ParkerVision Slides; Prices 8M Shrs At 22% Discount

ParkerVision (PRKR) shares are down sharply this morning, after the company priced an offering of 8 million common shares at $2, nearly 22% below the stock’s close yesterday at $2.55. Piper Jaffray was the sole underwriter of the offering.

Net proceeds are expected to be $14.6 million. The company, which focuses on wireless communications products, expects to use the cash for working capital and other general corporate purposes, including funding R&D and marketing.

The development stage company late yesterday reported a Q3 loss of $5.7 million; it has no revenue. At quarter end, the company had $3.3 million in cash.

PRKR this morning is down 53 cents, or 20.8%, at $2.02.

If you want to get refreshed on the strange saga of Parkervision, read Bill Alpert’s piece on the company from the print edition of Barron’s published in December 2007.

Lions Gate Entertainment: Still waiting for cash flow

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When I discussed Lions Gate Entertainment's (LGF) first-quarter results, I noted the disappointing statement of cash flows. Unfortunately, the company didn't do much better in the second quarter. For the six-month period, Lions Gate used over $160 million for operations compared to the roughly $40 million used in the similar frame one year ago.

Of course, cash flow doesn't always get the most coverage. Investors tend to get more excited by a swing to profitability. On that count, Lions Gate scored admirably, earning 26 cents per diluted share versus losing 44 cents per diluted share twelve months prior. Earnings.com indicates that analysts were really underestimating the Q2 income potential here: the call was for 6 cents per share.

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Lions Gate Entertainment: Still waiting for cash flow originally appeared on BloggingStocks on Tue, 10 Nov 2009 09:30:00 EST. Please see our terms for use of feeds.

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Guardian Raises Questions about Past IEA Forecasts of World Oil; New IEA Forecast is Out – With a Lower Forecast

Yesterday's Guardian raised questions about whether oil reserves published in the past by the IEA have been inflated.

Key oil figures were distorted by US pressure, says whistleblower

The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.

The article makes several other points, including that the US has been encouraging understatement, and that the new 2009 forecast released today may still be overstated.

The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves.

The allegations raise serious questions about the accuracy of the organisation's latest World Energy Outlook on oil demand and supply to be published tomorrow – which is used by the British and many other governments to help guide their wider energy and climate change policies.

One wonders whether similar pressures are put on the US Energy Information Administration. The article also talks about the possibility that we are "already in the 'peak oil' zone":

A second senior IEA source, who has now left but was also unwilling to give his name, said a key rule at the organisation was that it was "imperative not to anger the Americans" but the fact was that there was not as much oil in the world as had been admitted. "We have [already] entered the 'peak oil' zone. I think that the situation is really bad," he added.

Today, the IEA released its new World Energy Outlook 2009. The Oil Drum staff will be writing posts about it in coming days and weeks. This is a key graph from the press release packet, indicating the IEA is now seeing things through somewhat less rosy glasses, but still views world oil supply with more optimism than we would:

The new report also indicates that non OPEC production is peaking, with this statement:

"As conventional oil production in countries not belonging to the Organization of the Petroleum Exporting Countries (OPEC) peaks around 2010, most of the increase in output would need to come from OPEC countries, which hold the bulk of remaining recoverable conventional oil resources."

GigOptix Buying ChipX for $12.25 Million

GigOptix Inc. (OTCBB: GGOX) has agreed to acquire ChipX, Santa Clara, Calif.-based provider of ASIC products. ChipX investors will receive 3.5 million common shares of GigOptix stock, currently valued at approximately $12.25 million and representing a 26% stake in GigOptix. ChipX has raised approximately $65 million in total VC funding, including a recap in 2004. Current backers include Elron Electronic Industries, Needham Asset Management, Newlight Associates, Parker Price Venture Capital, UMC Capital, VantagePoint Venture Partners and Wasserstein Ventures.

PRESS RELEASE
GigOptix, Inc. (OTCBB: GGOX), a leading high speed analog semiconductor manufacturer specializing in electronic engines for the optically connected digital world, today announced that the company has signed a definitive agreement, and completed the acquisition of ChipX, Incorporated, a privately-held fabless supplier of analog and mixed signal custom Application Specific Integrated Circuits (ASICs) on November 9, 2009.

It is anticipated that on a consolidated pro-forma, non-GAAP basis, the company, with locations in the U.S., Switzerland and Israel, will have had combined revenues for the first nine months of 2009 of more than $25M. GigOptix and its subsidiaries will also have a work force of approximately 95 employees, down from 115 pre-merger, of which around 40% are in research and development, and approximately 15% are in sales and marketing. As demonstrated in its previous three acquisitions, the company believes it will achieve significant financial efficiencies after consolidation. Prior to the acquisition, GigOptix employees delivered approximately $230K annual revenue per employee, which the company plans to improve to over $300K annual revenue per employee in 2010.

“I am delighted with the strategic match we have found in ChipX which continues our vision of bringing complementary technologies together to increase value for our customers so that we can accelerate our growth engine and continue to enrich the features we offer while reducing the cost to our customers,” stated Dr. Avi Katz, Chairman of the Board of Directors and Chief Executive Officer of GigOptix. “ChipX brings a loyal portfolio of tier one customers who use the first class design services and IP of ChipX to create their own truly differentiated custom products. Similarly, we will bring our own IP together with that of ChipX to bring new standard products to market faster, and at a lower investment by leveraging their excellent design capability. This acquisition fits into our continuous rollup and consolidation growth strategy and will support continuous improvement of all our financial and business metrics. I am excited to welcome the new team and look forward to working together to continue to deliver excellent results for our shareholders.”

This acquisition is expected to bring a number of benefits to GigOptix’s current and future customers and investors, including:

a. A solid revenue stream from more than 60 active customers, over 100
custom mixed signal ASIC products in production and 5 products
currently in development.
b. Strong customer relationships due to the level of engagement
required during the joint development of custom ASICs. These are
particularly focused in the vertical markets of Defense & Aerospace,
Industrial, Communications, Medical and Test & Measurement, where
GigOptix can offer complimentary products for cross selling
opportunities.
c. A rich portfolio of intellectual property and complementary skills
that will enable GigOptix to develop new products to expand its
offering to the optically connected market. The alternative of
GigOptix organically developing and building such a rich portfolio
of approximately 70 silicon proven IP cores would take several years
and millions of dollars to achieve.
d. Increased presence in the Defense and Instrumentation market, which
is supported by ChipX’s ITAR certification and the addition of
ChipX’s subsidiary in Haifa, Israel, which is ideally located to
facilitate support expansion of GigOptix’ product sales to the
defense market there and around the world.
e. As a fabless high volume silicon integrated circuit supplier, ChipX
brings strong relationships with leading semiconductor foundries and
sub-contractors and increased purchasing power which may be
leveraged by GigOptix to further improve operating margins and
enhance supply chain accessibility.
f. Continuing the aggressive rollup of entities that have invested
millions of dollars in developing sophisticated technology and
products for a fraction of their investment, to support GigOptix’
cost-effective technology and product arsenal build-up.

“ChipX is a long time valued supplier to National Instruments and we look forward to continuing this collaboration with GigOptix,” stated Keith Odom, Research and Development Fellow at National Instruments (NASDAQ: NATI). “ChipX has a long track record of providing NI flexible, complex and cost-effective solutions such as mixed-signal ASICs for our USB 2.0 data acquisition products including NI CompactDAQ and advanced NI-STC3 PCI Express, timing and synchronization technology for our NI X Series DAQ devices. The joining of GigOptix and ChipX strengthens and broadens ChipX’s high-speed analog offering, another critical component for NI Multifunction DAQ and modular instruments. ChipX was honored with an NI 2009 Global Supplier Award after demonstrating commitment and results that set them apart from the rest of the industry and we look forward to continuing this high standard of innovation with GigOptix.”

With the acquisition, GigOptix brings high volume silicon design expertise into the company to complement its design excellence in the more specialist semiconductor technologies of III-V, Silicon germanium and of course its unique expertise in Electro-Optic (EO) polymer technology. This will support its strategic move into higher levels of integration of analog and mixed signal system-on-chip products, such as Clock Data Recovery (CDR) and Serializer/De-Serializers (SERDES). Similar to the acquisition of Helix Semiconductors in January 2008, the acquisition supports GigOptix’s plan to efficiently expand its product portfolio into high volume optically connected markets such as consumer electronics, data centers, high performance computing as well as significantly reducing the time and cost of developing new products, customer relationships and vertical markets. The transaction also delivers increased scale with an existing revenue stream from complementary product sales.

“This is a welcome and exciting move for the ChipX team,” commented Ophir Nadir, Vice President of Engineering at ChipX. “The combination of standard products and custom ASICs is an effective model in many successful semiconductor companies due to the ability to leverage the valuable customer channel and investment in IP across a larger number of products. It makes sense to add new intellectual properties to the custom ASIC tool kit from the GigOptix product base. ChipX has a healthy pipeline of new customer designs ongoing and expects to see growth in ASIC sales in 2010. The ChipX team is eager to work with everyone in the GigOptix corporate family to create additional new growth opportunities with this synergistic merger.”

While GigOptix has installed an efficient financial operating model, GigOptix anticipates that the scaled up company will be even better positioned financially to mitigate the infrastructure cost of being a publicly traded small cap company. Both companies’ headquarters are located in Silicon Valley, and, to bring organization and financial benefits, will be quickly consolidated into one location at the current GigOptix headquarters in Palo Alto, as the current lease of ChipX in Santa Clara, California, expires in two months. It is expected that costs synergies will contribute to improving the bottom line as soon as the first quarter of 2010.

The terms of the deal provide for the ChipX investors to receive approximately 3.5 million common shares, representing approximately 26% of the fully diluted share count of GigOptix. As well as the operational benefits, the acquisition is anticipated to have the significant effect of broadening the ownership of the GigOptix common stock with the addition of new strategic and institutional investors. In parallel with closing the acquisition, the company has entered into a new commercial banking relationship with Bridge Bank, N.A. (NASDAQ: BBNK), a full-service professional business bank based in San Jose, California, which will include a $4 million asset-based line of credit.

Dr. Avi Katz will continue as Chief Executive Officer and Chairman of the Board. The current GigOptix Management Team will continue to lead the combined company, and the new ChipX (CX) Product Line will be jointly managed, ad-interim, by Ophir Nadir, Vice President Engineering of CX Product Line, and Elie Massabki, Vice President Sales & Marketing of CX Product Line. Both Mr. Nadir and Mr. Massabki were formerly executive members of ChipX. The transaction was approved by the board of directors of both companies and became effective on November 9, 2009.

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The Financial Commentator: Gold and Gold Stocks

~~~

The Financial Commentator: Special Update
November 5, 2009

As promised in the October 18, 2009 letter, this is a Special Update for gold and the gold stocks.

As gold broke out of the triangle discussed in the August letter in early September, it made progressive new highs above the May 2009 peak in September, October, and now November. The gold stock indices also exceeded their May highs in September and in October. However, the gold indices are trading 6% below their October peaks, even as gold has pushed above $1,090. As gold was making new highs in September and October, the dollar made progressive new lows. With gold making a new high and assaulting $1,100, the dollar is holding 1% above its October low. This performance divergence between gold and the gold indexes and the dollar is at least a short term negative for gold and the gold stocks.

However, the intermediate term picture is also sporting an even more glaring divergence between gold and the gold stocks. When gold topped just over $1,000 in March 2008, the XAU was 209.27 and the HUI was 519.68. Gold is now 8% higher than its March 2008 peak, but the XAU is 170, or 18% lower, while the HUI is 17% lower at 430. In March 2008, the dollar was trading near 71.00, while it is trading just below 76.00 now. Given the negative sentiment toward the dollar, one would never guess it is up 7% from its multi-year low.

This performance divergence between gold and the gold indexes and the dollar suggests that gold is finally nearing an important intermediate top.

The gold indexes have retraced about 78.6% of their March 2008 to October 2008 decline (XAU 178.08, HUI 440.62), which looks like a B wave rally. Meanwhile gold has looks like an irregular B wave rally, since it rallied to new highs. If this pattern analysis is correct, both the gold stocks and gold are on the threshold of a large correction, possibly back to the 2008 October lows over the next year. Hard to believe. But with so much bullishness around in gold and the significant technical divergences, this is exactly the kind of environment that most tops are made, regardless of the market.

I would be surprised if gold doesn’t push above $1,100, at least temporarily. However, gold should not close above $1,115, so that will act as the stop for the following strategy, which is going to break the exposure into thirds.

DZZ – Buy 33% now ($15.20), 33% below $14.95, and 33% if it trades down to $14.65 – $14.35.
GLD – Short 33% now ($106.82), 33% above $107.50, and 33% if it trades up to $108.50 to $110.50.

Jim Welsh


Hong Kong Exchanges Net Up 33%; Tencent Sales Up

Hong Kong Exchanges and Clearing Limited third quarter revenues rose 14% to HK$1.87 billion and net profit rose 33% to HK$1.27 billion or HK$1.18 a share. Tencent Holdings Limited third quarter revenues rose 66.8% to Rmb 3.37 billion and net profit rose 93% to Rmb 1.42 billion or Rmb 0.77 a share.

J Sainsbury Sales Up 5%; Scottish and Southern Net Surges

J Sainsbury plc first-half revenues rose 5% to £10.4 billion and net profit rose 48% to £252 million or 13.8 pence a share. Scottish and Southern Energy plc first-half revenues fell 12.6% to £8.04 billion and net profit rose 195% to £377.9 million or 40.9 pence a share.

Mill Road Capital Buying Cossette

TORONTO (Reuters) - Cossette Inc (KOS.TO), Canada’s largest homegrown advertising agency, said on Tuesday it will sell itself to private eqyity firm Mill Road Capital, spurning a lower bid from Cosmos Capital.

Mill Road will acquire all of Cossette’s issued and outstanding subordinate voting shares for C$7.87 a share in cash.

Based on about 12.4 million shares outstanding, the deal is likely to be worth about C$97.6 million ($92.2 million). The Mill Road offer is not conditional on financing or due diligence.

Last month, Cossette urged shareholders not to tender shares toward a sweetened bid from North American private equity group Cosmos Capital worth C$5.25 a share, or about C$88 million. [ID:nN29102296]

The advertising agency’s clients include McDonald’s Restaurants of Canada, Bell Canada, General Motors of Canada and Coca-Cola.

Cossette’s board unanimously approved the Mill Road offer and has agreed not to actively solicit competing acquisition proposals. However, the board retains the ability to consider any competing acquisition proposal. ($1= $1.058 Canadian) (Reporting by Euan Rocha; Editing by Derek Caney)

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Henkel Sales Down; Intesa Sanpaolo Net Fall

Henkel AG & Co third quarter sales fell 7.2% to €3.49 billion and net profit rose 70% to €172 million or €0.39 a share. Intesa Sanpaolo SpA nine months net interest income fell 7.7% to €8.07 billion and net profit fell 40.2% to €2.26 billion or €0.18 a share.

Canadian VC Activity Hits 13-Year Low

TORONTO (Reuters) - Activity in Canada’s venture capital market hit a 14-year low in the third quarter, tumbling 51 percent to $191 million from the same period a year ago as uneasy investors stayed out of the market.

According to data put out by the Canadian Venture Capital and Private Equity Association (CVCA) and Thomson Reuters, the province of Ontario saw the steepest fall in investment, sagging to $24 million from $179 million a year earlier.

For all of Canada, venture capitalists invested only $682 million in the first nine months of the year, compared with $1.1 billion in the January-September period last year.

“There is increasing frustration in finding co-investment partners to fully capitalize companies to be successful and compete globally,” said Greg Smith, president of the CVCA.

At the current rate, venture capital is seen coming in under $1 billion for the full year, something it has not done since 1995.

Canadian venture capital activity is also down abroad, with funds investing only $38 million around the globe in the third quarter, compared with $151 million a year earlier.

At the same time, U.S. venture capital funds and other foreign investors boosted their presence in the Canadian market, bringing $77 million to deals, accounting for a hefty 40 percent of total activity.

($1=$1.05 Canadian) (Reporting by Pav Jordan; editing by Rob Wilson)

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UK most at risk of losing its triple-A rating, Fitch says

Fitch sparked a fresh round of sovereign rating shenanigans on Tuesday, with a declaration on Reuters Television that among large developed countries still rated triple-A, the UK was "potentially most at risk" of losing its gilt-edged designation. The other countries rated triple-A by Fitch are the US,...

Secondary Sources: Bubbles, Consumption, Summers

A roundup of economic news from around the Web.

  • Bubble Risk: In the Financial Times, former Fed governor Frederic Mishkin says not all bubbles present a risk to the economy. “The second category of bubble, what I call the “pure irrational exuberance bubble”, is far less dangerous because it does not involve the cycle of leveraging against higher asset values. Without a credit boom, the bursting of the bubble does not cause the financial system to seize up and so does much less damage. For example, the bubble in technology stocks in the late 1990s was not fuelled by a feedback loop between bank lending and rising equity values; indeed, the bursting of the tech-stock bubble was not accompanied by a marked deterioration in bank balance sheets. This is one of the key reasons that the bursting of the bubble was followed by a relatively mild recession. Similarly, the bubble that burst in the stock market in 1987 did not put the financial system under great stress and the economy fared well in its aftermath.”
  • Consumption: On Econbrowser, Menzie Chinn looks at per capita consumption. “Consumption (as well as disposable income) were higher [in the third quarter] than they were a year ago. Since we’re concerned with living standards, as opposed to economic activity, I thought it of interest to look at per capita consumption. Since population is available only on quarterly basis, I compare consumption per capita in 2009Q3 to that in 2008Q3. Per capita consumption is 0.3 percent (in log terms) below the level in 2008Q3. Moreover, per capita consumption is 6.5 percent below the 1967Q1-09Q3 trend (which grows at 2.9 percent per annum).Is that a disaster? Maybe not. But one wonders how much lower per capita consumption would have been in the absence of the actions undertaken by fiscal and monetary authorities around the world.”
  • Larry Summers: William D. Cohan profiles Larry Summers in Vanity Fair. “Sheryl Sandberg, the chief operating officer of Facebook, was Summers’s chief of staff for four years at the Treasury Department and also worked for him at the World Bank. She, too, thinks Summers has been unfairly criticized over the years. “I think his directness is a huge asset,” she says. “You always know exactly where you stand with Larry. He pulls no punches. He does nothing behind your back. He literally tells you to your face, if you are working for him and if he thinks you did a great job, he says, ‘You did a great job.’ If he thinks you did a bad job, he says, ‘Try harder and let me help you try harder. I don’t think you quite understood what you needed to do here. Let me help you.’?” But not everyone in Summers’s high-powered circle thinks he is misunderstood. For instance, Tim Geithner, the Treasury secretary: “Larry has not had the jobs he’s had because he’s misunderstood. He’s had them because some of the best leaders in our country understand quite well how much he has to offer.””

Compiled by Phil Izzo


EU objects to Sun-Oracle deal

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It's not the first time this happened, and likely not the last. The European Commission has objected to Oracle's (ORCL) acquisition of Sun Microsystems (JAVA) after U.S. authorities have approve the $7.4 billion deal.

The issue is Sun's database product, MySQL, which European antitrust authorities fear wouldn't be developed after the acquisition since Oracle has its own database and therefore it would hurt competition in the database business. The U.S. authorities disagrees, saying there are enough competitors in the market and that "the merger is unlikely to be anticompetitive."

Continue reading EU objects to Sun-Oracle deal

EU objects to Sun-Oracle deal originally appeared on BloggingStocks on Tue, 10 Nov 2009 09:00:00 EST. Please see our terms for use of feeds.

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Another New Issue


Issuer:             Emerson Electric
Ratings:            A2/ A (S/S)
Security Type:      SEC Registered
Size:               $500
Maturity:           11yr/ 30yr
Structure:          101% COC
Use of Proceeds:    Gen’l Corp, Acquisitions including Avocent Corp, Repay CP
Denoms:             1k x 1k
Bookrunners:        JPM/C
Co-mgrs:            BAS, BNP, BARC, RBC, DB, MS
Timing:             Today


State & Local Taxes Plummet

Via the Rockefeller Institute of Government, an independent research firm focusing on state and local governments, we get some nasty data and fugly charts.

The overview paints a picture of state and local governments in economic distress:

• State tax collections for the second quarter of 2009 showed a record drop of 16.6%, the second consecutive quarter in which revenues fell more sharply than during any previous time on record.

• Forty-nine states saw total tax revenue fall during the quarter,
with 36 states reporting double-digit declines. Both those numbers were up from the first quarter of this year.

• For the year ending in June 2009, the period corresponding to most states’ fiscal years, total state tax collections declined by $63 billion or 8.2% from the previous year. That loss is also a record, and is roughly twice the amount states gained during the year in fiscal relief from the federal stimulus package.

• Preliminary figures for July and August for 36 early-reporting states show continued deterioration, with overall tax collections dropping 8%. Early indications of September income tax payments provide further evidence of more troubling news for states during the third quarter of 2009.

• Local tax revenue declined by 2.8% in nominal terms and 4.2% in real terms, marking the first such decline since 2003.

This data is to be expected in a deep and protracted recession. Job loss and retail sales slowdown directly reduces tax revenue. That is the nasty; Now, for the fugly:

Both Income Tax and Sales Tax Declined Sharply

Income Tax and Sales Tax

State Taxes Are Faring Worse Than Local Taxes

State Taxes Worse Than Local

>

Source:
State Tax Revenues Show Record Drop, For Second Consecutive Quarter
Lucy Dadayan and Donald J. Boyd
The Nelson A. Rockefeller Institute of Government
http://www.rockinst.org/pdf/government_finance/state_revenue_report/2009-10-15-SRR_77.pdf


I should not have CoCo-ed?

As outlined in our criteria, we do not consider contingent capital securities to be a form of common equity. We can include them as hybrid equity depending on their exact features. If the conversion trigger is set at a level that we think would lead to a conversion occurring too late, then we will treat the contingent capital security according to its initial format when considering how much "equity credit"...

Drumbeat: November 10, 2009


International Energy Agency warns falling investment risk to economic recovery

PARIS (AP) — The global financial crisis has led to a dangerous drop in energy investment around the world which could choke off the nascent economic recovery, the International Energy Agency said Tuesday.

...The IEA, a policy adviser to 28 mostly industrialized oil-consuming nations, estimates that the financial and economic crisis is responsible for a $90 billion drop in global oil and gas investment this year, a 19 percent cut from 2008.

"Falling energy investment will have far-reaching and, depending on how governments respond, potentially serious consequences for energy security, climate change and energy poverty," the IEA said in its annual World Energy Outlook report.

The resulting drop in oil and electricity supplies could "undermine the sustainability of the economic recovery," the IEA warned.

IEA Cuts 2030 Oil Demand Forecast on Economy, Climate Policy

(Bloomberg) -- The International Energy Agency cut its long-term forecast for global oil demand as the economic crisis saps consumption in developed economies and environmental policies encourage alternative energy use.

Global oil demand is expected to advance 1 percent a year to 105 million barrels a day by 2030 from 85 million barrels a day in 2008, the adviser to 28 nations said today in its annual World Energy Outlook. The figure is below last year’s 2030 estimate of 106 million barrels a day.

“The global financial crisis and ensuing recession have had a dramatic impact on the outlook for energy markets,” the Paris-based agency said in its executive summary of the report. “World energy demand in aggregate has already plunged with the economic contraction.”


IEA report sees oil price at $100 a barrel in 2020

PARIS: The International Energy Agency forecast on Tuesday that the oil price would be $100 a barrel in 2020 and $115 in 2030, saying oil demand would rise by one percent per year.


Energy demand to rise rapidly without CO2 deal: IEA

World energy consumption will rise rapidly over the next 20 years, pushing up costs and increasing greenhouse gases, unless a deal is reached to curb carbon dioxide emissions, the International Energy Agency (IEA) said on Tuesday.

In its annual World Energy Outlook, the IEA said global energy demand would increase by an average of 2.5 per cent per year over the next five years if governments made no changes to their existing policies and measures.


IEA Expects Gas Glut as Unconventional Output Rises

(Bloomberg) -- There may be an “acute glut” of natural gas in the next few years because of rising production of so-called unconventional fuel in the U.S. and Canada, according to the International Energy Agency.

Global unconventional gas output will rise to 629 billion cubic meters in 2030 from 367 billion cubic meters in 2007, or to 15 percent of worldwide supply from 12 percent, the Paris- based adviser to 28 countries said in its annual World Energy Outlook. Gas supply capacity is set to outpace annual demand growth of 2.5 percent between 2010 and 2015, the IEA said.

“The looming gas glut could have far-reaching consequences for the structure of gas markets and for the way gas is priced in Europe and Asia-Pacific,” the IEA said in the report today.


IEA says oil-gas price link may break

An oversupply of natural gas NG-FT and continuing pressure on oil CL-FT supplies could break the link between gas and oil prices, the head of the International Energy Agency (IEA) said on Tuesday.

In many parts of the world outside the United States gas prices are contractually linked to world oil prices but this link has been under pressure in a market that looks awash with cheap gas for years ahead.


Oil stat shock

What the Guardian is saying is that the IEA has been massaging its figures on account of pressure from the US government.

As Morgan Downey over at Scarce Whales points out, that’s a very grave allegation indeed; the IEA after all is an OECD taxpayer-funded institution.

But given the numbers of abrupt revisions the IEA has had to make to its forecasts of late would it be too much of surprise?

As the Guardian states the body is expected to publish its latest World Energy Outlook on oil demand and supply on Tuesday, with the market expecting some “substantial” downward revisions to its long-term forecast for global oil demand.


Kevin Drum: Watching the Watchdog

It's pretty much impossible to know how seriously to take this. It's almost certainly true that analysts within the IEA disagree with each other about long-term projections, and it's also probably true that there are regional pressures of various kinds within the organization. That's pretty normal for international groups.

But is the U.S. actively pushing the IEA to produce figures that it knows to be wrong? And are these two anonymous sources the first ones to ever go public with this? Hmmm. I'm not so sure about that. But the IEA's 2009 World Energy Outlook comes out on Tuesday (last year's projections are above), and we'll see what they have to say then.


Ida makes landfall on U.S. Gulf Coast, hits oil supply

MOBILE, Alabama (Reuters) – A weakening Tropical Storm Ida lashed the U.S. Gulf Coast with drenching rain and high surf on Tuesday as it moved ashore after shutting down almost 30 percent of Gulf of Mexico energy production.

Ida, once a Category 2 hurricane, made its first U.S. landfall at around 6:40 a.m. EST on Dauphin island, the barrier island off Mobile, Alabama, packing maximum sustained winds of 45 miles per hour (75 kilometers per hour).


The Backside of Peak Oil

It's no secret that production in the United States has been tumbling down the backside of peak oil for the last three decades.

I haven't met anyone that believes U.S. production will ever return to its 1970 production level. Believe me, peak oil in the U.S. isn't a myth. It's about as real as it gets.

In fact, it gets downright ugly when you look at our top oil producers.

Let's take a closer look. . .


Goldman Keeps Crude Forecast at $85 a Barrel by End of Year

(Bloomberg) -- Goldman Sachs Group Inc. is maintaining its forecast for West Texas Intermediate crude to reach $85 a barrel by the end of this year and $95 next year as it expects the market to shift into a “global deficit” in coming months.

“Strong activity” in China’s petrochemical and metals sectors is likely to provide support to global oil demand, while production outside the Organization of Petroleum Exporting Countries is set to decline, generating “further price and returns upside,” Goldman’s analysts led by Allison Nathan said in a report dated Nov. 9.


CNN Student News: Economy News

JONATHAN STERN, OXFORD INSTITUTE FOR ENERGY STUDIES: National oil companies and their governments have taken over the access to all their oil. So, anything that is cheap and easy to produce they will do themselves. They now have the technology and the money to buy the technology. They don't need the IOCs for that.

DEFTERIOS: The IOCs, or international oil companies, are left battling it out for more costly prizes where their expertise and technology remain in demand. Recent discoveries in Kazakhstan, the Gulf of Mexico and off the coast of Brazil have allayed fears of what many call peak oil, the term used to describe falling global production. The new finds, however, come with a heftier price tag.


World oil demand to grow 700,000 bpd in 2010 - OPEC

DOHA (Reuters) - Global oil demand will grow 700,000 barrels per day (bpd) in 2010, OPEC's Secretary-General Abdullah al-Badri said in a speech delivered on his behalf on Tuesday.

China and India will lead global economic growth next year, with the producer group forecasting world GDP growth at 2.7 percent next year, up from an earlier forecast of 2.3 percent in July, he said in the text of a speech.


OPEC Won’t Raise Output Because of Stockpiles, Qabazard Says

(Bloomberg) -- OPEC won’t need to raise oil production levels when it meets next month in Angola because stockpiles are “very high,” the group’s head of research said.

“I don’t see that production should be increased,” Hasan Qabazard said in an interview today in Doha, Qatar. “Stocks are a worry, particularly the product stocks. At current calculations we will go to stock build early next year.”

The Organization of Petroleum Exporting Countries made a record 4.2 million barrel-a-day cut in production targets last year as fuel demand tumbled during the worst recession since the 1930s. The group has left quotas unchanged at its three meetings this year.


China slashes Iraq debt for oil deals

China has agreed to forgive 80% of $8.47 billion in debt owed by Iraq, sealing a preliminary deal struck more than two years ago, Iraqi officials said today.

The agreement comes as China's imports of Iraqi crude rise and Chinese oil companies like China National Petroleum Corporation eye contracts to develop Iraq's vast oil reserves as the world's 11th largest oil producer emerges from years of war and sectarian bloodshed.


ANALYSIS - Oil rally complicates China fuel pricing

BEIJING (Reuters) - China's latest fuel price rise may be its last easy fuel pricing decision for a while.

Under a pricing regime that links retail fuel prices to the the global cost of crude, the government upped pump prices for gasoline and diesel by about 7 percent from Tuesday, taking them to the highest ever.

But the system's clarity, the main reason for its introduction at the start of the year, only operates when crude is below $80 a barrel, a level the global benchmark is bumping up against.


China May Have to Raise Gas Price on Higher Costs

(Bloomberg) -- China, the world’s second-largest energy user, must increase domestic natural gas prices to accommodate higher-priced supplies from Qatar and Central Asia, an analyst said.

Liquefied natural gas supplies from Qatar on multiyear contracts may cost 3.95 yuan per cubic meter, or about $16 per million British thermal units after regasification, at the city gate, about 58 percent higher than what households and businesses pay for the fuel in Shanghai, said Tony Regan, a consultant at Tri-Zen International Ltd.


Newcastle Weekly Coal Exports Fall; Ship Queue Rises

(Bloomberg) -- Coal shipments from Australia’s Newcastle port, the world’s biggest export harbor for the fuel, fell by 11 percent last week while the number of vessels waiting to load increased.


E.ON Sells Grid to Tennet for 1.1 Billion Euros to End Probe

(Bloomberg) -- E.ON AG sold its German power network to Dutch electricity-grid operator Tennet BV for 1.1 billion euros ($1.7 billion) to help settle a three-year European Union probe into whether it thwarted competition.


Taylor claims US sought to oust him from power

THE HAGUE, Netherlands -- Charles Taylor claims he was indicted for war crimes as part of a U.S. "regime change" plan to gain control of West African oil reserves.

The former Liberian president has made the allegation in a typically defiant final day of direct testimony in his own defense at the Special Court for Sierra Leone.


PTTEP Won’t Comment on Oil Spill Cause Amid News Report Claim

Bloomberg) -- PTT Exploration & Production Pcl, facing an Australian investigation into the country’s third- worst oil spill, declined to comment on a news article that said the Timor Sea leak was caused by improper capping of a well.

“The company is declining to comment on the possible cause of the incident ahead of the Federal commission of inquiry,” Roley Myers, Perth-based spokesman for the Thai company, said by phone today. The company has seen the news article, he said.


Pennsylvania lawsuit says drilling polluted water

AVELLA, Pennsylvania (Reuters) - A Pennsylvania landowner is suing an energy company for polluting his soil and water in an attempt to link a natural gas drilling technique with environmental contamination.

George Zimmermann, the owner of 480 acres in Washington County, southwest Pennsylvania, says Atlas Energy Inc. ruined his land with toxic chemicals used in or released there by hydraulic fracturing.


‘Reclaim town hearts’

“We have constructed urban places for the last 50 years assuming cars have primacy, with everything built around them,” he said.

“That was the thinking from the 1950s to the 1990s, but now, in the noughties, we are getting different impressions.”

Dr Tolley said health through exercise, Peak Oil and climate change are all forcing changes on our designs and have “put pedestrians and cyclists back on the top of the pile”.


Communities try to prevent pedestrian traffic deaths

Some communities are working to curtail sudden, puzzling increases in pedestrian traffic deaths while safety advocates urge states to spend more federal transportation dollars on sidewalks, crosswalks and safety programs for walkers and bicyclists.

More than 76,000 Americans have been killed walking or crossing the street in the past 15 years, and pedestrians account for about 11.8% of all traffic fatalities, according to the groups Transportation for America and the Surface Transportation Policy Partnership. However, less than 1.5% of federal transportation money is spent on projects for walkers and bicyclists.


Of fish and men: A fable of modern times

Do you think that the US are frantically trying to look for alternate sources of energy just because of climate change? In a decade or so, the petrochemical refinery will most likely be a white elephant, whereas the skills of the fisher folk and the mangrove forest will be vital in keeping their neighbours alive.

Local resilience has started to become a concept that is being propagated by more and more grassroots NGOs the world over. But you can't have local resilience without a working local eco-system.


Crude World

In Crude World: The Violent Twilight of Oil, Maass presents humanity with a snapshot of the implications of our oil addiction. Examining oil collection and storage and transportation from locales in the furthest reaches of the globe, “Crude World” is authentic, persuasive, and damning.

“Across the world,” Maass writes, “oil is invoked as a machine of destiny. Oil will make you rich, oil will make you poor, oil will bring war, oil will deliver peace, oil will define our world as much as the glaciers did in the Ice Age.” “Crude World” depicts the inner workings of this petroleum machine to “reveal an order in the world’s disorder.” The power to create great opportunity is part of the myth of petroleum; Maass travels the globe in order to create lively vignettes of the opposite destiny.


Solar Thermal Electricity Production to Jump 100-Fold, IEA Says

(Bloomberg) -- Power generation using giant mirrors and solar panels to concentrate the sun’s rays and turn turbines will expand more than 100-fold over the next two decades, according to the International Energy Agency.

Solar thermal production will increase to 124 terawatt hours of energy in 2030 from less than 1 TWh in 2007, the Paris- based group said today in its annual energy outlook report.


Japan eyes solar station in space

TOKYO (AFP) – It may sound like a sci-fi vision, but Japan's space agency is dead serious: by 2030 it wants to collect solar power in space and zap it down to Earth, using laser beams or microwaves.

The government has just picked a group of companies and a team of researchers tasked with turning the ambitious, multi-billion-dollar dream of unlimited clean energy into reality in coming decades.


U.A.E. Atomic Program May Propel Region Into Nuclear Arms Race

(Bloomberg) -- The United Arab Emirates, which plans to award the Persian Gulf’s first nuclear power contracts this year, may start a regional arms race as its neighbors seek similar technology, according to a Chatham House report.

“Risks from nuclear proliferation cannot be eliminated entirely” from the U.A.E.’s program, Ian Jackson wrote in “Nuclear Energy and Proliferation Risks: Myths and Realities in the Persian Gulf,” published today. “It is possible that the genuine desire of Gulf states to engage in civil peaceful nuclear power could possibly tip the region into a nuclear arms race, especially if state intentions are misunderstood.”


Recession Opens ‘Narrow Window’ to Cut Global CO2, IEA Says

(Bloomberg) -- The global economic crisis has opened “a relatively narrow window of opportunity” to halt the increase in greenhouse gases released by power plants, factories and cars through 2020, the International Energy Agency said.

Annual emissions from using energy may peak at 30.9 billion tons over the coming decade, assuming there is “radical and coordinated policy action across all regions,” the Paris-based agency said today in its World Energy Outlook. The report reiterated estimates first published on Oct. 6, including its forecast that global energy use is set to decline this year for the first time since 1991 because of the recession.

“The financial crisis offers what maybe we a unique opportunity to take necessary steps as the political mood shifts,” the IEA report says. “But this saving will count for nothing if a robust deal is not reached in Copenhagen.”


Texas Gov. Perry: Cap-and-trade would harm state

AUSTIN, Texas — Texas Gov. Rick Perry told renewable energy industry officials that a cap-and-trade climate bill in Congress would increase taxes and devastate the state's energy sector.

Perry, contending that the climate bill would mean "economic disaster" in Texas, said the state is encouraging alternative energy sources while improving the environment.


Climate change makes English winemakers see red

DORKING, England (Reuters) – The pickers working their way along the hillside, clipping bunches of small, dark purple grapes from the rows of vines and dropping them into plastic buckets are harbingers of a warmer planet.

In recent years, aided by milder springs and autumns, a few British wineries have revived a red winemaking tradition which died around 600 years ago.


US seeks climate framework, not legal pact: experts

WASHINGTON (AFP) – Lack of action on the climate change bill bogged down in the US Senate will not stop Washington from seeking a framework to curb carbon emissions at next month's summit in Copenhagen, experts say.

"I don't think that anyone is expecting a legal pact at this point," Michael Levi, an expert on climate issues at the New York-based Council on Foreign Relations, told AFP.

But US President Barack Obama already hinted this week that the United States would seek to create a "framework for progress" at the summit, which he said would pave the way to stem a "potential ecological disaster."


The Maldives' battle against extinction

As its own gesture the Maldives now aims to go "carbon-neutral" by 2020. That means switching to renewable energy sources where it can, and balancing the carbon it does emit through measures like planting forests elsewhere.

There is a major problem - the islands' main earner, top-end tourism, cannot be environmentally friendly. All the clients, and all manner of extraordinary luxury foods from Europe and elsewhere, are flown in.


Glorious vision in Kenya's sky melts away

Mt. Kenya's ice cap was so stunning that some began revering it as God's home. But most of the shining glacier has now disappeared, robbing communities of water and leading to a crisis of faith.


India environment minister under fire over glaciers

India's environment minister came under fire Tuesday from scientists for denying climate change was causing Himalayan glaciers to melt and disputing the work of the UN's top global warming body.

On Monday, Environment Minister Jairam Ramesh said there was no "conclusive scientific evidence" linking global warming to the melting of the glaciers and questioned work by the Intergovernmental Panel on Climate Change (IPCC).

The IPCC, a UN body regarded as the world's top authority on climate change, has warned Himalayan glaciers are receding faster than in any other part of the world and could "disappear altogether by 2035 if not sooner".

New Corporates

Issuer:             General Electric Capital Corp (Ticker: GE)
Ratings:            Aa2/AA+ (S/S)
Security Type:      SEC Registered (Global MTN shelf)
Size:               $Benchmark
Maturity:           5yr (11/14/14)
Use of Proceeds:    GCP
Denoms:             1k x 1k
Bookrunners:        JPM/BAML/C/GS/MS
Co-mgrs:            TBA
Timing:             Today

Issuer………………..Pacific Gas & Electric “PCG”Rating………………..A3/BBB+/A  (stable/stable/stable)
Size………………….$550mm “will not grow”
Maturity………………30-year
Jt Books………………BAML/DB/RBS
Co Mgrs……………….WFS/MUFJ/BLAY/CASTLE/LOOP/RAMIREZ
Format………………..SEC-registered senior unsecured notes
Use Of Proceeds………..Working capital purposes
Denominations………….$1,000 x 1,000
Settle………………..T+5


UBS Adds To Financial Sponsors Group

Allen Bouch and Scott Norby have joined UBS Investment Bank as managing directors within the firm’s financial sponsors group. Bouch will be based in San Francisco, and previously was with Citigroup. Norby will be based in New York, and previously was with Goldman Sachs.

PRESS RELEASE

UBS Investment Bank announced today that it has hired two senior investment bankers within the firm’s Financial Sponsors Group. Allen Bouch and Scott Norby will join the firm’s Investment Banking Department (IBD) as Managing Directors, reporting to Steven Smith, Global Head of Leveraged Finance and Americas Head of Financial Sponsors. Bouch and Norby will be based in San Francisco and New York, respectively.

“Our financial sponsors deal pipeline continues to grow as financing markets have normalized and sponsors are becoming more active in both acquisitions and exits,” said Smith. “We are delighted Allen and Scott will be joining UBS. I am confident they will help strengthen and advance our Financial Sponsors practice through their deep knowledge of the sponsor community and proven credibility advising and delivering strategic solutions to top clients in this space.”

Bouch joins UBS from Citigroup, where he was most recently in the Financial Entrepreneurs Group and Head of the San Francisco Investment Banking Group. Previously, he was with Merrill Lynch in its investment banking division. He brings 21 years of top-tier investment banking experience, the last 13 of which have been focused on covering the financial sponsor community. Bouch holds a BA from Claremont McKenna College and an MBA from Duke University’s Fuqua School of Business.

Previously, Norby was a Managing Director at Goldman Sachs in its Financial Sponsor Group. Prior to joining Goldman Sachs, he was with Morgan Stanley in its Financial Sponsor practice. Most recently, Norby was a Managing Director at North Sea Partners where he led financial sponsor coverage. He holds a BA from the University of Wisconsin and an MBA from the University of Chicago.

Kevin Cox, Americas Head of IBD, added, “The financial sponsor community represents a very important group of clients for UBS. We are committed to serving clients with bankers like Allen and Scott who can deliver innovative ideas, valuable insights and flawless execution.”

Headquartered in Zurich and Basel, Switzerland, UBS is a global firm providing financial services to private, corporate and institutional clients. Its strategy is to focus on international wealth management and the Swiss banking business alongside its global expertise in investment banking and asset management. In Switzerland, UBS is the leading bank for individual and corporate clients.

UBS is present in all major financial centers worldwide. It has offices in over 50 countries, with about 36% of its employees working in the Americas, 36% in Switzerland, 15% in the rest of Europe and 13% in Asia Pacific. UBS employs more than 65,000 people around the world. Its shares are listed on the SIX Swiss Exchange, the New York Stock Exchange (NYSE) and the Tokyo Stock Exchange (TSE).

UBS Media Relations: Doug Morris, +1-212-882-5694 www.ubs.com

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