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Cooper Tire ends buyout agreement with Apollo

Written By Unknown on Selasa, 31 Desember 2013 | 00.33

Cooper Tire & Rubber Co. is calling off its sale to India's Apollo Tyres, unraveling a $2.2 billion deal announced just over six months ago.

Cooper said financing is no longer available and it continues to claim, as it has for months, that Apollo breached the terms of the agreement.

Apollo threatened for the first time Monday to pursue legal remedies after the announcement, which it called disappointing.

Both companies agreed to the sale in June, but things deteriorated rapidly. Negotiations with the union representing Cooper employees became a sticking point.

Apollo sought a better price citing labor issues in China and weaker profit, which Cooper said was a stalling tactic. The Findlay, Ohio, company took its claim to a Delaware court, but a ruling last month found no breach of obligations on Apollo's part.

Cooper Chairman and CEO Roy Armes said during a brief, Monday morning webcast that Cooper never received a new offer from Apollo that came with committed financing.

Company executives vowed to pursue a reverse termination fee of $112.5 million and other possible damages. They do not believe the company owes Apollo a $50 million termination fee that was part of the initial agreement.

Cooper will return to court with Apollo to resolve some remaining issues, including whether Apollo made an appropriate effort to reach a deal with the union, said Chief Financial Officer Brad Hughes.

Apollo Tyres Ltd. said Monday that it had made "exhaustive efforts to find a sensible way forward over the last several months."

Shares of Cooper fell 20 cents to $22.76 in late-morning trading.

Company shares soared to nearly $35 in June after it announced the buyout, but they have fallen steadily since then.


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Nikkei closes out best year since 1972

LONDON — Japan's main stock index rose Monday to end 2013 at its highest level in more than six years, though most other markets were lackluster, with Germany's DAX dipping to close the year just short of its record high.

The Nikkei 225 gained 0.7 percent to 16,291.31 on its last trading day of the year. That leaves it with a gain of 56.7 percent over the past 12 months, making 2013 its best year since 1972.

Prime Minister Shinzo Abe, whose government launched a huge stimulus effort to drag the economy out of a two-decade period of stagnation, took time out from vacation to celebrate the trading close.

"Thanks to our efforts, the economy went from minus to positive," Abe said. With winter bonuses up by several hundred dollars on average, he said, "You have to use that money, keep it moving."

Elsewhere, markets were more cautious. Germany's DAX drifted 0.4 percent lower on its last trading day, to 9,552.16, leaving it shy of its record high hit last week.

French and U.K. markets, which will trade for a half day on Tuesday, also closed slightly lower, with the CAC-40 down 0.1 percent at 4,275.71, and the FTSE 100 down 0.3 percent at 6,731.27.

In the U.S., the Dow was flat at 16,483.88, while the S&P 500 was down 0.1 percent at 1,840.22.

This was a banner year for many markets, with the DAX up 25.5 percent, the CAC index up 17.4 percent and the FTSE 100 gaining 14 percent. But none matched the Nikkei, which soared on renewed confidence in the economy.

Easy liquidity from government spending and monetary policies aimed at fueling inflation boosted shares, though the potential for continued strong gains remains uncertain.

For now, Abe can point to the share rally as evidence his "Abenomics" policies are yielding results.

"The Nikkei still looks to round off what has been an astonishing year ... its best year since 1972," Chris Weston of IG Markets said in a commentary, noting that the gain in that year was 92 percent and unlikely to ever be beaten.

"For those looking for volatility, the Nikkei will remain a major focus for traders in 2014," he said.

For the rest of Asia, 2013 has turned out to be much less exuberant.

Hong Kong's Hang Seng Index, burdened by rising concern over debt and slowing growth in mainland China, has gained just 2.4 percent this year. On Monday, it edged 0.2 percent lower to 23,209.25.

The Shanghai Composite Index fell 7 percent this year and extended that loss Monday, drifting 0.1 percent lower to 2,098.77.

Shares rose in Australia, South Korea, Singapore, Indonesia, Malaysia, Taiwan, mainland China and New Zealand. India share prices fell, while markets in Thailand and the Philippines were closed for holidays.

In foreign exchange markets, the dollar was trading 0.1 percent lower at 105.05 Japanese yen, while the euro rose 0.4 percent to $1.3815.

The price of crude oil dipped back below $100, with the benchmark U.S. contract for February delivery down 77 cents to $99.55 in electronic trading on the New York Mercantile Exchange.

___

Kurtenbach contributed from Tokyo.


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US stocks are little changed as 2013 winds down

NEW YORK — Stocks are little changed as Wall Street gets ready to close the books on a historic year.

The Dow Jones industrial average was up six points, less than 0.1 percent, at 16,484 in midday trading Monday.

The Standard & Poor's 500 index fell a point, or 0.1 percent, to 1,840. The Nasdaq composite fell five points, or 0.1 percent, to 4,150.

With just two days left in 2013, the S&P 500 is on track for an annual gain of 29 percent, the biggest since 1997. With dividends included, it's up 32 percent.

Crocs jumped $2.34, or 18 percent, to $15.67 after the shoe maker said it was getting a $200 million investment from the private equity firm Blackstone.

The yield on the 10-year Treasury note slipped to 2.98 percent.


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Mass. single-family home sales down in November

BOSTON — The number of single-family homes sold in Massachusetts in November dropped nearly 9 percent when compared to the same month last year, but prices surged more than 7 percent, the Massachusetts Association of Realtors reported Monday.

The reason was a low number of homes on the market, Realtors President Kimberly Allard-Moccia said.

"After strong buyer activity over the summer and early fall, the market slowed down in November because there were not enough homes for sale to meet demand," she said.

The Warren Group, a Boston-based publisher of real estate data, reported a more modest 2 percent drop in single-family home sales year-over year, the first since April.

"We're seeing the same thing in Massachusetts that the rest of the country is experiencing: a slight slowdown in home sales, driven by increasing interest rates and tight supply," Warren Group chief executive Timothy Warren Jr. said.

The median price of a single-family home jumped from $295,000 in November 2012 to $316,500 last month, the 14th consecutive month of higher median prices, the Realtors group said.

The Warren Group reported a 4 percent jump in median prices to $307,000.

"With the supply of homes for sale low and prices escalating we may have reached a turning point where the recovery continues but with less frenzy," Warren said.

The organizations use slightly different figures in their calculations.


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Mass. gas prices up another 2 cents per gallon

BOSTON — The cost of a gallon of gasoline in Massachusetts is up another 2 cents to an average of $3.46.

AAA Southern New England reports Monday that the current price for a gallon of self-serve, regular is 8 cents higher than a month ago and a nickel higher than at the same time last year.

The per-gallon price in the Bay State is also now 15 cents above the national average for the same grade.

AAA found self-serve, regular selling for as low as $3.35 and as high as $3.69 per gallon.


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New euro member Latvia brings dirty money headache

RIGA, Latvia — When Latvia adopts the euro on Jan. 1, it will bring with it a banking sector that is swelling with suspicious money from Russia and the east — just as the currency bloc is trying to clamp down on such havens.

It was just nine months ago that the eurozone had to rescue Cyprus, a similarly tiny member state that also specialized in attracting huge deposits from Russia. Since then, eurozone leaders have vowed to crack down on financial sanctuaries and improve transparency.

But as the 18th member of the eurozone, Latvia is likely to see a greater — not smaller — influx of dirty money as the country will be viewed as safer than other former Soviet states while financial oversight remains loose.

"Immediately after Latvia joins the eurozone, I imagine we're going to see an actual spike in dubious money flowing in," said Mark Galeotti, a professor at New York University whose researches organized crime in the former Soviet Union.

For years, Latvia's political and financial leaders had hoped to create a mini-Switzerland in Eastern Europe — a place where capital in unstable countries such as Russia or Kazakhstan could either park for a while or channel its way further west to banking meccas like Zurich or London.

After a slight dip during Latvia's financial crisis in 2008-2010, the amount of non-resident bank deposits has risen rapidly over the past two years ahead of the country's entry into the eurozone.

"The issue with Latvia is that you have a pretty permissible political environment, and you have the massive and quite efficient infrastructure for managing these funds from the East. The question is, why wouldn't you want to go to Latvia?" said Galeotti.

Latvia has 20 domestically registered banks, or one for every 100,000 residents — an extremely high ratio. Of these, about 13 are considered "boutique banks" that rely almost exclusively on foreign funds, mainly from volatile countries of the former Soviet Union. Rather than lend to businesses and consumers, these tiny financial institutions primarily serve as safe havens or money transfer operations. They tend to keep their money in liquid assets so it can quickly be moved.

Some of the money is dirty. This year, Latvia's bank regulator slapped a 100,000-lat ($200,000) fine on a bank for failing to exercise sufficient internal controls with money connected to the so-called Magnitsky case.

Sergei Magnitsky was a Russian lawyer who worked for Hermitage Capital, an investment fund whose chief executive accused Russian police officials of stealing $230 million in tax rebates after illegally seizing Hermitage subsidiaries. In 2008 Magnitsky, at the age of 37, died in prison of pancreatitis, allegedly after being beaten and denied medical treatment.

Hermitage Capital claimed that tens of millions of dollars of the stolen money passed through Latvia.

Claiming confidentiality and a risk of destabilizing the industry, Latvia's regulator refused to "name and shame" the bank connected to the case. This refusal, as well as the small size of the fine, triggered criticism and renewed doubts about the regulator's integrity despite imminent eurozone membership.

"The regulators don't have teeth," said Galeotti. They maintain "a kind of culture that emerged in Latvia in the late 1990s...which was ultimately 'Latvia desperately needs business,' and therefore the role of the regulator is not to impede business," he said.

Non-resident bank deposits comprise nearly half of all deposits, which is unusual, and they are on the rise. In the first quarter of 2013, non-resident deposits soared 17.7 percent compared with the same period in 2012 — clear evidence that Latvia's attractiveness as a safe haven is not relenting. The economy has been the fastest-growing in the EU for the past three years and the country displays a remarkable degree of political stability.

"Latvia has historically had a large banking sector, has extremely strict data privacy laws, speaks Russian and 'gets' the post-Soviet mentality," said Tom Wallace, an analyst C4ADS, a Washington, D.C.-based firm that specializes in data analysis and security.

Wallace, who co-authored a report on the links between Latvian banks and Ukrainian companies involved in the illicit arms trade, added that Latvia "is an EU member and so acts as a conduit to Western financial institutions. If you have money you want to discreetly move out of the former Soviet Union, Latvia has a lot of advantages."

Latvia's banks face scrutiny in a eurozone-wide review by the European Central Bank, which is trying to find weak spots in the financial sector to improve transparency and confidence.

The good news for the eurozone is that Latvia's banking system is not too big compared with its economy. That means the country is less likely to need a bailout from its new eurozone partners to save its banks, should they run into trouble, as happened with Cyprus. As of Sept. 30, the banks held nearly 20 billion lats ($30 billion) in assets, or about 120 percent of gross domestic product, far less than the average 320 percent in the eurozone in 2011.

On the flip side, for Latvia, the eurozone is now a safer economic bloc to join than it was 18 months ago, when many investors worried it would break apart. Markets have calmed since the ECB vowed in the summer of 2012 to do whatever it takes to keep the bloc together.

Latvia's regulator says it has introduced a number of controls aimed at anti-money laundering, counter-terrorist financing, and preventing excessively large sums from entering the banking system. Experts agree that the regulator has acknowledged the risks of dirty money and is addressing them, even if slowly.

But Latvian bankers say that pinpointing dirty money is not cut-and-dry.

"As anti-laundering regulations become more elaborate across the globe, so are the schemes used by persons who try to avoid them," said Arvids Sipols, who has worked 16 years in Latvian banks and is now on the board of Nord Capital Markets, a Riga-based asset management firm.

"In certain cases, simple filters do work and help to avoid the acceptance of rogue players," said Sipols. "In other cases it will not suffice, and it is not a banker's job to become an international detective."


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Federal health care sign-ups pass 1 million mark

HONOLULU — The government's rehabilitated health insurance website has seen a December surge in customer sign-ups, pushing enrollment past the 1 million mark, the Obama administration says.

Combined with numbers for state-run markets, that should put total enrollment in the new private insurance plans under President Barack Obama's health law at about 2 million people through the end of the year, independent experts said.

That would be about two-thirds of the administration's original goal of signing up 3.3 million by Dec. 31, a significant improvement given the technical problems that crippled the federal market during much of the fall. The overall goal remains to enroll 7 million people by March 31.

"It looks like current enrollment is around 2 million despite all the issues," said Dan Mendelson, CEO of Avalere Health, a market analysis firm. "It was a very impressive showing for December."

The administration said that of the more than 1.1 million people now enrolled in the federal insurance exchange, nearly 1 million signed up in December. The majority came days before a pre-Christmas deadline for coverage to start in January. Compare that with a paltry 27,000 in October, the federal website's first, error-prone month.

"We experienced a welcome surge in enrollment as millions of Americans seek access to affordable health care coverage," Marilyn Tavenner, the head of the Centers for Medicare and Medicaid Services, said in a blog post announcing the figures.

The numbers don't represent a full accounting for the country.

The federal website serves 36 states. Yet to be reported are December results from the 14 states running their own sites. Overall, states have been signing up more people than the federal government. But most of that has come from high performers such as California, New York, Washington state, Kentucky and Connecticut. Some states continue to struggle.

Still, the end-of-year spike suggests that the federal insurance marketplace is starting to pull its weight. The windfall comes at a critical moment for Obama's sweeping health care law, which becomes "real" for many Americans on Jan. 1 as coverage through the insurance exchanges and key patient protections kick in.

The administration's concern now shifts to keeping the momentum going for sign-ups, and heading off problems that could arise when people who've already enrolled try to use their new insurance.

"They've got the front end of the system working really well," said insurance industry consultant Robert Laszewski. "Now we can move on to the next question: Do people really want to buy this?" He also estimated 2 million will probably be enrolled this year.

The fledgling insurance exchanges are online markets for subsidized private coverage. Obama needs millions of mostly younger, healthy Americans to sign up to keep costs low for everyone. Open enrollment runs until the end of March.

Tavenner said fixes to the website, overhauled to address widespread technical problems, contributed to December's figures. But things haven't totally cleared up. Thousands of people wound up waiting on hold for telephone help on Christmas Eve for a multitude of reasons, including technical difficulties.

"We have been a little bit behind the curve," acknowledged Rep. Joaquin Castro, D-Texas, whose state has the highest proportion of uninsured residents.

"Obamacare is a reality," conceded one of the law's opponents, Rep. Darrell Issa, R-Calif., who as House oversight committee chairman has been investigating the rollout problems. However, he predicted it will only pile on costs.

"The fact that people well into the middle class are going to get subsidies is going to cause them to look at healthcare...sort of in a Third World way of do we get subsidies from the government for our milk, for our gasoline and, oh, by the way, for our healthcare," said Issa.

For consumers who successfully selected one of the new insurance plans by Dec. 24, coverage should start on New Year's Day. That's provided they pay their first month's premium by the due date, extended until Jan. 10 in most cases.

But insurers have complained that another set of technical problems, largely hidden from consumers, has resulted in the government passing along inaccurate data on enrollees. With a flood of signups that must be processed in just days, it remains unclear whether last-minute enrollees will encounter a seamless experience if they try to use their new benefits come Jan. 1.

The White House says the error rate has been significantly reduced, but the political fallout from website woes could pale in comparison with the heat that Obama might take if Americans who signed up and paid their premiums arrive at the pharmacy or the emergency room and find there's no record of their coverage.

Officials are also working to prevent gaps in coverage for at least 4.7 million Americans whose individual policies were canceled this fall because they fell short of the law's requirements. The administration has said that even if those individuals don't sign up for new plans, they can seek a waiver that would spare them from the law's tax penalty for remaining uninsured.

A few states offering their own updates have posted encouraging totals, including New York, where more than 200,000 have enrolled either through the state exchange or through Medicaid, a government program expanded under Obama's health law to cover more people. In California, a tally released Friday showed nearly 430,000 have enrolled through the exchange so far.

Castro and Issa spoke on NBC's "Meet The Press."

___

Alonso-Zaldivar reported from Washington. Reach Josh Lederman at http://twitter.com/joshledermanAP


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Stocks are flat in quiet end-of-year trading

NEW YORK — Stocks were little changed in midday trading Monday as investors closed out their positions for what has been a historic year on Wall Street.

Traders had little corporate or economic news to work through. The bond market was quiet as well. The yield on the benchmark 10-year Treasury note continued to hover near 3 percent

KEEPING SCORE: The Dow Jones industrial average was up seven points, or 0.04 percent, to 16,484 as of 11:50 a.m. Eastern time. The Standard & Poor's 500 index fell one point, or 0.1 percent, to 1,840 and the technology-heavy Nasdaq composite fell four points, or 0.1 percent, to 4,152.

TWITTER TUMBLE: Twitter was among the biggest decliners in early trading. Twitter lost $3.36, or 5 percent, to $60.40. Wall Street analysts said Friday that the stock, which is still up 47 percent this month alone, had risen too far, too fast. Twitter slumped 13 percent on Friday.

OTHER TECH STOCKS LAG: Facebook lost $1.42, or 3 percent, to $54.02 and Netflix fell $6.50, or 2 percent, to $361. Both were among the year's biggest gainers. Facebook rose more than 100 percent in 2013 and Netflix nearly 300 percent.

ALL QUIET: "It's pretty quiet out there, and we've already done our preparation for 2014, so I doubt we'll see the market move much here," said Ron Florance, deputy chief investment officer for Wells Fargo Private Bank.

HOLDING PATTERN: Stocks are likely to be in a holding pattern until next week, once all the mid-week holiday disruptions are over, Florance said. Both the New York Stock Exchange and the Nasdaq Stock Market will be closed Wednesday for New Year's Day. The first big piece of news investors will have to work through will be the December jobs report, which will be released Jan. 10.

CROCS TREAD HIGHER: Crocs rose $2.30, or 17 percent, to $15.63 after the company announced it was getting a $200 million investment from private equity firm Blackstone and its CEO was retiring.

JAPAN CLOSES OUT HISTORIC YEAR: Japan's Nikkei stock index closed higher for a ninth straight day Monday. The index ended 2013 up 57 percent, its best year in decades.


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Wells Fargo in $591 million deal with Fannie Mae

SAN FRANCISCO — Wells Fargo says it has made a $591 million deal with Fannie Mae to settle obligations related to loans that went bad after the housing bubble burst.

The deal announced Monday covers loans made through 2008. Wells Fargo & Co. says it resolves nearly all repurchase liabilities it has with Fannie Mae, the federal mortgage buyer.

After adjusting for other repurchases, San Francisco-based Wells Fargo will pay out $541 million, which it says it had already set aside. Wells Fargo agreed in September to pay $869 million to Freddie Mac to settle similar claims.

Lenders including Bank of America, Citigroup and JPMorgan Chase have also agreed to settle mortgage claims with Fannie this year.


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NBC's 'Today' show returns to glory days

NEW YORK — The glory days returned for the "Today" show — for one day at least — as NBC's morning show brought back Bryant Gumbel and Jane Pauley for a one-day nostalgia turn as co-hosts on Monday.

Gumbel and Pauley, who worked together on "Today" from 1982 to 1989, joined birthday boy Matt Lauer on the set. It wasn't ceremonial: with Savannah Guthrie and Natalie Morales off, Gumbel and Pauley had to work.

"Getting up was a little difficult and the studio has changed enormously," Gumbel said. Pauley said the fast pace makes the experience go "like a bat out of heck."

NBC hoped the trio's easy camaraderie enticed viewers. After a well-publicized tumble last year, the show runs second in the ratings to ABC's "Good Morning America." Pauley, who does occasional reports for the show, left as host in 1989 while Gumbel gave way to Lauer in 1997.

There were a few film clips of Pauley back in the big hair days. "I understand Gene Shalit's standing by to review 'Back to the Future,'" Al Roker quipped during a weather segment.

Gumbel and Pauley easily navigated a cooking segment (poached salmon and pasta). That was like old times, but the segment on what is trending on Twitter wasn't.

Not everyone's memory was clear. A sign held up by a fan outside the studio misspelled Gumbel's name.

___

Online:

http://www.today.com/


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