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U.S. and European central bankers are intensifying pressure on counterparts in emerging-market countries to step up the fight against inflation.

Federal Reserve Vice Chairman Donald Kohn yesterday urged countries where “rapid'' economic growth is elevating prices to respond. Hours earlier, Bank of England Governor Mervyn King said global monetary policy looks “a little lax.'' Bank of France Governor Christian Noyer said the day before that “coordinated, resolute action'' is needed to encourage more exchange-rate flexibility as a way of tackling inflation.

The comments reflect concern among central banks in major industrialized economies that their own campaigns against inflation will be undermined by a failure of others to combat price pressures. Demand in emerging markets is already propelling the cost of commodities such as oil, tin and corn to records.

“The bulk of inflation is coming from emerging markets,'' said Stuart Green, a global economist at HSBC Holdings Plc in London. “The concern in developed economies is that inflation is rising because of pressures outside of their remit and that monetary policy overseas is too loose.''

Morgan Stanley economists calculate about a quarter of the world's economies, representing 42 percent of its population, have “double-digit'' inflation. Almost all are emerging markets. Consumer prices in Vietnam jumped 26.8 percent in June, the biggest annual increase since 1992, data showed yesterday.

`Excess Demand'

“Many suspect that excessive economic policy in major emerging-market nations is causing excess demand for commodities globally,'' said Ashley Davies, a currency strategist at UBS AG in Singapore. Crude oil rose to a record above $1.42 a barrel this week and corn prices climbed to an unprecedented level.

Some central banks are starting to act. Those in Romania, Russia, Brazil, Egypt, Mexico, Chile, Taiwan, the Philippines and India all raised their key interest rates this month. Still, a majority of emerging economies have benchmark rates below the rate of inflation, resulting in negative real interest rates. Morgan Stanley estimates inflation of 5 percent globally compared with an interest rate of 4.3 percent.

Dow Chemical Co. said this week it will raise prices by as much as 25 percent in July to compensate for higher raw-material costs. Rival chemical maker BASF SE also plans to increase prices by as much as 20 percent.

“In those countries where strong commodity demands are associated with rapid growth in aggregate demand that outstrips potential supply, actions to contain inflation by restraining aggregate demand would contribute to global price stability,'' Kohn said in a speech in Frankfurt electronic check payday advance. King told U.K. lawmakers that “the biggest challenge'' for central banks is “trying to ensure a monetary policy framework for the world as a whole that doesn't build into it an excess inflationary impetus.

Dollar Peg

The officials all identified the policy of some Asian governments of linking their currencies to the dollar as a potential source of inflation. Such a practice risks increasing prices as they pursue the same monetary policy as the Fed even while their domestic economies may require higher interest rates.

“By maintaining too tight a peg to the dollar, some countries are led to largely import the U.S. monetary policy, which is often totally unsuited to their economic situation,'' Noyer, who also sits on the European Central Bank's Governing Council, said in an annual report to his government. “This may result in inflationary pressures that are difficult to contain, which then tend to spread to the rest of the world.''

China, Gulf Currencies

While China dropped a peg to the dollar in July 2005, it limits trading in the yuan against the dollar even as inflation is close to its strongest since 1996. In Hong Kong, where the currency is tied to the dollar, producer prices jumped by the most on record in the first quarter.

Gulf states, including Saudi Arabia and the United Arab Emirates, have been under pressure to follow Kuwait and drop their pegs. They have all kept their links, citing the need to keep currencies fixed until they form a monetary union in 2010, and the limited inflationary impact of the weak dollar.

David Hensley, director of global economic coordination at JPMorgan Chase & Co., said the response of emerging-market policy makers may determine how far the major central banks have to raise their own interest rates to pare inflation.

ECB officials have signaled they will raise their main rate by a quarter point to 4.25 percent on July 3 amid the fastest inflation in 16 years. The Fed's Open-Market Committee on June 25 ended a series of seven rate cuts since September and said “upside risks'' to prices have picked up. The Bank of England is now also considering whether it must raise rates to curb inflation. Central bankers convene on June 30 in Basel, Switzerland, for a meeting of the Bank for International Settlements.

Economists at Morgan Stanley say emerging markets may still not do enough to slow inflation because they want to protect growth and prevent their currencies from soaring.

“A massive global tightening of monetary policy is unlikely,'' the economists said in a June 25 report.

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A South Korean appeals court on Tuesday overturned a guilty verdict against U.S. private equity group Lone Star Funds, which had been accused of stock manipulation in a case that has been closely watched as a gauge of the country’s treatment of foreign investors.

Lone Star and the head of its Korean operation, Paul Yoo, were found guilty in February for manipulating stock prices ahead of the group acquiring a stake in Korea Exchange Bank. But Judge Ko Yue-young at the Seoul High Court overturned the verdict, citing insufficient evidence.

"It’s difficult to recognize that Lone Star had the intention to spread false facts or use deceptive schemes," Ko said.

The court’s ruling removed fines of $24.2 million each against Lone Star and KEB.

Yoo, who had been serving a five-year prison term, was freed Tuesday on a suspended sentence of 2 1/2 years for other minor charges, including his refusal to testify at the National Assembly.

Lone Star said it was "very gratified" with the verdict.

"We maintained our innocence throughout this process, and are pleased today to have the court’s confirmation. We hope that now we can all put this behind us and get back to business," chairman John Grayken said in a statement payday loan.

Prosecution spokesman Oh Se-in said it was not clear whether prosecutors would appeal the decision to the Supreme Court.

Dallas, Texas-based Lone Star, the bank and Yoo had been accused of conspiring to lower the share price of KEB’s credit card unit in 2003 by spreading false information.

Lone Star has battled suspicions that it was able to purchase the bank at a bargain price after colluding with government officials to understate the bank’s financial health.

The group has denied any wrongdoing and argued its rehabilitation of the once-financially strapped KEB has been good for South Korea’s economy.

Lone Star has tried to sell its stake in KEB, but had been prevented from doing so due to legal and tax disputes.

Last year, London-based HSBC announced plans to acquire Lone Star’s 51% controlling stake in KEB pending regulatory and government approval.

The watchdog Financial Services Commission said Tuesday it would not yet move ahead on procedures to allow the sale because it was not clear whether prosecutors will appeal the latest ruling. 

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Shares of Yahoo Inc rose as much as 11 percent on Tuesday, reversing earlier declines, after contradictory reports on whether buyout talks with Microsoft Corp were heating up again.

“People are attributing huge outcomes to very small pieces of information,” said Sanford C. Bernstein analyst Jeffrey Lindsay, referring to a flurry of thinly detailed stories citing unnamed sources that caused Yahoo’s stock to spike.

Following a report on technology blog TechCrunch saying merger talks were back on, Yahoo shares sailed as high as $23.71, a 10.5 percent rise from their Monday close and a 15 percent jump from a Tuesday session low of $20.60.

The shares erased most of the gains after TV news channel CNBC said no deal was on the table between the two companies internet payday loans. Other news reports had also suggested talks on a partial deal were back on. The reports all cited unnamed sources.

“It’s ‘he said, she said,’” Canaccord Adams analyst Colin Gillis said.

Both Microsoft and Yahoo declined to comment.

Yahoo shares settled back to trade up 1.6 percent at $21.80 in late Nasdaq trading. The stock had traded down around 3 percent early in the day after a downgrade by broker Thomas Weisel Partners that argued Yahoo was worth only $18 a share.

TechCrunch cited multiple unidentified sources saying Microsoft was back in talks to buy all of Yahoo, after walking away in May. 

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The United States and China have agreed to begin talks on an investment pact that U.S. officials hope can give American companies a stronger foothold in Chinese markets ranging from financial services to heavy industry.

The negotiations could easily take more than a year, making it the job of the next U.S. administration — which takes office in January 2009 — to finish the talks and win Senate approval, U.S. officials said on Wednesday.

“We believe that we’ve got a reasonably good chance of being able to negotiate an agreement with China that will meet the high standards typical of U.S. bilateral investment treaties,” a Bush administration official told reporters, speaking on the condition that he not be identified.

But “it’s obviously going to be a very challenging negotiation” because the United States will be pushing China to lower many longstanding investment barriers, such as caps on foreign ownership of Chinese firms, the official said.

“Whether or not we actually conclude an agreement will very much depend on the quality of what we think we can get out of the negotiation,” the official said.

U.S guaranteed payday loan. SEEKS NATIONAL TREATMENT

Washington will press for a comprehensive pact with high standard legal protections for U.S. investors and “national treatment” provisions requiring China to treat American companies the same as Chinese, the official said.

The national treatment issue is expected to be one of the more difficult area of the talks, since China has not included that in previous investment pacts, he said. 

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China Investment Corp is turning its back on countries that are suspicious of sovereign wealth funds, Gao Xiqing, CIC’s president and chief investment officer, said on Friday.

Gao told a mergers and acquisitions conference that CIC “has a problem” that countries are defining more industries as strategically important.

“Some think we are from a Cold War area and Red China. We are still regarded very much by many countries as a potential threat,” Gao, speaking in English, said.

“We are trying to get financial returns. If there is too much political pressure and too much unpredictability, you just go away,” he said.

“Fortunately, there are more than 200 countries in the world. And fortunately, there are many countries who are happy with us,” he added.

Gao said CIC had walked away from a potential investment in an unnamed country after its leaders flagged political concerns instant payday loan. “We then stopped reviewing that case,” he said.

CIC, which was set up last September to earn higher returns on a portion of China’s official reserves, would soon start making investments in global equities and bonds through fund managers that it is in the process of appointing, Gao said.

In that connection, a source told Reuters earlier this week that CIC was in final talks to entrust each of eight overseas asset managers with $250-600 million worth of fixed income funds focused on emerging markets. 

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MONTREAL–Garda World Security Corp. hauled in a 24 per cent increase in first-quarter revenue to $296 million but net income declined to $4.4 million, compared with $5.8 million in the year-ago period.

Garda World pointed Wednesday to a 51 per cent increase in gross profit to $72 million and a 55 per cent rise in earnings before interest, taxes, depreciation and amortization to $30 million.

The 50,000-employee international security-guard provider and armoured-car operator said net income of 14 cents per share compared with 19 cents per share in the year-earlier quarter, when revenue was $238 million.

The 24 per cent revenue increase came from organic growth of 2.5 per cent, with the rest arising from last year's acquisitions of ATI International and GSS Global.

"We are pleased with these strong results despite the impact of rising energy costs," stated chief financial officer Francois Rodrigue.

"Although most of these costs are assumed by our clients, we were not able to pass through 100 per cent of those costs given the sudden and unforeseeable increases recently http://savingpaydayloans.com. We have taken steps to mitigate the impact for the remainder of the year."

Revenue in Garda World's security-guard operations declined two per cent to $151.8 million, as the additional business from GSS Global was offset by the depreciation of the U.S. dollar against Garda's Canadian-dollar reporting currency.

Revenue in the cash transportation segment swelled 73 per cent to $144.2 million thanks to the ATI International acquisition in April 2007.

Geographically, revenue in Canada was up 2.5 per cent to $119.2 million while revenue from the United States and elsewhere grew 45 per cent to $176.8 million.

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World oil demand will rise at its slowest pace in six years during 2008 as a raft of fuel subsidy cuts in Asia erodes consumption, the International Energy Agency said on Tuesday.

But the adviser to 27 industrialized economies also sharply lowered its projection for supply outside the Organization of the Petroleum Exporting Countries, increasing consumers’ reliance on the exporter group.

In its monthly Oil Market Report, the IEA said global oil demand will rise by 800,000 barrels per day (bpd) this year, 230,000 bpd less than its previous forecast.

The head of the IEA’s oil industry and markets division, Lawrence Eagles, told Reuters this year’s demand growth will be the slowest since 2002, when consumption grew by 735,000 bpd and crude averaged just over $26 a barrel.

“It’s two things http://us-fast-cash-now.com. The easing of subsidies is one of the main factors and historical growth in Asia is stronger than we previously estimated,” Eagles said.

The report adds to evidence that high oil prices, which hit a record $139.12 on Friday, are slowing oil use. The IEA has more than halved its estimate for demand growth this year from 2.2 million bpd in July 2007.

Rising prices have forced several Asian economies to trim subsidies on domestic fuel in recent weeks.

India, Indonesia, Malaysia, Sri Lanka and Taiwan have all revised their administered prices of fuel, which the IEA said would tame oil demand growth in the region slightly. 

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SAN JOSE, CALIF.–Intel Corp. and its much smaller rival Advanced Micro Devices Inc. have been subpoenaed by the Federal Trade Commission about possible anticompetitive behaviour in the microprocessor market, the companies said yesterday.

The move by the FTC to escalate its probe to a formal investigation is the latest in a series of legal challenges facing Intel, the world’s largest computer chip maker.

Antitrust investigations of Intel have been launched in several countries, including the U.S., based on complaints by AMD, also based in California, of unfair business practices that it claims have stunted its growth.

Santa Clara-based Intel, which is facing antitrust charges in the European Union and was fined $25.4 million (U.S.) this week by South Korea’s antitrust regulator, said yesterday that the FTC investigation was considered "informal" until the subpoena for records was served this week.

AMD claims Intel has maintained its dominance in microprocessors – the electronic brains of personal computers – by illegally threatening computer manufacturers with higher prices if they do not stick exclusively with Intel chips.

Intel commands about 80 per cent of the worldwide market for microprocessors. AMD has roughly 20 per cent and claims it has been crippled by Intel’s sales tactics.

Also, lengthy delays in production of new chips have hurt AMD’s competitiveness the past two years, blunting some of the momentum generated with AMD’s 2003 push into the lucrative server market, where it stole substantial market share from Intel.

Intel said it has been co-operating with the FTC probe payday loans in one hour. The company has maintained its business practices are fully legal, despite AMD’s intensifying legal challenges over the past several years.

By opening a formal probe, the FTC can secure not only the records Intel has promised to provide but records from computer manufacturers and other Intel customers who have been involved in the disputed transactions, Intel said.

"The company believes its business practices are well within U.S. law," an Intel statement said. "The evidence that this industry is fiercely competitive and working is compelling.”

Also yesterday, Sunnyvale-based AMD acknowledged receipt of an FTC subpoena in the investigation.

AMD said the probe helps it hold Intel accountable for sales strategies that it argues have hurt AMD’s business and technology consumers.

"Intel must now answer to the Federal Trade Commission, which is the appropriate way to determine the impact of Intel practices on U.S. consumers and technology businesses," Tom McCoy, AMD executive vice-president and chief administrative officer, said in a statement. "In every country around the world where Intel’s business practices have been investigated, including the decision by South Korea this week, antitrust regulators have taken action.”

Intel shares closed in New York down 97 cents to $22.90, as more than 66 million shares traded. AMD shares finished the day, down 35 cents to $7.43, with more than 29 million shares changing hands.

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HarperCollins Publishers Worldwide Chief Executive Jane Friedman is resigning, parent company News Corp said on Wednesday, making her the second book publishing executive to quit in recent weeks as financial pressures weigh on the industry.

Friedman’s decision to quit HarperCollins was her own, according to a source familiar with the matter.

Friedman did not respond to a request seeking comment.

The news was first reported by New York media gossip blog Gawker.com.

Friedman’s replacement will be Brian Murray, president of HarperCollins Worldwide, News Corp said in a statement.

The appointment is effective immediately, the company said.

Friedman’s departure was hastened by the Gawker report, the source said, adding that Friedman was planning to leave before her contract came up for renewal payday loans in 1 hour. “It was her chance to leave on top,” the source said.

“Jane has been a terrific leader who succeeded in attracting some of the world’s most brilliant authors while, at the same time, delivering record-breaking profits,” News Corp Chief Executive Rupert Murdoch said in a statement. “We are enormously grateful for her contributions over the past 10 years and understand her desire to seek new challenges at this point in her career.” 

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Downgrades of three U.S. investment banks, an ouster of Wachovia’s chief executive, and a bleak U.K. housing market outlook from a British mortgage lender shook markets on Monday, reigniting fears that the global credit crunch will continue to hurt the world economy.

Standard & Poor’s on Monday cut the credit ratings of Lehman Brothers (LEH.N: Quote, Profile, Research), Merrill Lynch & Co Inc (MER.N: Quote, Profile, Research), and Morgan Stanley (MS.N: Quote, Profile, Research), and said the outlook for the large U.S. investment banks was now mostly negative.

The rating agency also warned that it may cut Wachovia Corp (WB.N: Quote, Profile, Research) after the U.S. bank ousted its chief executive Ken Thompson, following growing legal troubles and loan losses tied to the purchase of a big mortgage lender just before the U.S. housing market imploded.

S&P’s action rocked global markets already smarting from a stark warning on the state of UK housing from British lender Bradford & Bingley (BB.L: Quote, Profile, Research), as it tumbled into a loss for the first four months of the year and had to secure funding from a private equity group.

“It just reminds everyone how tenuous the situation is in the financial system now,” said Carl Lantz, U.S cash advances. interest rate strategist at Credit Suisse in New York.

Monday’s events sent U.S. and European stock indexes broadly lower and spurred a run to the safety of government bonds.

Several widely watched measures of investor anxiety also surged, reflecting the renewed investor nervousness.

The TED spread, which tracks the relationship between three-month U.S. Treasury bills and the London Interbank Offered Rate, moved to its widest in two weeks, and the Chicago Board Options Exchange Volatility Index, or VIX, shot up by the most in more than two months.  

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