bailout requirements negotiated since May 2010, so foreshadowing a euro withdrawal.

The European Commission isn’t considering easing the terms of the joint bailout for Greece from the EU and the International Monetary Fund, EU spokesman Amadeu Altafajsaid, denying a report by Athens-based Real News.

“I’m not aware of any discussions within the commission to grant new provisions, new concessions in the program” for Greece, Altafaj said by phone yesterday.

‘More Resilient’

Europe’s central bankers are discussing the possibility of a Greek departure and how to handle the fallout, Swedish Riksbank Deputy Governor Per Jansson said in an interview on May 11.

European Union Economic and Monetary Commissioner Olli Rehn said in Tallinn that the region is “certainly more resilient” to a possible Greek exit than it was two years ago, when the bloc would have been “massively underprepared.”

“I still believe that Greece can stay in the euro and find the way to make sure that it respects its commitments,” Rehn said. “It would be much worse for Greece and Greek citizens, especially for the less well-off Greek citizens, if Greece did leave the euro than for Europe as such. Europe also would suffer, but Greece would suffer more.”

Under a story headlined “Akropolis Adieu, Why Greece Must Leave the Euro”, Germany’s Der Spiegel magazine today reported that the EU may provide funding for Greece even after a euro departure.

‘Open Arms’

After elections in Greece and France signaled a backlash against the German-led agenda of scaling back spending to battle the debt crisis, officials across the region have re-tuned their rhetoric to emphasize growth and employment.

Hollande, who defeated single-term President Nicolas Sarkozy on May 6 to become the first Socialist president of the Fifth Republic in almost two decades, will tomorrow begin his campaign to shift the focus of crisis-fighting away from austerity.

Confronted with electoral defeat yesterday in Germany’s largest state, Merkel said last week that she’ll welcome Hollande for talks “with open arms.”

“I expect both of them to give a clear signal of commitment to stability of the euro zone of overcoming the sovereign debt crisis,” Peter Altmaier, the deputy floor leader of Merkel’s party, said yesterday on Sky News.

Aid Payment

With Hollande among leaders calling for a “growth pact” alongside the German-championed fiscal treaty, euro leaders will look toward a summit dinner in Brussels on May 23.

Investors will also be watching tomorrow when the Greek government is scheduled to repay 436 million euros ($563 million) on a floating-rate note held by investors who shunned its bond-loss accord. An EU official said May 10 that the payment decision is up to the government in Athens.

The government in Athens would run out of cash by early July if creditors decided to withhold their next aid payment in reaction to stalling progress in Greece, according to a report last week by Bank of America Merrill Lynch.

To contact the reporter on this story: Patrick Donahue in Berlin at

To contact the editor responsible for this story: James Hertling at