ANALYSIS-Oil reports may offer Obama an out on Iran

By Timothy Gardner
WASHINGTON, Jan 31 (Reuters) – President Barack Obama will soonget regular, albeit incomplete, reports on how oil markets are coping ahead of broader sanctions on Iran that could help him justify easing off sanctions to prevent a politically damaging jump in crude prices.

Under the latest Iranian sanctionssigned into law late last year, the U.S. Energy Information Administration must begin issuing reports by Feb 29 and every two months after that on oil production and prices as the United States moves to squelch Iranian oil shipments.

The lawimposes sanctions on financial institutions dealing with Iran’s central bank. It’s designed to rein in Iran’s nuclear program by targeting its ability to sell oil, the country’s lifeblood.

The administration has nervously moved ahead withsanctions as it negotiates with some of Iran’s biggest customers to reduce their imports of its oil.

The irony is that while the sanctions were designed to hit Iran, global oil prices could rise due to rising tensions over the sanctions andthat could trouble Obama.

TheWhite House is bracing for a barage of criticism if gasoline prices begin to rise with the onset of the summer driving season, according to one source close to the White House. If gasoline prices march towards $5 a gallon from more than $3.40 now,Republicans will attack just as Obama gears up for the November elections.

But Obama could use the EIA reports, which look at production and prices in countries besides Iran, to ease up on sanctions if they suggest energy security was at stake.

“If the president decides he doesn’t want to impose the sanctions he’s got a fig leaf,” said Phil Verleger an economist and consultant with PKVerleger LLC. “He can hide behind the report.”

Tensions between Iran and the West have been on the rise since the EU said this month it would embargo Iran’s oil exports from July 1.

The International Monetary Fund has warned a supply disruption caused by the sanctions could push oil prices up by $20 to $30 a barrel, exacerbated by the thinoil stocks held by many consuming countries.

The Obama administration has time to decide if the EIA reports suggest prices will rise to an uncomfortable level. The EIA will issue three of the reports ahead of the June 28 deadline in the law thatallows Washington to sanction foreign banks in countries such as China, India and South Korea that purchase petroleum from Iran.

Glen Sweetnam, who is in charge of the upcoming EIA report, said the agency has put adozen workers on the reports, a bit more than for its usual reports on energy markets.

“What we are trying to do here is trying to provide an accurate picture as we can of the oil market and that’s what we normally do,” said Sweetnam. Economists will be watching whether the February report gives insight on whether Saudi Arabia and the United Arab Emirates can make up for any shortfall if Iran shuts in production.

“One of the biggest parts of the debate is how much capacity does Saudi Arabia have to step in and make up for,” losses in Iran’s exports, said Michael Levi, a fellow at the Council on Foreign Relations.

But some doubt the EIA, riven by budget cuts, can give a complete picture of oil markets because ofknowledge gaps especially in Asia, where demand has been growing the fastest.

“There are massive problems with the data,” said Edward Morse, the global head of commodities research at Citigroup in New York. He believes the EIA could get a clearer snapshot if it get more money in the budget, but even then the picture would not be complete.

As the independent statistical arm of the Energy Department, the EIA is charged with compiling reports and forecasts free of influence from theadministration.

The reports mandated by the sanctions law, however, will be done in collaboration with the Treasury and State Departments and the Director of National Intelligence. Those agencies will provide input before the reports are sent to Congress.

The collaboration could spark criticism that the administration influenced the study, a charge Sweetnam rejected because the EIA would be the final editor. “We decide what it’s going to say,” he said.

Nevertheless, the EIA report could act as a political shield if Obama decided to temper the sanctions. Mark Dubowitz, a advocate for tougher Iran sanctions and head of the Foundation for Defense of Democracies, said it will be”difficult for Congress and for others to hold the administration’s feet to the fire” if Obama used the EIA report as a reason to ease up.

George Lopez, an expert on international sanctions at University of Notre Dame, said Obama would have totread carefully and not appear as being soft on Iran. But ultimately the president has much wiggle room.

“Previous presidents have dialed back on sanctions for reasons far less compelling to national security than high oil prices,” he said.

(Reporting By Timothy Gardner, additional reporting by Richard Cowan; Editing by Russell Blinch and Bob Burgdorfer)


Greece must pledge tough reforms for debt swap deal (summary of the situation)

By LefterisPapadimas and George Georgiopoulos
ATHENS, Jan 31 (Reuters) – Greece must make “difficult” decisions in the coming days to clinch a debt swap agreement and a 130 billion euro bailout package needed to avoid an unruly default, the government saidon Tuesday.

Near-bankrupt Greece is struggling to convince sceptical lenders it can ram through spending cuts and labour reform to help bridge a funding shortfall driven by a worsening economic climate and its previous reform plan having veeredoff track.

With a long-awaited debt swap deal largely almost secured, Athens’ focus is now squarely on the reform front. Failure to persuade lenders it can follow through on its pledges could put both the bond swap and the country’s latestbailout at risk.

“Without the new (bailout) programme we cannot have the necessary funding and the debt swap cannot be completed,” Finance Minister Evangelos Venizelos told reporters.

“In the next few days, our country needs to takedifficult decisions and to complete a gigantic effort which rewards the sacrifices, the achievements and the hopes of the Greek people.”

He reiterated that Athens is “one formal step away” from completing a deal with private bondholders torestructure 200 billion euros of Greek debt, and confirmed that talks on both the swap and the bailout were “converging” and “co-dependent”.

A senior Greek banker earlier said a final accord on the bond swap was on hold until Athens can show itis serious about tackling reforms.

“The debt swap agreement is ready, but it will not be announced before the end of the week and until the government has made certain commitments on reforms, labour issues and the pension system,” said thebanker, who declined to be named.

“By delaying the debt swap, European partners are putting pressure on the government and political leaders to make certain commitments.”

Prime Minister Lucas Papademos onTuesday confirmed that Athens was aiming for a definitive agreement on the debt swap by the end of this week — roughly the same time it expects to conclude talks with lenders in Athens on its second bailout.

Papademos acknowledged that the mainsticking points in talks with the so-called “troika” of foreign lenders – the European Central Bank, the EU and the International Monetary Fund — revolved around spending cuts and labour reform.

On top of biting austerity measures already takenthat regularly bring droves of angry protesters onto the streets, Greece’s lenders have demanded it make extra spending cuts worth 1 percent of GDP – or just above 2 billion euros – this year, including big cuts in defence and health spending. In a sign of the challenges the government faces in pushing those through, a Greek union official said the country’s major unions were gearing up for more anti-austerity protests next month after an early grace period for Papademos’s government. Talks with the troika have struggled over further cuts in labour costs in the private sector, which Athens has resisted over fears they could deepen a brutal recession and impose additional hardship on the poor, Greek officials say.

The prospect of elections as early as April has further complicated the talks, with political leaders in Papademos’s national unity coalition eager to distance themselves from any cuts that herald more pain for ordinary Greeks.

Increasingly exasperated byAthens’ failure to live up to pledges on the reform front, European partners have demanded all Greek parties commit to measures agreed under the bailout irrespective of who wins the next elections.

A German minister went so far as to call forAthens to surrender control of its budget policy to outside institutions if it could not implement reforms, though Berlin has toned down the debate after an indignant reaction from Greek officials.

Underscoring the stakes involved, ECB Governing Council member Ewald Nowotny said whether Greece stays in the euro zone depended on its ability to push through a series of measures.

“I hoped that these measures will be implemented but one cannot probably be absolutely sure,” Nowotny toldAustrian radio station ORF.

Despite expectations of a decision on the bond swap at the European Union summit in Brussels on Monday, sources familiar with the matter said euro zone leaders were not asked to givean outright approval or rejection of the bond swap.

That is expected to occur only after a comprehensive agreement is struck on both the swap and the bailout, they said.

As part of the swap, banks and insurers would take a 50 percentwritedown on the notional value of the Greek debt they hold, easing Athens’ debt load by 100 billion euros.

Their actual losses on the holdings are expected to be closer to 70 percent, however, based on an average coupon of under 4 percent — alevel the two sides have converged on after several rounds of talks, the senior Greek banker said.

Still, previous declarations of an imminent deal have failed to come to fruition and one senior Greek official cautioned: “Not everything has been agreed yet.”

The talks had been complicated by hedge funds that built up positions in Greek bonds, as they hoped the country would go under so that insurance against the debt could be paid out, or that they would be paid in full by holding out.

Greece has responded by threatening to enforce losses on investors who do not voluntarily sign up to the swap.

Time is running short for Greece, which needs to wrap up both set of talks by mid-February at the latest to ensure it getsmoney in time to avoid a chaotic default when 14.5 billion euros of bond redemptions fall due in March.

Without a deal and a subsequent release of funds from the bailout plan, Greece would sink into an uncontrolled default that risks spreadingturmoil across the euro zone and tipping the global economy back into recession.

(Additional reporting by Renee Maltezou in Athens and Luke Baker in Brussels, Writing by Deepa Babington; editing by Stephen Nisbet)

Borse frenate da dati Usa. Bye bye di Benetton alla Borsa

Le Borse europee hanno messo a segno una giornata positiva con gli indici che hanno chiuso in rialzo, ma a sotto i massimi della giornata. A Milano l’FtseMib è salito dello 0,4%, Londra +0,1%, Parigi ha guadagnato l’1%, Francoforte +0,2%.

Partite bene sull’onda dell’apprezzamento dell’accordo di lunedì sera a Bruxelles per il nuovo Trattato Ue, le Borse hanno frenato nel pomeriggio a causa di alcuni dati americani. In particolare, l’indice sulla fiducia dei consumatori è sceso a gennaio a quota 61,1 da 64,8 di dicembre. Gli economisti avevano previsto in media 68.

L’indice S&P Case Shiller sull’andamento dei prezzi delle case americano a novembre è sceso dello 0,7%, gli analisti attendevano un calo dello 0,5%.
Sul fronte valutario si registra la forte discesa dell’euro, caduto in serata a 1,305 contro il dollaro da 1,314 della chiusura precedente. Il movimento è stato causato dalle indiscrezioni secondo le quali la prossima asta straordinaria di liquidità (Ltro) della Bce inietterà nel sistema finanziario europeo circa 1.000 miliardi di euro di nuova liquidità.

La giornata è stata positiva, invece, per i titoli di Stato italiani: il rendimento del Btp decennale è sceso di 15 punti base al 5,91%, lo spread con il Bund è a 412 punti.

In Europa i rialzi sono stati diffusi su tutti i settori, ma i titoli guida sono stati i petroliferi, che hanno seguito il rincaro del greggio: Wti e Brent sono saliti dello 0,5% a 99,2 dollari al barile a 111,1 dollari. A Londra Bp (BP.L) è salita del 2,9%, a Parigi Total (FP.PAR) +1,5%, a Milano Eni (ENI.MI) si è mossa poco (+0,3%), mentre Saipem (SPM.MI) ha guadagnato l’1,9%.
In Piazza Affari si sono messe in evidenza le banche: Unicredit (UCG.MI) +6,3%, Intesa (ISP.MI) +3,1%, Banco Popolare (BP.MI) +2,9%, Pop.Milano (PMI.MI) +4,4%, MontePaschi (BMPS.MI) +1,4%. In forte discesa Mediobanca (MB.MI) -3,6%.

Fra le assicurazioni, Generali (G.MI) ha perso il 2,2% ma mancano notizie in grado di spiegare questo movimento.
Balzo di Fondiaria-Sai (FSA.MI), salita del 12,3% dopo le indiscrezioni, smentite, che ipotizzano un interesse di Axa per la compagnia. La controllata Milano (MI.MI) è salita dello 0,5%, Unipol (UNI.MI) ha chiuso in calo dello 0,4%.

Fra i titoli industriali, ha corso Fiat (F.MI), in rialzo dell’1,9% alla vigilia dei dati di bilancio che saranno annunciati domani. Fiat Industrial ha perso il 5,1% dopo la trimestrale di Cnh che ha deluso i mercati.

Positiva Finmeccanica (FNC.MI) +1,4%.

Bene anche Mediaset (MS.MI) +2,7% e Ferragamo +4%.

Benetton (BEN.MI) ha fatto un balzo all’insù del 9,2%, prima di venire sospesa: con un comunicato, la holding Edizione della famiglia Benetton ha annunciato che lancerà un’Opa sulla società finalizzata al delisting. La Consob ha aperto un’indagine sugli strani movimenti del titolo Benetton che ieri aveva guadagnato il 13%

La notizia ha acceso l’interesse speculativo degli investitori su titoli “vicini” a Benetton, come Geox (GEO.MI), salita del 6,2% e Stefanel +11%.

Banche Italia, collaterali per p/t Bce balzati oltre i 350 mld

MILANO, 31 gennaio (Reuters) – Sotto la spinta dei
bond garantiti, ma non solo di quelli, le banche italiane negli ultimi mesi hanno aumentato di circa il 50% la gamma di collaterali disponibiliper ottenere fondi dalla Bce al tasso dell’1%. Il nuovo livello, in base alle parole odierne del direttore generale di Bankitalia Fabrizio Saccomanni, è infatti balzato oltre i 350 miliardi, mentre a fine ottobre si attestava poco sopra i 200.

E ben 203 – 116 dei quali relativi al finanziamento a 3 anni dello scorso dicembre – sono attualmente impegnati presso la Bce, appena meno dei circa 210 di fine 2011.

Questa massa di fondi a disposizione del sistema creditizio italiano ha favorito nelle ultime settimane l’acquisto in asta di titoli di Stato a breve termine e l’attività di carry trade, sospinta dal tasso all’1% concesso dalla Bce a fronte di rendimenti molto più elevati sul mercato.

Ma buona parte dei fondi rimane nonutilizzata come mostrano i dati quotidiani – molto elevati – dei depositi overnight presso la stessa Bce. A non rafforzarsi è il filone dei prestiti a imprese e famiglie. Le prime si confrontano con richieste di rientro dai fidi e con condizioni piùonerose per i nuovi crediti, anche se dal fronte bancario – ultimo il presidente del consiglio di sorveglianza di Intesa (ISP.MI) Giovanni Bazoli – si replica che “le domande non giungono da parte degli industriali che sono sfiduciati”. Non migliorela situazione delle famiglie, in difficoltà rispetto al sistema bancario, sia per quanto riguarda l’accesso al credito sia per la richiesta di mutui, che, anche a condizioni nettamente peggiorate, le banche concedono con grande fatica.

Tornando al numero assoluto dei collaterali l’avvento dei bond bancari garantiti dallo Stato spiega solo metà dell’incremento di almeno 150 miliardi.

Secondo una fonte vicina alla situazione, i bondgarantiti sinora autorizzati sono infatti pari a circa 70 miliardi di euro e fanno capo per ben il 60% alle prime tre banche italiane Unicredit (UCG.MI) (20 miliardi di cui solo 15 già quotati sul Mot), Intesa Sanpaolo (ISP.MI) (12 miliardi) e Mps(BMPS.MI) (10 miliardi). Più indietro Banco Popolare (BP.MI) e Ubi (UBI.MI). ognuno con tre miliardi. Di questi 70 miliardi, in base ai dati della Borsa italiana, quelli già ammessi al Mot ammontano a circa 63,5 miliardi. Lo scorso dicembre iquotati, poi utilizzati per il primo p/t a tre anni, erano pari a 40,4 miliardi.

Benetton Family Eyes Buyback Of Their Clothing Empire

By Christopher Emsden

ROME (Dow Jones)–The Italian family that founded Benetton Group SpA (BEN.MI) may delist the company, taking advantage of its lowest stock price in decades to take back full possession of a company that helped invent global apparel retailing.

Edizione Srl, a holding company owned by the Benetton family, said Tuesday it was mulling a public offer for the 33% of Benetton shares it doesn’t already own. A decision will be made Wednesday, the company said.

Benetton said later Tuesday that 2011 net profit fell more than 30% to EUR70 million, even as sales broadly held steady at EUR2.03 billion. Profit will be “under pressure” even more this year as debt-servicing costs are set to rise, the company said.

Its operating profit margin fell to 7.5% of sales in 2011 from 8.6% the year before.

Despite its weakening profitability, Benetton’s top line has proved relatively resilient, and the EUR550 million in sales in the final three months of 2011 helped generate EUR190 million in cash flow in that period alone.

Investors are cool on Benetton and have driven its shares to their lowest price since being listed in the 1980s. Given The company does 55% of its sales in southern Europe and is already struggling with higher cotton and wool prices, its prospects are subdued, said Giuseppe Corona, an analyst for Exane BNP Paribas in Milan who has an underperform rating on Benetton shares.

Edizione, which is being advised by Intesa Sanpaolo SpA (ISP.MI), UniCredit SpA (UCG.MI) and Mediobanca SpA (MB.MI), used past gains from the clothing company to take big stakes in larger companies such as Autogrill SpA (AGL.MI) and tollroad operator Atlantia SpA (ATL.MI). Such diversification also means the Benettons have, beyond sentimental interest in a company bearing their family name, developed sophisticated in-house skills in terms of assessing questions of leverage and economic growth.

Benetton noted it has to refinance EUR400 million in debt later this year, and those loans were taken out at very low interest rates in 2007. Italian corporate borrowing costs have risen in step with the strains on Italy’s sovereign debt.

Edizione has the financial heft to negotiate lower costs and possibly to retire some debt, bankers say. Doing so would be easier if it delisted the company, which would cost around EUR190 million at current prices.

Full ownership would offer more flexibility in terms of balance-sheet operations. Benetton values its real-estate portfolio–comprising mostly its global store network, which unlike many peers it has never sold into lease-back deals–at EUR780 million, about the same as its current market capitalization.

The company’s real-estate portfolio supports Benetton’s ultimate value, said Exane BNP Paribas’s Corona.

Benetton shares were suspended Tuesday on the Milan bourse after rising almost 10%. However, that jump was triggered by a speculative report in the local online press that Benetton was considering a merger with Zara, the larger fast-fashion rival owned by Spain’s Inditex SA (ITX.MC).

-By Christopher Emsden, Dow Jones Newswires; +39 06 6976 6920;

Former RBS CEO Fred Goodwin’s Knighthood To Be Withdrawn – UK Govt

LONDON (Dow Jones)–The knighthood awarded to former Royal Bank of Scotland Group PLC (RBS, RBS.LN) chief executive Fred Goodwin has been withdrawn after a U.K. government committee ruled that he brought the country’s honor system into disrepute, the Cabinet Office said Tuesday.

The Forfeiture Committee said the “scale and severity of the impact” of Goodwin’s actions while in control of RBS made it an exceptional case.

Goodwin was awarded his knighthood in 2004 for services to banking.

In 2008 the government was forced to inject GBP20 billion of new equity to recapitalize RBS, with subsequent increases in government capital bringing the total injection of taxpayers’ money in the bank to GBP45.5 billion.

The committee said investigations from the Financial Services Authority and the Treasury Select Committee had made it clear that the failure of RBS played an important role in the financial crisis of 2008-2009 which, together with other macroeconomic factors, triggered the worst recession in the U.K. since the Second World War, imposing significant costs on British taxpayers and businesses.

“Fred Goodwin was the dominant decision maker at RBS at the time,” the committee said. “In reaching this decision, it was recognised that widespread concern about Fred Goodwin’s decisions meant that the retention of a Knighthood for ‘services to banking’ could not be sustained.”

By Ainsley Thomson, Dow Jones Newswires; 44 20 7842 9318;

Chicago Business Barometer Shows ‘Less Pervasive’ Growth

By Howard Packowitz


CHICAGO (Dow Jones)–Purchasing managers in the Chicago area saw the nation’s economy growing at a slower pace to start the new year, a closely-watched index revealed Tuesday.

The Institute for Supply Management-Chicago reported its Chicago Business Barometer slipped to a seasonally-adjusted 60.2 in January, from a downwardly revised 62.2 in December. The December index had been at 62.5 prior to annual recalculations released Thursday by ISM to adjust for seasonal factors.

The latest reading was weaker than expected. The consensus estimate of economists surveyed by Dow Jones Newswires projected January’s barometer would hold at 62.2.

However, ISM-Chicago reported its three-month moving average for the barometer continued to trend higher, reaching 61.6, which is the highest level since June of last year.

January also marked the 28th consecutive month that the business barometer signaled economic expansion. Above-50 barometer readings indicate the economy is growing, while sub-50 readings reflect economic contraction.

The closely-watched employment index fell to 54.7 in January, from 59.2 in December, providing “further evidence of less pervasive economic growth,” ISM-Chicago said in a news release.

Order backlogs contracted in January, sustaining its sharpest drop since November 2008. It fell to 48.3, from 57.3 in December. ISM Chicago said production was able to “catch up” because of declines in order backlogs and new orders.

ISM-Chicago’s new orders index slipped to 63.6 in January, from 67.1 in December. The production index was at 63.8 in January, from 64.9.

Purchasing managers participating in the survey do business beyond the Chicago region, thus providing a snapshot of nationwide economic activity. The purchasing managers, according to ISM-Chicago, represent various sectors of economy including retail, manufacturing, and resources.

The business barometer is formerly known as the Chicago Purchasing Managers Index, or Chicago PMI.

Kingsbury International compiles the data for ISM-Chicago. Deutsche Boerse AG (DBOEF, DB1.XE) purchased Kingsbury’s assets in June of last year.

-By Howard Packowitz, Dow Jones Newswires; 312-750-4132;