US economy 'uncomfortably' close to stalling: IMF report
Washington: Though the US economy may appear to be emerging from a period of sluggish growth, it is "uncomfortably close" to the "stall speed" associated with past recessions, the International Monetary Fund said yesterday.

In its annual report on the United States, the IMF cut its outlook for US gross domestic product growth but said it shares the assessment of US authorities "that the most likely scenario is a soft landing."

The IMF said its "baseline" forecast for the US economy is for GDP growth of 2 per cent over the course of 2007 - down slightly from its 2.2 per cent forecast in April.

"However, growth is uncomfortably close to the 2 per cent 'stall speed' associated with past recessions, even if other accompanying factors — rising unemployment and high real interest rates — are not evident," the IMF said.

The report said US growth is likely to accelerate to 2.7 per cent in 2008, still considered below the optimum pace of 3.0 to 3.5 per cent.

In 2006, the world's biggest economy expanded 3.3 per cent.
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Blackstone float raises $4.13 billion
The partial stock market listing of US private equity giant Blackstone, that will see its boss Steve Schwarzman receive a bumper sum, has raised $4.13 billion.

The 13.2-per cent stake in the company, at $31 at the higher end, values the private equity firm at about $33.5 billion.

The Chinese State Investment Company had bought a 10-per cent share in the business for £3 billion in May.

China's investment in Blackstone has raised national security concerns among policy makers in the US. Some US politicians also wanted to see Blackstone's float to be delayed to enable them to introduce a new law to increase the tax paid by private equity firms. At present PE firms like Blackstone can use a loophole to pay significantly less than more typically structured businesses.

Reports say that Blackstone's chief executive, and co-founder, Stephen Schwarzman will walk away from the float with a 24-per cent stake in the business worth about $7.7 billion.
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Bear Stearns pledges $3.2 billion to rescue fund
New York: Investment bank, Bear Stearns Companies, has pledged up to $3.2 billion in loans in order to bail out one of its hedge funds that was facing collapse because of bad bets on subprime mortgages.

The move by Bear Stearns makes it the biggest rescue of a hedge fund since 1998 when Alan Greenspan organized a move to bail out Long-Term Capital Management.

The near collapse of two hedge funds, managed by Bear Stearns, stems directly from the slumping housing market and the fallout from loose lending practices that allowed people with weak, or subprime, credit, to avail of loans. Many of these borrowers are now struggling to stay in their homes.

Though Bear Stearns would appear to have averted a meltdown, there are nagging concerns that if delinquencies and defaults on subprime loans surge, Wall Street firms, hedge funds and pension funds could be left holding billions of dollars in bonds and securities backed by loans that are quickly losing their value.

Souring subprime loans and rising oil prices sent the stock market plummeting with the Dow Jones Industrial Average falling sharply after the announcement of the bailout and closing down 185.58 points.
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Gazprom buys off Siberian gas field from BP
Moscow: State-controlled energy giant, Gazprom on Friday bought a vast natural gas field in Siberia from a unit of British-based petroleum conglomerate BP, in a move that continues the Kremlin's policy of shifting control of the country's major energy projects from foreign to state hands.

There was some surprise in global markets at the terms of the deal, which was more favorable to BP than analysts and some company executives had predicted. There was a general fear that BP would end up getting next to nothing.

BP continues to have major oil holdings in Russia, which account for 10 per cent of its global revenue, analysts said. As for the deal itself, BP obtained an option to purchase a 25 per cent stake in the field within 12 months, which would allow it to share in potentially vast profits.

Under the deal, TNK-BP, BP's joint venture with a group of Russian tycoons, will sell its 62.89 percent stake in the Kovykta gas field, in the Irkutsk region of eastern Siberia, for $700 million to $900 million, according to a BP statement.

Gazprom said the price would be fixed in 90 days. BP had already invested about $500 million in the field.

BP and Gazprom also agreed to invest at least $3 billion jointly in energy projects in Russia and around the world. "This historic agreement lays the ground for powerful cooperation," said BP chief executive officer, Tony Hayward.

Russian officials had accused TNK-BP of failing to meet its license requirements for the Kovykta field, which holds nearly 106 trillion cubic feet of natural gas. President Vladimir Putin recently noted that the field contains the equivalent of all of Canada's reserves.
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