NEW YORK (Reuters) - A dramatic increase in the amount of government bonds that investors purchase directly from the U.S. Treasury Department in its regular debt auctions is reducing the advantage large dealers have traditionally held in the sale process.
The Treasury will not disclose the names of investors who can purchase directly from the government in its auctions but speculation is rife that the participants include an expanding number of the world's largest governments and asset management firms.
BlackRock , the world's largest asset manager, has access to the auctions as a "direct bidder", but does not use it, said Lauren Post, a spokeswoman for the firm in New York. A spokesman for PIMCO, which manages the world's largest bond fund, did not respond to inquiries over whether they have direct bidding access.
Qualified investment funds, insurance companies, banks, and foreign governments may all bid directly in U.S. Treasury auctions, but only the 21 authorized "primary dealers" are required to bid to fulfill their role as market makers in the securities.
"Direct bidders" are showing an increasing presence in the auctions in the last three years, and this week they bought a record share of seven-year notes and the most five-year debt in the auctions in five years.
The shift in the auction procedure is expected to continue, as asset managers increasingly take advantage of the debt sales to buy big positions and leave dealers increasingly in the dark over their purchase plans, while dealers continue to shrink balance sheets weakened by loss making positions taken before the credit crisis of 2007-2009.
"It's becoming more consistent that they are doing that now," said Richard Gilhooly, an interest rate strategist at TD Securities in New York. "They are concealing information and they may think that it might help them get the auction cheaper, because the dealers may bid back thinking the demand isn't there."
Reuters in May reported that China, the largest holder of U.S. Treasuries with more than $1 trillion, has direct bidder status, and market participants surmise other major central banks may also, although this could not be verified.
Japan is close to approaching the size of China's Treasuries holdings, while Switzerland has been dramatically increasing its Treasuries holdings as its central bank accumulates more cash to invest from its foreign exchange intervention against the Swiss franc.
In the auction on Tuesday this week, direct bidders bought 30.4 percent, or $10.62 billion, out of $35 billion in five-year notes, while dealers purchased 37.2 percent, or $12.98 billion.
On Wednesday the bidders bought 23.1 percent, or $6.69 billion in seven-year notes, a record for a those notes. Dealers took 37 percent, or $10.72 billion of the $29 billion sale.
Those recent auctions may have been influenced by year-end demand for low risk assets amid concerns about the impact on U.S. economic growth from the approaching "fiscal cliff" but the results still trail behind a July auction of 10-year notes that stunned dealers.
In that month direct bidders bought 45.4 percent of a 10-year note auction, the largest on record for any Treasuries auction, eclipsing dealer purchases of 14 percent.
LOSING THE INFORMATION ADVANTAGE
The presence of direct bidders in Treasuries auctions has been growing over the past three years, building from a sporadic presence that would involve less than 10 percent of a sale to a consistent attendance that approaches the amount of dealer purchases.
For dealers, the increased presence of direct bidders is making it harder for them to gauge demand for bonds ahead of a sale, and therefore hard to know how aggressively to bid for the debt.
"If you are a direct bidder you're under no obligation to bid, you just have access to go directly to the Fed, which is a complete advantage for you," said Tom Tucci, head of Treasuries trading at CIBC in New York, which is not a primary dealer.
For dealers, "that they are bidding on securities where now they don't see the bids coming, so they are at a disadvantage," he added.
By bypassing a dealer, an investor wanting to purchase a large block of bonds may estimate they can obtain a more favorable price.
Some primary dealers have argued, however, that the shift might cause long-term harm to the auction process, which they say so far has been stable in large part because of support from the Federal Reserve's massive monthly bond purchases.
"The primary dealers are having less information on flows and liquidity. They will take less risk," said Brian Edmonds, head of rates trading at Cantor Fitzgerald, a primary dealer based in New York. "Down the road, you could have sloppy auctions because if the direct bidders step away, primary dealers are not going to fill the void."
STRUCTURAL SHIFT
For large investors with growing assets under management that need to be invested, government debt auctions are one of the few places they can buy in large amounts with sufficient liquidity, and also without tipping their hand over their positions.
"They are trying to get large size because they have much larger portfolios than before," said TD's Gilhooly.
While asset managers grow their investments, dealers have pared back assets and shrunk their balance sheets, because they are still hurting from risky loans bought and made before the 2007-2009 financial crisis.
Countries which have been active in curbing the appreciation of their currencies in order to help their exporters, may now also have the ability to buy Treasuries in large quantities and direct access may be more appealing, analysts said.
According to U.S. Treasury data released earlier this week, Japan's Treasuries holdings were $1.135 trillion in October, up nearly $130 billion from a year earlier, while Switzerland's U.S. bond ownership grew to $194.4 billion from $143.9 billion 12 months earlier.
China's Treasuries holdings fell to $1.162 trillion in October from $1.256 trillion a year earlier, but analysts have said China has been storing their Treasuries in overseas accounts which are not counted as a part of its official U.S. bond holdings.
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S&P downgrades Cyprus on default fears
Labels: BusinessNICOSIA, Cyprus (AP) — The Cyprus government has vowed to do what is needed to finalize a bailout agreement with international lenders after ratings agency Standard & Poor's downgraded Cyprus further into junk status amid concerns that the country could default on its debts.
The U.S. agency said Friday that the two-notch downgrade to CCC+ was due to a "considerable and rising" risk that the country, one of the 17 European Union countries that use the euro, may default. It also maintained its negative outlook on the country, meaning that further downgrades are possible.
S&P said it went ahead with the downgrade because the Cypriot government is running out of money while uncertainty remains over the terms of a bailout that the country is trying to negotiate with international lenders and its euro partners. The rescue loans will be used to salvage the country's banks, which are heavily exposed to Greece.
"With the government's financing options increasingly limited — coupled with what we view as the hesitant attitude of Cyprus' eurozone partners toward sharing the cost of a severe banking crisis — we view the risk of a sovereign debt default as considerable and rising," S&P said.
Unable to borrow from international markets for more than a year, the Cypriot government this week had to tap the pension funds of the country's top three state-owned companies to cover salaries and benefits up until March when it's hoped the first batch of bailout cash will arrive.
Germany's Foreign Minister Guido Westerwelle said Friday that there are "appropriate aid mechanisms" for Cyprus, but that the country must first make "serious reforms" and achieve "real budget savings."
Cyprus government spokesman Stefanos Stefanou played down the S&P downgrade, saying the country is "making every effort" to clinch a bailout accord and attributed any difficulties with doing so to squabbles among its euro partners.
Cyprus' Finance Minister Vassos Shiarly said one such difficulty is the International Monetary Fund's insistence on money being pumped directly into troubled banks from the European Union's bailout fund instead of lending it to governments first and pushing up public debt. The EU is balking at that because its single banking supervisor isn't in place yet.
S&P said some progress has been made putting together the bailout with the "troika" of international creditors — the European Commission, the European Central Bank and the IMF. It also acknowledged the country's efforts to shore up public finances with this week's approval of the 2013 budget that incorporates troika-mandated spending cuts totaling almost 6 percent of the country's €17.5 billion ($23.2 billion) gross domestic product. Cyprus is the third-smallest economy in the eurozone, ahead of Estonia and Malta.
Shiarly said the fact that the country has done "all and more" that the troika has asked it to do even before a bailout accord has been signed — from slashing government workers' salaries and benefits to raising a host of taxes — will stand it in good stead when its eurozone partners decide on the bailout on Jan. 21.
But S&P said it doubts whether state-owned companies have much more money to help the government pay its bills if a bailout deal isn't finalized by March, while presidential elections set for February could complicate matters.
The agency said it's still unclear how Cypriot banks — whose assets total more than five times the country's economy — will get the money they need to replenish their depleted capital buffers.
A draft version of the bailout foresees Cypriot banks needing up to €10 billion ($13.25 billion) to recapitalize, raising questions whether Cyprus can pay off any such loan when its economy is projected to contract by 3.5 percent of its GDP next year.
S&P said if the government were to take on the cost of the bank's recapitalization, the Cyprus' debt would rise "well above" 100 percent of GDP.
Shiarly said that it's premature to talk about whether the country's debt would be sustainable since an exact figure on the banks' actual needs won't be known before sometime next month when an assessment by investment firm PIMCO and auditors Deloitte will have wrapped up.
Cyprus' left-wing President Dimitris Christofias — who won't run for re-election in the February poll — said Friday that he would never accept a writedown of Cyprus' debt in order to make it sustainable, but Germany didn't rule it out.
Shiarly said any such haircut would do more harm than good because a large amount of Cypriot government bonds are held by Cypriot banks and the losses they would sustain would push their recapitalization needs even higher.
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Wall St clings to hopes for budget deal, but market risks rising
Labels: BusinessNEW YORK (Reuters) - If the United States sails over the fiscal cliff in less than two weeks, it probably will not mean disaster for the stock market, investors said on Friday, but the margin for error is getting dangerously thin.
At heart are fears over how long the U.S. economy, the world's largest, can hold up under the brunt of higher taxes and big spending cuts that would be triggered by the fiscal cliff.
If Washington's inability to reach a deficit-reduction deal persists into late January or provokes a second credit ratings agency to strip the United States of its top triple-A rating, all bets may be off.
"Clearly, if this thing drags on with no deal, eventually markets are going to start to take it on the chin," said Sandy Lincoln, chief market strategist at BMO Asset Management in Chicago, which oversees $38 billion.
Stock markets fell on Friday after a Republican proposal that would have prevented tax increases on all but those earning more than $1 million unraveled amid a conservative backlash.
Though President Barack Obama had vowed to veto the bill, opposition from Republicans stoked doubt about the ability of House of Representatives Speaker John Boehner to win support within his party. That suggested the two sides were too far apart to reach a deal to forestall the $600 billion in automatic tax hikes and spending cuts before they are set to begin to take effect in January.
"The fact they couldn't even get the Republicans in Congress to sign on for that is disturbing. If we get into late January, early February and we are still in the soup, then the odds of going into a recession go up, and I just can't believe anybody wants that," said Jeffrey Saut, chief investment strategist at Raymond Jones Financial.
HEATING UP
If the new year dawns without a deal, Jack Ablin, chief investment officer at BMO Private Bank, said he would view "any incremental market sell-off as a buying opportunity."
But if things remain in limbo in February, "that is going to leave a mark on the economy," he said. "The way I'd characterize it is that we're sitting in this pot of water and on January 1, Congress turns on the flame underneath. It's comfortable at first, but eventually it's going to start to hurt."
Americans would start to feel the effects in their wallets. As of 2013, payroll taxes would revert to 6.2 percent of Americans' paychecks, up from the 4.2 percent level put in place during the economic downturn.
Higher income tax rates would also start to hit, though that could be delayed by officials in Washington. Still, Americans would start to feel a pinch on their paychecks, which could hurt spending next year. Some investors believe holiday sales are already being affected.
Another risk, said BNY Mellon currency strategist Michael Woolfolk, would be if a second ratings agency cuts the United States' AAA rating, a move that Standard & Poor's made after a similar budget standoff in 2011.
Fitch Ratings said this week it would be more likely to downgrade the United States if the economy goes over the cliff.
"Markets would take that very badly," Woolfolk said. "Stocks sold off by 10 percent after the S&P downgrade in 2011, and I'd expect something at least as severe" if Fitch were to act.
LAST-MINUTE DEAL STILL POSSIBLE
Of course, lawmakers still have 10 days left in 2012 to strike a deal, and some are confident they will return to Capitol Hill after Christmas and do just that.
"So far, the market has been handling setbacks in talks very well, and with a bit of time left on the clock, this time will be no different," said Jim Barnes, senior fixed income manager at National Penn Investors Trust Co.
For some, the political disarray among Congressional Republicans that sent Boehner's "Plan B" to defeat late on Thursday only increased those hopes.
"Given that Reid called Plan B 'dead on arrival' and Obama said he would veto it, the non-passage of this bill due to lack of Republican support makes it more likely, not less likely, that compromise will be reached," said Jeffrey Gundlach, chief executive officer and chief investment officer of DoubleLine Capital, which oversees more than $50 billion.
Harry Reid is the Democratic Senate leader.
The "continued positioning and posturing" isn't a huge concern to investors, Woolfolk said. "Neither side has incentive to compromise too much, too soon. They can extract concessions by delaying. So I would not be surprised if it takes until minutes before midnight on December 31."
All the back-and-forth, however, may keep the stock market a bit more volatile than it would normally be so late in the year.
The benchmark S&P 500 <.spx> has gained or lost more than 1 percent in three of the past five trading sessions, while the CBOE Volatility Index <.vix> has climbed more than 20 percent over the past three days.
In a sign of the type of volatility investors may be confronted with, S&P 500 E-Mini futures fell as much as 3.6 percent in after-hours trading Thursday evening, with a 15-point drop in less than one second that resulted in a brief halt in futures trading.
"While last night's mini-crash is a rare event, I do expect bigger moves than we've seen in the past year," said Enis Taner, global macro editor at RiskReversal.com, an options trading firm based in New York.
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How the Dow Jones industrial average fared
Labels: BusinessInvestors sent Washington a reminder Friday that Wall Street is a power player in talks to avoid the "fiscal cliff." Stocks fell sharply after House Republicans called off a vote on tax rates and left federal budget talks in disarray 10 days before sweeping tax increases and government spending cuts take effect. The Dow Jones industrial average was down as much as 189 points before recouping some of its losses.
The Dow Jones industrial average lost 120.88 points, or 0.9 percent, to close at 13,190.84.
The Standard & Poor's 500 index fell 13.54 points, or 0.9 percent, to 1,430.15.
The Nasdaq composite index fell 29.38, or 1 percent, to 3,021.01.
For the week:
The Dow is up 55.83, or 0.4 percent.
The S&P is up 16.57, or 1.2 percent.
The Nasdaq is up 49.68, or 1.7 percent.
For the year:
The Dow is up 973.28, or 8 percent.
The S&P is up 172.55, or 13.7 percent.
The Nasdaq is up 415.86, or 16 percent.
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Wall Street falls on fiscal cliff setback
Labels: BusinessNEW YORK (Reuters) - U.S. stocks finished lower on Friday after a Republican plan to avoid the "fiscal cliff" failed to gain sufficient support on Thursday night, draining hopes that a deal would be reached before 2013.
Still, stocks managed to rebound from the day's lows near the end of the session, and for the week, major averages still ended higher, with the S&P 500 gaining 1.2 percent.
Trading was volatile as confidence eroded in the prospect of a deal out of Washington, and in part due to quarterly expiration of options and futures contracts. The CBOE Volatility Index or VIX, the market's favored anxiety measure, finished below its high of the day.
Republican House Speaker John Boehner failed to garner enough votes from even his own party to pass his "Plan B" tax bill late on Thursday. It was the latest setback in negotiations to avoid $600 billion in tax hikes and spending cuts that some say could tip the U.S. economy into recession.
"The failure with Plan B was disappointing, if not terribly surprising, but now there's a real lack of clarity about what will happen, and markets hate that," said Mike Hennessy, managing director of investments for Morgan Creek in Chapel Hill, North Carolina.
Herbalife dropped for an eighth straight session. Investor Bill Ackman recently ramped up his campaign against the company. The company skidded 19 percent to $27.27 and has lost more than 35 percent this week.
Plan B, which called for tax increases on those who earn $1 million or more a year, was not going to pass the Democratic-led Senate or win acceptance from the White House anyway. But it exposed the reality that it will be difficult to get Republican support for the more expansive tax increases that President Barack Obama has urged.
Still, the declines of less than 1 percent in the three major U.S. stock indexes suggest that investors do not believe the economy will be unduly damaged by the absence of a deal, said Mark Lehmann, president of JMP Securities, in San Francisco.
"You could have easily woken up today and seen the market down 300 or 400 points, and everyone would have said, 'That's telling you this is really dire,'" Lehmann said.
"I think if you get into mid-January and (the talks) keep going like this, you get worried, but I don't think we're going to get there."
Banking shares, which outperform during economic expansion and have led the market on signs of progress on resolving the fiscal impasse, led declines. Citigroup Inc fell 1.6 percent to $39.49, while Bank of America slid 1.9 percent to $11.29. The KBW Banks index lost 1.19 percent.
Volatility on Friday was exacerbated in part by "quadruple witching," the quarterly expiration of stock index futures and options, stock options and single stock futures contracts.
About 8.59 billion shares changed hands on major U.S. exchanges, more than the daily average of 6.47 billion daily in 2012, in part due to expiration.
The Dow Jones industrial average dropped 120.72 points, or 0.91 percent, to 13,191.00. The Standard & Poor's 500 Index fell 13.52 points, or 0.94 percent, to 1,430.17. The Nasdaq Composite Index lost 29.38 points, or 0.96 percent, to 3,021.01.
"Amazingly, this sharp decline today may not actually change the technical picture much - unless the decline gets worse," said Larry McMillan, president of options research firm McMillan Analysis Corp, in a research note.
The day's round of data indicated the economy was surprisingly resilient in November; consumer spending rose by the most in three years and a gauge of business investment jumped.
But separate data showed consumer sentiment slumped in December. The S&P Retail Index fell 1.2 percent.
U.S.-listed shares of Research in Motion sank 22.7 percent to $10.91 after the Canadian company, known as the BlackBerry maker, reported its first-ever decline in its subscriber numbers on Thursday alongside a new fee structure for its high-margin services segment.
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NHL lockout has chilling effect on business
Labels: SportsBUFFALO, N.Y. (AP) — Most everywhere Lou Billittier turns these days, the Buffalo restaurateur is reminded of the NHL lockout, and its impact on his blue-collar, sports-mad town where Dominik Hasek became a star and the French Connection is still revered.
Billittier misses the familiar faces of Sabres players having their traditional game-day lunch at his restaurant, Chef's. He recalled a recent conversation he had with his seafood supplier, who's struggling because he also provides salmon and chicken wings to the Sabres arena, the First Niagara Center.
And then there are the arena's idled, part-time employees who stop in looking for work. With his own business down 15 percent, Billittier can only turn them away because he's concerned whether there's enough work for his staff.
"It's amazing the trickle-down effect," Billittier said, standing in his lobby, not far from Chef's "The French Connection" room, honoring the famed former Sabres line of Gilbert Perreault, Rene Robert and Rick Martin. "It bothers me, not only because we're down, but it affects everything. Our community out-reach, we can't donate to the people we normally donate to. It's brutal."
From south Florida to Vancouver, Montreal to Anaheim, a wide array of businesses located in the NHL's 30 markets have taken a significant hit because of the lockout, which is now in its fourth month and has wiped away 625 games. On Thursday, the league canceled all games through Jan. 14.
Joe Kasel, owner of the Eagle Street Grille in St. Paul, Minn., last month wrote a letter expressing his concerns to NHL Commissioner Gary Bettman.
"I had to look 32 of 48 employees in the eyes and inform them that I no longer can afford to keep them on staff," Kasel wrote. "The impact on our lives is immeasurable. One city's devastation may not seem like a powerful incentive to end the lockout; but I know this is happening in other cities around the nation."
Chris Ray, manager of the Brewhouse Downtown in Nashville, said his establishment is losing an estimated $5,000 for every canceled Predators' home game. That's already a $90,000 hit, given 18 Predators' home games have been wiped out.
It's no different at Wayne Gretzky's sports bar in Toronto, where much of the Great One's memorabilia is on display.
"Yes, it's been very slow," said a bartender, who wouldn't give her name. "I'm scared about January."
The Hockey Hall of Fame in Toronto is feeling the pinch. Hall of Fame spokeswoman Kelly Masse said they've made "adjustments" to staff because gate and retail revenues are down significantly.
And so's Hockeytown, aka, Detroit.
The downtown three-level Hockeytown Cafe, operated by Red Wings owner Mike Ilitch, was nearly empty on Monday.
"If there's not a show at the Fox, this is what it's like in here," bartender Molly Brown said, referring to the Fox Theatre next door. "We haven't fired anyone, but everyone has had their days and hours cut because the Red Wings aren't playing. We're all suffering."
The effect goes beyond bars, restaurants and tourism.
In Chicago, Gunzo's Hockey Headquarters, a four-store chain that sells hockey equipment and jerseys, is losing business.
"It's been a huge impact. Huge, huge, huge. People don't see the games and it's out of sight, out of mind," owner Keith Jackson said. "It's kind of a double-whammy for us. We're losing out on equipment sales and we're losing out on the jerseys and licensed apparel sales."
With the Christmas shopping season nearly over, Jackson worries those are sales he'll never get back even if the NHL resumes playing soon. Mid-January will be a critical time, since Bettman has said the league doesn't want to play a season shorter than 48 games per team.
With an entire season wiped out in 2004-05, outsiders are wondering whether the two sides — rich owners and well-paid players — are indifferent to the effects their labor disputes create.
"People are disgusted," said Tom Woolsey, owner of Andrews On the Corner in Detroit. He estimates his business is down 75 percent on nights the Red Wings are playing.
"It's incomprehensible to me that after four or five prosperous years in the NHL, that they can't figure out how to split $3.2 billion (in revenue)," Woolsey said.
It's mind-boggling to John Heidinger, chairman of the Service Employees International Local 200 in Buffalo, who represents about 225 ushers at First Niagara Center.
"When you're making 12 bucks an hour working at an arena, and these guys are haggling over hundreds of millions of dollars, I think for a lot of people it's a hard reality to understand," Heidinger said. "It really frustrates you."
Sabres president Ted Black can understand the frustration.
"We are disappointed the NHL and NHLPA have not been able to negotiate a new collective bargaining agreement," Black said. "Our fans are extremely disappointed, and we know the lack of NHL hockey is having a negative impact on many local businesses. At the same time, we want to play hockey under the right circumstances that the NHL will negotiate on our behalf. ... The league has our full confidence."
The impact of another lost season would be high.
In Buffalo alone, the city's tourism bureau, Visit Buffalo Niagara, estimates local hotels that host visiting NHL teams will lose between $850,000 and $1 million if there's no season.
City transit is affected. Douglas Hartmayer, spokesman for the Niagara Frontier Transportations Authority, says up to 1,700 riders use Metro Rail to attend each Sabres home game.
There's even a psychological cost, especially in a place like Buffalo, where the winters are already long, and the Sabres provide an entertaining outlet, particularly when the Buffalo Bills are struggling, as they are once again are this year.
"Especially with Pegula, you had some hope," said Joe Allman, bartender at the Swannie House, referring to Sabres owner Terry Pegula, who's raised expectations since purchasing the team two years ago. "They probably are our best chance to win."
With no hockey, and the Bills out of playoff contention for a 13th straight season, there's little for Buffalonians to fall back on.
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Billittier misses the familiar faces of Sabres players having their traditional game-day lunch at his restaurant, Chef's. He recalled a recent conversation he had with his seafood supplier, who's struggling because he also provides salmon and chicken wings to the Sabres arena, the First Niagara Center.
And then there are the arena's idled, part-time employees who stop in looking for work. With his own business down 15 percent, Billittier can only turn them away because he's concerned whether there's enough work for his staff.
"It's amazing the trickle-down effect," Billittier said, standing in his lobby, not far from Chef's "The French Connection" room, honoring the famed former Sabres line of Gilbert Perreault, Rene Robert and Rick Martin. "It bothers me, not only because we're down, but it affects everything. Our community out-reach, we can't donate to the people we normally donate to. It's brutal."
From south Florida to Vancouver, Montreal to Anaheim, a wide array of businesses located in the NHL's 30 markets have taken a significant hit because of the lockout, which is now in its fourth month and has wiped away 625 games. On Thursday, the league canceled all games through Jan. 14.
Joe Kasel, owner of the Eagle Street Grille in St. Paul, Minn., last month wrote a letter expressing his concerns to NHL Commissioner Gary Bettman.
"I had to look 32 of 48 employees in the eyes and inform them that I no longer can afford to keep them on staff," Kasel wrote. "The impact on our lives is immeasurable. One city's devastation may not seem like a powerful incentive to end the lockout; but I know this is happening in other cities around the nation."
Chris Ray, manager of the Brewhouse Downtown in Nashville, said his establishment is losing an estimated $5,000 for every canceled Predators' home game. That's already a $90,000 hit, given 18 Predators' home games have been wiped out.
It's no different at Wayne Gretzky's sports bar in Toronto, where much of the Great One's memorabilia is on display.
"Yes, it's been very slow," said a bartender, who wouldn't give her name. "I'm scared about January."
The Hockey Hall of Fame in Toronto is feeling the pinch. Hall of Fame spokeswoman Kelly Masse said they've made "adjustments" to staff because gate and retail revenues are down significantly.
And so's Hockeytown, aka, Detroit.
The downtown three-level Hockeytown Cafe, operated by Red Wings owner Mike Ilitch, was nearly empty on Monday.
"If there's not a show at the Fox, this is what it's like in here," bartender Molly Brown said, referring to the Fox Theatre next door. "We haven't fired anyone, but everyone has had their days and hours cut because the Red Wings aren't playing. We're all suffering."
The effect goes beyond bars, restaurants and tourism.
In Chicago, Gunzo's Hockey Headquarters, a four-store chain that sells hockey equipment and jerseys, is losing business.
"It's been a huge impact. Huge, huge, huge. People don't see the games and it's out of sight, out of mind," owner Keith Jackson said. "It's kind of a double-whammy for us. We're losing out on equipment sales and we're losing out on the jerseys and licensed apparel sales."
With the Christmas shopping season nearly over, Jackson worries those are sales he'll never get back even if the NHL resumes playing soon. Mid-January will be a critical time, since Bettman has said the league doesn't want to play a season shorter than 48 games per team.
With an entire season wiped out in 2004-05, outsiders are wondering whether the two sides — rich owners and well-paid players — are indifferent to the effects their labor disputes create.
"People are disgusted," said Tom Woolsey, owner of Andrews On the Corner in Detroit. He estimates his business is down 75 percent on nights the Red Wings are playing.
"It's incomprehensible to me that after four or five prosperous years in the NHL, that they can't figure out how to split $3.2 billion (in revenue)," Woolsey said.
It's mind-boggling to John Heidinger, chairman of the Service Employees International Local 200 in Buffalo, who represents about 225 ushers at First Niagara Center.
"When you're making 12 bucks an hour working at an arena, and these guys are haggling over hundreds of millions of dollars, I think for a lot of people it's a hard reality to understand," Heidinger said. "It really frustrates you."
Sabres president Ted Black can understand the frustration.
"We are disappointed the NHL and NHLPA have not been able to negotiate a new collective bargaining agreement," Black said. "Our fans are extremely disappointed, and we know the lack of NHL hockey is having a negative impact on many local businesses. At the same time, we want to play hockey under the right circumstances that the NHL will negotiate on our behalf. ... The league has our full confidence."
The impact of another lost season would be high.
In Buffalo alone, the city's tourism bureau, Visit Buffalo Niagara, estimates local hotels that host visiting NHL teams will lose between $850,000 and $1 million if there's no season.
City transit is affected. Douglas Hartmayer, spokesman for the Niagara Frontier Transportations Authority, says up to 1,700 riders use Metro Rail to attend each Sabres home game.
There's even a psychological cost, especially in a place like Buffalo, where the winters are already long, and the Sabres provide an entertaining outlet, particularly when the Buffalo Bills are struggling, as they are once again are this year.
"Especially with Pegula, you had some hope," said Joe Allman, bartender at the Swannie House, referring to Sabres owner Terry Pegula, who's raised expectations since purchasing the team two years ago. "They probably are our best chance to win."
With no hockey, and the Bills out of playoff contention for a 13th straight season, there's little for Buffalonians to fall back on.
Finding the right footwear a constant challenge for offensive lineman Sewell
Labels: SportsWhen Matt Sewell starts the season with a new pair of football cleats, he'll go to great lengths to make sure they last.
The McMaster Marauders hulking offensive lineman isn't superstitious or especially finicky about his footwear. It's just with size 17 feet, finding shoes that fit is a constant challenge.
So when the six-foot-eight, 340-pound Sewell gets his hands on a suitable pair of shoes, he goes the extra mile to ensure they stand the test of time.
"Shoes in general are hard to find but (football) cleats are probably the hardest," he said with a chuckle. "Once I find a pair I stick with them until they're completely gone.
"I just tape them up and hopefully they don't fall apart during the game because if I wanted a new pair of cleats it would be tough to find in mid-season.''
With size 17 shoes a rarity in the bargain bin, Sewell often surfs the net looking for footwear and orders them online. That will be put on hold shortly as Sewell will spend Christmas with his family in Mexico.
But only for a week. Then Sewell will resume his search ahead of what promises to be a very busy off-season.
Sewell is being considered to play in the 2013 East-West Shrine Game on Jan. 19 at Tropicana Field in St. Petersburg, Fla. If chosen to play, Sewell will receive pro level coaching during the week-long practices and work out under the watchful eye of scouts representing teams on both sides of the border.
CFL teams are very aware of Sewell, who earlier this month was ranked second among the top-15 ranked prospects for this year's Canadian draft by the league's scouting bureau. Not only will Sewell be put through his paces by CFL scouts at the league's annual evaluation camp in Toronto but he'll also spend a lot of time answering questions in head-to-head interviews.
NFL teams have also reportedly taken note of Sewell's size and quick, nimble feet, which could also result in further workouts and interviews.
Add to that regular training sessions and it's shaping up to be a hectic off-season for Sewell as he auditions for the next phase of his football career.
"I'm looking forward to it," he said. "It should be an exciting few months for me and I think things will work out.''
Growing up in Milton, Ont., Sewell said he was more a fan of the sport than a specific team and thus has no real preference as to where he might start his pro career.
Sewell was an all-Canadian in 2012 for a second straight year and helped lead McMaster to another Vanier Cup appearance. The Marauders beat Laval 41-38 in double overtime to win a thrilling 2011 Vanier Cup final at B.C. Place before the Rouge et Or exacted some revenge by downing the Marauders 37-14 in last month's rematch at Rogers Centre.
Sewell played left tackle at McMaster, given the important task of protecting Hec Crighton Trophy-winning quarterback Kyle Quinlan's blind side. It's a position he'd like to line up at in the pro ranks.
"I think I have the body shape more for a tackle," he said. "When I was growing up all the minor coaches would tell me, 'If you're going to play offensive line, play left tackle,' and I've always played that position through my entire career.''
Sewell said working under the guidance of McMaster offensive line coach Jason Riley — a former CFL player with Montreal, Saskatchewan and Hamilton, — he feels he's ready to move up to the next level.
"Coach Riley is a high school teacher by nature so he liked to teach us," Sewell said. "He certainly knows what he's talking about.''
Sewell has also shown he can overcome physical adversity.
During his high school career he suffered a knee injury that forced him to the sidelines. After completing his rehab, Sewell opted to attend a prep school in Massachusetts to not only play another year but make sure all was right with his knee.
Convinced it was, he returned to Ontario the following year looking to go to school near home and settled upon McMaster.
"I'm very proud of that (overcoming knee injury), I actually put a lot of work into it," he said. "Football has been great at Mac but most important for me was everything outside of football.
"I've been able to accomplish a lot (in football) but the biggest thing for me is I'm going to be able to graduate with a degree in commerce from one of the top business programs in the country. I think that's the greatest achievement from my university career.''
Read More..
The McMaster Marauders hulking offensive lineman isn't superstitious or especially finicky about his footwear. It's just with size 17 feet, finding shoes that fit is a constant challenge.
So when the six-foot-eight, 340-pound Sewell gets his hands on a suitable pair of shoes, he goes the extra mile to ensure they stand the test of time.
"Shoes in general are hard to find but (football) cleats are probably the hardest," he said with a chuckle. "Once I find a pair I stick with them until they're completely gone.
"I just tape them up and hopefully they don't fall apart during the game because if I wanted a new pair of cleats it would be tough to find in mid-season.''
With size 17 shoes a rarity in the bargain bin, Sewell often surfs the net looking for footwear and orders them online. That will be put on hold shortly as Sewell will spend Christmas with his family in Mexico.
But only for a week. Then Sewell will resume his search ahead of what promises to be a very busy off-season.
Sewell is being considered to play in the 2013 East-West Shrine Game on Jan. 19 at Tropicana Field in St. Petersburg, Fla. If chosen to play, Sewell will receive pro level coaching during the week-long practices and work out under the watchful eye of scouts representing teams on both sides of the border.
CFL teams are very aware of Sewell, who earlier this month was ranked second among the top-15 ranked prospects for this year's Canadian draft by the league's scouting bureau. Not only will Sewell be put through his paces by CFL scouts at the league's annual evaluation camp in Toronto but he'll also spend a lot of time answering questions in head-to-head interviews.
NFL teams have also reportedly taken note of Sewell's size and quick, nimble feet, which could also result in further workouts and interviews.
Add to that regular training sessions and it's shaping up to be a hectic off-season for Sewell as he auditions for the next phase of his football career.
"I'm looking forward to it," he said. "It should be an exciting few months for me and I think things will work out.''
Growing up in Milton, Ont., Sewell said he was more a fan of the sport than a specific team and thus has no real preference as to where he might start his pro career.
Sewell was an all-Canadian in 2012 for a second straight year and helped lead McMaster to another Vanier Cup appearance. The Marauders beat Laval 41-38 in double overtime to win a thrilling 2011 Vanier Cup final at B.C. Place before the Rouge et Or exacted some revenge by downing the Marauders 37-14 in last month's rematch at Rogers Centre.
Sewell played left tackle at McMaster, given the important task of protecting Hec Crighton Trophy-winning quarterback Kyle Quinlan's blind side. It's a position he'd like to line up at in the pro ranks.
"I think I have the body shape more for a tackle," he said. "When I was growing up all the minor coaches would tell me, 'If you're going to play offensive line, play left tackle,' and I've always played that position through my entire career.''
Sewell said working under the guidance of McMaster offensive line coach Jason Riley — a former CFL player with Montreal, Saskatchewan and Hamilton, — he feels he's ready to move up to the next level.
"Coach Riley is a high school teacher by nature so he liked to teach us," Sewell said. "He certainly knows what he's talking about.''
Sewell has also shown he can overcome physical adversity.
During his high school career he suffered a knee injury that forced him to the sidelines. After completing his rehab, Sewell opted to attend a prep school in Massachusetts to not only play another year but make sure all was right with his knee.
Convinced it was, he returned to Ontario the following year looking to go to school near home and settled upon McMaster.
"I'm very proud of that (overcoming knee injury), I actually put a lot of work into it," he said. "Football has been great at Mac but most important for me was everything outside of football.
"I've been able to accomplish a lot (in football) but the biggest thing for me is I'm going to be able to graduate with a degree in commerce from one of the top business programs in the country. I think that's the greatest achievement from my university career.''
NHL cancels all games through Jan. 14
Labels: SportsNEW YORK (AP) — The NHL could be one step away from canceling another hockey season because of a labor fight with the players.
In the latest round of cancellations, the NHL on Thursday wiped out all games through Jan. 14. More than 50 percent of the schedule has been lost, and the rest is now in great danger, too.
"I don't want to characterize what today's cancellations mean or don't mean," NHL deputy commissioner Bill Daly told The Associated Press in an email. "I will stand on the announcement that was made."
So far, 625 regular-season games have been called off, including nearly 100 in the announcement made Thursday — the 96th day of the NHL's lockout. The New Year's Day Winter Classic and the All-Star game also have been lost.
The NHL had previously canceled games through Dec. 30.
Daly said in a radio interview Wednesday that mid-January is likely the latest the sides could go to make a deal to save the season. When pressed, however, he said he expects the season will be played.
No drop-dead date has been announced by the NHL, which is the only North American professional sports league to cancel a season because of to a labor dispute. The 2004-05 season was lost to a lockout.
Daly said the sides hadn't been in contact with each other Thursday, and no new talks are planned.
The groups have remained apart since two days of meetings with a federal mediator last week produced no progress. There haven't been negotiations since Dec. 6 in New York, when talks broke down after a few days of bargaining.
Since the sides split last week, there has been limited contact — phone calls and a brief email exchange.
The NHL believes negotiations should resume only when there is something new to say.
"I don't think either party is refusing a meeting," Daly said Wednesday. "But unless there is an indication one side or the other is prepared to move or has a new idea to move the process forward — and so far neither side has indicated — I am not sure what we would do at the meeting.
"What is the agenda? Who is directing the conversation? We don't have anything new to say right now."
Union executive director Donald Fehr said Wednesday he was glad to hear Daly's belief that there would be a season, and added he hopes Daly is right.
"Hopefully, we'll get back together and negotiate out the remaining issues as soon as possible," Fehr said. "(We aren't talking) because the owners have not indicated a desire to resume.
"We've indicated any number of times that we're willing to resume when they are (and) we're willing to resume without preconditions. So we're waiting to hear back from them."
Last week, the NHL announced it filed a class action suit in the U.S. District Court in New York, seeking to establish that its lockout is legal. In a filing posted Thursday, the court said the union had three weeks after receiving the suit to file an answer.
Read More..
In the latest round of cancellations, the NHL on Thursday wiped out all games through Jan. 14. More than 50 percent of the schedule has been lost, and the rest is now in great danger, too.
"I don't want to characterize what today's cancellations mean or don't mean," NHL deputy commissioner Bill Daly told The Associated Press in an email. "I will stand on the announcement that was made."
So far, 625 regular-season games have been called off, including nearly 100 in the announcement made Thursday — the 96th day of the NHL's lockout. The New Year's Day Winter Classic and the All-Star game also have been lost.
The NHL had previously canceled games through Dec. 30.
Daly said in a radio interview Wednesday that mid-January is likely the latest the sides could go to make a deal to save the season. When pressed, however, he said he expects the season will be played.
No drop-dead date has been announced by the NHL, which is the only North American professional sports league to cancel a season because of to a labor dispute. The 2004-05 season was lost to a lockout.
Daly said the sides hadn't been in contact with each other Thursday, and no new talks are planned.
The groups have remained apart since two days of meetings with a federal mediator last week produced no progress. There haven't been negotiations since Dec. 6 in New York, when talks broke down after a few days of bargaining.
Since the sides split last week, there has been limited contact — phone calls and a brief email exchange.
The NHL believes negotiations should resume only when there is something new to say.
"I don't think either party is refusing a meeting," Daly said Wednesday. "But unless there is an indication one side or the other is prepared to move or has a new idea to move the process forward — and so far neither side has indicated — I am not sure what we would do at the meeting.
"What is the agenda? Who is directing the conversation? We don't have anything new to say right now."
Union executive director Donald Fehr said Wednesday he was glad to hear Daly's belief that there would be a season, and added he hopes Daly is right.
"Hopefully, we'll get back together and negotiate out the remaining issues as soon as possible," Fehr said. "(We aren't talking) because the owners have not indicated a desire to resume.
"We've indicated any number of times that we're willing to resume when they are (and) we're willing to resume without preconditions. So we're waiting to hear back from them."
Last week, the NHL announced it filed a class action suit in the U.S. District Court in New York, seeking to establish that its lockout is legal. In a filing posted Thursday, the court said the union had three weeks after receiving the suit to file an answer.
Top prospect Parker chooses Duke
Labels: SportsCHICAGO (AP) — Jabari Parker still had just about everyone guessing. Then, he pulled out that blue T-shirt with a white "D," and, finally, it became clear.
The prized prospect from Chicago's Simeon Career Academy, one of the most highly touted recruits in years, is headed to Duke to play for Mike Krzyzewski. Parker made the announcement in front of a national TV audience Thursday, in his high school gym, surely delighting Blue Devils fans.
A 6-foot-8 forward with the ability to nail jumpers from just about any spot when he's not throwing down vicious dunks, Parker can't sign his letter of intent until April 17. But he made his intentions clear with one highly anticipated oral commitment.
Michigan State, Florida, Stanford and Brigham Young also made his top five and caps from each school lined a table next to the podium. But he said it really came down to three schools, with the Gators and Spartans right there with the Blue Devils.
In the end, he chose to play for Krzyzewski for at least a year before making what many believe will ultimately be a jump to the NBA.
"Duke is always going to be a team in the tournament," he said. "You can't go wrong at the program and most importantly, the long-term investment. I feel like if I go there, I can get a good degree. I can also stay close to home where it's easily accessible to my parents, my family. It's not too far away. Coach K, that's one of the best coaches ever, and I wanted to be able to experience the things that he has next year."
Parker said he might play two or three seasons in college. Either way, he vowed to get a degree. He also said he didn't decide on a school until about 1 p.m. Central, and he apparently kept his parents in the dark until just before he made his announcement.
His mom Lola said Jabari whispered his decision to her and her husband, Sonny, as they were walking into the gym. A few minutes later, he pulled out that Duke T-shirt, drawing a standing ovation from the crowd packing the bleachers behind the podium.
Parker committed to join a program next season will lose two key frontcourt players — seniors Mason Plumlee and Ryan Kelly — from a team that earlier this week rose to No. 1 for the first time since February 2011.
Parker figures to fit right in on a talented group of players that will include Quinn Cook, who's expected to be in his second year as the starting point guard, and returns pure shooter Andre Dawkins, who's expected back after redshirting this season.
Turning down the other programs, particularly Michigan State, wasn't easy, particularly after coach Tom Izzo's final pitch Wednesday.
Simeon coach Robert Smith was so impressed he said, "If he was recruiting me yesterday, I would have committed."
Parker didn't. He saw a potential for controversy with him and the Spartans' Branden Dawson playing the same position. Instead, he's headed to Duke even though he said that was his "worst" on-campus visit.
"I didn't do what I wanted to do — that's be a kid," he said. "But I know being at college, it's all business. That's what they wanted to do, to show me. I know I didn't have a good time, but they just wanted to tell me, prepare for me and give me a little bit of a taste of how it's going to be in college."
Lola Parker said she was more interested in Krzyzewski the person than the Krzyzewski the coaching icon. She mentioned his character, his discipline and his final home visit on Tuesday.
"The first time Coach K came in, he stood up and showed Jabari where his foot should be on an offensive or a defensive play," she said. "He showed Jabari where his arms should be. This guy doesn't sit down. We kind of laughed about it, and it was the same thing Tuesday. I moved my coffee table to the side to make sure he had room right there to get up."
Given Jabari Parker's skills, it's easy to see why just about every major program was interested in him.
Parker just might be the greatest prospect to come out of Simeon, and that's saying something considering Derrick Rose played there. All he did was go on to become the MVP with the hometown Bulls.
As for Parker, his credentials to this point sure are impressive.
He received the Gatorade Boys Basketball Player of the Year award after leading Simeon to its third straight state championship while averaging 19.5 points and 8.9 rebounds as a junior.
His father played six seasons with the Golden State Warriors in the NBA after starring at Chicago's Farragut Career Academy.
"He has a gift and he has what's called 'It'," Sonny Parker said.
Religion also plays a big role in Jabari's life. He is a devout Mormon, just like his mom, and he has talked about going on a mission. He's not sure if he will do that, but he did make one thing clear:
He plans to get his degree.
Now that he's made his college choice and assuming he doesn't have a change of heart, Jabari can focus on leading Simeon to another state title and getting his conditioning back after being slowed by a broken right foot.
The injury over the summer caused him to push back some recruiting trips and delay his decision rather than commit during the early signing period last month. He's also missed a game this week because he's trying to work his way back from the injury, an obstacle for a player rarely stopped on the court, but this moment was years in the making.
Lola Parker recalled in an interview at the family's house earlier this year that she could see it when Jabari, the youngest of seven children, was in the second grade going against the fourth and fifth-graders in a league run by Sonny, who established a foundation to help inner-city youth in Chicago after he retired.
Scholarship offers started rolling in when Jabari was in the sixth grade, and now, it's not uncommon for him to get mobbed by fans at games, even though they're often not from Simeon.
Usually, he'll accommodate them, but sometimes, he needs an escape.
He finds one in religion. That means rising several days a week at 5 a.m. for Bible study and heading from the family's brick bungalow on the city's South Side to worship a few miles away, near the University of Chicago.
The day of the interview at the house earlier this year, there was a reminder on Jabari's door to "put the Lord first" along with several sheets of 8-by-10 white paper. One listed the Ten Commandments, the other personal rules such as "don't be quick to judge" and "Think positive things."
For now, big things are happening for Parker. He's headed to a storied program. And then?
"His potential, the sky's the limit," Sonny Parker said.
Read More..
The prized prospect from Chicago's Simeon Career Academy, one of the most highly touted recruits in years, is headed to Duke to play for Mike Krzyzewski. Parker made the announcement in front of a national TV audience Thursday, in his high school gym, surely delighting Blue Devils fans.
A 6-foot-8 forward with the ability to nail jumpers from just about any spot when he's not throwing down vicious dunks, Parker can't sign his letter of intent until April 17. But he made his intentions clear with one highly anticipated oral commitment.
Michigan State, Florida, Stanford and Brigham Young also made his top five and caps from each school lined a table next to the podium. But he said it really came down to three schools, with the Gators and Spartans right there with the Blue Devils.
In the end, he chose to play for Krzyzewski for at least a year before making what many believe will ultimately be a jump to the NBA.
"Duke is always going to be a team in the tournament," he said. "You can't go wrong at the program and most importantly, the long-term investment. I feel like if I go there, I can get a good degree. I can also stay close to home where it's easily accessible to my parents, my family. It's not too far away. Coach K, that's one of the best coaches ever, and I wanted to be able to experience the things that he has next year."
Parker said he might play two or three seasons in college. Either way, he vowed to get a degree. He also said he didn't decide on a school until about 1 p.m. Central, and he apparently kept his parents in the dark until just before he made his announcement.
His mom Lola said Jabari whispered his decision to her and her husband, Sonny, as they were walking into the gym. A few minutes later, he pulled out that Duke T-shirt, drawing a standing ovation from the crowd packing the bleachers behind the podium.
Parker committed to join a program next season will lose two key frontcourt players — seniors Mason Plumlee and Ryan Kelly — from a team that earlier this week rose to No. 1 for the first time since February 2011.
Parker figures to fit right in on a talented group of players that will include Quinn Cook, who's expected to be in his second year as the starting point guard, and returns pure shooter Andre Dawkins, who's expected back after redshirting this season.
Turning down the other programs, particularly Michigan State, wasn't easy, particularly after coach Tom Izzo's final pitch Wednesday.
Simeon coach Robert Smith was so impressed he said, "If he was recruiting me yesterday, I would have committed."
Parker didn't. He saw a potential for controversy with him and the Spartans' Branden Dawson playing the same position. Instead, he's headed to Duke even though he said that was his "worst" on-campus visit.
"I didn't do what I wanted to do — that's be a kid," he said. "But I know being at college, it's all business. That's what they wanted to do, to show me. I know I didn't have a good time, but they just wanted to tell me, prepare for me and give me a little bit of a taste of how it's going to be in college."
Lola Parker said she was more interested in Krzyzewski the person than the Krzyzewski the coaching icon. She mentioned his character, his discipline and his final home visit on Tuesday.
"The first time Coach K came in, he stood up and showed Jabari where his foot should be on an offensive or a defensive play," she said. "He showed Jabari where his arms should be. This guy doesn't sit down. We kind of laughed about it, and it was the same thing Tuesday. I moved my coffee table to the side to make sure he had room right there to get up."
Given Jabari Parker's skills, it's easy to see why just about every major program was interested in him.
Parker just might be the greatest prospect to come out of Simeon, and that's saying something considering Derrick Rose played there. All he did was go on to become the MVP with the hometown Bulls.
As for Parker, his credentials to this point sure are impressive.
He received the Gatorade Boys Basketball Player of the Year award after leading Simeon to its third straight state championship while averaging 19.5 points and 8.9 rebounds as a junior.
His father played six seasons with the Golden State Warriors in the NBA after starring at Chicago's Farragut Career Academy.
"He has a gift and he has what's called 'It'," Sonny Parker said.
Religion also plays a big role in Jabari's life. He is a devout Mormon, just like his mom, and he has talked about going on a mission. He's not sure if he will do that, but he did make one thing clear:
He plans to get his degree.
Now that he's made his college choice and assuming he doesn't have a change of heart, Jabari can focus on leading Simeon to another state title and getting his conditioning back after being slowed by a broken right foot.
The injury over the summer caused him to push back some recruiting trips and delay his decision rather than commit during the early signing period last month. He's also missed a game this week because he's trying to work his way back from the injury, an obstacle for a player rarely stopped on the court, but this moment was years in the making.
Lola Parker recalled in an interview at the family's house earlier this year that she could see it when Jabari, the youngest of seven children, was in the second grade going against the fourth and fifth-graders in a league run by Sonny, who established a foundation to help inner-city youth in Chicago after he retired.
Scholarship offers started rolling in when Jabari was in the sixth grade, and now, it's not uncommon for him to get mobbed by fans at games, even though they're often not from Simeon.
Usually, he'll accommodate them, but sometimes, he needs an escape.
He finds one in religion. That means rising several days a week at 5 a.m. for Bible study and heading from the family's brick bungalow on the city's South Side to worship a few miles away, near the University of Chicago.
The day of the interview at the house earlier this year, there was a reminder on Jabari's door to "put the Lord first" along with several sheets of 8-by-10 white paper. One listed the Ten Commandments, the other personal rules such as "don't be quick to judge" and "Think positive things."
For now, big things are happening for Parker. He's headed to a storied program. And then?
"His potential, the sky's the limit," Sonny Parker said.
AP Sources: Jets could trade QBs Sanchez, Tebow
Labels: SportsFLORHAM PARK, N.J. (AP) — Mark Sanchez is no longer the face of the New York Jets. He could soon be a former member of the team.
And Tim Tebow might even beat him out the door.
A person with knowledge of the situation told The Associated Press on Thursday that the Jets will consider all of their options regarding the two quarterbacks during the offseason. That means both Sanchez and Tebow are in limbo and trades cannot be ruled out.
The person, who requested anonymity because the team's personnel plans are private, told the AP that the Jets have not made any determinations involving Sanchez or Tebow.
The Jets could be hard-pressed to trade or cut Sanchez, who is due $8.25 million in guarantees next season after having his contract extended last offseason.
But there are no such complications with Tebow, who will likely be traded or released after just one disappointing season in New York. Tebow has two years remaining on his contract, but would cost the Jets only a little more than $1 million against the salary cap if cut.
"Anything dealing with the future past Buffalo (the regular-season finale) will be handled after that," coach Rex Ryan said.
The futures of Ryan, general manager Mike Tannenbaum and offensive coordinator Tony Sparano also are uncertain.
Parting ways with Tebow, the immensely popular but little-used backup, appears a certainty, though, after he came to New York amid lots of hype but had little impact. The final indication that Tebow will not be part of the Jets' future came when Ryan went with Greg McElroy, the third-stringer, to start at quarterback instead of him against San Diego on Sunday.
"Sometimes, things just happen out of your control," Tebow said Wednesday. "Obviously, you might not be pleased with them or happy about it, but you just try to handle it as best you can."
There are several complications that could lead to Sanchez actually sticking around in New York — whether it's as a backup or starter. Sanchez, who received a contract extension in March, would cost the Jets a $17.1 million salary cap hit next season. They could, however, spread that amount over the next two seasons if he is cut after June 1.
New York could also find it difficult to find a trading partner to unload Sanchez, who isn't likely a very attractive option at the moment after turning the ball over 50 times since the start of last season. With Tannenbaum's status unclear, teams might not be willing to even talk to him about possible trades. Teams can't make deals or sign free agents until March.
If the Jets did wind up trading Sanchez, the salary cap hit for them would still be a costly $8.9 million.
"That didn't come from me or anything else," Ryan said of the trade rumors. "We have two games to play and that's where my focus is, so, that's news to me."
The Daily News reported Thursday, according to sources, that the Jets would be interested in Michael Vick and that the Eagles quarterback would come to New York if it was clear he would be the starter. The newspaper also said Ryan "loves" Vick.
"I'll just focus on the players we have on this roster instead of somebody else's players," Ryan said while laughing.
Sanchez, whom the Jets drafted fifth overall in 2009, was benched in favor of McElroy for at least the home finale Sunday against San Diego. Sanchez threw four interceptions and fumbled away the final offensive snap — and the Jets' playoff chances — in New York's 14-10 loss at Tennessee on Monday night.
He once drew comparisons to Joe Namath after helping the Jets to consecutive AFC title games in his first two seasons, but his lack of improvement the last two years have caused him to fall out of favor. Ryan was non-committal Thursday when asked about Sanchez's long-term future.
"Whether it's not a ringing endorsement or whatever, I have absolutely zero focus on that right now," he said. "Everybody knows I've been supportive of Mark Sanchez. I think he still has the skill set to be a good quarterback in this league and we've won a lot of games with him.
"Again, that's for another day."
Tebow was supposed to be the spark that got the offense going, but instead spent most of his time on the sideline. While he has been hampered the last month by two broken ribs, his numbers were far from special even before that. For the season, he has rushed for 102 yards on 32 carries and is 6 of 8 for 39 yards, and has a stunning zero touchdowns while participating in just 72 offensive snaps.
"I think anytime you look at those things, it's a combination of things, but I wouldn't use the words 'didn't work' at all," Sparano said. "We had a plan going into this thing, but obviously the plan always, at that particular time, was that Mark was the quarterback and Tim would have a role and to what degree the role was, if I remember correctly, it was one to 20 plays in a game. Some days it was eight, some days it was one, some days it was none."
But, many fans and media have said it appears Tebow never got a true opportunity to be the playmaker everyone expected.
"I'm not going to get into that fair shake, not fair shake, all of those kinds of things," Sparano said. "Tim played his role and has done his role as well as expected right now. In other words, he's done everything we've asked him to do so far."
Tebow repeatedly said he was "excited" to be a member of the Jets when he first came from Denver in a trade in March, and he reiterated that throughout the season. But he acknowledged that he was "a little bit disappointed" that Ryan chose McElroy to start over him — at least for Sunday.
Now, Tebow could be an ex-Jet less than a year after he came to New York with lots of expectations.
"I've always, since I was a young boy, believed in myself and the abilities that God has given me and I just look forward to having an opportunity to try to show those again," Tebow said. "I'm pretty positive and I look forward to the future and what's going to happen."
It won't be in New York, though. And the inability to consistently find a way to effectively use Tebow could end up costing Sparano his job, too.
"That's not for me to assess," Sparano said. "Somebody else will do that."
Read More..
And Tim Tebow might even beat him out the door.
A person with knowledge of the situation told The Associated Press on Thursday that the Jets will consider all of their options regarding the two quarterbacks during the offseason. That means both Sanchez and Tebow are in limbo and trades cannot be ruled out.
The person, who requested anonymity because the team's personnel plans are private, told the AP that the Jets have not made any determinations involving Sanchez or Tebow.
The Jets could be hard-pressed to trade or cut Sanchez, who is due $8.25 million in guarantees next season after having his contract extended last offseason.
But there are no such complications with Tebow, who will likely be traded or released after just one disappointing season in New York. Tebow has two years remaining on his contract, but would cost the Jets only a little more than $1 million against the salary cap if cut.
"Anything dealing with the future past Buffalo (the regular-season finale) will be handled after that," coach Rex Ryan said.
The futures of Ryan, general manager Mike Tannenbaum and offensive coordinator Tony Sparano also are uncertain.
Parting ways with Tebow, the immensely popular but little-used backup, appears a certainty, though, after he came to New York amid lots of hype but had little impact. The final indication that Tebow will not be part of the Jets' future came when Ryan went with Greg McElroy, the third-stringer, to start at quarterback instead of him against San Diego on Sunday.
"Sometimes, things just happen out of your control," Tebow said Wednesday. "Obviously, you might not be pleased with them or happy about it, but you just try to handle it as best you can."
There are several complications that could lead to Sanchez actually sticking around in New York — whether it's as a backup or starter. Sanchez, who received a contract extension in March, would cost the Jets a $17.1 million salary cap hit next season. They could, however, spread that amount over the next two seasons if he is cut after June 1.
New York could also find it difficult to find a trading partner to unload Sanchez, who isn't likely a very attractive option at the moment after turning the ball over 50 times since the start of last season. With Tannenbaum's status unclear, teams might not be willing to even talk to him about possible trades. Teams can't make deals or sign free agents until March.
If the Jets did wind up trading Sanchez, the salary cap hit for them would still be a costly $8.9 million.
"That didn't come from me or anything else," Ryan said of the trade rumors. "We have two games to play and that's where my focus is, so, that's news to me."
The Daily News reported Thursday, according to sources, that the Jets would be interested in Michael Vick and that the Eagles quarterback would come to New York if it was clear he would be the starter. The newspaper also said Ryan "loves" Vick.
"I'll just focus on the players we have on this roster instead of somebody else's players," Ryan said while laughing.
Sanchez, whom the Jets drafted fifth overall in 2009, was benched in favor of McElroy for at least the home finale Sunday against San Diego. Sanchez threw four interceptions and fumbled away the final offensive snap — and the Jets' playoff chances — in New York's 14-10 loss at Tennessee on Monday night.
He once drew comparisons to Joe Namath after helping the Jets to consecutive AFC title games in his first two seasons, but his lack of improvement the last two years have caused him to fall out of favor. Ryan was non-committal Thursday when asked about Sanchez's long-term future.
"Whether it's not a ringing endorsement or whatever, I have absolutely zero focus on that right now," he said. "Everybody knows I've been supportive of Mark Sanchez. I think he still has the skill set to be a good quarterback in this league and we've won a lot of games with him.
"Again, that's for another day."
Tebow was supposed to be the spark that got the offense going, but instead spent most of his time on the sideline. While he has been hampered the last month by two broken ribs, his numbers were far from special even before that. For the season, he has rushed for 102 yards on 32 carries and is 6 of 8 for 39 yards, and has a stunning zero touchdowns while participating in just 72 offensive snaps.
"I think anytime you look at those things, it's a combination of things, but I wouldn't use the words 'didn't work' at all," Sparano said. "We had a plan going into this thing, but obviously the plan always, at that particular time, was that Mark was the quarterback and Tim would have a role and to what degree the role was, if I remember correctly, it was one to 20 plays in a game. Some days it was eight, some days it was one, some days it was none."
But, many fans and media have said it appears Tebow never got a true opportunity to be the playmaker everyone expected.
"I'm not going to get into that fair shake, not fair shake, all of those kinds of things," Sparano said. "Tim played his role and has done his role as well as expected right now. In other words, he's done everything we've asked him to do so far."
Tebow repeatedly said he was "excited" to be a member of the Jets when he first came from Denver in a trade in March, and he reiterated that throughout the season. But he acknowledged that he was "a little bit disappointed" that Ryan chose McElroy to start over him — at least for Sunday.
Now, Tebow could be an ex-Jet less than a year after he came to New York with lots of expectations.
"I've always, since I was a young boy, believed in myself and the abilities that God has given me and I just look forward to having an opportunity to try to show those again," Tebow said. "I'm pretty positive and I look forward to the future and what's going to happen."
It won't be in New York, though. And the inability to consistently find a way to effectively use Tebow could end up costing Sparano his job, too.
"That's not for me to assess," Sparano said. "Somebody else will do that."
Exclusive: U.S. likely to extend Iran sanction waivers-sources
Labels: BusinessWASHINGTON (Reuters) - The United States is likely to exempt India, South Korea, Turkey and others from Iranian financial sanctions for another six months on Friday as a reward for reducing crude purchases from the Islamic republic, two U.S. government sources said.
Oil shipments by Iran have more than halved in 2012 in the face of U.S. and European Union sanctions aimed at cutting Tehran's foreign exchange earnings and funding for a nuclear program they suspect is designed for a military purpose. Iran denies that the program is for nuclear weapons.
The U.S. sanctions, which target financial transactions, have gradually tightened the noose on Iran's crude sales. But exports took a deep hit in July when EU sanctions kicked in, largely because they effectively, overnight, banned insurance cover on ships carrying Iranian crude.
The sanctions have sharply curtailed the market for Iranian crude, with Asian buyers and Turkey the only customers this month, according to shipping sources. EU sanctions included a ban on members from buying Iranian crude.
The International Energy Agency (IEA) estimates that Iranian oil exports dipped below 1 million barrels per day (bpd) over the summer as Western sanctions on Tehran tightened.
According to official Iranian government data available through the Joint Oil Data Initiative (JODI), Iran exported an average of just over 2 million bpd in 2011.
On June 11, a number of countries received their first round of reprieves from U.S. sanctions that President Barack Obama signed into law a year ago. The waivers are issued by the State Department.
Under the law, banks in countries that buy oil from Iran can be cut off from the U.S. financial system unless their purchases are reduced.
The architects of U.S. sanctions legislation, Democratic Senator Robert Menendez and Republican Senator Mark Kirk, have urged the White House to require oil importers to reduce purchases by 18 percent or more to qualify for further exemptions.
U.S. waivers for China, the top consumer of Iran's oil, and Singapore are due to expire on December 25, 180 days after they were issued. Both countries are expected to get waiver extensions because they have reduced oil purchases from Iran. Those waivers could also be issued on Friday, one of the government sources and an oil industry source said.
"There's nothing in the sanctions law that says the U.S. has to wait a full 180 days to announce exceptions for China," said the government source, who asked not to be named because of the sensitive nature of the matter.
Japan and 10 EU countries received six-month sanction reprieves from the United States in September.
SANCTIONS HIT
The West suspects that Iran's nuclear program is enriching uranium to levels that could be used in weapons. Tehran has said that the program is for the generation of electricity and medical purposes.
David Cohen, undersecretary for terrorism and financial intelligence at the U.S. Treasury Department, said this week the mix of sanctions was costing Iran up to $5 billion a month.
The United States and the EU say the sanctions are targeted at the government and not ordinary citizens, although the rial has dropped sharply in value and forced up food prices so that Iranians can not always afford even basic items.
Still, the West has been ramping up sanctions further as worries mount about Tehran's nuclear intentions and to try to calm concerns in Israel, which has threatened to attack Iranian nuclear installations if a peaceful solution is not found.
Shipping sources say Iran's crude exports are set to drop by about a quarter in December from November and to the lowest level since the sanctions were imposed this year, representing a loss of about $800 million at current prices.
EU sanctions mean that major buyers China, South Korea and India ask Iran to ship the oil to them because they are unable to secure insurance cover for vessels.
Delivery has often been delayed because the Iranian fleet is severely stretched, with an increasing number of its tankers being used as floating storage for unsold oil.
The sanction will leave Asia's 2012 Iranian crude imports at just over 1 million bpd, down roughly a quarter from a year ago, Reuters calculations show.
As Iran's biggest buyers of Iran crude, Asian countries lobbied hard for exemptions to the sanctions for fear that a loss of the crude would force prices higher and undermine economic growth. Many Asian refiners are also designed to handle Iranian crude, and would require costly reconfiguring if they were to give up the grade substantially.
China, the world's second-largest oil consumer, has also repeatedly voiced its opposition to unilateral sanctions, such as those imposed by the United States. It says measures should be multilateral and agreed through the United Nations.
Still, China's imports have fallen in recent months as Iranian tankers struggled to ship even the reduced volumes requested by importing countries. Earlier this year, China slashed imports by as much as half as the country wrangled over annual contract terms with Tehran.
China's imports from Iran are down 22 percent on the year to 426,000 bpd in January-October, the months for which official data is available.
South Korea has reduced purchases 39 percent to 148,000 bpd and Japan 41 percent to 188,000 bpd over the same period. In contrast, India has raised imports to 328,000 bpd, up 7 percent.
Read More..
Oil shipments by Iran have more than halved in 2012 in the face of U.S. and European Union sanctions aimed at cutting Tehran's foreign exchange earnings and funding for a nuclear program they suspect is designed for a military purpose. Iran denies that the program is for nuclear weapons.
The U.S. sanctions, which target financial transactions, have gradually tightened the noose on Iran's crude sales. But exports took a deep hit in July when EU sanctions kicked in, largely because they effectively, overnight, banned insurance cover on ships carrying Iranian crude.
The sanctions have sharply curtailed the market for Iranian crude, with Asian buyers and Turkey the only customers this month, according to shipping sources. EU sanctions included a ban on members from buying Iranian crude.
The International Energy Agency (IEA) estimates that Iranian oil exports dipped below 1 million barrels per day (bpd) over the summer as Western sanctions on Tehran tightened.
According to official Iranian government data available through the Joint Oil Data Initiative (JODI), Iran exported an average of just over 2 million bpd in 2011.
On June 11, a number of countries received their first round of reprieves from U.S. sanctions that President Barack Obama signed into law a year ago. The waivers are issued by the State Department.
Under the law, banks in countries that buy oil from Iran can be cut off from the U.S. financial system unless their purchases are reduced.
The architects of U.S. sanctions legislation, Democratic Senator Robert Menendez and Republican Senator Mark Kirk, have urged the White House to require oil importers to reduce purchases by 18 percent or more to qualify for further exemptions.
U.S. waivers for China, the top consumer of Iran's oil, and Singapore are due to expire on December 25, 180 days after they were issued. Both countries are expected to get waiver extensions because they have reduced oil purchases from Iran. Those waivers could also be issued on Friday, one of the government sources and an oil industry source said.
"There's nothing in the sanctions law that says the U.S. has to wait a full 180 days to announce exceptions for China," said the government source, who asked not to be named because of the sensitive nature of the matter.
Japan and 10 EU countries received six-month sanction reprieves from the United States in September.
SANCTIONS HIT
The West suspects that Iran's nuclear program is enriching uranium to levels that could be used in weapons. Tehran has said that the program is for the generation of electricity and medical purposes.
David Cohen, undersecretary for terrorism and financial intelligence at the U.S. Treasury Department, said this week the mix of sanctions was costing Iran up to $5 billion a month.
The United States and the EU say the sanctions are targeted at the government and not ordinary citizens, although the rial has dropped sharply in value and forced up food prices so that Iranians can not always afford even basic items.
Still, the West has been ramping up sanctions further as worries mount about Tehran's nuclear intentions and to try to calm concerns in Israel, which has threatened to attack Iranian nuclear installations if a peaceful solution is not found.
Shipping sources say Iran's crude exports are set to drop by about a quarter in December from November and to the lowest level since the sanctions were imposed this year, representing a loss of about $800 million at current prices.
EU sanctions mean that major buyers China, South Korea and India ask Iran to ship the oil to them because they are unable to secure insurance cover for vessels.
Delivery has often been delayed because the Iranian fleet is severely stretched, with an increasing number of its tankers being used as floating storage for unsold oil.
The sanction will leave Asia's 2012 Iranian crude imports at just over 1 million bpd, down roughly a quarter from a year ago, Reuters calculations show.
As Iran's biggest buyers of Iran crude, Asian countries lobbied hard for exemptions to the sanctions for fear that a loss of the crude would force prices higher and undermine economic growth. Many Asian refiners are also designed to handle Iranian crude, and would require costly reconfiguring if they were to give up the grade substantially.
China, the world's second-largest oil consumer, has also repeatedly voiced its opposition to unilateral sanctions, such as those imposed by the United States. It says measures should be multilateral and agreed through the United Nations.
Still, China's imports have fallen in recent months as Iranian tankers struggled to ship even the reduced volumes requested by importing countries. Earlier this year, China slashed imports by as much as half as the country wrangled over annual contract terms with Tehran.
China's imports from Iran are down 22 percent on the year to 426,000 bpd in January-October, the months for which official data is available.
South Korea has reduced purchases 39 percent to 148,000 bpd and Japan 41 percent to 188,000 bpd over the same period. In contrast, India has raised imports to 328,000 bpd, up 7 percent.
Rona says looking to sell non-core assets
Labels: Business
(Reuters) - Canadian home-improvement retailer Rona Inc , the target of a C$1.8 billion takeover proposal by U.S.-based Lowe's Cos Inc earlier this year, said it expects to dispose of non-core assets and redeploy capital to leverage core assets.
The company wants
to improve its retail EBITDA (earnings before interest, tax,
depreciation and amortization) margin in line with industry standards
under the leadership of acting Chief Executive Dominique Boies, who joined Rona in 2011, the company said in a statement.
Lowe's withdrew its
unsolicited offer buy Montreal-based Rona in mid-September in the face
of stiff opposition from Quebec province politicians and many of the
company's independent dealers.
Rona's longtime
chief executive, Robert Dutton, stepped down last month following
disappointing results, prompting speculation that the company could be
back in play.
Maintenance deals drive Micro Focus earnings beat
Labels: BusinessLONDON (Reuters) - Information technology company Micro Focus International posted better-than-expected first-half core earnings after it moved towards more lucrative maintenance contracts, with fewer low-margin consultancy deals.
The British mainframe software specialist posted a 3 percent rise in adjusted core earnings of $92.2 million on Thursday, ahead of analysts' average forecasts of about $86 million.
Revenue at the business, which works on the large computers that crunch data for banks and retailers, slipped 5 percent to $207.3 million, broadly as expected by the market.
Executive Chairman Kevin Loosemore said it was a "solid" performance against a backdrop of weak demand in markets like Spain, Italy and Japan.
"We are cautious about the macro stuff, but not to the point where we think it will cause any great downturn," he said in an interview.
He said revenue in the second half would likely be similar to the first.
The target for the core earnings margin, however, was increased to 40-45 percent, from a previous range of 37-42 percent, reflecting the changed product mix.
Loosemore has repositioned the business to drive cash returns for shareholders rather than chasing high revenue growth.
A total $313.9 million was returned to shareholders in the previous 12 months, he said, and the board intended to return more cash in November next year and in 2014.
It also increased its interim dividend by 45 percent to 11.9 cents.
Shares in the group, which have risen by 29 percent in the last six months, were flat at 570.5 pence at 1010 GMT.
Read More..
The British mainframe software specialist posted a 3 percent rise in adjusted core earnings of $92.2 million on Thursday, ahead of analysts' average forecasts of about $86 million.
Revenue at the business, which works on the large computers that crunch data for banks and retailers, slipped 5 percent to $207.3 million, broadly as expected by the market.
Executive Chairman Kevin Loosemore said it was a "solid" performance against a backdrop of weak demand in markets like Spain, Italy and Japan.
"We are cautious about the macro stuff, but not to the point where we think it will cause any great downturn," he said in an interview.
He said revenue in the second half would likely be similar to the first.
The target for the core earnings margin, however, was increased to 40-45 percent, from a previous range of 37-42 percent, reflecting the changed product mix.
Loosemore has repositioned the business to drive cash returns for shareholders rather than chasing high revenue growth.
A total $313.9 million was returned to shareholders in the previous 12 months, he said, and the board intended to return more cash in November next year and in 2014.
It also increased its interim dividend by 45 percent to 11.9 cents.
Shares in the group, which have risen by 29 percent in the last six months, were flat at 570.5 pence at 1010 GMT.
CIBC profit rises on markets-related income
Labels: BusinessTORONTO (Reuters) - Canadian Imperial Bank of Commerce reported a 13 percent increase in quarterly earnings, driven by higher income from its wholesale banking and wealth management businesses.
CIBC, Canada's fifth-largest bank, said on Thursday that it had earned C$852 million ($858.05 million), or C$2.02 a share, in the fourth quarter ended on October 31, compared with C$757 million, or C$1.79 a share, a year earlier.
Excluding certain items, the bank earned C$2.04 a share, ahead of the analysts' average estimate of C$1.98, according to Thomson Reuters I/B/E/S.
Toronto-based CIBC is the third of Canada's "Big Five" banks to report fourth-quarter results.
Like peers Bank of Montreal and Royal Bank of Canada , CIBC benefited from a sharp year-on-year rise in wholesale banking revenue as trading fees improved from the relatively weak year-earlier period.
Wholesale banking income, which includes trading and investment banking, rose 58 percent to C$193 million.
Income from domestic retail banking, CIBC's largest division, fell 5 percent to C$569 million, while wealth management income rose 20 percent to C$84 million.
(Reporting by Cameron French; Editing by Lisa Von Ahn)
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Read More..
CIBC, Canada's fifth-largest bank, said on Thursday that it had earned C$852 million ($858.05 million), or C$2.02 a share, in the fourth quarter ended on October 31, compared with C$757 million, or C$1.79 a share, a year earlier.
Excluding certain items, the bank earned C$2.04 a share, ahead of the analysts' average estimate of C$1.98, according to Thomson Reuters I/B/E/S.
Toronto-based CIBC is the third of Canada's "Big Five" banks to report fourth-quarter results.
Like peers Bank of Montreal and Royal Bank of Canada , CIBC benefited from a sharp year-on-year rise in wholesale banking revenue as trading fees improved from the relatively weak year-earlier period.
Wholesale banking income, which includes trading and investment banking, rose 58 percent to C$193 million.
Income from domestic retail banking, CIBC's largest division, fell 5 percent to C$569 million, while wealth management income rose 20 percent to C$84 million.
(Reporting by Cameron French; Editing by Lisa Von Ahn)
Explore Related Content
1 - 4 of 20
prevnext
* Go to page 1
* Go to page 2
* Go to page 3
* Go to page 4
* Go to page 5
1.
A Bank of Montreal sign is pictured in downtown Ottawa
A Bank of Montreal sign is pictured …
2.
BMO profit rises on wholesale banking, better loans
BMO profit rises on wholesale banking, …
Reuters
3.
AkzoNobel's logo is seen in Amsterdam
AkzoNobel's logo is seen in Amsterd …
4.
Scotiabank profit rises 31 percent on wholesale banking
Scotiabank profit rises 31 percent on …
Reuters
Sudan rules out devaluation despite black market gap
Labels: BusinessKHARTOUM (Reuters) - Sudan plans to close the gap between official and black market exchange rates through higher earnings from resources like gold and oil instead of devaluing the pound again, a vice-president said on Wednesday.
Sudan has been in economic crisis since South Sudan seceded last year, taking with it three-quarters of the once unified nation's oil output. This had been Sudan's main source of revenues and the dollars it needs to pay for imports.
Inflation hit 45 percent in October. This week Sudan's pound fell to a historic low of 6.5 pounds against the dollar on the black market as hopes faded that Sudan would soon collect revenues from South Sudanese oil exports.
In an interview with Reuters, Second Vice President al-Haj Adam Youssef said authorities were trying to get the rate down to about 4.5 pounds to the dollar, close to the official rate of around 4.4 pounds.
"There are some efforts to have the price of the dollar around 4.5 as an average in the next few months, and that will be appropriate for our economy, for export and import as well," he said in his office in Sudan's Republican Palace on the Nile.
Youssef said the government would not devalue the pound, as it did in July when it nearly halved the official value.
Instead, it hoped the pound would get a boost from previously announced plans to increase foreign currency earnings through higher output of gold and oil from Sudan's own resources.
"We want things to be normalised by the natural mechanism," he said.
There is little foreign trade in the pound, but listed firms like cellphone operator Zain, German airline Lufthansa and Bank of Khartoum, co-owned by Dubai Islamic Bank, watch the rate closely because they sell products in pounds and then struggle to convert profits to dollars.
CUTTING SUBSIDIES
Sudanese officials blame economic problems largely on tensions with South Sudan, which was supposed to pay Khartoum fees to pipe oil through Sudanese pipelines to a Red Sea port.
But the two fell out over the fees, and South Sudan shut down its 350,000 barrel-per-day output in January. Flows have yet to resume, although the two signed economic and border security deals in September that officials say could see oil exports restart by the end of the year.
Sudan says it aims to increase oil production in its remaining fields from 115,000 barrels per day to 150,000 bpd next year. It had planned to boost output to 180,000 bpd this year but failed to reach the target.
The country's gold exports reached between 47 and 48 tonnes this year and were expected to rise above 50 tonnes annually, bringing in more than $2 billion a year, Finance Minister Ali Mahmoud said this week.
Even before South Sudan seceded - the result of a 2005 peace deal that ended decades of civil war - Sudan's economy was weakened by years of conflict, corruption and U.S. trade sanctions.
The government was forced to scale back its costly fuel subsidy programme in June to plug a budget deficit left by the loss of oil revenues, sparking small anti-government protests.
Youssef said the government still aimed to eliminate subsidies for all commodities but declined to give a timeline, saying only that subsidies would be phased out gradually.
The country's cabinet approved the country's 2013 budget on Monday, putting the budget gap at 10 billion Sudanese pounds - roughly $1.5 billion at current black market rates.
Even without earnings from the South's oil - which are not included in the budget - Youssef said the government could draw about half the deficit from the central bank and make up the rest with increased tax collection and other measures.
Support from friendly countries could also help, he said, although this was not included in the budget. "There is no problem as far as the deficit is concerned," he said.
Read More..
Sudan has been in economic crisis since South Sudan seceded last year, taking with it three-quarters of the once unified nation's oil output. This had been Sudan's main source of revenues and the dollars it needs to pay for imports.
Inflation hit 45 percent in October. This week Sudan's pound fell to a historic low of 6.5 pounds against the dollar on the black market as hopes faded that Sudan would soon collect revenues from South Sudanese oil exports.
In an interview with Reuters, Second Vice President al-Haj Adam Youssef said authorities were trying to get the rate down to about 4.5 pounds to the dollar, close to the official rate of around 4.4 pounds.
"There are some efforts to have the price of the dollar around 4.5 as an average in the next few months, and that will be appropriate for our economy, for export and import as well," he said in his office in Sudan's Republican Palace on the Nile.
Youssef said the government would not devalue the pound, as it did in July when it nearly halved the official value.
Instead, it hoped the pound would get a boost from previously announced plans to increase foreign currency earnings through higher output of gold and oil from Sudan's own resources.
"We want things to be normalised by the natural mechanism," he said.
There is little foreign trade in the pound, but listed firms like cellphone operator Zain, German airline Lufthansa and Bank of Khartoum, co-owned by Dubai Islamic Bank, watch the rate closely because they sell products in pounds and then struggle to convert profits to dollars.
CUTTING SUBSIDIES
Sudanese officials blame economic problems largely on tensions with South Sudan, which was supposed to pay Khartoum fees to pipe oil through Sudanese pipelines to a Red Sea port.
But the two fell out over the fees, and South Sudan shut down its 350,000 barrel-per-day output in January. Flows have yet to resume, although the two signed economic and border security deals in September that officials say could see oil exports restart by the end of the year.
Sudan says it aims to increase oil production in its remaining fields from 115,000 barrels per day to 150,000 bpd next year. It had planned to boost output to 180,000 bpd this year but failed to reach the target.
The country's gold exports reached between 47 and 48 tonnes this year and were expected to rise above 50 tonnes annually, bringing in more than $2 billion a year, Finance Minister Ali Mahmoud said this week.
Even before South Sudan seceded - the result of a 2005 peace deal that ended decades of civil war - Sudan's economy was weakened by years of conflict, corruption and U.S. trade sanctions.
The government was forced to scale back its costly fuel subsidy programme in June to plug a budget deficit left by the loss of oil revenues, sparking small anti-government protests.
Youssef said the government still aimed to eliminate subsidies for all commodities but declined to give a timeline, saying only that subsidies would be phased out gradually.
The country's cabinet approved the country's 2013 budget on Monday, putting the budget gap at 10 billion Sudanese pounds - roughly $1.5 billion at current black market rates.
Even without earnings from the South's oil - which are not included in the budget - Youssef said the government could draw about half the deficit from the central bank and make up the rest with increased tax collection and other measures.
Support from friendly countries could also help, he said, although this was not included in the budget. "There is no problem as far as the deficit is concerned," he said.
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