>>> Fitch issues commentary on US growth; lowering outlook to 2.2% in 2015 and 2

Fitch issues commentary on US growth; lowering outlook to 2.2% in 2015 and 2.5% for 2016 and 2017 
- Fitch: A narrowing output gap and approaching monetary tightening are reducing the US economy's ability grow at around 3% a year, Fitch Ratings says. We cut our outlook for US growth to 2.2% in 2015 and 2.5% in each of 2016 and 2017 in our latest quarterly "Global Economic Outlook", published on Tuesday, down from our previousforecasts of 3.1% for 2015 and 3.0% for 2016.
- Not only is the supply of capital and labour growing more slowly, but Bureau of Labor Statistics data this week showed total factor productivity increased at an annual rate of 0.8% last year - lower than the 1.4% average in 1995-2007. Slower productivity growth combined with temporary shocks such as those in 1Q15 means annual US GDP growth has averaged just 2.2% since 2010. As the output gap gradually narrows, growth rates should converge with potential output at around this level
- The US economy is also heading into a period of monetary tightening. We expect the first Fed rate increase before the end of 2015. We also expect the pace and extent of tightening to be subdued by historical norms, but higher rates will increase debt-servicing costs, and even a gentle exit from a long period of loose monetary policy could increase financial market and asset price volatility, affecting household wealth and confidence

(BFW) Glencore Execs Said to Meet Iranians Ahead of Nuclear Deal: FT

Glencore Execs Said to Meet Iranians Ahead of Nuclear Deal: FT
2015-07-02 14:50:04.880 GMT


By Ronald Day
(Bloomberg) -- Glencore oil head Alex Beard met in Tehran
with Iranian oil ministry and Iranian National Oil officials, FT
said, citing people familiar.

* Indicates traders seek to help OPEC member Iran return to
international oil market
* Talks focused on “potential business opportunities subject
to removal of relevant sanctions,” Glencore spokesman told
FT
* NOTE: Earlier, UN Nuclear Chief Seeks Clarity of Iran Past
in Tehran Talks


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To contact the reporter on this story:
Ronald Day in New York at +1-609-279-3007 or
rday1@bloomberg.net

(BFW) *EUR200-300B GREEK DEBT NEEDS RESTRUCTURING NO MATTER WHAT:GROSS

BFW 07/02 14:33 *EUR200-300B GREEK DEBT NEEDS RESTRUCTURING NO MATTER WHAT:GROSS
Janus Capital: Gross: Important Factoid: €200-300 billion of Greek debt will have to be restructured no matter what the vote.
2015-07-02 14:31:18.587 GMT

Gross: Important Factoid: €200-300 billion of
Greek debt will have to be restructured no
matter what the vote.
Janus Capital @JanusCapital
 
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found here.

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-0- Jul/02/2015 14:31 GMT

>>> K&S - Confirms rejection of Potash offer at €41/shr Following a thorough rev

Confirms rejection of Potash offer at €41/shr 

Following a thorough review of all aspects and considering the overall circumstances, the Board of Executive Directors and the Supervisory Board of K+S Aktiengesellschaft today have decided to reject the unsolicited proposal of Potash Corporation of Saskatchewan Inc. to acquire all outstanding shares of K+S Aktiengesellschaft for 41 Euro per share. The proposed transaction does not reflect the fundamental value of K+S and is not in the best interest of the company.

CEO: Jointly with the Supervisory Board we have come to the conclusion that the proposed price of 41 Euro per share does not adequately reflect the fundamental value of K+S. Not only does this proposal undervalue our potash and magnesium products and our salt business, it completely disregards the value of our Legacy Project. The book value alone represents 11 Euro per share; considering future earnings we calculate a value of up to 21 Euro per share. This is not yet reflected in the share price. We believe PotashCorp is trying to take advantage of the valuation gap to take over K+S and gain control over Legacy. 

Legacy is the first greenfield project in the potash industry in almost 40 years. K+S has already invested more than 2 billion Euro in the project which is on time and on budget. The first tonnes of potash will be produced by the end of 2016 and positive cash flows will be generated already from 2017 onwards.

K+S strong outlook is also driven by ongoing strategic initiatives across both the potash and magnesium and salt business units. The Salt 2020 strategy alone is expected to produce a sustainable increase in operating profit of up to 250 million Euro. Furthermore, the Fit for the Future efficiency program is expected to deliver cumulative cost savings of more than 500 million Euro by the end of 2016.

Overall, K+S expects to see Group EBITDA to increase to 1.6 billion Euro by 2020 with the Legacy Project contributing on average annual operating cash flow growth of more than 10% up to this point.

Since the Boards continue to remain committed to its dividend policy of a pay out of between 40-50% of its adjusted operating income after taxes, shareholders can look forward to an attractive dividend yield in the coming years.

NYT - In Tests, Yahoo Uses Google to Power Search Results and Ads

In 2008, the Justice Department blocked Yahoo from making a deal with Google to provide the search ads for Yahoo’s web search efforts.

Now, Yahoo and Google are exploring a new relationship in which Yahoo would use Google for some regular search results as well as search ads.

Yahoo confirmed on Wednesday that it has begun testing the use of Google search ads for a small portion of its desktop and mobile web search results. “As we work to create the absolute best experiences for Yahoo users, from time to time, we run small tests with a variety of partners including search providers,” the company said in a statement. “There is nothing further to share at this time.”

Google also confirmed the arrangement.

The tests were first uncovered by Aaron Wall, founder of SEO Book, a site that helps companies improve their rankings in web searches.

Yahoo got the right to work with other search providers in April, when it renegotiated its partnership with Microsoft, whose Bing search service had been the exclusive provider of search results and ads to Yahoo under a 10-year partnership between the companies. Under the revised deal, Yahoo can use its own search technology or that of other providers for up to 49 percent of its search results.

Marissa Mayer, Yahoo’s chief executive, oversaw search products at Google earlier in her career. However, until now, she has signaled that she was focused on developing new search products at Yahoo rather than turning to her old employer for help. She has also been aggressive at getting Yahoo’s search engine bundled into third-party products, like Mozilla’s Firefox web browser and Oracle’s Java software.

Any broad search deal between Yahoo and Google is likely to come under antitrust scrutiny. Google already handles most web searches worldwide, and the European Commission has a formal antitrust case pending against it, alleging it has abused its dominant position.

(BI) Turkey would invade northern Syria


You were probably just thinking to yourself that the civil war in Syria isn’t complicated enough, that there aren’t enough warring parties, and that the constantly shifting sides have become predictable and tired.
Well, don’t despair, there are now rumors emerging out of Turkey that may introduce enough new dimensions to the conflict to keep you confused well into the next decade.
The Turkish press is reporting that the Turkish government may be about to invade Syria along a 70-mile stretch of Turkey’s border with Syria to create a 20-mile deep safe zone. This issue is currently the subject of heated speculation and controversy in Ankara, making it quite difficult to figure out what is really happening.
But beyond the fevered speculation, why would Turkey want to invade Syria anyway?
Syria has long been a threatening mess, but neither Turkey nor anyone else has exactly been lining up to send their national armies into Syria. Sure, foreign fighters are plentiful in Syria and all of the regional powers, as well as the United States and Russia, have supported proxies there. But even after more than four years of bloody, destabilizing warfare, national armies have avoided it like the plague. The reason is quite simple: The complicated Syrian civil war has quagmire written all over it. As hard as it is to send a foreign army into Syria, it would be harder still to get it out.
In Turkey, particularly, the idea of military intervention into Syria remains very unpopular among the populace. The possibility that intervention might backfire and unleash Islamic State (or ISIS) terrorism within Turkey, or even reignite the bloody Kurdish insurgency in Turkey’s southeast, remains an ever-present fear.

Now, however, the theory goes that Syrian Kurdish advances against ISIS have caused such concern in Turkey that the Kurds will create some sort of state or autonomous region along Turkey’s southern border. To prevent that outcome, the Turkish government, we are told, is finally willing to intervene in Syria.
Well, maybe. But, in our view, the reason that Turkey might now finally be contemplating such a step says more about changes in the domestic and international standing of the Turkish government than about the course of events in Syria.
Domestically, the outcome of the Turkish election of June 7 has seriously scrambled Turkish politics. After nearly 13 years in power, the ruling Justice and Development Party (AKP) lost its absolute majority in parliament. The AKP, which still holds a plurality of seats in parliament, has 45 days to form a government with at least one of the minority parties.
But it seems clear that Turkish President Recep Tayyip Erdoğan has very little interest in coalition government. The leaders of the two main opposition parties, the nationalist Nationalist Action Party (MHP) and the center-left Republican Peoples Party (CHP), have both demanded the re-opening of corruption cases against the AKP. Erdoğan may fear that those corruption cases may eventually touch even his family.
REUTERS/Umit Bektas Turkish Prime Minister Ahmet Davutoglu (L), accompanied by his wife Sare Davutoglu, greets AK Party supporters during an election rally for Turkey's June 7 parliamentary election, in Kahramanmaras, Turkey, June 5, 2015.

Erdoğan would undoubtedly prefer an early election to his party or even his family to the indignities of prying prosecutors. But to achieve a better outcome than the AKP managed in June, he needs to demonstrate to the population the pitfalls of weak, coalition governments.
As the possibility of intervention in Syria increases, as the markets spooks on the prospects of war, and even if a few bombs were to go off in the Kurdish areas, the growing sense of national insecurity would only serve to make Erdoğan’s case that the country needs the firm hand of one-party leadership. With a big enough victory, it might even serve to bring back prospects of constitutional change to increase the powers of the presidency. At that point, an early election would be worth having.
Insecurity works
Internationally, Turkey may be driven by the sense the White House now prefers their Kurdish partners in Syria to Turkey. The Turkish government is extremely angry about the emerging alliance between the United States and the Syrian Kurds, especially the Kurdish Democratic Union Party (PYD), a Syrian affiliate of the Turkish Kurdistan Workers' Party (PKK).
They attribute Kurdish success against ISIS to the American willingness to support Syrian Kurdish forces with air power and supplies. In the Turkish view, the PYD is simply a branch of the PKK, which both Turkey and the United States have branded a terrorist group. Allowing the PYD to unite the Kurdish areas of Syria would therefore represent an existential threat to Turkey.
By threatening to intervene in Syria, the Turkish government seeks to change a U.S. policy that it finds potentially very damaging to Turkish interests. As Erdoğan no doubt reminded Vice President Biden when they talked the other day, Turkey has the ability to have a far greater impact on the fight against ISIS than the Kurds do. (The Turkish government might tell their domestic audiences that a prospective intervention in Syria is to stop the Kurds, but they will tell international audiences that it is to fight ISIS.)
Stringer ./REUTERSMembers of the Kurdish People's Protection Units (YPG) man a weapon mounted on a pick-up truck as they take position behind cement blocks in the Iraqi city of Rabia on the Iraqi-Syrian border

Interestingly, to achieve both these international and domestic advantages, it is not necessary or even wise to actually go through with the intervention. Domestically, all that is necessary is to convince the population that the situation is sufficiently insecure to require firm, one-party leadership. Internationally, it just requires using the prospect of intervention to gain U.S. attention and convince the U.S. government to reduce its support of the PYD. At the current moment, the prospect of intervention is very useful for the Turkish government. Actual intervention, with all of the attendant risks of quagmire, is significantly less appealing.
So that means that it is probably not strictly necessary to spend your time trying to understand how the myriad factions within Syria will respond to the presence of the Turkish military on Syrian soil. On the bright side, you now have some really good reasons to enter into the nearly as confusing realm of Turkish domestic politics. Maybe start with our Turkish election series.


Read more: http://www.brookings.edu/blogs/order-from-chaos/posts/2015/07/02-would-turkey-invade-syria-shapiro-taspinar?rssid=LatestFromBrookings#ixzz3eju1WssM