QUOTE OF THE DAY
“Inflation remains quite tame. Over the course of the next year, the core numbers will drift up a little bit as the economy remains healthy and unemployment keeps falling.”
Jim O’Sullivan, High Frequency Economics Ltd. chief U.S. economist Article, 1D
Toyota seeks to settle acceleration suits
SANTA ANA, Calif. - Toyota will seek to settle almost 400 lawsuits involving purported unintended acceleration problems in its vehicles, according to a U.S. District Court filing in California.
A motion filed Thursday by Toyota and plaintiffs asks for an order to establish an “intensive settlement process” in personal injury, wrongful death and property damage cases.
A Toyota spokesman told the Los Angeles Times the process will make resolution of pending cases more efficient.
“We continue to stand behind the safety and quality of our vehicles,” spokesman Carly Schaffner told The Associated Press.
Many of the hundreds of cases filed nationwide have been consolidated in California courts.
In October, an Oklahoma jury became the first in the country to find Toyota liable in an unintended acceleration lawsuit, awarding $3 million in damages.
Toyota recalled millions of cars, starting in 2009, but has denied that electronics played any role in the problem.
Cases that don’t settle after a two-stage mediation process will go back to court for trial, said plaintiffs’ co-lead counsel Mark Robinson Jr., but most of the 375 claims will likely get resolved.
“It’s not practical to try all these cases,” he said.
“You’ve got two chances to get your case settled, and if you’re a plaintiff, at least you’re not just sitting in some file in the courthouse.”
Foreign equity in U.S. Treasury hits high
Foreign central banks’ holdings of Treasuries held at the Federal Reserve surpassed $3 trillion for the first time this month as nations intervening in the currency markets plowed dollars back into U.S. government debt.
Overseas central banks lifted the amount of Treasuries held for them by the Fed to $3.007 trillion, Fed data showed.
That’s more than double the $1.162 trillion held at the start of 2007. The Bloomberg U.S. Treasury Bond Index is up 15 percent since January 2010, when Bloomberg began calculating the data.
“There has been a sizable increase in these holdings since late September,” said Win Thin, the global head of emerging market strategy at Brown Brothers Harriman & Co. in New York. “While most emerging market currencies have been under pressure during that time, two outliers have been South Korea and China. Those are likely the nations accumulating dollars, as they are known to intervene in the currency market, and putting them into Treasuries.”
Many emerging-market currencies have come under pressure this year after Federal Reserve officials began signaling in May that they may soon begin to pare back $85 billion in monthly bond purchases. The Fed’s quantitative easing, as the bond buying is known, and near-zero interest rates since 2008 helped fuel global risk-taking and demand for emerging-market securities.
Intel logo to show when players strip
BARCELONA, Spain - The FC Barcelona soccer team has signed a sponsorship deal with Intel, whose logo may never be seen despite being on the jerseys of the Spanish league champions.
The four-year deal with the American semiconductor chip maker is worth a reported $34 million.
The phrase “Intel Inside” will be placed on the inside front of the jersey, meaning it may be seen only when a player lifts his shirt over his head in celebration. The Catalan club calls this a “pioneering initiative in the world of sports advertising.”
Barcelona said that as part of the deal Intel will provide Barcelona players and coaches with company devices. The multinational company also will apply its technology in an effort to improve research, training and performance.
- The Associated Press
Analyst: Shipping to start 2-year rally
Shipping is at the start of a two-year rally, led by advancing rates to haul coal, iron ore and grains, as fleet growth slows and China’s strengthening economy increases cargoes, an analyst at Morgan Stanley said.
Demand for ships will expand at a faster pace than vessels in 2014, the first time in six years that will have happened, New York-based analyst Fotis Giannakoulis said in a report Friday. He upgraded estimates for the industry to “in-line” from “cautious,” and said demand for ships to haul everything from iron ore to grains will benefit most.
The more positive forecast mirrors wider predictions by shipping analysts that the worst of an industry rout is ending. Rates for 10 out of 11 commodity-carrying ships will advance next year, led by a 53 percent rally for Panamaxes hauling coal and ore, according to the averages of more than 50 analyst estimates compiled by Bloomberg News. A Panamax ship is one capable of traversing the Panama Canal.
“We see a 12- to 18-month window to play the cycle,” Giannakoulis said. The industry’s recovery will last two years, after which vessel supply will quicken again. The rally favors owners and operators, including Diana Shipping Inc., Safe Bulkers Inc., Knightsbridge Tankers Ltd., and Star Bulk Carriers Corp., he said.
- Bloomberg News
GM to sell stake in French automaker
General Motors Co., which acquired a stake in PSA Peugeot Citroen last year, is selling off the entire 7 percent holding in its French partner.
GM’s about $440 million investment in the Paris-based automaker was part of an alliance aimed at finding savings through joint purchasing and product development to improve the results for both companies in Europe.
“The alliance remains strong with our focus on joint vehicle programs, cross manufacturing, purchasing, and logistics,” Steve Girsky, GM vice chairman, said Friday in a statement posted on the company’s website. “We’re making good progress while remaining open to new opportunities.”
GM will sell its 24.8 million shares is Peugeot through a private placement to institutional investors, GM said in the statement. Peugeot fell 7.6 percent after saying 2013 profit will take a $1.5 billion hit from currency swings and from a lack of savings from the GM alliance.
“Our equity stake was planned to support PSA in their efforts to raise capital at the time of the creation of the GM and PSA alliance, and that support is no longer needed,” Girsky said.
- Bloomberg News
Business, Pages 30 on 12/14/2013