To issue Eurobonds, you need to address all these issues


BRUSSELS | Wed May 23, 2012 8:49pm EDT

(Reuters) – European Union leaders discussed broad measures to stem the fallout from a winding up or restructuring of bad banks on Wednesday, EU officials said, with the European Central Bank pressing for the bloc to stand behind its struggling lenders.
At the heart of the discussion are proposals from the European Commission for a legal framework to wind up or reorganize insolvent banks so as to avoid a repeat of the multi-trillion-euro taxpayer bailouts during the financial crisis.
The issue of bank resolution has risen to the top of the agenda as concerns grow about the impact if Greece were to leave the currency zone, and as problems deepen in Spain’s large banking sector, which is laden with bad property debts.
Officials said among the issues EU leaders were discussing was whether it might be necessary to establish a taskforce to look in more detail about bank resolution issues, and to examine related steps such as what legislation and fiscal steps would be necessary to lay the ground for euro zone bonds.
“There’s some discussion about how to use the mandate given to EU leaders back in December,” said one EU source, saying the European Council President Herman Van Rompuy or European Commission President Jose Manuel Barroso could be given responsibility for setting up the taskforce.
The source added, however, that any move would depend on EU leaders agreeing and German Chancellor Angela Merkel’s approval was far from guaranteed.
The basis of the leaders’ talks are detiled proposals the European Commission is scheduled to present in early June on how to take control of failing banks, merge bad ones with sound ones and impose losses on bank bondholders.
The European Central Bank wants the proposals to include a pan-euro-zone resolution fund for larger, systemically important banks, a message its President Mario Draghi intended to deliver to leaders on Wednesday, a central bank source said.
“There are a series of issues covering bank resolution, a debt agency for euro bonds and the financial sector in general that leaders are working on,” said the first source when asked about how wide-ranging the talks were.
“When it comes to the banking sector, the debate really focuses on whether they want to broaden the ideas out or keep them narrowly focused.”
Aside from bank resolution, there are calls from some EU countries to make it possible for the euro zone’s bailout funds to directly recapitalize banks, rather than having to lend to the sovereign which then on-lends to the banking sector.
Germany is opposed to direct recapitalization, but one official said there was some backing for the idea.
“There is more momentum behind these kinds of issues such as using the European Stability Mechanism to directly recapitalize banks and the idea of federalizing Europe’s response to the banking crisis,” the official said.
The proposal for a central euro-zone fund to neutralize any knock-on effects from the closure or overhaul of a struggling bank is one of the most contested issues in the debate about winding up lenders.
Earlier this week, ECB policy maker Joerg Amussen referred to the need for the creation of further funds beyond the ESM, a reference one official said referred to the requirement for new facilities to finance and recapitalize banks directly.
“We should have tools to prevent banks runs and to force (bank) restructuring,” said a third EU official. “For bank crisis management, it would make sense. But it is more of a political question.”
Although some believe that a central resolution fund could play a role in making the banking sector “shock-proof”, in the words of the official, Germany still has reservations about supporting flagging banks in countries such as Spain.
“It means metallization of risks and that is a problem for several countries,” said the official.
Any such fund would also require giving further powers of enforcement to European authorities such as EU regulator, the European Banking Authority, or the European Central Bank.
“If you create bank resolution funds without European level powers to impose structural changes, then you use funds but you don’t have a central to force the banking sector to reorganize.”
(Reporting By Luke Baker and John O’Donnell)

Plane-makers walk the line on golden age, demand could fuel specialisation eg supersonicjet, where is the bubble?


By Kyle Peterson

CHICAGO | Tue May 22, 2012 8:39pm EDT

(Reuters) – From a chilly perch in Burnsville, Minnesota, Tim Zemanovic has an usual perspective on the global aircraft market, which is booming – some say overheating – as the world’s largest plane-makers pump out jets as fast they can.
Zemanovic, the head of Aircraft Demolition, a company that tears down and recycles unwanted airplanes, says his five-year-old business has never been stronger as airlines expand and replenish their fleets with fuel-efficient planes.
“This year, I expect to do double the work we did last year,” he said. The company destroyed 24 planes in 2011, and an industry trade group estimates more than 12,000 aircraft will be retired in the next 20 years.
Zemanovic’s story reflects a golden age for commercial plane-making – where strong air traffic, underpinned by stunning economic expansion in China and India, supports demand for new jets and there is no shortage of third parties willing to finance those purchases.
Or it may be evidence of unsustainable demand.
HOT PACE
As Boeing Co (BA.N) and Airbus (EAD.PA) race to bag as many orders as possible, they are ramping up production 57 percent by value between 2011 and 2014, according to some estimates, with hot-selling narrowbodies – single-aisle planes with about 150 seats – leading the way.
But the pace comes with risk, according to experts who say manufacturers are taking more orders than they can expect to deliver.
An order bubble is swelling, they say, and warn it is possible that if some shock to the chronically unstable airline industry – volatile fuel prices, terror attacks, economic recession – makes airlines rethink their expansion plans or replenishment needs, demand could sink, aircraft values could fall and planes could roll off assembly lines without buyers.
“The problem with a bubble is you don’t know it is a bubble until it bursts and then everyone wants to get out,” said Adam Pilarski, senior vice president at AVITAS, an airline consulting company that also works with aircraft lessors and lenders.
Some airlines already are rethinking their purchase plans. On May 16, Southwest Airlines Co (LUV.N), a loyal Boeing customer, deferred deliveries of 30 Boeing 737s it was to receive in the coming two years, aiming to save more than $1 billion in capital spending. Earlier this month, Australian carrier Qantas (QAN.AX) delayed delivery of two Airbus A380s to help cut spending.
Moreover, critics say the airlines’ scramble for new planes comes on top of a rise in aircraft orders from third-party buyers like aircraft leasing companies that essentially bear the risk of aircraft ownership for operators.
This rise in speculative activity has already stretched the demand for aircraft in markets like India that have seen rapid expansion but where several carriers now face financial problems.
“I believe there is a bubble, and it is important to think about what happens when it bursts and what happens with aircraft retirements and values,” Pilarski said.
Indeed, Zemanovic said Aircraft Demolition is chopping up younger and younger planes for scrap. The company recently destroyed a well-used 10-year-old Boeing 737, which typically has a life cycle of closer to 30 years, because its Saudi Arabian owner wanted a newer model and decided the parts of its 737 had more value than an intact plane.
The list prices for new planes did not decline during the last recession, but Boeing and Airbus have accused each other in the past of granting steep discounts to win a price war.
$4 TRILLION MARKET
Aircraft manufacturers are aware of the risk, but they stand by their forecasts.
“The last thing we want to do is build more airplanes than the market needs,” said Randy Tinseth, vice president of marketing for Boeing Commercial Airplanes.
“If we do that, the values of our airplanes go down, the residual values go down for our customers. It’s not good for us. It’s not good for our customers.”
Boeing and Airbus, which dominate the market for large jets, are both predicting a staggering $4 trillion market for new jets over the next 20 years with a sharp increase in deliveries.
Boeing forecasts a market for 33,500 new passenger planes and freighters between 2011 and 2030 thanks to robust growth in China, India and other emerging markets.
Population growth, urbanization and a burgeoning middle class with extra disposable income are underpinning the sharp growth in aviation demand in the world’s two most populous nations, China and India.
India’s domestic network alone is expected to generate the world’s fastest air traffic growth over 20 years. Manufacturers say the prospects for growth are further spurred by the low starting point, reflecting the dominance of rail.
To meet anticipated aircraft demand, Boeing is ramping up production on all of its commercial programs – most notably the narrowbody 737, which is going to 42-a-month from the current 35-a-month. Airbus is also increasing production on its competing A320 narrowbody jet to 42 planes a month from the current rate of 40 per month.
Together, the rate increases for the two narrowbodies represent perhaps the most ambitious peacetime ramp-up in airplane production and draw on an increasingly global supply chain. Airplane production is already at record levels.
Both plane-makers are revamping these best-selling 150-seat jets from mid-decade with new engines to deliver fuel savings of 15 percent. The decision sparked a stampede of orders even as storm clouds gathered over the economy and European banks scaled back exposure to the sector due to the region’s debt crisis.
Popularity of the upgraded narrowbodies is sure to erode the value of the earlier generations, but soaring fuel prices keep pressure on airlines to stock their fleets with the most fuel-efficient planes.
“Fuel prices have gone up significantly in recent years and all the forecasts are that they will remain high, and you simply can’t compete if you are operating an older aircraft that is maybe burning 15-20 percent more fuel than your competitor,” said Tony Tyler, director general of the International Air Transport Association (IATA).
TUNING OUT GURUS
Airbus sales chief John Leahy dismissed talk of a production bubble and defended the industry’s demand projections.
“I have been selling commercial airliners for 28 years. Approximately every five years we go through the cycle of industry gurus predicting asset bubbles, shortage of financing and imminent collapse. It hasn’t happened yet, and it won’t,” Leahy told Reuters.
In May, both Boeing and Airbus parent EADS posted higher quarterly profits helped by commercial aircraft sales.
Neither manufacturer is saying demand growth will happen in a straight line without upsets or airline failures on the way. Both believe the combination of hundreds of old planes needing re
placement and emerging market growth will hold up demand.
“This industry doubles every 15 years in seat-mile capacity, the demand side of the equation. That is one of the strongest growth stories you can see. It is hard to imagine an asset bubble in the supply side when you are feeding into an industry that is doubling in size every 15 years,” Leahy said.
Boeing’s Tinseth said that in the last 10 years, cancellation or conversions affected less than 2 percent of the backlog, underlining real demand for the aircraft. That means that more than 98 percent of the company’s orders were filled.
Furthermore, Boeing and Airbus typically overbook their delivery slots to ensure they always have a buyer for planes if another customer cancels or defers an order.
CYCLES, BUBBLES AND VICTIMS
Some observers believe the highly cyclical aircraft market is overdue for a correction.
Airbus and Boeing notched up a combined 2,529 orders in 2011, the highest number since a record 2,881 in 2007. Orders plummeted in 2008 and again in 2009 amid economic recession. But they picked up the following year.
Through it all, deliveries – which is when airlines get paid – held strong, suggesting airline customers have a strong commitment to their growth and fleet replacement plans – at least for now.
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Graphic on aircraft demand link.reuters.com/wet38s
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The fact that combined deliveries dipped only 4 percent in 2008 from 2007 – Airbus deliveries actually rose – reveals a departure from the historical trends that suggest deliveries should shadow the rest of the economy, said Richard Aboulafia, aerospace analyst at Teal Group.
“Any other previous event that even vaguely resembled this would have produced a painful downturn,” he said, adding that jet-makers may eventually have to curb production rates to match weaker demand.
“There’s nothing wrong with taking orders,” he said. “It’s the production ramp-up that is an issue.”
For Boeing, Aboulafia said a more appropriate production rate on narrowbodies is less than 40 per month, compared with its plans to build 42 each month.
IATA has warned that its airlines worldwide face more than $8 billion in losses this year if Europe’s politicians fail to come to grips with the region’s debt crisis.
Some economists fear that deeper turmoil in the 17-nation currency area could spill over to other regions and cripple the Asian profit machine that underpins recent orders.
If anticipated demand fails to materialize, plane-makers are not the only ones that might be hurt.
“You could say there’s a new aircraft production bubble,” said John Walsh, an aerospace consultant at Walsh Aviation.
“And if that bursts, then people who have built brand new plants and have excess capacity as suppliers will be hung out to dry for a little while until the market catches up with them.”
(Reporting by Kyle Peterson; Additional reporting by Tim Hepher in Paris; Editing by Patricia Kranz and Matthew Lewis)

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Full-service carriers need to diffentiate their branding via special service for business class (eg VVIP conceirge service) I can think of so many ways ie special checkin no-fuss counters, the conceirge takes care of everything even helping to checkin to hotels, a “Siri special service” to handle all demands of the VVIP guest etc. even a nanny service to take care of kids (in doing so I can increase air ticket by up to 50% for this special service and there will be a great demand, because these clients do not want the hassle of budget airlines) – Contributed by Oogle.

By Yvonne Chan | Posted: 24 May 2012 2024 hrs
SINGAPORE : Things are looking bleak for full-service airlines.
The long haul market for carriers has been hit by falling demand due to the eurozone crisis and high oil prices.
Analysts say these carriers need to rethink their operating strategies, which include putting more aircraft into intra-Asia routes.
There are many signs of turbulent times in the industry.
Australia’s national carrier Qantas has an impending 500 job cuts on the way.
Both Singapore Airlines and Cathay Pacific have reported lower profits and are retiring older aircraft.
With consumers turning to cheaper flights, full-service carriers are re-thinking strategies.
Paul Ng, Global Head of Aviation at Stephenson Harwood, said: “There’s a very stable low-cost passenger base and the segment of the market that’s been squeezed somewhat in these times of austerity is the business class segment.
And many of the carriers are reconfiguring their aircraft to meet these challenges or perhaps to split their business so part of their business focuses on the growing segments of their passenger clientele. ”
He added: “Other cost items are obviously manpower. And the cost of financing their aircraft – financing costs – have also have been going up. So all round, they’ve had to look for more revenue just to break-even because many of their costs that they’ve tried to mitigate is not totally within their control.”
SIA says it will grow its offshoots SilkAir and Scoot to offset lower volumes in long-haul flights.
It also halted flights to Athens and Abu Dhabi due to weak demand.
Meanwhile, experts say passenger travel in developing markets like China and India will remain buoyant ..
According to the Xinhua News Agency, China plans to buy more than 2,500 commercial aircraft from 2011 to 2015, bringing the country’s total fleet size to more than 4,500 jets.
But there are others eyeing the same pie.
Siva Govindasamy, Asia Managing Editor of Flight Global, said: “Look at the likes of Garuda, look at the likes of MAS. In China you have China Southern, China Eastern, these airlines are really upping the game. Where previously passengers used to fly into Singapore or Hong Kong and then onwards elsewhere, the domestic carriers are now offering them the option to fly directly there.
So SQ, Cathay, Qantas need to react to that. They need to react and adapt to the new market where they not only have to face up to high fuel prices but also competitors who are upping the game and that’s going to be the key thing in the coming years.”
Full service carriers have have had their fair share of challenges this year and as the global economic uncertainty continues and oil prices remain volatiles, experts say these carriers are likely to cut back on long haul routes to Europe and the US and increase the frequencies of short-haul popular routes within Asia Pacific.

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$10 TRILLION MARKET and it is sustainable because there is no shortcut to air travel, there will be a great demand for specialisation, where the capacity and the quick travel times of the supersonic jet will fill the gap, look at how the second tier luxury cruise industry is doing, there is no stopping demand. The demand for budget airlines will rise to be close to 50% of the industry, and there will be less transit destinations, the supersonic jet will fly you direct. Rising fuel prices will make it cheaper to fly direct than to transit. I do not need to be a salesman to sell you anything, you prese
nted the statistics, I will give you the projections, and it is based on your data.

– Contributed by Oogle.

Mr Chan, you are asking for trouble, to ask women to have children out of wedlock

Tough ‘social choices‘ ahead: Chan Chun Sing
If it wants to solve problems such as a low fertility rate and low wages, Singapore will have to make some difficult ‘social choices’, said Acting Minister for Community Development, Youth and Sports Chan Chun Sing.
For example, the country could turn its dismal total fertility rate (TFR) of 1.2 around, as Nordic countries managed to do – if it accepts women having children out of wedlock.
And it could raise the wages of cleaners – if people were willing to pay higher service and conservancy (S&C) charges.
Spelling out these trade-offs at a dialogue that wrapped up the Institute of Policy Studies conference on integration, Mr Chan then said: ‘Are we prepared to do that? These are social choices that we have to make for ourselves.’

‘Barcode everyone at birth’? You can create an IC or a Tag but no way embed it

22 May 2012 
Each week a global thinker from the worlds of philosophy, science, psychology or the arts is given a minute to put forward a radical, inspiring or controversial idea – no matter how improbable – that they believe would change the world.

This week science fiction writer Elizabeth Moon argues that everyone should be given a barcode at birth.
“If I were empress of the Universe I would insist on every individual having a unique ID permanently attached – a barcode if you will; an implanted chip to provide an easy, fast inexpensive way to identify individuals.
It would be imprinted on everyone at birth. Point the scanner at someone and there it is.
Having such a unique barcode would have many advantages. In war soldiers could easily differentiate legitimate targets in a population from non combatants.
This could prevent mistakes in identity, mistakes that result in the deaths of innocent bystanders. Weapons systems would record the code of the use, identifying how fired which shot and leading to more accountability in the field.
Anonymity would be impossible as would mistaken identity making it easier to place responsibility accurately, not only in war but also in non-combat situations far from the war.”
You can listen to Elizabeth discuss her idea with aerial warfare expert Elizabeth Quintana  and war ethics authority David Rodin in more detail on the BBC World Service programme The Forum, where you can also download more 60-second ideas.

Everybody can see "They do not Walk the Talk"

By Thomas Cho | Posted: 22 May 2012 2333 hrs
SINGAPORE: Deputy Prime Minister and Finance Minister, Tharman Shanmugaratnam, has called for the financial services industry to develop a strong pipeline of Singaporeans to be leaders in the financial industry and take on specialist roles.
Mr Tharman, who is also the chairman of the Monetary Authority of Singapore (MAS), said the Institute of Banking and Finance will undertake a comprehensive review of the Financial Industry Competency Standards to further enhance competency levels.
This will support Singapore in its goal to sustain its growth as a world-class international financial centre.
Through the institute, the government plans to introduce revamped foundational programmes for new entrants in high-growth segments in the financial industry such as corporate banking, compliance as well as insurance.
While foreign talent will bring in relevant expertise in financial services, Mr Tharman said more Singaporeans will be developed to take on leadership roles in the industry.
Mr Tharman said: “We have tightened up on standards for employment passes, so as to manage the growth of the foreign workforce even amongst professionals and ensure that Singaporeans continue to have opportunities for good jobs and careers. We will continue to keep watch on this, and raise standards further if we have to.”
Bankers also welcomed other initiatives which include help to develop the knowledge known as “Asian Advantage” as Singapore is in a unique position to grow its networks within ASEAN, China, India and the Middle East.
Group CEO of DBS Bank Piyush Gupta said: “On my shortlist of potential of successor candidates, we have a slate. There a number of Singaporeans on the list today. But to get them to where we need them to get to, we have to do all the things that DPM talked about. International exposure and mobility that is crucial.”
CEO of Standard Chartered Bank Singapore Ray Ferguson said: “In Standard Chartered case, we have a global platform we have an opportunity to. We have over 200 Singaporeans outside Singapore in Hong Kong, in China, in Middle East, in London that are all part of a Singaporean workforce because we have a big global operation here, where we are to develop people and push them to the system and into the rest of our networks.”
The annual conference conferred the distinguished FICP title to 11 senior management executives in the financial industry for their contribution towards raising the professional competency of the financial sector workforce.

– CNA/ck

It should be inventive step and completeness, not "non-obviousness"

Inventive step and non-obviousness

The inventive step and non-obviousness reflect a same general patentability requirement present in most patent laws, according to which an invention should be sufficiently inventive — i.e., non-obvious — in order to be patented.
The expression “inventive step” is predominantly used for instance in Germany, in the United Kingdom and under the European Patent Convention (EPC), while the expression “non-obviousness” is predominantly used in United States patent law. Although the basic principle is roughly the same, the assessment of the inventive step and non-obviousness varies from one country to another. For instance, the practice of the European Patent Office (EPO) differs from the practice in the United Kingdom.

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Updated 05:49 PM May 22, 2012

NEW YORK – Eastman Kodak lost a ruling in a two-year legal fight against Apple and Research In Motion (RIM) over a patent for digital image-preview technology, a decision that may hurt the value of assets Kodak is selling.
RIM and Apple did not violate Kodak’s rights because the patent is invalid, United States International Trade Commission Judge Thomas Pender said in a notice posted on the agency’s website. Kodak said it will appeal the findings with the six-member commission in Washington, which has the power to block imports of products that infringe US patents.
Kodak, which filed for Chapter 11 bankruptcy protection in January, contends Apple already owes it more than US$1 billion (S$1.27 billion) in damages for infringement of this and other digital capture patents, according to a bankruptcy court filing this month. Kodak has said a victory in the case may force RIM and Apple to pay for licensing and bolster the value of patent portfolios the company is seeking to sell.
“It adds another risk factor, or concern, for anybody who’s looking at the value of the IP portfolio, because Kodak is still looking to sell it,” said analyst Shannon Cross, who follows Apple and Kodak at Cross Research.
The company’s two digital patent portfolios may be its most valuable assets, reported Bloomberg. The patent in today’s ruling is part of a portfolio of more than 1,100 related to digital capture that Kodak is selling. The other collection covers imaging systems and services.
The judge’s recommendation “represents a preliminary step in a process that we are confident will conclude in Kodak’s favour”, Kodak’s chief intellectual property officer Timothy Lynch said in a statement. “Kodak has invested billions of dollars to develop its pioneering digital imaging technology, and we intend to protect these valuable assets.”
Together, the technology is valued at between US$2.21 billion to US$2.57 billion, based on an estimate by a patent advisory firm cited in a debtor’s motion it filed before a US bankruptcy court in January.
The disputed patent, which Kodak claims is used in all modern cameras, covers a feature that previews low-resolution versions of a moving image while recording still images at a high resolution. Higher resolution requires more processing power and storage space. Samsung Electronics and LG Electronics have already paid US$964 million in settlements to Kodak for using the technology.
Judge Pender said that the aspect of the patent that was in the case covered an obvious variation of earlier inventions. He did say that, were it valid, BlackBerry devices and the Apple iPhone 3G would infringe it, while the iPhone 3GS and iPhone 4 do not.
A different judge at the agency found the patent valid and infringed by Samsung, “whose products are similar to those offered by Apple and RIM,” Mr Lynch said. The US Patent and Trademark Office also took a second look at the patent and upheld it in December 2010, Kodak said.
The case looked only at older versions of BlackBerry phones, said Mr Tom Sanchez, vice president of licensing and standards, in charge of all aspects of patents at RIM. The company hasn’t seen the judge’s full determination. While pleased with the finding that there was no violation, RIM will ask the commission to review his finding of infringement, he said. AGENCIES

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It just doesn’t make sense, “non-obviousness” is outdated because it gives the person who patent rights when he only contributes part of a patent, not the complete patent which will cause a stumbling block to those who can certify completeness, a stumbling block to innovation and technological advances. “Completeness” should be a better bet since it gives the person who register a patent the rights if he is able to explain his complete range of technologies and a working concept or “proof”, if he is not able to, then it will not be registered but place on “hold” until such time has passed where there is no challenges to his patent shall the judge seriously allow him to patent his rights, what a “joke”!
Let me explain my logic. If I want to patent “3D search engine with intelligent searches” I must produce “proof of concept” for the final product I intend to create, it is not possible to patent “3D search” because it is a design unless you copyright your design, if I am not able to provide a total “proof of concept” it can be registered but put on hold, until someone comes up with a “Total completeness” for the patent, it will be a time-based registration, when the time has lapsed and I am not able to finalised a “Total completeness” then it will be de-registered, to give a chance for others who have the capabilities to complete the product.  
– Contributed by Oogle.