Australia added the most workers in 14 months in January and the jobless rate unexpectedly declined, spurring investors to increase bets the central bank will extend an interest-rate pause.
Payrolls rose by 46,300 last month, the most since November 2010, after a revised drop in December of 35,600, the statistics bureau said in Sydney today. That compares with the median estimate for an increase of 10,000 in a Bloomberg News survey of 25 economists. The jobless rate fell to 5.1 percent.
Stocks fell as traders boosted the odds Reserve Bank of Australia Governor Glenn Stevens will keep the benchmark borrowing cost unchanged March 6 after he unexpectedly paused at 4.25 percent rather than cut last week as resource investment drives growth. The central bank lowered the rate at back-to-back meetings last quarter as Europe
Greece’s international creditors have spelled out the austerity measures promised by Athens that have to be put into practice before it can receive new bailout cash, totaling more than euro2.5 billion ($3.31 billion).
Those budget cuts include:
_ euro1.076 billion ($1.43 billion) to be cut from the country’s pharmaceuticals spending
_ euro300 million ($397 million) in military budget cuts
_ euro270 million ($358 million) to be slashed from regular government expenditure and election-related budgets
_ euro190 million ($251 million) to be trimmed from subsidies to people living in remote areas
_ euro400 million ($530 million) in public investment budget cuts
_ euro300 million ($397 million) in budget subsidies to pension funds
The leaders of the two parties backing Greece’s coalition government called on their deputies Saturday to back legislation that calls for harsh new austerity measures _ essential if Greece is to get a new bailout deal worth euro130 billion ($171.6 billion) and stave off bankruptcy.
Debate on emergency legislation approving the new bailout and a debt-swapping deal with private creditors will begin in committee Saturday afternoon. A plenary session will debate and vote on it Sunday. Further legislation detailing the measures demanded by, and agreed with, Greece’s public creditors, the European Union and the International Monetary Fund, will be up for vote a few days later. The exact time has not yet been set.
Both leaders _ socialist George Papandreou and conservative Antonis Samaras _ told their respective parliamentary groups that there is no real alternative to voting for the legislation, except pushing Greece to bankruptcy.
“If we do not dare today, we will live a catastrophe,” Papandreou said.
“This (bailout) will give the country the opportunity and the time to stand back on its feet,” said Samaras.
Deputies are wary of voting for the measures, which include wage and pension cuts and the prospect of more to come, along with the firing of several thousand civil servants. The demands of the EU and the IMF have caused one of the original coalition parties _ the populist right-wing Popular Orthodox Party _ to quit the government and withdraw its four members from the cabinet. Two more cabinet members _ both socialist deputy ministers _ have also quit, citing their disagreements with parts of the austerity package.
Sensing the unease among their MPs, and trying to prevent a wholesale rebellion, both Papandreou and Samaras have called for a yes vote. But whereas Papandreou was vague about the prospect of sanctions against any rebels, Samaras was clear _ threatening to expel those who did not vote in favor and to exclude them from the next election. “I want to make it absolutely clear … rebels or ‘bravehearts’ have no place in (the party’s) candidate lists,” he said.
Samaras had opposed the initial bailout, worth euro110 billion, that Papandreou, as Prime Minister, had negotiated in May 2010, saying the measures it contained would worsen the crises and result in a deep recession. He now says he feels vindicated, but conditions have worsened so much lately _ due to the bad handling of the crisis by the previous socialist government _ that social cohesion is at stake. He also blamed Greece’s EU partners for lately showing a tendency to punish Greece rather than help it. He added that the turning point for the EU’s hardening stance was Papandreou’s sudden call in late October for a referendum on Greece’s stay in the eurozone.
“The danger now is that Greece’s social unrest will spread as a contagion to Europe,” he said.
In his speech earlier Saturday, Papandreou defended his government’s record, saying that they had inherited a badly damaged economy from the conservatives in October 2009 and that the socialists faced nothing but disruptive criticism throughout their term, through last November.
“We were at war, fighting alone, for two years … whoever talks about the recipe (of the austerity measures) being wrong is a hypocrite.”
Papandreou laid the blame for the worsening crisis in Greece at the doorstep of a “conservative Europe with slow reflexes,” saying the Franco-German meeting in Deauville, France, in October 2010, emboldened the markets to fan the flames of the crisis. He called for “real integration of economic policies,” a Eurobond, a crackdown on tax havens and a tax on financial transactions.
Samaras insisted the country must hold a snap election once the agreement is in place and the debt swap with private creditors is completed. “Then we will demand a dissolution of the parliament, because (an election) will strengthen our bargaining position … I have been a deputy since 1977 and never, in my career, has a parliament been so out of step with the wishes of the people,” he said, adding that he would not agree to the extension of the mandate of the coalition government. Elections are normally due in October 2013.
While the two parties met, union leaders staged a demonstration outside parliament that attracted about 4,000 protesters, according to the police _ while 5-6,000 policemen patrolled the streets of Athens. The protest ended peacefully, but authorities are bracing for a much larger, and possibly violent, one on Sunday evening.
Another 4,000 turned out for a peaceful demonstration in Thessaloniki, Greece’s second city.
McDonald’s extreme-green shamrock shake is going nationwide for the first time, the fast food franchise revealed on Wednesday.
The leprechaun-colored shake is currently available at every one of McDonald’s (, Fortune 500) 14,000 U.S. restaurants, according to company spokeswoman Ashlee Yingling.
The shamrock shake itself isn’t new. It’s been offered by McDonald’s restaurants at or around St. Patrick’s Day since 1970. But in the past, only certain restaurants offered the familiar green shake.
In its 42 years of existence, the shamrock shake has developed what McDonald’s refers to as a "cult-like" following among certain aficionados who prize its vivid-green hue.
So where does the shamrock shake gets its color? It’s basically a vanilla shake with mint flavor, said Yingling, and it gets the green hue from the syrup.
Like many of McDonald’s products, the shamrock shake once had its own mascot, named Uncle O’Grimacey, who appeared in commercials while singing a jaunty jingle about the shake.
O’Grimacey is an Irish version of the more well-known Grimace character, a rotund, purple creature of uncertain origin. O’Grimacey is green, of course, and unlike the naked Grimace, he wears clothes: a vest with shamrocks on it and a top hat of the sort worn by leprechauns.
But O’Grimacey won’t be pitching the shamrock shake this year.
"We will not be bringing back Uncle O’Grimacey or the jingle you referenced," said Yingling, when asked about his whereabouts.
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In fast food parlance, the shamrock is considered a "special" shake because of its exotic look and flavor. Not one to be outdone, the fast food franchise Jack in the Box () offers its own "special" drink: the bacon shake.
The bacon shake debuted on Feb. 2 and is only available for a limited time at certain restaurants, said Jack in the Box spokesman Brian Luscomb.
He said the bacon shake contains bacon-flavored syrup. But it contains no actual bacon, so it could actually be consumed by vegetarians, so long as they don’t mind milk products.
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The bacon shake also contains a lot of calories: 773 for a 16-ounce drink, according to Jack in the Box. That’s more than a 16-ounce shamrock shake, which contains 680 calories, according to McDonald’s.
But what did you expect? It’s a milk shake!
"Shakes are typically higher in fat and calories, but the bacon shake has about the same nutritional content as the other shakes," said the Luscomb, comparing it to other Jack in the Box products.
Two years of minimal wage increases have left Christoph Schoenau, a metallographer for auto and aircraft component maker GKN Plc at a factory near Frankfurt, feeling left out of Germany
Euro-area confidence in the economic outlook improved less than forecast in January as the region
In Silicon Valley’s white-hot competition for tech talent, programmers can face a daily barrage of calls from recruiters seeking to woo them to rival companies with offers of better pay and perks.
But workers for some of the biggest names in the business claim their phones fell silent because of a conspiracy among their employers. And they claim the world’s biggest tech icon was at the center.
A lawsuit filed in federal court in San Jose claims senior executives at Google Inc., Intel Corp., Adobe Systems Inc., Intuit Inc., Lucasfilm Ltd., Pixar and Apple Inc. violated antitrust laws by entering into secret anti-poaching agreements not to hire each other’s best workers. In doing so, the suit contends the companies were able to keep wages artificially low by preventing bidding wars for the best employees.
The plaintiffs also claim that company e-mails show Steve Jobs himself sought and orchestrated at least some of the so-called “gentlemen’s agreements” while Apple’s CEO.
“I believe we have a policy of no recruiting from Apple,” then-Google chief executive Eric Schmidt wrote in a 2007 email cited by the plaintiffs. The email was originally furnished to the U.S. Justice Department, which investigated similar allegations in 2010. The same email included a forwarded message from Jobs complaining that Google’s recruiting department was trying to lure away an Apple engineer.
“Can you get this stopped and let me know why this is happening?” Schmidt wrote. Google’s director of staffing replied that the recruiter “will be terminated within the hour.”
The companies’ attorneys said the facts even as presented by the plaintiffs show no evidence of a conspiracy.
Rather, they said in court filings that some companies had separate one-to-one pacts among themselves as they worked together on various business ventures.
“The obvious explanation for the existence of these agreements were the collaborations,” said Apple defense attorney George Riley, as the two sides squared off Thursday in U.S. District Court in San Jose. Riley told Judge Lucy Koh that such arrangements were common.
The case hinges on a practice described in court documents as “cold-calling.” Under the practice, recruiters from one company will call an employee at another company who has the skills the company needs. The practice can lead to bidding wars as workers play the companies off one another to get the highest pay.
Cold-calling, the suit contends, helps workers get a sense of what they’re worth in a free market for employment in which all the companies are competing against one another for top employees. When the cold-calling stops, workers lose the knowledge and the leverage they could otherwise use to demand higher pay.
The Justice Department’s 2010 investigation included all the same companies except Lucasfilm, and the plaintiffs in some ways mimic the language from the department’s original case. The companies settled without admitting any wrongdoing but agreed not to enter into future agreements preventing them from cold-calling each other’s employees to recruit them.
Because the Justice Department’s case was settled quietly without any public dispute, court records contain little detail about any specific alleged agreements among companies.
Some of those details did come to light, however, in a recent filing by the plaintiffs, which quotes emails they obtained from the companies that had previously been given to the Justice Department business cards.
In a 2005 email describing a purported agreement between former Adobe CEO Bruce Chizen and his then-counterpart at Apple, an Adobe human resources executive wrote: “Bruce and Steve Jobs have an agreement that we are not to solicit ANY Apple employees, and vice versa,” according to court documents.
Ex-Palm Inc. CEO Ed Colligan wrote to Jobs in 2007: “Your proposal that we agree that neither company will hire the other’s employees, regardless of the individual’s desires, is not only wrong, it is likely illegal,” the plaintiffs’ filing said.
In internal company communications, Intel CEO and Google board member Paul Otellini described a gentleman’s agreement between the two companies: “Let me clarify. We have nothing signed. We have a handshake `no recruit’” between himself and then-Google CEO Schmidt. “I would not like this broadly known.”
Defense attorneys contend the emails are being distorted by the plaintiffs and show nothing beyond legitimate one-to-one agreements. Apple declined to comment.
“Intel disagrees with the allegations contained in the private litigation related to recruiting practices and plans to conduct a vigorous defense,” said Sumner Lemon, an Intel spokesman.
Adobe said the company does not comment on pending litigation.
The other companies named in the suit did not immediately respond to requests seeking comment.
Whichever side prevails, the case underscores the high wages talented tech workers can command in Silicon Valley, where the tech industry added thousands of jobs last year. According to federal labor statistics, mid-level tech workers in the region such as computer security specialists, web developers and network architects earn more money than anywhere else in the country, with average annual salaries topping $110,000.
Many of those workers could get thousands more if the case goes their way, lead plaintiff’s attorney Joseph Saveri said. Given the potentially tens of thousands of workers affected if the plaintiffs succeed in turning the suit into a class-action case, Saveri said the combined damages for the companies could reach into the hundreds of millions of dollars if decided at trial.
Such penalties would sink many companies. But Apple recently reported cash reserves of more than $97 billion. Google also has billions in cash on hand.
One anti-trust attorney not involved in the case doubts the companies have much to worry about anyway.
Antitrust cases that revolve around hiring practices are difficult to win, said David Balto, a Washington, D.C.-based antitrust lawyer who investigated Microsoft as a staff attorney for the Federal Trade Commission in the 1990s. Among the legal challenges they face is defining who exactly makes up the class of workers harmed by the alleged violations, since people with different jobs have different employment options, he said.
“I don’t think anybody at these companies is losing a nanosecond of sleep because of this lawsuit,” Balto said.
Portugal has come under heavy pressure in the bond market this week as investors fear the nation could be the next domino to fall in the eurozone debt crisis.
On Thursday, the yield on 10-year government bonds spiked above 15%, the highest level since the euro currency was launched in 1999, while yields on 3-year notes surged to nearly 21%.
Investors have been rattled by the increasingly coercive debt negotiations in Greece, where private sector bondholders are facing losses of up to 70% of their Greek debt holdings. The fear is that Portugal may eventually seek a similar deal to write down some of its €162 billion debt load.
Portugal’s borrowing costs shot up after Standard & Poor’s downgraded the government’s credit rating to speculative grade, or junk, on Jan 13. The ratings agency said investors could lose up to 50% of their holdings if Portugal were to default on its debts.
But investors are also worried about Portugal’s bleak economic prospects and the uncertain outlook for the eurozone in general. The Portuguese economy is expected to shrink 3% this year as austerity measures take their toll and the broader eurozone economy contracts.
"Obviously it is not just the downgrade but the starting debt position, the economic outlook and the possibility that Greece is setting a template for the future that is concerning investors," said Gary Jenkins, a fixed-income analyst at Swordfish Research.
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While the bond market has turned against Portugal, investors have been primarily worried about larger eurozone economies such as Italy and Spain, which are seen as vulnerable to a full-blown debt contagion.
Borrowing costs for Italy and Spain have backed off recent highs amid a flood of liquidity from the European Central Bank, which pumped nearly €500 billion of long-term loans into the banking system and relaxed its collateral requirements.
Meanwhile, Portugal succumbed to the debt crisis long ago. The nation first tapped a €78 billion bailout from the European Union and International Monetary Fund in Apirl 2011.
In December, the IMF released €2.3 billion from Portugal’s bailout and praised the government for the progress it has made on fiscal reforms, saying the program was "broadly on track."
The IMF expects Portugal to return to the public markets in 2013. But fund officials cautioned that the government needs to do a better job at controlling public spending, especially at the local level and in state-owned enterprises.
IMF cuts growth forecast for all but U.S.
Despite the market pressure and economic challenges, analysts say Portugal is not in immediate danger of default.
"Regardless of the future complications, it is unlikely that the government will opt to default in the next few months," said Antonio Barroso, an analyst at Eurasia Group, a political risk research firm.
However, the government may need to seek additional bailout money in the second half of the year, depending on its progress on fiscal reforms and the outcome of the eurozone crisis, Barroso wrote in a note to clients.
Greece, by contrast, has struggled to implement budget cuts and structural reforms that are a condition of its bailout loans.
The nation has yet to seal a deal with private investors over a proposed 50% reduction in the value of Greek government bonds. The agreement is a key condition of a second €130 billion bailout, the terms of which are now being negotiated.
Athens is facing a €14.5 bond redemption in March that it may not be able to pay without additional bailout funds.
Ireland, which passed its latest bailout review with flying colors last week, has been the most successful bailout recipient. The nation’s borrowing costs have eased this year and Dublin announced a debt swap with private investors on Wednesday.
Freddie Mac is in the spotlight of the Republican presidential contest, as Mitt Romney attacks Newt Gingrich for his 2006 work for the mortgage finance firm.
But what the firm did, and the role it and larger rival Fannie Mae played in the housing crisis of the last decade, remain a source of confusion for many Americans.
What do Freddie Mac and Fannie Mae do? The two of them support the housing industry by providing billions in financing to the mortgage market.
They buy mortgage loans from lenders that conformed to their guidelines, typically safer loans with a large down payment, good credit scores for the borrowers and verification of their income.
Because there is an implicit guarantee that the federal government stands behind both firms, which were set up by Congress, they borrow money at the lowest possible rates and get a good return on their investment.
Did the two firms create the housing bubble that caused the financial meltdown? Not really.
The two firms were major players in the mortgage market, and so the rising home values were at least partly funded by their flow of money.
But the bubble really inflated when Wall Street started buying riskier loans made to borrowers who didn’t qualify for a Fannie or Freddie conforming loan. Those loans carried higher interest rates, with relatively little risk for investors while home prices were going up.
Experts say it was the growth of those riskier loans that caused home prices to rise and the bubble to inflate.
"When you bring in 5 million marginal buyers who under normal circumstances would not qualify for a mortgage, that’s what ends up driving home prices," said Barry Ritholtz, CEO of Fusion IQ.
He said the big Wall Street firms that became major players in the mortgage market, such as Citibank (, Fortune 500), Bank of America (, Fortune 500), Goldman Sachs (, Fortune 500), Morgan Stanley (, Fortune 500) and AIG (, Fortune 500), are as or more guilty than Freddie and Fannie.
"If Freddie and Fannie never existed, we would have had the same problem," he said.
What caused problems for Fannie and Freddie? By the middle of the last decade, Freddie and Fannie had lost their dominant position in the home loan market, as the riskier loans became a larger share of the mortgage market.
So they adjusted their underwriting standards in order to participate in the riskier lending as well.
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Even though the riskier loans were a minority of the loans each purchased, because each was so huge, they ended up with a large volume of those loans.
They also were relatively late to the game. That meant they got into riskier loans right before the decline in home prices — which began in 2006 — led to a spike in foreclosures. After that, home buyers started to default on loans that were safer, adding to Freddie and Fannie’s losses.
"What killed Fannie and Freddie is the housing market went to hell and they were 100% exposed to housing," said Jaret Seiberg, analyst with Guggenheim Washington Research Group.
How much money did the collapse cost taxpayers? So far Freddie has received $72.2 billion from Treasury, while Fannie, which is larger, received $111.6 billion. The combined $183.8 billion makes it the most expensive bailout by taxpayers of the financial crisis. But part of that bailout has been repaid to taxpayers in the form of dividends. Freddie has repaid $14.9 billion, while Fannie paid $17.2 billion.
Seiberg said that the bailout might have been avoided, or been relatively minor, if Fannie and Freddie had stayed away from the riskier loans.
"Best-case scenario would have been they were knocked down, but not knocked out," he said.
Why did Freddie and Fannie hire Washington insiders such as Newt Gingrich?Gingrich’s contract with Freddie is short on specifics of the work he performed for $25,000 a month. But even if he did no lobbying, as he says, the contract came at a time when Freddie and Fannie were eager to buy as much Washington influence as possible.
For years, the two firms were among the most powerful companies in terms of Washington muscle, getting free reign from both Congress and their regulator, then known as the Office of Federal Housing Enterprise Oversight (OFHEO).
"Fannie and Freddie had Congress wrapped around their fingers," said Guy Cecala, CEO of Inside Mortgage Finance, which publishes trade publications following the mortgage market. "They were untouchable."
Because of the public-private nature of their charters, the firms wanted to make sure Congress and OFHEO allowed them to operate with few restrictions. But they also wanted to keep government’s implicit backing in place so they could borrow money cheaply.
"They were very aggressive lobbying Congress and OFHEO to stay out of their way," said Ritholtz.
Ecuador received a loan commitment from China last month for at least $1 billion, helping finance a budget deficit that
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