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Bezos Ferried by Ecuadorian Navy to Island for Surgery: Universo 2014-01-04 21:27:20.662 GMT

By Charlie Devereux Jan. 4 (Bloomberg) -- Jeff Bezos, founder of Amazon and owner of the Washington Post, was ferried by an Ecuadorian Navy helicopter when he became ill during a cruise of the Galapagos islands on Jan. 1, El Universo reported, citing regional director of the Coast Guard Daniel Ginez Villacis. * Bezos flown to island where a private plane was stationed so he could return to U.S. for emergency surgery, paper said * CNBC, citing one report, said he suffered a kidney stone attack

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To contact the editor responsible for this story: Sylvia Wier at +1-212-617-8958 or swier@bloomberg.net

Pricey Beef Is Set to Test Appetites Smaller Cattle Herds Help Drive Up Prices

U.S. cattle prices jumped to a record Friday, setting up a fresh hit of sticker shock for consumers at the grocer's meat counter.

Meatpackers this past week paid the highest cash prices on record for live, slaughter-ready cattle in the major producing states of Kansas, Nebraska and Texas. That led traders to bid up futures prices, which already had been rising as retailers increased beef purchases for the holidays and the meat industry grappled with tight cattle supplies after prolonged drought in parts of the U.S. Great Plains.

Analysts said the higher cattle prices likely will be passed along to U.S. consumers in the next few months. That would boost fresh-beef prices at retail that surged to a record $5.014 a pound in November, according to the U.S. Department of Agriculture, a 26% increase over five years ago.

Higher beef prices could further pinch per-capita U.S. consumption of the red meat, which has slumped 25% in the past three decades as Americans have turned to less-costly meats or avoided animal protein for health and other reasons.

Some analysts said they expected consumers, as well as some retailers, to resist the higher costs as they face continued economic headwinds.

John McDonnell, a 44-year-old who works in auto sales in Chicago, said he is buying more chicken and pork instead of beef. "The increases have been unbelievable," Mr. McDonnell said Friday as he shopped at a Mariano's grocery store.

The USDA estimates retail beef prices will climb 2.5% to 3.5% this year. That would be up from about 2% last year but below some earlier increases, including a 10.2% jump in retail beef prices in 2011.

On Friday, live cattle futures for February delivery, the front-month contract, rose 0.67 cent, or 0.5%, to $1.363 a pound at the Chicago Mercantile Exchange. The series of record prices this week broke the previous all-time closing high of $1.345 in October.

U.S. cattle owners are commanding higher prices because supplies have shrunk after roughly three years of drought in parts of Texas, Kansas and other big cattle-producing states. Many ranchers reduced their herds in recent years as the searing heat and lack of rain parched pastures and increased the cost of feed, including hay and corn.

The tight supplies are squeezing companies across the beef-industry supply chain. In recent months, for instance, feedlot operators, who fatten cattle for slaughter and sell them to meatpackers like Tyson Foods Inc. and Cargill Inc., have paid ranchers record prices for young beef cattle.

"I think it'll be four to five years before we see a big increase in the amount of feeder cattle out there," said Jason Swain, assistant general manager for Cimarron Feeders, a cattle feed yard based in Texhoma, Okla. "We've got to rebuild numbers due to the droughts we've had over the last 10 years."

A big U.S. corn crop in 2013 has cut the cost of the grain roughly 40% in the past year. For now, that is further reducing the cattle supply, because the lower costs make it more affordable for ranchers to hold on to cows and breed more calves to try to take advantage of higher prices for feeder cattle.

"You look at what calves are bringing at the sale barn, and it's definitely turning some eyes," said Micah Steinbrink, who raises about 900 head of cattle in Loomis, Neb., and is working to expand his herd. "People who are in the business already see this as an opportunity to expand if they have the resources to do so."

The nation's cattle herd was the smallest in six decades at the start of 2013, the most recent data available, according to the USDA.

A big question for cattle traders, meatpackers and grocery chains is whether U.S. consumers will be willing to pay higher prices for beef. If some turn to other meats, as has occurred in the past, cattle prices could retreat.

Last year, some consumers pushed back at higher beef costs.

Beef sales volumes fell 0.7% in the 52 weeks that ended Oct. 26 from a year earlier at 18,000 grocery stores, supermarkets and other retail outlets tracked by market-research firm Nielsen Co.

Meanwhile, pork volumes grew 3.6%, and chicken volumes rose 0.8%.

Rising prices have turned strip steaks, rib-eyes and other prime cuts of beef into "luxury items," said Brett Hundley, an analyst with BB&T Capital Markets. "That's always a dangerous component in today's market, where the consumer remains soft," he said.

Roundy's Supermarkets Inc., RNDY 0.00% a publicly traded grocery-store operator that owns the Mariano's chain, said Friday it won't push back on its meat suppliers for lower prices but acknowledged it will be difficult to pass along higher costs to consumers.

Chicken prices have been coming down, which will help Roundy's offset higher beef prices, said spokesman James Hyland.

"We may have to tweak our [retail] prices, but margins are always a balancing act," he said. "You may put something on sale, which gives you lower margins, but you make it up with higher [sales] volume."

Analysts said beef prices will stay high for several more years because of the time it takes to bring cattle to market. Calves take about nine months to deliver and then are fed for 12 to 18 months before slaughter.

Dan Norcini, an independent livestock-futures trader in Coeur d'Alene, Idaho, said he has been surprised to see the major run-up in cattle prices and is now waiting on the sidelines to bet on futures. He wants to see how retailers who buy large volumes of beef react to the increase in costs.

"I've never seen prices like this before, in all of my years trading," said Mr. Norcini. "I'm not surprised that we have a shortage of cattle, but I am surprised [meatpackers] are willing to pay this kind of money."

Mr. Norcini said he wished there was a futures market for U.S. chicken. "If I could be 'long' chickens right now, that would be the trade of a lifetime," he said.

The first big winter storm of the year pummeled the northeastern US with heavy snow and bitter cold, closing schools, tangling traffic and grounding flights. Snow blanketed the region from Virginia to Maine by Friday morning, with nearly 18 inches reported in Boston, 11 inches in New York City, nine inches in Philadelphia and three inches in Washington, according to the National Weather Service. Some Massachusetts towns recorded nearly two feet of snow.

Another wave of arctic chill was forecast to move from Canada across the midwest, dropping temperatures as low as -34C (-30F).New York and New Jersey declared states of emergency as snowfall and high winds created near-blizzard conditions. Cold air was expected to blast the region through the weekend, with temperatures in the mid-Atlantic and northeast areas forecast to be as much as 20 to 30 degrees below normal on Friday night. “It is going to be bitterly cold tonight. The snow may have stopped, but we are not out of the woods,” said Bill de Blasio, New York mayor, who was facing his first test at the helm of the largest US city following his swearing-in on New Year’s day. The storm led to at least 16 deaths across the country, several due to slippery roads, the Associated Press reported. More than 2,700 US flights were cancelled and 5,600 delayed on Friday, following 2,300 cancellations on Thursday ahead of the storm, according to FlightAware, a tracking provider. Amtrak train services between New York and Boston operated with delays, and commuter trains in New Jersey, Long Island and New York’s northern suburbs ran on reduced weekend schedules. New York City subways and buses were running but with some service changes because of the storm. Schools in cities including New York and Boston were closed on Friday as thousands of ploughs and salt spreaders were deployed to clear streets. Some highways, including the New York Thruway, which stretches from New York City to Albany, and the Long Island Expressway, were reopened after being closed on Thursday night, but officials cautioned people to stay indoors. “If you can avoid travelling and stay inside tonight, please do so. If you must go outside, dress warmly and be extremely careful – and avoid driving if possible,” Mr de Blasio said, warning of icy pavements and roads. In a sharp contrast to his predecessor, Michael Bloomberg, who was heavily criticised for the city’s slow response to a 2010 blizzard while he was on holiday in Bermuda, Mr de Blasio tweeted a photograph of himself shovelling snow outside his family’s Brooklyn home on Friday morning. “We have to get it right, no question about it,” he said. He gave city workers an “A” grade for their response but said, “it ain’t over till it’s over.” In Boston, Thomas Menino, the long-time mayor who leaves office on Monday, declared a snow emergency as his final official act. “What a New Year’s gift, to receive one last snowstorm as mayor,” he said.

Fed's Rosengren (dovish dissenter; FOMC non-voter in 2014): Fed can be patient about removing monetary policy support - Reiterates Fed should be equally concerned about inflation being too low as it would be about it being too high. - Fed should have a balanced approach to the dual mandate of inflation control and maximum employment. Low inflation and high unemployment are not good for the economy. Fed is currently undershooting its 2% inflation target, and needs to work on lowering persistently high unemployment which is damaging to the economy. - Fed benefits from the diverse viewpoints of the regional Fed boards.

Fed's Dudley (dove, FOMC voter): there is much uncertainty about the Fed exit and future monetary policy framework; Fed could make test reverse repos fully operational "at a future date" - Given all the new tools the Fed has implemented during the crisis, "there is an open question" as to how the Fed will conduct monetary policy in the future. - The impact of the QE program is not fully understood. "We don't understand fully how large-scale asset purchase programs work to ease financial market conditions: Is it the effect of the purchases on the portfolios of private investors, or alternatively is the major channel one of signaling?" - There could be "unintended consequences" when the Fed moves toward normalizing monetary policy in the future. We don't have any experience with the challenges of exiting this unprecedented level of accommodative policy. - Fed policy is targeted at the US, but Fed keeps the global impact in mind when making policy.

Bernanke bows out with upbeat view

Ben Bernanke is ending his tenure asFederal Reserve chairman with an upbeat assessment for the US and global economy, declaring “some grounds for cautious optimism” for both advanced and emerging economies around the world. In what is likely to be his last big policy speech before handing over the reins of the US central bank to Janet Yellen next month, Mr Bernanke said difficult reforms in Europe and Japan were “still in early stages” but “we have also seen indications of better growth”.

The Fed chairman noted that “emerging marketeconomies had also grown somewhat more quickly lately after a slowing in the first half of 2013” but he warned that the “extent and effectiveness” of reforms would be “critical”, citing China and Mexico as examples. Mr Bernanke said that the US recovery “clearly remains incomplete” with unemployment still at 7 per cent. But he said that headwinds afflicting the world’s biggest economy in recent years – from the effects of the financial crisis and the woes of the housing market to low productivity growth, the eurozone crisis and US fiscal dysfunction – could “now be abating”. “The combination of financial healing, greater balance in the housing market, less fiscal restraint, and of course continued monetary policy accommodation bodes well for US economic growth in coming quarters,” Mr Bernanke said. In light of the improved economic prospects, the Fed last month began to reduce, ortaper, the scale of the asset purchases it has used to prop up the US economy from $85bn a month to $75bn. By the end of this year, assuming continued economic improvement, it is possible that these asset purchases, known as quantitative easing, could be wound down completely. Nonetheless, the Fed balance sheet now exceeds $4tn, much larger than the pre-crisis level of $800bn, and officials have warned that interest rates would remain close to zero until well after the unemployment rate dips to 6.5 per cent. In his speech, delivered in Philadelphia on Friday, Mr Bernanke spent considerable time defending his move towards a much more open communication policy at the US central bank, including press conferences to explain monetary policy decisions. “The crisis and its aftermath . . . raised the need for communication and explanation by the Federal Reserve to a new level. We took extraordinary measures to meet extraordinary economic challenges, and we had to explain those measures to earn the public’s support and confidence,” he said. For the most part, research supports the conclusion that the combination of forward guidance and large scale asset purchases has helped promote therecovery - Ben Bernanke One of the champions of more open communication at the Fed is Ms Yellen, who is expected to be confirmed by the US Senate to take over the chairmanship in a vote on Monday evening in Washington. Ms Yellen would be the first female Fed chair. “I think the Fed’s need to educate and explain will only grow,” Mr Bernanke said. On financial stability, Mr Bernanke cited progress in financial reform around the world to avoid the pitfalls of 2008, but said the risks of “too big to fail” financial institutions had still not been fully addressed. “The agenda still includes further domestic and international co-operation to ensure the effectiveness of mechanisms to allow the orderly resolution of insolvent institutions and thereby increase market discipline on large institutions”, he said. The Fed chairman also strongly defended Fed asset purchases against critics of US monetary policy during his tenure. “Economic growth might well have been considerably weaker, or even negative, without substantial monetary policy support,” Mr Bernanke said. “For the most part, research supports the conclusion that the combination of forward guidance and large scale asset purchases has helped promote the recovery,” he added.

Barrons Saturday summary: positive on NOV, PCL, IVZ

Cover story: Interview with Nobel Prize winning economist Eugene Fama of the University of Chicago and professor and economist Kenneth French of Dartmouth, who discuss their efficient markets concept and how it differs from the behavioral finance approach of Nobel winner Robert Shiller; Profile of Dimensional Fund Advisors, a $332B mutual fund firm whose investment strategy is based on Eugene Famas research, and which has no star managers because the funds are based on computer models rather than individual security selection; New category of smart beta ETFs claims to take a more intelligent approach to generate better returns by using alternative ways to represent the market, beyond the traditional market-value weighting; Interview with Don Phillips, Managing Director, Morningstar, who says the mutual fund industry has gotten better because investors have demanded it; Profiles of four stock pickers who have had tenures of at least 10 years with above-average returns over the long haul and below-average returns over the past five years, but who seem to have promising prospects (Christopher Davis, NYVTX, SLASX; Daniel Becker, UNVGX, WLGAX; Judith Vale, NBGNX; Conrad Herrmann, FKCGX).

Features: 1) Positive on NOV: Offshore rig companys prospects seem bright, with growth in orders for aftermarket parts and replacement orders for aging drill fleets, while shale boom should pave way more for overseas plays; split-up later this year could unlock value, and shares could see 30% gain. 2) Positive on PCL: Shares could fall more than 20% to $36 unless CEO Rick Holley can figure out some new ways to sell more timber, or its markets pick up. 3) Positive on IVZ: Money-management firms smart moves have positioned it for another strong year, and a richer stock price amid streamlined operations, better technology, and the shedding of non-core businesses; buyback is also possible this year.

Tech Trader: Tiernan Ray looks at a decades worth of follow-on stock offerings in the tech sector, noting many of them helped keep questionable companies such as PRKR, PAMT, OLED, and UNXL afloat; As the secondary offering trend gains momentum, companies such as WAVX, FLTX, EOPN, FEYE, and CUDA benefit, even as they continue to struggle and/or lose money.

Trader: Cautious on AAPL, GOOG, AKAM, N, CSCO, HPQ: One of the biggest risks to earnings in the tech sector in 2014 may be increasing worry on the part of global leaders in countries such as Germany, Brazil, and China that the NSA is spying on them through equipment made in the U.S. and data centers run by U.S. companies; Cautious on GCVRZ: Following FDAs failure to approve SNYs Lemtrada treatment for relapsing forms of multiple sclerosis, value of separately traded contingent rights tied to drugs future sales remains in doubt.

Follow-Up: At current prices, Puerto Ricos bonds are starting to anticipate the possibility of a debt restructuring or default, and bears argue the commonwealth is in a debt and economic spiral; Negative on UNXL: Company has missed production expectations and rung up losses, and with shares falling recovery now seems unlikely.

European Trader: Positive on Fiat: In wake of Chrysler deal, stock could accelerate this year, but might not find its top gear until 2015, when it could double in value; conventional metrics that indicate the shares are pricey now are misleading.

Asian Trader: Research by Ayako Weissman of Horizon Kinetics finds owner-operated companies in Japan have since 2001 routinely outpaced benchmarks such as the Topix, MSCI Japan, and the Nikkei 225 (Positive on Cookpad, Unicharm, Internet Initiative Japan).

Emerging Markets: Investors in Gulf stocks are waiting to see if they can maintain their 2013 momentum, fueled by reforms and government spending that sparked a recovery and fueled increased consumption.

Commodities: Floridas orange crop is on thin ice this winter, and any hint of a freeze is likely to push futures prices higher, in addition to which there is potential for another drought to develop in Florida in the first three months of the year. Up & Down Wall Street: Consumer discretionary stocks such as NFLX, BBY, and TRIP benefitted last year from levitated stock portfolios, rehabilitated home prices, and muted gas prices.

Streetwise: There are signs more companies, including VFC and MA, could split their shares in 2014; Low-priced stocks continue to outperform, and bargain-hunters could help boost MGM, HTZ, and BTU.