Business and Finance

U.S. Trade Representative Ron Kirk says leaders of Asia-Pacific economies will deliver meaningful steps to boost trade and growth at their annual summit this weekend.

Kirk ended a meeting of regional trade ministers Friday with praise for Japan’s plan to join efforts to forge a Pacific free trade bloc. He said leaders meeting in Hawaii intend to announce a broad outline for the plan.

He said the so-called Trans-Pacific Partnership would complement other efforts to promote freer trade and that other countries can join if they are willing to meet the very high standards required.

China’s trade minister, Chen Deming, said Beijing would seriously consider it if invited. Kirk said, “You should not wait for an invitation.”

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World stock markets were mostly higher Friday following signs of progress in debt-plagued Europe _ a successful bond sale in Italy and the naming of a new leader in Greece.

Benchmark oil rose to $98 per barrel while the dollar slipped against the euro and the yen.

European shares posted gains in early trading. Britain’s FTSE 100 rose 0.6 percent at 5,472.80. Germany’s DAX rose 0.9 percent at 5,919.99 while France’s CAC-40 added 0.8 percent to 3,087.77.

Wall Street was also poised for gains, with Dow Jones industrial futures 0.1 percent higher at 11,869 and S&P 500 futures rising 0.2 percent to 1,239.30.

The gains in Europe were in line with trading earlier in the day in Asia.

Japan’s Nikkei 225 index closed up 0.2 percent to 8,514.47, a day after the index fell to a five-week closing low of 8,500.80.

Hong Kong’s Hang Seng gained 0.9 percent to 19,137.17 and South Korea’s Kospi added 2.8 percent to 1,863.45. Australia’s S&P/ASX 200 rose 1.2 percent to 4,296.50. Mainland China’s Shanghai Composite Index rose marginally to 2,481.08.

Investors were calmed by news that Greece _ which is struggling to pull back from the brink of bankruptcy _ had named Lucas Papademos, a respected economist, as its new prime minister on Thursday.

Another sign of stability came after Italy was able to borrow $6.8 billion at lower interest rates than analysts expected. On Wednesday, Italy’s 10-year bond yields shot up alarmingly, stoking panic in financial markets that the country was heading toward a Greece-style debt crisis.

Confidence was also boosted by the prospect of economist Mario Monti replacing Italian Premier Silvio Berlusconi, who has been viewed as an obstacle to meaningful economic reform.

“Europe still dominates and there are still huge concerns, but Greece has a new prime minister and Italy has a new prime minister in the wings, and everyone is much more aware of the seriousness of the nature of what is confronting Europe,” said Andrew Sullivan, principal sales trader at Piper Jaffray in Hong Kong.

Traders have fretted that debt troubles in Italy and Greece could blow up into a massive liquidity crisis and lead to a global financial meltdown.

The European Union warned Thursday that the grouping of 17 nations that use the euro common currency could slip back into recession next year. The European Commission predicted the euro countries will grow a barely perceptible 0.5 percent in 2012 _ much less than its earlier forecast of 1.8 percent.

Europe has already bailed out Greece, Portugal and Ireland _ but Italy is a much larger economy and its mountain of debt _ $2 faxless cash advance.6 trillion (euro1.9 trillion) _ is far too massive for the continent to cover.

Sullivan said economic data next week on the world’s No. 1 economy will be closely watched.

“If any of that data comes out bad, it’s probably going to put Asia into more of a downturn. If there’s bad data out of the U.S. and more out of Europe, we can see Asia taking another step down,” Sullivan said.

Hong Kong-based ERA Mining Machinery Ltd. shot up 19.7 percent after U.S.-based Caterpillar Inc. said it was seeking to buy the Chinese maker of mining machinery for as much as $886 million. ERA designs, builds, sells and supports equipment for underground coal mining in China.

In Seoul, technology shares jumped. LG Electronics gained 6.4 percent and Samsung Electronics was up 5.1 percent. Shares of SK Telecom Co., South Korea’s top mobile carrier, rose 3.1 percent after the company offered to buy a controlling stake in Hynix Semiconductor, Yonhap News Agency reported.

India’s privately owned Kingfisher Airlines dropped 12.7 percent after the carrier was forced to cancel dozens of flights as pilots and crew called in sick after their October salaries were delayed.

In New York on Thursday, the Dow Jones industrial average rose 1 percent to close at 11,893.86. It plunged 389 points Wednesday after Italy’s borrowing rates soared and talks in Greece to name a new prime minister broke down.

Positive economic data from the U.S. also boosted hopes that the world’s No. 1 economy would avoid a new recession.

The Labor Department reported that the number of people applying for unemployment benefits in the U.S. fell to 390,000 last week _ the fewest since April. The data suggested layoffs are easing and that the economy grew slightly better over the summer than estimated.

The S&P 500 index gained 0.9 percent to 1,239.70. The Nasdaq rose 0.1 percent to 2,625.15.

In currency trading, the euro rose to $1.3653 from $1.3581 late Thursday in New York. The dollar fell to 77.34 yen from 77.66 yen.

Benchmark oil was up 30 cents at $98.08 a barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.04, or 2.1 percent, to finish at $97.78 on Thursday.

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Kellwood is channeling an edgy rock ‘n roll spirit for its newest brand called Lamb & Flag, which is set to launch later this week.

Its promotional materials quote from Jack Kerouac (”Here’s to the crazy ones. The misfits. The rebels.”) and encourage its target audience of 18 to 25 years olds to “join the beautiful rebellion.”

The brand’s e-commerce site — LambandFlag.com — goes up on Friday. And three 3,500-square foot stores, which will sell both the namesake label as well as other third-party brands, will open in Southern California in the coming months.

Michael Kramer, the company’s chief executive, has big hopes for the brand. He told Women’s Wear Daily that if the first stores are successful, he wants to open 20 to 30 more stores in 2013. And one day, he said, he could envision 700 to 800 of them.

This is the Town and Country-based apparel company’s second in-house brand it has launched in recent years. Earlier this year, it also rolled out Blk Dnm, a premium denim line by designer Johan Lindeberg absolutely free credit score.

The company has also been in acquisition mode in the last year or so, buying up brands such as Scotch & Soda, Zobha, and Rebecca Taylor.

Lamb & Flag is named after an English pub near Oxford. The brand will be driven by denim, but will also include off-the-shoulder knits, cinched dresses, logo’d tees, striped hoodies and more. Its prices will range from $56 to $98 for denim, $22 for $68 for tees and $48 to $128 for outerwear. It will also have related fragrances.

Most of Kellwood’s business is in women’s apparel. But Lamb & Flag is aimed equally at men and women.

The first mall-based Lamb & Flag store will open in December in Brea, Calif. It will be followed in January by two more locations in Mission Viejo and Cerritos.

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It sounded like a can’t-miss proposition: Buy the winners, drop the losers.

Developing countries from Brazil to China are expanding much faster than aging economies in the U.S. and Europe, where borrowing during the boom years has been a drag on growth. So the smart money bought stocks in emerging markets, expecting that rapid economic expansion there would provide better rewards. This year, that bet hasn’t worked out.

The broadest measure of U.S. stocks, the Standard & Poor’s 500 index, is down just 0.4 percent this year. Markets in Brazil, China and the like have lagged far behind, even though their economies are still growing faster than the U.S.

“If you were anywhere in the world other than in the S&P 500 this year, you got crushed,” said Greg Peterson, director of research at Ballentine Partners, an investment advisory firm.

The main reason emerging market stocks have suffered deeper losses isn’t because their economies are suddenly sluggish. Analysts say it’s because people have been worried about the European debt crisis and a possible recession in the U.S. It may seem unfair, but when fear of another financial crisis strikes money managers, they tend to flee emerging markets and stay closer to home.

This summer, panicked money managers dropped the most risky investments first. That meant bonds from deeply indebted countries like Italy and Portugal, small companies in the U.S and emerging market stocks got hit the hardest. Even gold, an asset normally considered safe, dropped as traders shifted money into dollars.

“There was a globalization of fear,” says Nathalie Wallace, a senior portfolio manager at Batterymarch Financial Management.

The same thing happened when the U.S. financial crisis hit in 2008. The S&P 500 fell 38.5 percent for the year. But the MSCI Emerging Market index, made up of countries where the banks didn’t peddle subprime mortgage bonds, plummeted 47.3 percent.

“Anytime you see risk and fear coming, you see emerging markets get hit a bit more,” Wallace says. “It doesn’t mean the underlying fundamentals of the economy have changed.”

Consider the collection of emerging-market rising stars known as the BRICs, which stands for Brazil, Russia, India and China. All have economies whose growth exceeds the U.S.

_ Brazil: The economy has expanded 3.1 percent over the past year. The benchmark Bovespa has lost 15.3 percent.

_ Russia: Economic growth of 5.1 percent. The Micex has dropped 11.1 percent this year even after a 10 percent rebound in the past month.

_ India: Economic growth of 7.7 percent. The BSE Sensex index is down 14.4 percent.

_ China: Economic growth of 9.1 percent. The Shanghai Composite has slumped 10 percent this year.

By contrast, the U.S. economy has expanded 1.6 percent over the past 12 months. That’s sluggish compared to the developing world’s stars. And worries that the U.S. could slip into a recession, or that Europe’s debt crisis could tip it into one, have weighed on investors for months. Even after those fears dragged down stocks nearly 20 percent in a month, the S&P 500 outshines indexes in nearly all of the world’s fastest growing economies.

In fact, if you rank the U.S. against emerging markets this year, it places ahead of 20 countries and behind just one, Indonesia.

China and other emerging markets long relied on shipping toys, timber and other goods to consumers in the U.S. and Europe. Trade helped them grow. But that has a downside, says Tim Morris, a portfolio manager at J.P. Morgan’s asset management unit. When a small country hitches its fortunes to U.S. shoppers, it’s bound to suffer when the U.S. economy slows down.

A related problem for many emerging market countries is that they’re dominated by energy and material producers, the type of companies most vulnerable to a global slowdown. Todd Henry, an emerging markets equity specialist at T. Rowe Price, points to Brazil, a country that isn’t as dependent on exports for growth. “It’s a relatively closed economy,” Henry says. “But commodity and energy companies make up a large part of their stock market. So if the world is slowing down, that gets priced in.”

The largest company in Brazil’s stock index is the oil giant Petrobras. When the U.S. economy looks weak, the price of oil falls and the companies that sell oil fall, too. That pushes down Petrobras, which tugs on the Bovespa. In other words, when the U.S. has the sniffles, Brazil’s stock market still catches a cold.

“Americans tend to think our problems are limited to the U.S.,” says Richard Bernstein, chief executive officer of Richard Bernstein Advisors LLC. “But our problems are their problems, too.”

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Regulators have closed small banks in Georgia, North Carolina and New Jersey, boosting to 79 the number of U.S. bank failures this year.

The Federal Deposit Insurance Corp. on Friday seized Piedmont Community Bank of Gray, Ga., with $201.7 million in assets and $181.4 million in deposits. It also shuttered Blue Ridge Savings Bank, based in Asheville, N.C., with $161 million in assets and $158.7 million in deposits. Also closed was First State Bank in Cranford, N.J., with $204.4 million in assets and $201.2 million in deposits.

The failure of Piedmont Community Bank is expected to cost the deposit insurance fund $71.6 million. That of Blue Ridge Savings Bank is expected to cost $38 million, and that of First State Bank, $45.8 million.

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For five years, two of the region’s biggest developers have been working to get NorthPark

A prosecutor has asked a federal judge to sentence a New York hedge fund founder convicted of insider trading charges based on illegal gains of more than $70 million.

The prosecutor, Andrew Michaelson, told Judge Richard Holwell (HAHL’-wehl) on Tuesday that he should reject arguments by defense attorneys. They say Raj Rajaratnam (rahj rah-juh-RUHT’-nuhm) made as little as $7 million through his trades.

Rajaratnam is scheduled to be sentenced next week after his conviction earlier this year.

Prosecutors have asked that he be sentenced to between 23 1/2 years and 29 1/2 years in prison. Defense lawyers have urged leniency, in part for health reasons that remain under seal.

Michaelson says the judge should reject defense arguments that Rajaratnam should only be held accountable for trades he made in personal accounts.

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Kevin O’Leary has written a book so engaging and sympathetic that he risks losing his claim as the Mean One on the hit reality show Dragons’ Den.

In his autobiography Cold Hard Truth, he tells of a difficult Montreal childhood.

When he is 6, his parents undergo “a devastating, acrimonious split,” ending with his father’s early death from alcoholism.

At school, O’Leary discovers he is dyslexic — good with numbers but unable to read — until he enrolls in a revolutionary program that builds his other talents and self-confidence. More: Dragons’ Den star Arlene Dickinson on the art of persuasion

At university, he parlays an aptitude for winning handsomely at barroom shuffleboard into his first business, Special Event Television, featuring the talk show Don Cherry’s Grapevine, precursor to Coach’s Corner on CBC’s Hockey Night in Canada.

Then the real work begins. From his basement, O’Leary launches a computer software firm, which he builds it into The Learning Company, which he eventually sells to the Mattel toy corporation for $4.2 billion.

“Getting rich feels like joy,” O’Leary writes. “A hot burst in the heart.”

Now he runs the O’Leary Funds mutual fund company and appears in the television business shows Dragon’s Den, Lang & O’Leary Exchange on CBC News Network, and Shark Tank on ABC.

At a Toronto coffee shop this week, he spoke about his book. Here is an edited excerpt of his talk with Star business reporter John Goddard.

What does it take to get rich?

Real entrepreneurs who have had success tell me the same thing — they are not pursuing cash wealth. They are trying to be successful in their business and then one day they wake up and they’re rich.

That’s what happened to me. I was living and breathing The Learning Company. I was working 25 hours a day and I loved it.

I was running all over the world doing deals — and I mean everywhere. We had 3,000 employees. We owned the consumer educational software market in reading and math worldwide personal loans for bad credit. Every company like IBM and Apple, and every hardware manufacturer, wanted to do business with us. It was amazing.

I remember waking up one day and looking at the software we were selling to Mattel and saying, “Wow, where did all this come from? Look what we’ve created. Look at this beautiful thing.” (The Learning Company) was very big and very valuable.

Is it true that an entrepreneur must discard the idea of a balanced life?

Yes. If you are an entrepreneur, there is no such thing as balance.

There are periods of time when you need to be myopically, intensely, focused on your business and if you are successful — it may take five years, or three years or 10 years — you are free. You are wealthy. You can start a new business. You can be a philanthropist. You can do whatever you want.

It doesn’t mean that during your whole life you’re imbalanced. It just means that during that period your business will consume you.

What attracted you to Don Cherry?

I formed Special Event Television and I said, “This Don Cherry is a very gregarious guy, very interesting to watch. Let’s let him build his personality, make the show all about him and his dog, and see if people will watch. And it was a monster hit.

In the book, you say that Cherry “uses his opinions as a branding mechanism.” Did you adopt his idea for Dragons’ Den?

Don taught me the value of candour. He would say, “Look, that goalie is no good and here is why.” And he would list three reasons — the guy can’t take a low shot or whatever.

I thought, “Boy, that’s tough,” but people would perk up. And I thought, “Why can’t I apply that same approach to business? Why can’t I have candour in business, because that’s how I feel, too.

Don taught me that — candour and honesty. I believe that it’s important to be factual and honest with people and not to dress it up, just tell it the way it is.

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Factory workers at General Motors are likely to approve a new four-year contract with the company.

Negotiators for GM and the United Auto Workers union agreed to a tentative contract on Sept. 16. Union members have until Wednesday morning to vote. Most local unions with results posted on their websites have approved the deal.

Most of GM’s 48,500 factory workers won’t get annual pay raises under the contract. But they’ll get $5,000 signing bonuses and profit-sharing checks, along with other payments pay day advance. GM has also promised to add at least 5,100 jobs.

Entry-level workers at GM will get raises.

The pressure is now on for bargainers to reach contract agreements at Ford and Chrysler.

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Swiss bank UBS says its chief executive has resigned over a $2.3 billion rogue trading loss.

The bank says its Europe chief Sergio P. Ermotti will take over as interim chief executive until Gruebel’s replacement is appointed.

UBS board president Kaspar Villiger said in a statement Saturday that Oswald had considered it his duty to take responsibility for the massive loss caused by unauthorized trading at its London-based investment banking unit.

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