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BUSINESS NEWS BRIEFING & ECONOMIC ANALYSIS
미 한국상공회의소 매일경제정보
www.kocham.org
2007년 10월 26일 (금)


        뉴욕 증시 전망

뉴욕 증시의 주요 지수들이 상승세를 보이고 있다.  다음 주 월요일과 화요일 미 연준의 공개시장 위원회가 예정된 가운에 금리 인하에 대한 기대감이 투자심리를 자극하고 있다.  이와 더불어 기대이상의 3분기 실적을 거둔 마이크로 소프트 소식이 기술주의 상승세를 주도하고 있다.

        경제지표 및 주가지수

주요 시장 데이터
다우존스 지수        지수: 13671.92        전일비: - 3.33 (- 0.02%)
나스닥 지수        지수: 2750.86        전일비: - 23.90 (- 0.86%)
S&P 500 지수        지수: 1514.40        전일비: - 1.48 (- 0.10%)
10년 만기 재무부 채권        수익률: 4.385%        전일비: +0.30%
미 서부텍사스산 중질유 선물 (10월물)        가격: 배럴당 90.46달러        전일비: +3.36달러
시카고 선물거래소 옥수수 선물 (12월물)         가격: 부셸당 366.2센트        전일비: +9.6 센트
뉴욕상품거래소 금 (12월물)        가격: 온스당 771.00달러        전일비: +5.40달러
원/달러 환율        환율: 916.59원/달러        전일장: 917.85원/달러
엔/달러 환율        환율: 114.03엔/달러        전일장: 114.22엔/달러
달러/유로 환율        환율: 1.4313달러/유로        전일장: 1.4262달러/유로
참고: 전일 종가기준

금일 발표되는 주요 경제지표
10월 미시간 대 소비자 태도지수 (consumer sentiment) –수정치        80.9        잠정수치: 82.0
참조: The Wall Street Journal



        뉴욕증권거래소(NYSE) 상장 한국기업 주가동향

회사명        Name        NYSE
상장명        종가        거래량        주가변동액
국민은행         Kookmin Bank        KB        $80.05        649,300        +1.59 (+2.02%)
한국전력          Korea Electric Power Corporation        KEP        $21.42        950,500        +0.03 (+0.14%)
한국통신         KT Corporation        KTC        $23.33        490,900        - 0.04 (- 0.17%)
LG 필립스 LCD        L.G. Philips LCD Co., Ltd        LPL        $23.51        900,900        +0.26 (+1.11%)
POSCO        POSCO        PKX        $174.78        2,153,300        +2.88 (+1.67%)
신한금융그룹         Shinhan Financial Group        SHG        $117.20        50,600        +0.98 (+0.84%)
SK 텔레콤         SK Telecom Co., Ltd        SKM        $30.24        1,546,300        - 0.78 (- 2.51%)
우리금융지주         Woori Finance Holdings Co., Ltd        WF        $61.00        6,500        - 1.80 (- 2.86%)
참조: NYSE MarkeTrac 전일 종가기준

Today’s Notable Quote:

“The price seems to be driven by some speculation and also has a political premium in it rather than actually some of the fundamental drivers.”
-- Peter Voser, Royal Dutch Shell CFO

국제 석유시장이 펀더멘탈에 의해 움직이기 보다는 투기성자본 유입과 중동 지역의 긴장 문제에 좌지우지되고 있다고 유럽 최대의 석유회사인 쉘의 CFO가 밝혔다.  

“The sanctions are a shot across the bow of the entire energy sector.”
-- an anonymous U.S. official who worked on the U.S. financial sanctions on Iran

“Having been in the marketplace for almost 30 years, I can’t see a scenario for it, or precautionary measures.  Certainly when you lose 2.5 million barrels a day of Iranian production, which is the most likely case scenario, that will literally just make the market go berserk.”
-- Abdulsamad al-Awadi, an oil trading consultant and former executive at Kuwait Petroleum

“If war breaks out, anticipate that all hell will break loose in the oil markets.”
-- Robin West, chairman of PFC Energy.

어제 발표된 미국의 이란 제재 조치의 핵심 중 하나는 세계 2의 원유 매장국인 이란의 에너지 산업에 타격을 주는 것이다.  특히, 이란 혁명수비대가 큰 영향력을 행사하고 있는 석유와 가스산업에 직격탄(a shot across the bow)을 쏴 이란의 핵무기 개발을 막아보겠다는 것이다.  이와 함께 프랑스의 토탈, 한국의 현대 등 이란 현지에 가스와 유전을 개발하고 있는 외국계 기업들도 제재조치의 직간접 영향을 받을 가능성이 높아졌다.  하지만, 유럽 등 다른 나라들이 미국의 조치를 얼마나 성의있게 따라줄지는 의문이다.


세계 경제 포커스

국제유가, 100달러 돌파 가능성 높아져
The Wall Street Journal; The Financial Times; The Washington Post

        유가, 어제 역대 최고치 경신
국제유가가 어제 또다시 역대 최고치를 경신했습니다.  지난 주말과 이번 주 초 안정세를 보이던 유가는 수요일 미 에너지부가 미국 내 에너지 재고량이 예상 외로 감소했다는 발표하면서 상승세를 타기 시작했다.  그런데, 어제 석유수출국 기구 (OPEC)이 원유생산을 크게 늘리지 않을 것이라는 관측과 중동 여기 저기에서 긴장이 고조되고 있다는 소식이 동시다발적으로 터지면서 국제 유가는 하루 만에 3달러 이상 올랐다.  특히, 미 행정부가 이란에 경제제재 조치를 발표한 것이 쿠르드 반군에 공습을 가한 터키 정부가 지상군 투입 가능성까지 시사한 것과 맞물리면서 중동의 긴장 상태가 급격히 높아졌다.






        국제유가 100달러 돌파할 것인가?
골드만삭스가 이미 2년 전에 예고한 것처럼, 많은 전문가들이 100달러 돌파는 시간문제라고 전망하고 있다.  밤 사이 뉴욕상업거래소 아시아 전자거래에서는 국제 유가가 배럴 당 92달러를 돌파하기도 했다.  세계 석유 수요가 인도와 중국 효과로 크게 늘어나, 산유국들의 추가 생산 여력이 얼마 되지 않는다는 우려감이 원유시장으로 유입되고 있는 막대한 투기자본을 자극해 유가의 변동폭을 크게 하고 있는 것이 가장 큰 요인 중 하나이다.  원유시장 동향을 주시하고 있는 많은 경제학자들은 수요-공급 문제만 놓고 본다면 국제 유가는 배럴당 80달러를 넘길 이유가 없다고 말하고 있다.  특히, 세계 최대의 석유소비국인 미국 경제의 침체가 수요감소로 이어질 것이라는 전망이다.  국제유가 상승에도 불구하고 미국 내 휘발유 평균 가격도 갤론 당 2.82달러로 안정적인 모습을 보이며 별다른 수급문제를 보이고 있지 않다.  하지만, 에너지 수요가 큰 겨울철이 다가오고 있는 것이 수요 급감의 가능성을 막아주고 있는 형편이다.  한해 1000억 달러의 헤지펀드 자금이 원자재 시장으로 유입되고 있는 상황에서 중동의 긴장문제가 어떻게 진행되는 가에 유가가 일시적이나마 100달러를 돌파하는 것은 큰 무리가 없을 것으로 보인다.  하지만, 유가 100달러 시대가 장기적으로 갈 가능성은 크지 않다.      


        산업별 주요 뉴스와 분석

경제전망        미국 경제, 여기저기서 빨간 불
        The Wall Street Journal

        주택경기, 제조업, 노동시장 모두 약세
주택경기 침체 속에서 제조업이 약세를 보이고 있는 것이 가장 큰 문제다.  어제 발표된 내구재 감소 소식은 특히 중요한 의미를 갖는다.  내구재라고 하면, 자동차와 컴퓨터 등, 수명이, 적어도 3년 이상 되는 제품을 말한다.  그런데, 내구재 산업은, 미국 경제의 중추를 이루고 있는 동시에, 다른 많은 산업들과 직,간접적으로 관련되어 있다.  따라서, 내구재 주문이 늘었는가 줄었는가는, 미국 경제의 건강 상태를 말해 준다.  그런데, 이처럼 중요한 내구재 주문이, 두 달 연속 감소했다는 소식은 주택경기 침체와 금융 위기로, 미국 경제의 성장엔진이 주춤하고 있다는 것을 의미한다.  

        주택경기 침체와 금융권 피해 늘어

중고 주택 매매가 역대 최저치를 기록한 지난 9월 신축 주택 매매도 신통치 않았던 것으로 나타났다.  지난 9월에, 신축주택매매가, 8월에 비해 조금 늘어나기는 했지만, 8월 매매건수가 워낙 많이 떨어졌기 때문에, 매매가 늘어난 것이 큰 의미를 갖지 못했다.  지역별로 살펴보면, 서부에서는 매매건수가 8월에 비해 40% 가까이 증가했지만, 중서부와 북동부에서는 크게 감소한 것으로 나타났다.  한편, 금융권의 피해 규모도 점점 더 드러나고 있다.  월가의 대표적인 투자은행인, 메릴린치가, 서브 프라임 모기지 시장 붕괴로 입은 피해가, 앞으로 더 늘어날 것이라는 전망이 나왔습니다.  메릴린치는 지난 수요일 3 분기에 약 80억 달러 규모의 자산손실을 기록했다고 발표했는데, 월 가에서는 피해규모가 앞으로도 더 늘어날 것으로 전망하고 있다.  대형금융회사인 메릴린치가 서브 프라임 파장으로 주식 시가총액의 20%가 넘는 손해를 본 것으로 나타나면서, 투자자들은 도대체 금융권의 총 피해규모가 얼마나며, 우려의 목소리를 내고 있다.


금융        시티은행, SIV 통한 수익구조 드러나
        The Wall Street Journal

        영국 금융감독당국에 제출한 보고서에서 드러나
투자자회사 (SIV)를 운용해 온 시티은행 등 주요 금융회사들의 수익구조가 일부 공개됐다.  시티은행의 경우, 운용규모가 큰 2개의 자회사를 통해 한 해 최대 5억 달러의 수입을 올린 것으로 나타났다.  시티은행과 같은 대형은행의 경우 5억 달러가 큰 액수는 아니지만, 은행장부에도 전혀 기록되지 않고 추가비용을 전혀 들이지도 않은 상태에서 마치 공돈처럼 생기는 고정수입치고는 규모가 작지 않은 편이다.  SIV들은 단기자금을 빌려 고수익•고위험 자산에 장기투자를 하는 방식으로 돈을 벌었는데, 은행은 주로 거래수수료 명목으로 많은 이익을 거뒀다.  하지만, SIV들이 경영난에 빠지면서 지급보증을 선 모은행들도 위험에 노출될 가능성이 높아졌고, 고정수입도 날아갈 판이다.















중국        고도성장으로 세계 자본시장 영향력 확대
        The Wall Street Journal

        중국경제, 높은 성장률 속 문제점
중국 경제가 지난 분기 11.5%의 성장을 기록했다.  국내 이자율이 상승하고 수출지원 혜택이 줄어들면서 경제 성장률은 2분기의 11.0%에서 조금 하락했다.  물가상승률도 6.2%로 높은 수준이지만 조금은 안정세를 보이고 있다.  하지만, 수출경제의 비중이 너무 높다는 것이 일부에서는 우려감을 자아내고 있다.  경제성장률 중에서 소비증가가 차지하는 비중이 지난 해에는 39%를 차지했지만 올해는 37% 떨어졌다.  대신 수출증가의 비중은 41.6%로 작년보다 더 늘어났다.  특히, 미국 경제에 대한 의존도가 높다는 것이 문제다.  전문가들은 중국 등 아시아가 세계경제에서 차지하는 비중이 많이 높아졌지만, 내수소비의 비중이 아직은 작기 때문에 실제로 미치는 영향력을 아직은 크지 않다고 평가하고 있다.  

        중국 공상은행, 남아공 스탠다드 은행 지분 인수
중국이 전세계 금융권 내 영향력을 확대하고 있다.  중국 최대 국영은행인 공상은행(ICBC)는 지난 25일 남아프리카 최대은행인 스탠다드 은행의 지분 20%를 약 55억 달러에 매입할 것이라고 밝혔다.  이번 주 초에는 중국의 중신증권이 미국 투자은행인 베어스턴스에 10억 댤러를 투자하기로 하는 전략적 제휴를 체결하기도 했다.  이외에도 중국 개발은행은 올해 초 바클레이즈에 30억 달러를 투자하기로 합의하는 등 중국의 세계 금융시장 진출이 본격화되고 있다.


환경        UN 보고서, “국제사회에 대한 마지막 경고”
        The International Herald Tribune

        환경문제, 회기불가능점이 다가온다
유엔이 ‘국제사회에 대한 마지막 경고’라며 환경보고서를 발표했다.  이 보고서는 인류의 심각한 환경파괴로 더 이상 되돌릴 수 없는 시점을 지날 수도 있다고 보고서는 경고했다.  지난 20년간 어류 남획, 기온상승, 수질오염, 야생동물 멸종, 농지 파괴 등 얼룩진 세계 환경은 미래를 더욱 비관적으로 만들 거이며, 미래 경제성장의 잠재력을 위협할 수 있다고 전망했다.  


        영문기사 원문

Oil Tops $90 on Range of Worries
Tensions in the Mideast And Tightening Supplies Push Crude Prices to Record
The Wall Street Journal
Oil soared past $90 a barrel to a record on a mix of unsettling news that ranged from Middle East tensions to supply concerns, demonstrating the delicate state of world petroleum markets heading into the energy-intensive winter months.
The events -- which included a statement by a top OPEC official to The Wall Street Journal that the world's oil cartel doesn't see a need to check the price surge -- might not have moved oil markets dramatically by themselves. But oil's 3.9% rise yesterday to an exchange high of $90.46 a barrel shows that prices are responding to a slew of economic and geopolitical forces and suggests further big swings could lie ahead. (Please see related article3.)
Abdalla Salem El-Badri, secretary-general of the Organization of Petroleum Exporting Countries, told the Journal yesterday the cartel isn't worried about prices hovering around $90 a barrel as long as global economic conditions are good.
"We have no price band or price target," Mr. El-Badri said on the sidelines of a meeting with Chinese energy officials in Beijing. "If it persists for a longer period, then we start worrying. But at this time, we don't know what's going to happen next month."
Traders have speculated that the group could announce another production increase when it meets in December, or even earlier at an OPEC heads-of-state summit in Saudi Arabia next month. Attention at those meetings will focus on Saudi Arabia, which takes the lead role in the cartel's decisions because it is the group's largest producer and the only member with major excess production capacity.
Iran, the world's third-largest oil exporter, also figured in yesterday's price action. Analysts said the rise in futures prices stemmed from a blend of geopolitical unease, including a new raft of sharp U.S. economic sanctions on Iran. Markets were also digesting a midweek U.S. government report that pointed to declining crude-oil supplies in the U.S., with particularly strong demand for scarce light, sweet crude, which is easier to refine into fuels like gasoline.
•  The News: Oil prices hit another high, driven by tight supplies, Middle East jitters and concerns that OPEC may not be ready to boost output.
•  The Big Question: All eyes now turn to whether oil -- already up about $40 a barrel this year -- could top $100, which is seen as a key psychological milestone.
•  What's Next: So far the soaring prices have had a muted impact on the global economy, as well as on energy demand. But some oil-producing countries fear the U.S. could tip into recession, which could slacken the country's thirst for oil.
The market got its first nudge when reports broke that the Bush administration planned to slap economic sanctions on two prime components of Iran's military, as well as several of the country's top state-owned banks. The steps marked a ratcheting up of pressure from Washington and deepened fears that the Bush administration may be set on a path toward outright conflict with Iran over its nuclear program.
Then came the comments from OPEC's Mr. El-Badri, reported on WSJ.com yesterday, suggesting that the cartel didn't plan to step up production to add supplies to the world market.
Traders next reacted to a report from Oil Movements, a British company that monitors oil-tanker traffic in an effort to get around the secrecy of major oil exporters such as Saudi Arabia and Kuwait. The company's weekly report, which went out in the morning, said OPEC shipments for the first 10 days of November appeared to be "well below the October equivalents."
The report estimated that October OPEC shipments were likely to be about 300,000 barrels a day more than their September level, "but early indications for next month are that there may be nothing more to come." The world consumes more than 80 million barrels of oil a day, but a minor disruption can have an outsize effect because the margin between supply and demand has narrowed in recent years.
Adding to the turmoil, the Turkish government announced that it reserved the right to invade northern Iraq whenever it wanted, despite strong U.S. and Iraqi objections. The Turkish air force has been flying continuous bomber-jet sorties near the Iraqi border as tensions have risen over fighting between Turkish troops and Kurdish separatist guerillas in northern Iraq. Turkey is a primary conduit for oil shipments from Kirkuk, Iraq's main oil field in the north.
The Oil Movements report caused ripples in large part because it damped expectations that OPEC was going to boost oil shipments next month. OPEC, which produces about 40% of the world's oil, last month pledged to pump an additional 500,000 barrels a day as of Nov. 1 in a largely futile effort to check the rise in oil prices. So any hint that the promised increase may not actually happen was enough to spook an already tense petroleum market.
Some OPEC members, including Saudi Arabia, fear higher prices will damp demand for cartel oil. Others, such as Iran, would prefer to keep prices high. Mr. El-Badri said that there is plenty of oil available and that prices have been rising on political turmoil in the Middle East, and investors dumping equities and putting their money in oil futures.
The rise in oil prices still hasn't stopped the resilient U.S. economy. The average U.S. price for a gallon of regular gasoline stood at $2.82 yesterday, according to AAA. Despite oil's rise, that is up only one penny from the average price a month ago, due to smooth U.S. refinery runs and strong imports. But with winter on the way, November heating-oil futures yesterday went up 6.64 cents to settle at $2.4084 a gallon, an exchange record. (Oil prices remain below their record when adjusted for inflation of $101.70 a barrel reached in the spring of 1980 in the wake of the Iranian revolution.)
Historically, oil consumption rises during winter in the Northern Hemisphere because of its use as a heating fuel in many places. But according to the International Energy Agency, the Paris-based energy watchdog for Western countries, stocks fell 33 million barrels, or 360,000 barrels a day, between July and September. That contrasts with an average third-quarter increase in stocks of 280,000 barrels a day during the past five years.
The agency in August said the amount of oil in tanks had fallen below the five-year average to about 54 days of consumption.
"We're in an extremely tight supply situation," said Ann-Louise Hittle, a Wood Mackenzie oil-market analyst. That, she said, was giving credence to "peak oil theory" and the idea that supply won't be able to meet growing demand.
Oil analysts trace the current tightness in the market back to 2004, when China's energy-hungry economy pushed up oil demand by three million barrels a day. OPEC increased its production that year by three million barrels a day to meet increased demand, but that led to a collapse in the group's productive spare capacity, its traditional lever for influencing world oil prices.
This year, the situation has become worse. OPEC placed constraints on its production starting last November, driving up oil demand by 1.3 million barrels a day in 2007, according to Wood Mackenzie. Developed economies responded by drawing down their crude inventories, leading to more tightness in the market.
Now, the combination of record oil prices, falling home prices and the growing subprime-mortgage crisis have increased fears that the U.S. economy could possibly slip into recession.
Worries of a downturn in the U.S., both the world's largest economy and biggest energy consumer, have only deepened the sense of caution among some OPEC members, who must try to make the straddle between boosting supplies to tamp down prices while not sparking a precipitous fall in prices through oversupply.
OPEC ministers have complained in recent weeks that the latest price surge has little to do with fundamentals such as supply and demand. They argue that the price increase is driven more by market speculation, the falling U.S. dollar and refining bottlenecks.


U.S. Turns Up the Heat on Iran
Sanctions Against Banks, Military Unit Carry Risks; Impact on Foreign Firms?
The Wall Street Journal
WASHINGTON -- By imposing a broad set of financial restrictions on Iran, the Bush administration has set out to break down Tehran's elite military units and isolate its merchant class, all with an eye toward inducing change in the country.
The administration also appears to hope that, by striking such a tough stance, it will prod or even alarm allies into following suit in isolating Tehran.
NEW MOVES

•  The News: The U.S. sanctioned Iranian banks and the military, raising pressure on the world financial system to cut ties with Tehran.
•  The Background: The move comes amid a hardening of the U.S. stance on Iran over its nuclear program and support for terrorism.
•  The Catch: The effort faces numerous obstacles and raises fears internationally about possible military action.
But the moves, combined with heightened rhetoric against Tehran for its nuclear program and alleged support of terrorism, are raising concerns at home and abroad that the administration is laying the groundwork for military action. That has the potential to backfire by pulling apart the fragile coalition of countries working to cobble together international sanctions.
The White House's hawkish stance contributed to further roiling in the global oil markets yesterday, with crude oil spiking to a record close of $90.46 a barrel.
Iran condemned the U.S. moves, saying they would bring further instability to the Middle East. "The hostile policies of America ... are against international regulations and have no value," Foreign Ministry spokesman Mohammad Ali Hosseini said in Iran's state-owned media.
Yesterday's announcement by the State Department and Treasury specifically targeted Iran's elite military unit, the Iranian Revolutionary Guard Corps, as well as key state-owned banks, companies and officials that U.S. officials charge with supporting terrorist and proliferation activities. The sanctions are the stiffest since 1979, when Iranian militants seized the U.S. Embassy in Tehran and held its staff hostage for more than a year. They also mark the first time the U.S. has directly imposed sanctions against the armed forces of a sovereign nation.
U.S. officials said they expect the measures will force European, Asian and Middle Eastern nations to curb business ties with Iran, fearing possible U.S. penalties.
Only American companies are directly affected by the sanctions. Any assets found in the U.S. belonging to the designated groups must be frozen. Americans are also forbidden to do business with the designated organizations.
But foreign companies could also potentially be blacklisted if they are found to be aiding Iranian activists. The U.S. has the world's largest economy and the most influential banking system, and much of the world's business is done in dollars.
Firms aiding Iran's oil-and-gas sector are seen as particularly exposed, as companies controlled by the Revolutionary Guards, such as the engineering firm Khatam ol-Anbia, now dominate the energy sector. Asian and European firms investing in Iran's gas fields and oil pipelines include France's Total SA, Spain's Repsol YPF SA, Royal Dutch Shell PLC and South Korea's Hyundai Group.
"The sanctions are a shot across the bow of the entire energy sector," said one U.S. official who worked on the sanctions.
Other Western companies working in Iran -- such as France's auto companies, PSA Peugeot-Citroën and Renault SA, and Sweden's telecommunications giant, Telefon AB L.M. Ericsson -- also could be vulnerable because of their involvement in sectors controlled by the Revolutionary Guards, said Western diplomats.
Administration officials expressed optimism that the actions could work to freeze Tehran out of the global financial system, as foreign businesses fear being tarnished by their association with Iranian entities.
"As awareness of Iran's deceptive behavior has grown, many banks around the world have decided as a matter of prudence and integrity that Iran's business is simply not worth the risk," Treasury Secretary Henry Paulson said. "It is plain and simple: Reputable institutions do not want to be the bankers for this dangerous regime."
Washington's strategy, however, faces numerous obstacles, said diplomats and businessmen, and has raised fears internationally about possible military action. Many European, Asian and Arab states have indicated an unwillingness to risk their business and diplomatic ties with Iran at a time when its energy assets are in increasing demand. A number of diplomats also said Washington's aggressive action risked ripping apart the countries working for a third round of international sanctions against Iran through the United Nations. Russia and China, which hold veto power at the U.N. Security Council, are allies or business partners of Iran and have resisted the drive for new U.N. sanctions.
"I think running around like a lunatic -- with a razor and waving a red banner -- isn't the best way to solve this kind of problem," Russian President Vladimir Putin said in response to the announcement. Questioned by reporters in Portugal, where he is attending a summit of Russian and European Union leaders, he added that sanctions "worsen the situation, leading it to a dead end."
Key Gulf states are also voicing wariness about challenging an Iran that is increasingly aggressive and cash-rich. The United Arab Emirates' city of Dubai serves as Iran's principal overseas financial center, according to businessmen and diplomats. And the six member states of the Gulf Cooperation Council (GCC) recently started negotiations on a free-trade agreement with Iran, even as these countries have taken some steps to crack down on military sales to Iran and Syria, said U.S. officials.
"We cannot ignore the importance of Iran in terms of the GCC economy," Abdulla bin Ahmed al Saleh, the United Arab Emirates' undersecretary for economics, said in a recent interview, before the sanctions were announced. "We have a long history of trade relations with them."
The U.S. sanctions announced yesterday hit Iran's Revolutionary Guard Corps along with eight affiliated companies and five Guard officials and the Guard's elite Quds Force unit. The Revolutionary Guard Corps and its officials were designated as proliferators of sophisticated ballistic-missile technology, while the Quds Force was accused of backing the Taliban in Afghanistan and other terrorist groups. Also targeted are Iran's defense-ministry logistics unit, three officials in its ballistic-missile program and state-run banks.
State-owned banks Bank Melli and Bank Mellat were named as facilitators for Tehran's weapons programs, while Bank Saderat was designated as a supporter of global terrorist groups for its activities in Afghanistan, Iraq and the Middle East. The Treasury Department also accuses Bank Melli, which has branches all over the world, of covertly conducting transactions for the previously blacklisted Bank Sepah, a major cog in the country's weapons programs.
Stuart Levey, the U.S. Treasury's undersecretary for terrorism and financial intelligence, alleged that Bank Melli engaged in deceptive practices, such as removing Bank Sepah's name from wire-transfer records. He also said that Bank Melli delivered more than $100 million to the Quds Force between 2002 and 2006.
Bank Melli officials in the United Kingdom weren't available for comment yesterday. Bank Saderat officials have denied wrongdoing in prior statements responding to U.S. allegations. Their offices were closed for the day at the time of the latest allegations, as were those of Bank Mellat.
The new designations could prove particularly troublesome for Iranian businesses because of their role in facilitating trade after the other big state-run banks were sanctioned by the U.S. and most banks in Western Europe either curtailed ties or cut them off altogether.
The latest moves "will make it much more difficult for [Iranian businesses] to engage in international commerce financed by their state-owned banks," Mr. Levey said.
The sanctions come amid a general hardening of the White House's stance on Iran. This week, Ambassador David Satterfield, the State Department's top Iraq adviser, told reporters that U.S. officials had "no question in our minds whatsoever" that "the most senior levels of the Iranian government" were actively involved in the funneling of advanced Iranian weaponry to Iraq.
But administration critics, pointing to past intelligence failures on Iraq, say administration hawks may be distorting the evidence in an attempt to make the case for a military attack on Iran. The military has presented confiscated weapons that it claims were manufactured in Iran, but neither the administration nor the military has ever presented conclusive evidence of Iranian government involvement in any weapons shipments. Iran has long denied funneling any of its armaments into Iraq.

Shell says ‘speculation’ inflating oil prices
The Financial Times
Royal Dutch Shell, Europe’s biggest oil company, warned that record high oil prices were being driven by speculation and political tension, not a lack of supply.
The comments by Peter Voser, chief financial officer, came as the group reported that third-quarter earnings, on a current cost of supply basis, had fallen 8 per cent to $6.39bn as a result of lower refining margins and sales volumes.
But record high oil prices meant that profit attributable to shareholders rose 16 per cent to $6.916bn.
“The price seems to be driven by some speculation and also has a political premium in it rather than actually some of the fundamental drivers,” Mr Voser said at a news conference.
Exploration and production revenues fell to $3.51bn, from $3.74bn in the past year, hit by lower volumes, higher tax charges and higher costs.
Third-quarter production slipped to 3.14m barrels of oil equivalent a day from 3.25m b/d a year ago.
Gas and power earnings were $568m, down from $781m a year ago, as a result of lower marketing and trading results and a planned shutdown of the Bintulu gas-to-liquids plant in Malaysia.
Downstream earnings also fell, to $1.65bn from $2.16bn a year ago, mainly due to lower refining margins. Refinery processing intake was down 1 per cent.
Jeroen van der Veer, Shell’s chief executive, said: “Given the weaker industry refining margins we have seen in the quarter, these are satisfactory results.”
The figures were ahead of analysts’ forecasts and Shell’s A-shares rose 12p to £20.68 in London. Analysts had on average been expecting cost of supply net profit, excluding non-operating items, of $5.52bn, according to a Reuters’ poll.
Some analysts said that the results were buoyed by Shell’s corporate line, which saw $413m in earnings, reflecting higher insurance underwriting income, improved interest income and favourable foreign exchange movements. This has raised questions about whether core operations will be able to ride out some of the geopolitical and market conditions surrounding the oil and gas industry.
Shell expects to revive production from operations including a gas-to-liquids plant in Qatar and from its Canadian oil sands projects.
The quarterly dividend rises 14 per cent to 36 cents.
Shell’s drop in third-quarter profits follows a trend elsewhere in the global oil and gas industry.
In spite of record oil prices, the major multinationals are struggling to book growth in profits, taking hits in their refining divisions or facing industry-wide cost pressures and delays to important new oil and gas projects.
John S Herold, an oil and gas research firm, and industry advisory group Harrison Lovegrove recently estimated that spending by the 228 global oil and gas companies increased 45 per cent to $401bn in 2006 but they generated only a 2 per cent increase in reserve volumes to 263bn barrels of oil equivalent.
The majors are still recording multibillion-dollar profits, but not at the levels they enjoyed before cost inflation took off.
BP’s announcement this week of a 45 per cent reduction in third-quarter replacement cost profits was followed by drops in earnings at ConocoPhillips.
And analysts predict similar gloomy news for Exxon’s results next week.
At both Shell and BP, Europe’s two biggest oil companies, upstream production has fallen since 2005.
Shell’s third-quarter production of 3.14m barrels of oil equivalent per day from 3.25m boe/d a year ago compares with BP’s 4 per cent drop to 3.65m boe/d.
Shell’s refinery processing intake was down 1 per cent while BP’s refining throughput was also slightly down.
Yet companies such as Shell and BP seem to have beaten market expectations on profits, prompting some in the industry to question whether their prognosis has been too severe.
Others say Shell’s $413m earnings – which reflect higher insurance underwriting income, improved interest income and favourable foreign exchange movements – mask weaker performance in its operating divisions.
“Do not be fooled,” says Jason Kenney, senior oil and gas equity analyst at ING. “The potential for deals, reserves replacement [and] exploration upside all look cautious.”
Other analysts disagree, saying Shell is in a strong cash position to keep pushing with new projects, having $14bn in hand at the end of September.

Strike on Iran Would Roil Oil Markets, Experts Say
Price Hits Record Close; U.S. Tightens Sanctions
Washington Post
A U.S. military strike against Iran would have dire consequences in petroleum markets, say a variety of oil industry experts, many of whom think the prospect of pandemonium in those markets makes U.S. military action unlikely despite escalating economic sanctions imposed by the Bush administration.
The small amount of excess oil production capacity worldwide would provide an insufficient cushion if armed conflict disrupted supplies, oil experts say, and petroleum prices would skyrocket. Moreover, a wounded or angry Iran could easily retaliate against oil facilities from southern Iraq to the Strait of Hormuz.
Oil prices closed at a record $90.46 a barrel in New York yesterday as the Bush administration tightened U.S. financial sanctions on Iran over its alleged support for terrorism and issued new warnings about Tehran's nuclear program. Tension between Turkey and Kurds in northern Iraq, and fresh doubts about OPEC output levels also helped drive the price of oil up $3.36 a barrel, or 3.8 percent.
Although the Bush administration is not openly threatening a military strike against Iran, the president recently spoke of needing to avoid "World War III," and Vice President Cheney said that the United States would "not stand by" while Iran continued its nuclear program. "We will not allow Iran to have a nuclear weapon," he said.
Oil traders said that even if the chances of military conflict with Iran were small, the huge run-up in oil prices that would result encourages some speculators and investment funds to bid up the price of oil, adding a premium of $3 to $15 a barrel.
"It will be chaos. . . . I can't really see it," said Abdulsamad al-Awadi, an oil trading consultant and former executive at Kuwait Petroleum. "Having been in the marketplace for almost 30 years, I can't see a scenario for it, or precautionary measures" that oil companies could take. "There are no precautionary measures."
"If war breaks out, anticipate that all hell will break loose in the oil markets," said Robin West, chairman of PFC Energy, a District oil consulting firm.
"If it's a clinical strike like the one that Israel carried out on the Syrian installations and no one admitted to doing it, you'd have a fierce reaction from Iran, but it would probably die down," said Leo Drollas, deputy executive director and chief economist of the Center for Global Energy Studies, a London think tank founded by former Saudi oil minister Ahmed Zaki Yamani. "If it were a botched job with lots of targets and civilians dying and Iranians retaliating . . . it could escalate and the price of oil could shoot up to God knows where."
Ominous warnings about oil prices have preceded other conflicts in the oil-rich Persian Gulf, and spikes in crude prices proved fleeting in the past.
But during earlier conflicts in the region -- the Iran-Iraq war in the 1980s, the Gulf War in 1991 and even the 2003 U.S.-led invasion of Iraq -- the world's oil-exporting countries had enough capacity to make up for the disruption in oil exports. Not so this time. Demand has grown, and output has fallen in many oil-producing countries.
Saudi Arabia, which accounts for about 8.7 million barrels a day, produces almost all of the world's excess oil and is capable of boosting output by about 2.5 million barrels a day, Drollas said. Iran produces 2.5 million barrels a day.
Moreover, while some members of the Organization of the Petroleum Exporting Countries fear that high prices would hurt oil demand and undercut long-term revenue, others see no need to boost output. In a meeting with reporters in Caracas yesterday, Venezuelan energy minister Rafael Ramirez said that the market is "well supplied." Earlier, Venezuelan President Hugo Chavez said he expected oil prices to climb higher.
"Can the world do without Iranian oil exports at the present time? The answer is: just," said a senior planning executive at a major European oil company who spoke on condition of anonymity because the company has a policy not to publicly discuss oil prices. "There is enough spare capacity to offset Iranian exports, but it would be very tight. If every spigot were open everywhere, including Saudi Arabia, that should just about cover it. But it's not comfortable."
"That's just arithmetic," he added, "but is it all as simple as that? The question is: What would the Iranians do in retaliation?"
He and others noted that Iran would not need to attack well-guarded facilities in places like Saudi Arabia or harass tankers in the U.S.-patrolled Strait of Hormuz, at the head of the Persian Gulf. It could simply collaborate with Shiite forces in southern Iraq to cut off Iraq's roughly 1.7 million barrels a day of production, further weakening its neighbor while driving up prices for its own exports.
"Certainly when you lose 2.5 million barrels a day of Iranian production, which is the most likely case scenario, that will literally just make the market go berserk," al-Awadi said. Asked whether the companies he worked with had contingency plans, he said, "The oil industry does not have contingency plans. We are not military people."
The senior executive from the European oil company said that his firm did not have contingency plans, either. "You come to a point where you say it's indefinable," he said. "You sit around and ask, 'What would we as a company do differently?' The answer is nothing. You deal with it at the time."
Most industrialized nations do have contingency plans; they have strategic petroleum reserves that could be tapped during an emergency. The U.S. Strategic Petroleum Reserve, which was tapped during Operation Desert Storm in 1991 and after Hurricane Katrina in 2005, has nearly 700 million barrels, enough to cover about 68 days of U.S. oil imports from all sources.
Yesterday, Secretary of State Condoleezza Rice said that Bush is "committed to a diplomatic course on Iran," but she added that U.S. patience is "not limitless, and allies need to know that."
"These crises have a habit of bursting on the scene and leading to unforeseen places," Drollas said. "Everyone wants it not to happen, but it's like a crash happening slowly. You can see the two cars coming toward each other. . . . There's an inevitability about it."

Banks' SIVs, Emerging From Shadows
U.K. Filings Show Vehicles Provided Rich Profit Streams
The Wall Street Journal
As Citigroup Inc. and other U.S. banks seek to raise as much as $100 billion for a rescue package for a group of investment funds, they aren't just trying to avert a financial crisis: They are also working to shore up -- particularly for Citigroup -- what has been a very profitable business.
United Kingdom regulatory filings show how the opaque funds, known as structured investment vehicles, or SIVs, generated hundreds of millions of dollars in profit for investors and for the banks and firms that created the vehicles, with the top two of Citigroup's seven funds bringing in nearly $50 million a year at their peak. Although that is a small share of profit for a large bank like Citigroup, it is painful to lose given that the funds didn't require much overhead.
"I'd say it's a pretty big deal," says Ganesh Rathnam, a stock analyst who covers Citigroup and other banks for Chicago research firm Morningstar Inc. "It was steady income that came from out of nowhere for them."
The filings with the Financial Services Authority also detail how the funds, now the target of a rescue effort spurred by the U.S. Treasury Department, managed to sidestep U.S. and U.K. taxes by incorporating in an offshore tax haven. Citigroup funds gained dispensation to avoid taxes in the Cayman Islands.
As early as next week, Citigroup, which created the first SIVs in the late-1980s, Bank of America Corp. and J.P. Morgan Chase & Co. are expected to complete a term sheet for a so-called superfund, which would buy securities from SIVs in an attempt to avert a fire sale that could further destabilize global credit markets. Not all the banks participating in the superfund operate SIVs.
Filings with the U.K. financial regulator shed light on how the SIVs operated and just how much profit they generated. SIVs make money by pocketing the difference between the interest they pay on their short-term IOUs and the higher rates they earn on their longer-term investments. The vehicles provided SIV managers -- often banks -- with steady income and a share of the SIVs' investment earnings, without requiring any big expenditures or adding any liabilities to their balance sheets.
According to the filings, Citigroup's largest fund, Centauri, paid its core investors $62.7 million in the year ended September 2006, up from $45.7 million in the previous year. Citigroup collected fees of more than $24 million.
By incorporating in an offshore tax haven such as the Cayman Islands, the SIVs also managed to avoid paying taxes to the U.S. government. Several Citigroup funds say in filings that they made no provisions for a tax bill, because there are no taxes on income or gains in the Cayman Islands, where they are registered.
The Treasury Department stated it doesn't back efforts to avoid taxes, saying, "With respect to existing SIVs, there could be many legitimate reasons, including nontax reasons, for establishing such an entity in an offshore jurisdiction, especially if many of the investors are foreigners."


China's Economy Sizzles, But Flaws Limit Global Role
The Wall Street Journal
BEIJING -- While China delivered another quarter of double-digit economic growth, its persistent weakness in consumption is likely to limit how much support the nation can provide to the global economy as the U.S. slows.
Data announced Thursday show that China is still growing extremely rapidly, with year-to-year expansion of 11.5% in the third quarter, although the pace of growth has eased after government measures to prevent the economy from spiraling out of control.
The latest statistics also show that consumer spending is accounting for a smaller share of Chinese economic growth this year than last, and the dependence on exports has increased. Stronger consumption would help address trade imbalances and increase the chance of China playing a bigger role in helping sustain the world's economic expansion.
Thursday's announcement contained some encouraging news. The third-quarter growth rate was a modest slowdown from the worryingly high 11.9% rate for the second quarter. Inflation, although still high at 6.2%, also has come down slightly from its recent peak.
Those results were enough for government officials to claim that their recent policies -- including higher lending costs at banks and lower tax benefits for exporters -- have averted overheating for now. Analysts now forecast a gradual easing in the pace of China's expansion in coming months.
Growth in gross domestic product is likely to fall below 11% in 2008 -- still extraordinarily fast by global standards, especially for a country that will soon edge out Germany as the world's third-largest economy. Whether China's rapid growth can be maintained has become increasingly important as the possibility of a recession in the U.S. has risen.
"Previously, when the U.S. would falter, we would see that global growth would evaporate. It seems that there's a little more of a chance of growth being sustained right now," says David Cohen of Action Economics in Singapore. "The U.S. is somewhat less important than it was a half-dozen years ago because of the dramatic growth of Asia."
The acceleration in China's economy in the past few years has had two main drivers: a boom in housing, infrastructure and factory construction, and a dramatic surge in exports. There has been a slight moderation in both areas in recent months, but growth continues at a high rate: Investment spending has expanded by 25.7% so far this year, compared with a 27.3% gain at the same point of 2006. And China's trade surplus, which leapt 74% in the second quarter, increased a mere 50% in the third quarter, a slowdown that mostly reflects tax changes for exporters and a high base of comparison last year.
Yet both of those sources of growth hold risks, which have increased as China's reliance on them has grown. Enthusiastic companies and local governments are investing in lots of projects now, but many of them could turn out to be unnecessary in a few years' time, creating a drag on the economy. And while the export-manufacturing sector is humming as consumers in the U.S., Europe and Japan snap up Chinese-made goods, a drop in consumer spending in rich countries could hit it hard. That has prompted many calls, both inside and outside China, for a shift in the country's growth model.
"China has proven to the world that it can grow fast, but can it grow differently and, ultimately, grow smarter?" U.S. Treasury Secretary Henry Paulson said in a speech on Tuesday. "Bold structural policies are needed to shift China's growth away from heavy industry, high energy use and dependence on exports."
China's government says it is moving in that direction. "Increasing the contribution of consumption to economic growth has been an important focus of our economic policies in the last few years," Li Xiaochao, spokesman for the National Bureau of Statistics, told reporters Thursday as he announced the latest figures. He said wage increases and welfare programs are putting more money in Chinese consumers' pockets.
Mr. Li said preliminary estimates show consumer spending has accounted for 37% of China's economic growth so far this year. Yet that means consumption is actually becoming relatively less important: It contributed 39% to growth in all of 2006, according to figures previously published by his bureau. And China's dependence on exports, which accounted for 21.4% of economic gains in the first nine months of 2007, as well as on investment, which contributed 41.6%, has increased.
The relatively large role of exports, and the relatively smaller role of consumer spending, in China's economy is one reason why its growth hasn't become more of a driver of activity elsewhere. China's construction boom has benefited the world's producers of raw materials and heavy equipment, but its consumers don't buy many other goods from overseas.
The big emerging economies of China and India "do account for a lot of growth, but the initial impetus to growth still comes very much from domestic demand in the rest of the world and not domestic demand generated independently in Asia," Steven Dunaway, deputy director of the International Monetary Fund's Asia and Pacific department, said on Oct. 19.
That means trends in the global economy are becoming more, not less, important to China. Mr. Li, the statistics-bureau spokesman, said the weakening U.S. real-estate market, the fallout from the subprime-mortgage crisis, and high oil prices are major global risks that could affect China. "Because prospects for world economic development are uncertain, there is also some uncertainty about the impact on our nation," Mr. Li told reporters, adding that his government is ready to take what policies are necessary to ensure "the fast and stable growth" of the Chinese economy.


China Makes Splash, Again
ICBC Takes 20% Stake In South African Bank; Got Lots of Cash? 'Invest'
The Wall Street Journal
A $5.5 billion investment by China's biggest bank in South Africa is the latest sign of China's growing power as an exporter not just of toys, sweaters and MP3 players, but of capital.
Yesterday, the state-owned Industrial & Commercial Bank of China Ltd., based in Beijing, announced it was purchasing a 20% stake in Standard Bank, South Africa's largest bank by assets, for 36.67 billion rand ($5.5 billion). The deal will be the largest overseas investment by a Chinese entity and follows a string of billion-dollar-plus investments by China's rapidly growing finance sector.
CHINA'S REACH

•  What Happened: Industrial & Commercial Bank of China Ltd., based in Beijing, announced it was purchasing a 20% stake in South Africa's largest bank.
•  What it Means: China is flexing its financial muscle. This is the latest in a string of investments in overseas financial institutions by China.
•  What's Behind It: China has a huge interest in developing ties to commodity-rich Africa. It also wants to make more investments abroad.
Earlier this week, Chinese brokerage Citic Securities Co. agreed to invest $1 billion in Wall Street investment bank Bear Stearns Cos. as part of a strategic alliance. State policy lender China Development Bank has invested $3 billion in Barclays PLC. And in June, Beijing paid $3 billion for 9.3% of Blackstone Group LP, the private-equity firm, through a newly formed sovereign-wealth fund that is expected to make more investments.
In recent months, investment bankers also have pitched U.S. financial-services company CIT Group Inc. to ICBC, according to presentation materials reviewed by The Wall Street Journal. But it doesn't appear to have bitten so far. CIT, based in Livingston, N.J., said it doesn't comment on "market rumors or speculation." ICBC declined to comment on the matter.
Beyond the finance sector, Chinese oil and commodities firms also have been investing aggressively in Africa, hoping to lock in resources to satisfy the country's fast-growing demand for energy. China's investments in places like Sudan have drawn criticism in the West.
Behind China's growing clout abroad are the twin pillars of a fast-rising trade surplus and supercharged economic growth.
China's exports, combined with rising foreign direct investment in its economy, are bringing in mountains of cash. The World Bank predicts China's current-account surplus will reach $378 billion, or 11.9% of gross domestic product, for 2007.
Meanwhile, the Chinese government says the country's economy grew at an 11.5% annual rate in the third quarter, an extraordinary rate given the global economic uncertainty created by the sharpening U.S. housing downturn and mortgage crisis.
The U.S. turmoil has left banks elsewhere in the world facing a cash crunch, and the costs of acquisitions have risen, notes David Li, director of the Center for China in the World Economy with Tsinghua University in Beijing.
"In contrast, the stocks of Chinese banks keep on rising," he said. "Liquidity is very strong. What do you do when you have cash? Invest."
China's banks were loaded with bad loans a few years ago and were largely unattractive to foreign investors. Today, its major listed banks have reduced nonperforming loans and built up their capital cushions, and they rank among the world's biggest lenders, based on stock-market value, thanks in part to Beijing-led bailouts.
Yesterday, ICBC reported third-quarter net profit of 22.46 billion yuan ($3 billion), up 76% from a year earlier on higher interest income, fees and commission income. Its assets now total a trillion dollars, and for the nine months ended Sept. 30, it had cash and cash equivalents of 427.4 billion yuan.
Chinese authorities worry that their growing cash piles could lead domestic banks into new rounds of risky domestic loans that would add to inflationary pressure. So the government has begun to encourage certain kinds of capital outflows, including offshore acquisitions.
The latest deal will be paid for in cash.
Last week, at a national Communist Party congress that is held twice a decade to set development goals, party chief Hu Jintao said the country would "accelerate the growth of Chinese multinational corporations and Chinese brand names in the world market."
China had total investments in Africa of around $11.7 billion as of 2006, according to China's Ministry of Commerce. In Beijing yesterday, ICBC Chairman Jiang Jianqing said, "Our strategic cooperation joins the hands of Asia's largest bank and Africa's largest bank," adding that "this will help push forward the development of Africa-China trade relations."
In the U.S. and Europe, Chinese expansion remains politically sensitive, prompting Chinese companies to look at other countries and to favor minority stakes rather than outright takeovers.
ICBC is China's biggest bank by market capitalization. It raised nearly $22 billion last October in the world's biggest initial public offering of stock. It has almost 17,000 outlets on the mainland but only 98 branches overseas.
Standard Bank operates in 18 African countries and in 21 countries outside the continent. In August, it posted a 30% rise in first-half net profit, to 6.35 billion rand, on brisk economic growth in its home market.
Senior ICBC officials have broadcast their interest in growing globally by making acquisitions in developing countries and by setting up outposts under the bank's own banner in key financial centers like New York and London. Their goals are twofold: diversify revenue streams and serve Chinese companies as they expand beyond mainland China.
ICBC recently bought an 80% stake in Seng Heng Bank Ltd. of Macau and last year completed a deal for a small Indonesian lender. Earlier this year, ICBC applied to convert its New York representative office into a branch.
In its Beijing headquarters, ICBC has set up a small, dedicated team to evaluate opportunities pitched to the firm by investment banks. It has employed its strategic partner, Goldman Sachs Group Inc., as financial adviser on deals. Goldman Sachs owns a 4.9% stake in ICBC and advised on the Standard Bank deal.
In an interview yesterday, Standard Bank Chief Executive Jacko Maree said that "a lot of business we do is China-driven -- resources and mining -- and we're going to direct business to each other in those areas." When asked about potential political pressure from having a major Chinese shareholder, he said: "If a deal a Chinese company wants to do conflicts with our values and principles, we're just not going to do it."
The two banks have agreed to contribute $250 million each to start up a private-equity fund to channel Chinese and global money into mining and resources companies. Private contributions to that fund are expected to bring it over an initial $1 billion, Mr. Maree said.

UN issues 'final wake-up call' on population and environment
The International Herald Tribune

PARIS: The human population is living far beyond its means and inflicting damage on the environment that could pass points of no return, according to a major report issued Thursday by the United Nations.
Climate change, the rate of extinction of species and the challenge of feeding a growing population are among the threats putting humanity at risk, the UN Environment Program said in its fourth Global Environmental Outlook since 1997.
"The human population is now so large that the amount of resources needed to susta