EVERY YEAR, thousands of people from around the world descend on an American city to spend the weekend discussing everything from bubble wrap to counterfeit goods and the Russian mafia at eBay Live, the online auction giant’s annual jamboree.

The get-together has always been a fun affair, with silly hats and jokey T-shirts, but there was never any disguising that eBay is a serious business. With 233m customers worldwide, the world’s largest online retailer sold $60 billion (£30 billion) of goods last year.

A car gets sold on eBay every minute, a music player every 16 seconds. Thousands make a full-time living buying and selling on eBay - African villagers are sending their children to school on money they make by selling goods on the site. By any measure, eBay is one of the great successes of the internet age. So why were these people booing?

This year’s conference took place in Chicago and was the most controversial in the seven-year history of eBay Live.

The company had been expecting 10,000 people. It looked like half that number had turned up and the exhibitors’ hall seemed to have been reshuffled to hide the gaps.

Many people walked out when eBay chief executive John Donahoe took the stage to make his keynote address. His predecessor, Meg Whitman, used to get rock-star treatment, mobbed by fans on the floor. But at least the crowd was polite to Donahoe. They booed his No 2, Lorrie Norrington, president of eBay Marketplaces, the company’s core auctions business.

After introducing some controversial and unpopular changes, the pair knew they needed to do some schmoozing. Donahoe showed pictures of himself as a child; he even introduced his parents. Norrington told everyone how well they were doing. But for all the buttering up, the crowd turned nasty as Norrington began explaining the changes.

In the past six months a storm of protest has howled from America to Britain to Australia over radical changes to fees and the way items are listed and paid for on eBay.

The move that triggered the most boos concerns the way buyers and sellers rate their transactions. It was one of the unique characteristics of eBay that both buyer and seller would rate their transaction. The idea was to build a community of trust where both parties knew - by reputation - who they were dealing with even if they were separated by thousands of miles. Now eBay sellers are up in arms over a change that means they can leave only positive feedback for buyers.

“For the past dozen years we together have built one of the most unique businesses and we have done it through trust,” said Norrington. “Building trust is a priority for us and it should be for you too. But some of our users have developed bad habits.”

Leaving “retaliatory feedback” for buyers was driving away business and was not acceptable, she said.

The boos began. “Bring it on - we love it. Tell us how you feel,” she said gamely.

The eBay community is certainly doing that - on eBay’s chat boards, their own websites and any place they can get themselves heard.

Elaine Bennett Scheib is one of an army of small eBay sellers who believe the company has used them to build up its business and now wants to dump them to make way for much bigger fish.

For the past nine years the self-described “stay at home mom” has sold her paintings and drawings of fairies and other cutesy beings through eBay. She has a 100% positive record, meaning every one of her customers was happy with the business they did with her.

“You’re the greatest, thank you,” wrote one recent customer. Another wrote: “I love this fat fairy.”

Happy fairies, happy customers. The only one who isn’t happy is Bennett Scheib. She thinks eBay is trying to drive her out of business. “They are rude and arrogant,” she said. “They want me gone as quickly as possible.”

She is one of a growing band of angry eBay sellers who started boycotting the firm from May 1. Some are defecting to other sites or going it alone. Others have even begun lobbying Google in the hope it will launch a rival. If there was a big enough rival to eBay out there already, the exodus would “blow their doors off”, said Bennett Scheib.

Not everyone is unhappy. Chris Dawson, author of the Tamebay.com eBay blog, described this eBay Live as the most professional he had attended. “They are doing a number of things that they had to do,” he said. “Good sellers will change. It may be painful but they will do it.”

Dawson said eBay now faces more competition in a world where expectations for online shopping have risen rapidly. “eBay can’t just stand still. But it does seem to be trying to do a lot of things at once,” he said. “There are reasons why eBay is changing and they are unlikely to stop. Boos or no boos.”

Donahoe said he wanted the company to operate less like a car-boot sale and more like a shopping mall. Most eBay sales are auctions, with bidders vying to secure what’s on offer, but the company has been growing the number of goods its sells at a fixed price. Fixed-price sales accounted for 42% of the total in the last three months of 2007.

To speed up the gentrification, eBay has started offering discounts for big sellers and changes in its search process that favour them with good feedback.

It’s not just small sellers who are finding the new system frustrating. Bruce Hershenson, boss of Emovieposter.com, a vintage-cinema memorabilia company, has sold more than $13m of goods on eBay since he signed up in 1998. He recently quit eBay for good and is dedicating his efforts to his own website.

The recent price changes will result in his fees going up 40% annually and, he said, eBay wants to ditch people dealing in “vintage” items in favour of those selling new goods.

Norrington denied that this was eBay’s intention. She said good sellers had nothing to fear. “Our goal is to bring buyers and sellers together in the safest way,” she said. “The internet is continually evolving. It’s all about staying focused on our customer.”

As far as Hershenson is concerned, that customer isn’t him. “Normally I can understand business situations like this,” he said. “I might not agree with them but I understand. But this I don’t get at all. They are just trying to copy Amazon.”

And well they might, said Jeffrey Lindsay, analyst at Sanford Bernstein. He felt eBay had to change or die. “Our view is that management have about a year to turn this company round,” said Lindsay.

eBay posted a 22% jump in first-quarter profits, boosted in large part by the performance of Paypal, its online-payment system, international sales and the weak dollar. But growth in active users at eBay’s core business was almost flat and the number of new listings was up only 4% from the previous quarter.

Its core business is growing at about 9% year on year, said Lindsay, about half the rate of the e-commerce market in general. Amazon is growing at 32% a year and positioning itself as an alternative to eBay.

“Amazon has superior customer service and almost zero fraud,” said Lindsay. “eBay has seller fraud and counterfeit-goods problems.

“As the internet matures, its audience expect more and eBay has to make its sellers deliver.

“This is the first time in five years that they have addressed eBay’s core problems. The real question is, have they left it too late?”

NEW YORK — Many fanatic golf players dream of their next business trip and use it as an excuse to play at least 18 holes a day but don’t have anyone to play at their destination. An online business travel network has found a unique solution by creating interactive travel Lounges that will let you know when other members with similar interests are at the same destination as you.

The site is called SkyLounge (www.skylounge.com) and focuses on business travelers that do not like leaving anything up to coincidence. Members can sign up for free and use multiple tools that are geared towards business travelers from restaurant guides to Forums.

“The Lounges are unique and very easy to use. Say you join the ‘Golf Connection Lounge. You add your upcoming trips and that’s it. If there are Lounge members that are going to the same destination during the same period, we will send you an automatic email trip alert. This allows you to challenge other members for 18 holes and maybe even a drink at the 19th. You can also see who you went to school with, where they work, who lives near you, who is attending the same tradeshow, etc… Why make contact on arrival if you can do so beforehand and make a well organized plan. You might meet some great people that you have a lot in common with” said founder Marcel van Gemerden.

The site is extremely easy to use and joining or opening Lounges is very fast.

“SkyLounge is extremely user friendly. To join a Lounge is a click on a button and to open one takes 3 minutes with no extra skills needed. You can open / join as many Lounges as you like free of charge. The only thing you need to do is add your trips. The rest is automated” Van Gemerden said.

SkyLounge also expects that many companies and employees will open new Lounges.

“Join the GE Connection Lounge (unofficial) or the Shell Globe Trotters (unofficial). One click on ‘Sky View’ and you will know who is in what city and who is attending what tradeshow. You can sort upcoming Lounge member trips by name, destination, or date. Sharing taxi’s, flights, information, meeting co-workers from other offices can create synergies within a company that will save time, money and make trips more enjoyable” said van Gemerden.

Sky Lounges are Unique. “We are very excited to be the first site with Interactive travel Lounges. It’s easy to use, saves time, money and is free for all. You can decide to make the Lounge public or private. We currently have over 60 Lounges and expect to have 250 Lounges within the next two months” van Gemerden said.

About SkyLounge

SkyLounge is a network that connects Business travelers and expats around the globe. Having access to up to date information and the ability to network with the right people could make your trip(s) more profitable and enjoyable. Start networking before you arrive!

by Jacob Eskena
Boasting sales of around two thousand million dollars daily, the Commodity Forex Online Trading market is the single and biggest financial trading instution worldwide. Also known as Forex, the Commodity Forex Online is referred to as FX, Spot FX or even Spot.

Ever wondered how big the Commodity Forex Online Trading market is, be ready to be astounded. By comparison, the New York Stock Exchange is a light weight as it “only” trades an average of 2 billion dollars a day. In fact, you would need to combine both the Futures market and the Stock market and then time it by 3 to get nearer to the value of the Forex Trading Market. Did you ever think it was so big?

And in the event that you also want to know what is traded in Forex Trading, well, to the risk or appearing simplistic, the answer fits in one word! Money! Lots and lots of it! Forex Trading is actually the simultaneous exchange of one currency against another and since only one currency can ever only be exchanged against another, the exchange is referred to as pairs. As in Euro dollar for US dollar (EUR/USD) or the British pound for Japanese Yen (GBP/JPY).

In the old days, when the barter economy formed the basis of daily exchanges, the value of one product was estimated against that of another, and a trade would take place based on that estimation. This analogy still holds true for the Commodity Forex Online Trading market with the difference that the estimation of one currency against the other is based on the global market value of these currencies and not on the estimation of a few individuals.

Unlike traditional purchases, a currency is sought as a sign of investment in it’s country’s economy. The stronger the economy, the safer the trader is that his/her newly acquire currency will not only hold its current value but possibly be even stronger in the future. At times, a trader might forecast that a particular country is due for an upturn in its economy and decide to purchase currency from that very country.

The Commodity Forex Online Market is unique. Not only is it really big in terms of daily trades, but it doesn’t have any physical address or location, and is independent of any central exchange body. It is a truly independent body, with a life of its own. It is made possible through the establishment of a giant web of computer network link with each other from bank to bank. Forex Trading is opened 24 hours a day.

Up until recently Forex Trading was only available to banks or large financial institutions who could afford the millions of dollards required to trade. As such, only banks and large financial institutions were able to be involved in this industry. Today, things are not the same anymore and to the delights of the ever increasing number of independent Forex Trader, Commodity Forex Online Trading is now accessible to individuals with very little money to invest.

These small and oftentimes inexperienced traders can quickly become expert in the Commodity Forex Online Trading business by using expert forex trading software such as Forex Killer.

By MADLEN READ

NEW YORK (AP) — Stocks tumbled Friday on escalating worries about the financial sector and rebounding oil prices. The Dow Jones industrial average sank more than 120 points.

Merrill Lynch — which slashed earnings estimates for regional banks Friday — was the target of market rumors that it may issue its own profit warning. Merrill Lynch spokeswoman Jessica Oppenheim declined to comment. Merrill shares dropped $2.20, or 5.8 percent, to $35.49.

The rumors added to the market’s anxiety, which ballooned Thursday when Citigroup Inc. warned of significant debt markdowns for the second quarter, Washington Mutual Inc. announced 1,200 job cuts and Moody’s Investors Service decided late in the day to downgrade the two biggest bond insurers.

Troubling news about the financial sector has been piling up all week, driving the stock market back toward the levels it plummeted to in March. Earlier this week, investment banks posted profit declines, Fifth Third Bancorp said it need to raise $2 billion in capital, and two Bear Stearns hedge fund managers were charged with lying to investors — causing many investors to flee from stocks.

“There has to be reticence about getting back in,” said Stephen Carl, principal and head of equity trading at The Williams Capital Group. “It’s definitely an ugly end to the week.”

In midday trading, the Dow slumped 122.86, or 1.02 percent, to 11,940.23. The blue chips haven’t closed below 12,000 since mid-March, when the market was worried about Bear Stearns Cos. collapsing.

Broader stock indicators also dropped Friday. The Standard & Poor’s 500 index fell 14.43, or 1.07 percent, to 1,328.40, and the Nasdaq composite index fell 41.67, or 1.69 percent, to 2,420.39.

The session also saw “quadruple witching” — the simultaneous expiration of four types of options contracts — that can lead to heavy trading near the start and end of the session. It could be contributing to the steepness of the day’s pullback and was adding to volume.

As the economy faces a tight lending climate, it also struggles with surging fuel costs. Crude oil futures jumped $2.61 to $134.54 a barrel on the New York Mercantile Exchange, recovering some of Thursday’s drop of nearly $5 per barrel on news of a fuel price hike in China.

Investors are awaiting this weekend’s meeting in Saudi Arabia of oil producers and consumer nations, which could bring some relief to the problem of soaring oil prices. But many analysts believe the gathering might end up being a mere finger-pointing session.

Bond prices rose as stocks sank. The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 4.15 percent from 4.21 percent late Thursday.

Bond insurer MBIA Inc. shares fell 45 cents, or 7 percent, to $6, and competitor Ambac Financial Group Inc. fell 3 cents to $2, after losing their “AAA” rating from Moody’s.

Moody’s had already warned of a possible downgrade, and the move followed similar actions by rival agencies Standard & Poor’s and Fitch Ratings. But it nevertheless underscored the troubles that the nation’s money centers face.

The dollar fell against most other major currencies, while gold prices rose.

Declining issues outnumbered advancers by nearly 5 to 1 on the New York Stock Exchange, where volume came to a heavy 915.7 million shares.

The Russell 2000 index of smaller companies fell 10.94, or 1.48, to 726.89.

Overseas, Japan’s Nikkei stock average dropped 1.33 percent. In afternoon trading, Britain’s FTSE 100 fell 1.16 percent, Germany’s DAX index declined 2.12 percent, and France’s CAC-40 fell 1.79 percent.

Here’s what’s going on to bring the market back up to speed By david silva

CTW FEATURES

As one would expect over a problem that’s already sent nearly 2 million American homeowners into foreclosure and threatens to drag the economy into recession, the federal government is beside itself trying to bring the ongoing mortgage crisis under control.

That’s proving a particularly tough challenge for numerous reasons, not the least of which being that no one really knows just how deep is the hole in which we find ourselves. Aside from the financial exposure already incurred by the mortgage industry — The Economist magazine in December estimated sub-prime borrowers alone may ultimately default on as much as $300 billion in loans — the potential losses as the crisis bleeds into other areas of the economy are incalculable. But that hasn’t stopped the U.S. government from trying to fix the mess anyway.

Since the sub-prime debacle first came to the fore in July 2007, an increasingly desperate Federal Reserve has tried to shore up the economy through interest-rate cuts four times — in August, October, December and January. More cuts are almost certainly on the way. In March, the Reserve and the central banks of four foreign countries announced they would pump $200 billion of Treasury securities into financial institutions that have seen their liquid assets dry up as a result of the crisis.

In December, President Bush announced the creation of the “Hope Now Alliance,” in which lenders would be encouraged to temporarily freeze the mortgages of some homeowners with adjustable-rate loans. The Treasury Department has been working with banks to try to modify loans facing adjustable-rate increases. For its part, Congress in February pushed through a $168 billion economic stimulus package that, aside from putting a few hundred more dollars in everyone’s pockets, raised the FHA jumbo-mortgage limit in high-cost areas to $729,750. The move was aimed at bringing more buyers to the housing market and, thus, stop falling property values by reducing the inventory of unsold homes.

So how much of a positive effect will all this official activity have on the foundering mortgage market and the shaky economy as a whole? According to two industry experts, not much at all.

The trouble with all those interest-rate cuts by the Federal Reserve, says Robert Pavlik, the investment chief at the investment firm Oaktree Asset Management in New York, is they only help when an individual or institution has actually obtained a loan. And loans, he says, have become increasingly difficult to obtain.

“The real-estate market faces high mortgage rates despite the fact that the Fed continues to cut short-term interest rates because lenders have raised credit standards — they want a certain level of income and verification,” Pavlik says. “So it’s harder to go out and obtain those loans for investment and personal buying. (The cuts) are a step in the right direction, but the lenders have to be willing to make those loans.”

Pavlik also expressed concern that tottering financial institutions might not use the liquidity freed up by the Reserve for its intended purpose.

“I think that the Fed’s actions, while designed to increase lending, might be used by banks and federal borrowers as a way to shore up their weakening balance sheets.”

Ken Mayland, president of the economic analysis firm ClearView Economics LLC in Pepper Pike, Ohio, says interest-rate cuts and increasing market liquidity might provide some initial relief, but he worries that it could come at a high cost. Further, he says, nothing the federal government has done thus far addresses the problems at the core of the mortgage crisis.

“The rate cuts are a good thing for real-estate markets and mortgage lending, et cetera, and the Fed has injected a substantial amount of liquidity into the system,” he says. “Things tend to work better when there’s money growth versus no money growth. But it carries a risk; it’s a two-edged sword. Putting too much liquidity into the system can cause inflation.

“Is this going to resolve the problem?” he continues. “I think it will only have a modest, limited effect, because the real problem is that there was a lot of bad underwriting, and people were allowed to be put into mortgages and homes that they really couldn’t afford under any circumstances. On top of that, there was a substantial amount of fraud on the part of the homebuyers. Buyers bought homes without any intention of living in them — they just planned to flip them.”

Mayland and Pavlik say that, despite the frenzy of activity in Washington, the real-estate market is going to get worse before it gets better. Both men, however, see bright spots in their otherwise gloomy forecasts. Pavlik believes that the coming recession “will probably last six to nine months, at the longest,” while Mayland suggests that the good thing about hitting bottom is you have nowhere to go but up.

“Step back and look at the big picture,” he says. “We started to slide in 2006, when new housing starts were at about 2.2 million. We’re at 1 million right now. We know that housing declines are cyclical, and that, historically, the deepest ‘bottoms’ tend to be around 900,000 new housing starts. That means that most of the decline is behind us.”

By David M. Kinchen
Huntingtonnews.net Real Estate Writer

Commercial real estate vacancies are trending up modestly, while investment has dropped sharply in the wake of the credit crunch, according to preliminary information for the latest COMMERCIAL REAL ESTATE OUTLOOK of the National Association of Realtors.

Investment in commercial real estate during the first four months of 2008 was $48.2 billion, down 69.5 percent from $157.8 billion during the same period in 2007 when the credit markets were functioning normally; those totals do not include transactions valued at less than $5 million or investments in the hospitality sector.

NAR Chief Economist Lawrence Yun said economic weakness is impacting commercial real estate. “Although the supply-demand fundamentals are broadly favorable in most commercial real estate markets, vacancy rates are rising modestly and rent gains are slowing,” he said. “Slow economic growth is lowering demand for commercial space, mostly in the office and industrial sectors. Despite the slowdown, the commercial real estate market is in much better shape compared to conditions during the 2001 recession.”

Patricia Nooney of St. Louis, chair of the Realtors Commercial Alliance Committee, said credit has been a problem. “Tight credit availability has significantly slowed the volume of commercial real estate transactions,” she said. “Even so, institutional investors, along with foreign investors who are encouraged by the drop in the dollar, remain active in the current market. Because conditions are so varied across the country, we recommend investors or businesses looking for space consult with Realtors in their area who specialize in commercial real estate.”

The NAR forecast in four major commercial sectors analyzes quarterly data for various tracked metro areas. The sectors are the office, industrial, retail and multifamily markets. Historic data were provided by Torto Wheaton Research and Real Capital Analytics.

Office Market
With a growth in inventory, office vacancy rates are projected to increase to 13.7 percent in the fourth quarter of this year from 12.5 percent in the fourth quarter of 2007. As a result, annual rent growth in the office sector is expected to be 3.0 percent this year, following an 8.0 percent jump in 2007.

Estimates for the second quarter show vacancies rising sharply in Phoenix and West Palm Beach, Fla., to nearly 20 percent, double the levels of a year ago. Other central business districts in Florida have shown notable increases. The housing market downturn is having a spillover effect on commercial real estate in some local areas.

Net absorption of office space in 57 markets tracked, which includes the leasing of new space coming on the market as well as space in existing properties, is likely to total 31.3 million square feet this year, about half of the 60.0 million absorbed in 2007. “Part of the slowdown in office absorption results from new space coming online and the challenge of back-filling older class B and class C buildings,” Yun said.

Office building transaction volume has dropped significantly. In the first four months of 2008, a total of only $18.5 billion in office buildings traded hands, compared with $95.0 billion during the same timeframe in 2007. The greatest decline was in suburban markets.

Industrial Market
Warehouse demand has fallen because of the economic slowdown, although the demand for light manufacturing space has risen slightly. “The drop in the dollar is favoring American goods, stimulating some manufacturing with a solid pickup in exports,” Yun said.

Even so, overall vacancy rates in the industrial sector are forecast to rise to 9.9 percent in the fourth quarter of this year, up from 9.4 percent in the same period of 2007. Annual rent growth should be 1.2 percent by the end of the year, down from 3.6 percent in the fourth quarter of 2007.

Markets in the West and Florida have been most impacted by the economic slowdown. Industrial markets with rising availability include Orlando, Fla.; Phoenix; Tampa, Fla.; and West Palm Beach.

Net absorption of industrial space in 58 markets tracked is estimated at 68.8 million square feet this year, down from 158.3 million in 2007. Most of the new industrial completions have been built-to-suit, leaving many obsolete or nearly obsolete structures on the market.

Secondary markets have become most attractive to institutional investors and users. Industrial transaction volume during the first four months of 2008 was $8.5 billion, down from $11.9 billion in same period of 2007. The biggest slowdown is in the mid-Atlantic and the Midwest.

Retail Market
Retail spending has been hurt by high oil prices with consumers throttling back on their spending habits, even in the retailing hotbed of Southern California. “Fortunately, the construction of retail space has slowed, which is helping preserve some balance in the market,” Yun said.

Vacancy rates in the retail sector will probably edge up to 9.3 percent in the fourth quarter from 9.2 percent in the fourth quarter of 2007. Average retail rent is expected to rise 1.3 percent in 2008, compared with a 2.9 percent gain last year.

Net absorption of retail space in 53 tracked markets is projected to grow to 18.2 million square feet in 2008 from 12.9 million last year.

Retail transaction volume during the first four months of 2008 totaled $7.5 billion, significantly below the $27.7 billion in the same period last year. Markets like Cincinnati and Detroit have seen a 100 percent decline in investment activity so far this year. Only Sacramento, Calif., is showing a gain, up 47 percent.

Foreign buyers are focused on retail strip centers in Southern California, Chicago, the Northeast and the Southeast. Even so, strip center transaction volume is down 77 percent from a year ago.

Multifamily Market
The apartment rental market – multifamily housing – could see less demand during the second half of the year as some first-time home buyers jump off the fence and into the market.

Multifamily vacancy rates are likely to rise to 5.7 percent in the fourth quarter from 4.8 percent in the fourth quarter of 2007. Average rent is forecast to rise 4.0 percent in 2008, up from a 3.1 percent increase last year.

Multifamily net absorption is seen at 219,900 units in 59 tracked metro areas this year, up from 230,900 in 2007.

Transaction volume in the multifamily market so far this year is only $13.7 billion, compared with $23.2 billion in the first four months of 2007. Even so, some markets have seen increasing sales including San Francisco; San Jose, Calif.; Tampa; Portland, Ore.; and Raleigh, N.C.

By Haris Anwar

June 20 (Bloomberg) — Canada’s dollar is poised for the biggest weekly gain in more than a month amid speculation that accelerating inflation will prevent the central bank from cutting borrowing costs this year.

Bank of Canada Governor Mark Carney said last night in Calgary policy makers won’t be “complacent,” even if it means surprising investors as they did with last week’s rate decision. Inflation accelerated in May to the highest since 1991.

“Carney’s remarks suggest that our monetary policy is in a neutral zone,” said Jack Spitz, managing director of foreign exchange trading at National Bank of Canada, the nation’s sixth- largest bank. “There is some interest to buy the Canadian dollar as it moves closer to parity. But it will be hard to take it below the C$1.0100 area.”

Canada’s dollar advanced 1.1 percent this week to C$1.0178 per U.S. dollar at 12:54 p.m. in Toronto, from C$1.0294 on June 13. The currency gained 1.4 percent during the week ended May 9. One Canadian dollar buys 98.25 U.S. cents.

The Canadian currency has traded near parity with its U.S. counterpart this year. It touched a 2008 low of C$1.0379 on Jan. 22, and a high of 97.12 cents per U.S. dollar on Feb. 28.

The Bank of Canada will probably keep borrowing costs unchanged through at least October, according to economists surveyed by Bloomberg. The central bank unexpectedly held the main lending rate at 3 percent on June 10, after four straight reductions since December to stimulate an economy struggling with credit shortages and falling exports.

BCE Decision

Traders said the Canadian dollar was unlikely to post further gains as Canada’s top court releases its decision on BCE Inc.’s proposal for the world’s biggest leveraged buyout today at 4:30 p.m. in Ottawa.

BCE asked the court at a June 17 hearing to overturn an appeals court ruling that blocked the C$52 billion ($51 billion) transaction for not adequately considering the negative impact on bondholders. The appeals court overturned a trial judge who had approved the buyout, led by Ontario Teachers’ Pension Plan. Montreal-based BCE is the country’s largest telephone company.

“This decision has some serious ramifications for the market,” said Firas Askari, head of currency trading at BMO Capital Markets in Toronto, a unit of Canada’s fourth-largest bank. “A decision favoring bondholders can force many companies to change their capital structure, and make us different from the U.S.”

Crude Oil

Crude oil rose 2.3 percent to $135.01 per barrel today as the weaker U.S. dollar enhanced the appeal of commodities as a currency hedge and the New York Times reported that Israel held a rehearsal for a potential bombing attack on nuclear targets in Iran.

The near-term outlook is slightly positive for the Canadian dollar, “with oil remaining bid, and the Bank of Canada having concluded its easing cycle,” wrote London-based strategists, led by Bilal Hafeez, at Deutsche Bank AG. “Long-term, we remain bullish U.S. dollar and continue to target C$1.10 by year end.”

Canada’s currency has depreciated 1.9 percent this year as slower growth in the U.S., Canada’s biggest trading partner, reduced demand for the nation’s manufactured goods such as cars and auto parts. Gross domestic product unexpectedly contracted at a 0.3 percent annualized rate between January and March, the first drop in almost five years, according to the government. Statistics Canada will report April growth numbers on June 30.

Currency Forecast

Canada’s dollar is forecast to decline to C$1.07 in the first quarter of 2009, according to the median estimate in a Bloomberg survey of 38 analysts.

“The Canadian dollar likely will continue to weaken against major currencies,” economists at Citigroup Inc., led by New York-based Lewis Alexander, wrote in a research note. “We anticipate that the policy rate spread between Canada and the U.S. probably will remain constant. However, faster Canadian CPI inflation and somewhat better prospects for the U.S. economy likely will accelerate the Canadian dollar depreciation versus the U.S. dollar. The direction of commodity prices poses upside and downside risks to our projection.”

The Canadian dollar will weaken to C$1.04, and the bank rate will remain at 3 percent by the end of this year, according to Citigroup.

The yield on the two-year government bond fell 8 basis points, or 0.08 percentage point, to 3.30 percent this week. The price of the 3.75 percent security due in June 2010 rose 14 cents to C$100.83 this week.

The 10-year government bond’s yield fell 9 basis points to 3.80 percent this week. The price of the 4 percent security due in June 2017 rose 65 cents to C$101.47 this week.

The 10-year bond yielded 50 basis points more than the two- year security, down from 81 basis points on June 5.

Canada’s two-year bond yield will touch 3.06 percent by the end of this year, with the 10-year yield reaching 3.88 percent, according to the median forecast in a Bloomberg survey.

Canadian government bonds have returned 2.2 percent in 2008, according to Merrill Lynch & Co. index statistics. U.S. Treasuries returned 0.7 percent so far this year.

To contact the reporter on this story: Haris Anwar

Last Updated: June 20, 2008 12:57 EDT

By ELAINE KURTENBACH

SHANGHAI, China (AP) — The Chinese yuan gained against the U.S. dollar on Wednesday, hitting a fresh high as American and Chinese officials resumed talks centering on trade and other strategic issues.

Washington wants Beijing to loosen controls on currency trading and allow the yuan’s rate to set by market forces. U.S. manufacturers contend that the restrictions keep the yuan’s value artificially low, giving Chinese exporters an unfair advantage and boosting China’s trade surplus.

The yuan has gained about 20 percent against the U.S. dollar since Beijing revamped its foreign exchange trading system in July 2005, revaluing the currency by 2.1 percent to 8.11 yuan to one dollar.

On Wednesday, the yuan began trading at a 6.8823 to the dollar, continuing a steady advance against the dollar that has taken it to record highs in recent weeks. It was trading at 6.8827 by Wednesday afternoon on the over-the-counter market, stronger than Tuesday’s close of 6.8914.

China has pledged to loosen currency controls, but has not given any timetable, saying that sudden change would expose the country’s shaky financial system to excessive risks from outside speculators.

During the talks in Annapolis, Md., China’s central bank governor, Zhou Xiaochuan, alluded to such risks by asking about the regulatory mistakes that may have helped precipitate recent U.S. financial troubles.

“China always hopes to draw lessons from the U.S. experience in macroeconomic management and market development,” the official Xinhua News Agency quoted Zhou as saying. “However, during this time of discussion, we are also interested in drawing lessons from the U.S. financial turbulence.”

Among the questions Zhou said raised was the role exchange rates can play “in maintaining the world’s financial stability.”

The yuan has gained about 6 percent so far this year, compared with a 6.9 percent gain in 2007.

Top finance officials from the United States and China pledged greater cooperation Tuesday on a range of economic issues. But it was clear that the fourth round of high-level economic talks would leave both nations far apart on a number of contentious subjects from U.S. unhappiness over the slow pace of China’s economic reforms to Chinese concerns about increasing protectionist sentiments in the United States.

Treasury Secretary Henry Paulson hoped that the two days of talks in Annapolis will produce enough results to persuade the next administration to continue the meetings. It was Paulson’s brainchild to start the twice-a-year discussions in 2006.

The U.S. trade deficit with China grew to a record $256.3 billion last year, although the gap has begun to moderate as U.S. demand for Chinese-made exports has slackened.

“We now believe that the (Chinese) trade surplus should plateau in 2008,” Stephen Green, China economist at Standard Chartered Bank in Shanghai, wrote in a report issued this week.

The People’s Bank of China, the central bank, announces the yuan’s parity rate — a weighted average of prices given by market makers, excluding the highest and lowest offers, early each trading morning.

By Ye Xie

June 20 (Bloomberg) — The dollar may decline against the euro on speculation the Federal Reserve will delay increasing borrowing costs as the U.S. economy shows few signs of recovery.

The greenback has traded in a range of $1.53 to $1.56 per euro after last week’s 2.5 percent gain, the biggest since 2005. The pound rose yesterday to a two-week high versus the euro on an unexpected surge in U.K. retail sales. The Swiss franc fell as the central bank left its target lending rate at 2.75 percent, one of the lowest among industrialized countries.

“The Fed is not likely to back up its hawkish rhetoric with interest-rate hikes,” said Vassili Serebriakov, a currency strategist at Wells Fargo in New York. “That could set off a new wave of dollar selling.”

The dollar traded at $1.5504 per euro at 6 a.m. in Tokyo, after rising 0.2 percent yesterday. The U.S. currency was little changed at 108.02 yen. The euro traded at 167.43 yen, following a 0.1 percent drop.

Futures on the Chicago Board of Trade showed a 10 percent chance the Fed will increase the 2 percent target rate for overnight lending between banks by a quarter-percentage point on June 25, compared with 22 percent odds a week ago. The chance of an increase in borrowing costs in August also fell.

“It will be a huge mistake for the Fed to raise rates and jeopardize the economy,” said Steven Butler, director of foreign-exchange trading at Scotia Capital Inc. in Toronto. “We are facing the next wave of the U.S. economic downturn in the second half of the year. We are going to have another sharp downturn in the dollar.”

Factory Decline

The Philadelphia Fed reported yesterday that its general economic index, a gauge of manufacturing, dropped to minus 17.1 in June, from minus 15.6 the previous month. Readings less than zero signal contraction. It was the seventh straight month of declines.

The U.S. currency touched a one-month high of $1.5303 per euro last week after Fed Chairman Ben S. Bernanke said on June 9 that economic risk has faded, raising speculation the central bank will increase interest rates this year to control accelerating inflation.

The British pound increased yesterday 0.8 percent to 78.61 pence per euro, and touched 78.49, the strongest since June 2. The Office for National Statistics said U.K. retail sales increased 3.5 percent in May, the biggest gain since the data began in 1986. The median forecast of 37 economists surveyed by Bloomberg News was for a 0.1 percent decrease.

Swiss Franc

The Swiss franc dropped 0.9 percent to 1.0454 versus the dollar yesterday and 0.7 percent to 1.6209 against the euro after the Swiss National Bank held borrowing costs steady and signaled inflation is under control. The franc decreased 0.8 percent to 103.31 yen. It touched 104.28, the highest level since 1991.

The dollar rose against the euro yesterday after the surge in U.K. retail sales led traders to sell the 15-nation currency versus the greenback and buy British sterling.

Traders face low liquidity in currency cross trades such as the pound versus the euro. About 86 percent of global currency turnover involves the dollar, according to the Basel, Switzerland-based Bureau of International Settlements.

“When you try to turn around a large volume in the crosses, you have to go through the dollar to get the liquidity,” said Brian Dolan, chief currency strategist at FOREX.com, a unit of online currency trading firm Gain Capital in Bedminster, New Jersey. “That’s why the dollar strengthened.”

Crude Oil

The dollar was also supported as crude oil prices fell more than $4 a barrel to $131.80 yesterday. Oil and the euro-dollar exchange rate have moved in the same direction more than 90 percent of the time during the past year, according to Bloomberg calculations based on value changes.

Some traders sold the euro yesterday as the SNB’s decision cast doubt on whether the European Central Bank will raise the main refinancing rate from 4 percent in July, according to Boris Schlossberg, senior strategist at DailyFX.com in New York, a currency dealer.

“There’s some disappointment,” said Schlossberg. “The SNB shadows the European Central Bank. It’s an indication that the ECB won’t raise rates at its next meeting.”

ECB President Jean-Claude Trichet said on June 5 that the bank may increase borrowing costs by a quarter-percentage point next month. Luxembourg Prime Minister Jean-Claude Juncker said before a European Union summit in Brussels yesterday that inflation in the region is “too high.”

To contact the reporter on this story: Ye Xie in New York at

Brookfield Properties Corp. has downtown Denver’s Seventeenth Street Plaza high-rise office building under contract for roughly $225 million, according to real estate professionals familiar with the deal.

JP Morgan Chase & Co. owns the building, which is one of Denver’s largest office properties at 666,653 square feet in 33 stories.

Seventeenth Street Plaza is located at 1225 17th St., across from the Tabor Center.

Brookfield of New York already owns one of the Denver business district’s trophy office buildings — the 1.2 million-square-foot, 56-story Republic Plaza — and hopes to develop an office building behind the Denver Pavilions mall. The new project, currently called 425 15th Street, could include 833,000 square feet of space, and is in the planning phase, according to Brookfield.

JP Morgan quietly put Seventeenth Street Plaza up for sale earlier this year. The asking price is $385 per square foot, or roughly $250 million, according to Denver investment brokers.

Calls to Bill Lucas, a Brookfield vice president in Denver, weren’t returned this week.

Investment brokers Mike Winn and Tim Richey at Cushman & Wakefield of Colorado Inc. represent Morgan in the sale. Winn didn’t return a call for comment.

Tenants in Seventeenth Street Plaza include the U.S. headquarters of Molson Coors Brewing Co. and Xcel Energy Inc.’s regional headquarters.

Xcel recently decided to leave the building for 330,000 square feet of space at the $192 million, 500,000-square-foot 1800 Larimer office building under construction on Larimer Street between 18th and 19th streets. The new building is scheduled for completion in mid-2010, and Xcel hopes to move in by 2011.

Brookfield (NYSE: BPO) is a publicly traded real estate investment trust (REIT) and one of North America’s largest commercial real estate companies.

The company, as of late April, owned interests in more than 100 properties, includ­ing 76 million square feet of space. Signature assets include the World Financial Center in New York and Brookfield Place in Toronto, Canada.

Brookfield reported net income of $23 million and revenue of $665 million in the first quarter.

Seventeenth Street Plaza was developed by what’s now Jones Lang LaSalle Inc. of Chicago, and completed in 1982.

Previous owners include Equitable Real Estate Investment Management Inc. (ERE), part of the Equitable insurance company. Australian real estate giant Lend Lease Corp. Ltd. took over the building in the 1990s, after it acquired ERE.

Denver Business Journal - by Paula Moore Denver Business Journal