Finance & Business World

The European Central Bank, facing potential losses on asset-backed bonds held as collateral for loans, will require banks to provide more details about the debt, two people familiar with the matter said.

Banks have used asset-backed bonds — notes secured by mortgages and credit card bills — more than any other type of debt to obtain 676 billion euros ($883 billion) of loans from the ECB, according to central bank data. Bank officials are planning to tighten rules as Standard & Poor’s says credit- rating downgrades are “rising sharply” amid Europe’s deepest economic slump in 13 years.

“The ECB needs to know more about the asset-backed bonds it’s taking from banks as collateral because this debt is vulnerable to severe losses in the credit crunch,” said James Zanesi, a Munich-based analyst at UniCredit SpA, Italy’s biggest lender.

Financial companies will have to provide details of each underlying mortgage or loan they package into the debt, said the people, who declined to be identified before the plan is announced. Banks would provide the information to S&P, Moody’s Investors Service and Fitch Ratings, the people said.

Raphael Anspach, a spokesman for the ECB in Frankfurt, declined to comment. Bank officials may complete the rules by the end of the year, the people said.

Further than Fed

The Federal Reserve doesn’t require the same level of information for securities it accepts as collateral for loans to commercial banks, according to the Fed’s Web site. U.S. authorities committed $12.8 trillion to bail out the financial system and cut interest rates to zero to 0.25 percent. The ECB’s main rate is 1.25 percent.

Policy makers in Europe tightened rules twice this year. Since February, the central bank has charged financial institutions more to borrow by reducing the amount it lends against some assets to 88 percent of the collateral from 98 percent. Last month, the ECB started demanding asset-backed securities be rated AAA.

“The ECB needs to know more about the credit quality of the underlying collateral to help it avoid losses,” said Willem Buiter, a professor at the London School of Economics who was a member of the Bank of England’s Monetary Policy Committee from 1997 to 2000.

Boost Trading

The ECB also may require that banks disclose the additional details to investors to encourage trading in the bonds, said the people paperless payday loans. Sales of asset-backed securities shrank to 5.2 billion euros this year, from 45.4 billion euros in the same period of 2008 and 167 billion euros a year earlier, according to data compiled by Milan-based UniCredit.

To obtain credit from the ECB, banks will have to provide information about individual loans such as the value of the property backing a mortgage, how the property was assessed, details on cash flow and whether the borrower is in arrears, the people said.

Ian Linnell, head of European structured finance at Fitch in London, said the company has been working with the ECB on its collateral eligibility rules, while declining to give details.

Daniel Piels, a London-based spokesman for Moody’s, declined to comment on the talks, as did Mark Tierney, a spokesman for S&P.

The ECB’s requirements come after European Union lawmakers passed this week the region’s first direct regulation of credit rating companies, which were blamed for ignoring risks that led to the financial crisis.

ABS Holdings

The ECB held 442 billion euros of asset-backed bonds at the end of last year, or 28 percent of all collateral the bank has accepted since it expanded lending in August 2007 as the subprime mortgage crisis took hold, according to central bank data published April 22. European financial companies have reported $384 billion of credit-related losses and writedowns since the start of 2007.

The ECB asked euro-region central banks last month to set aside 5.7 billion euros to cover potential losses on asset- backed debt after five lenders, including a Lehman Brothers Holdings Inc. unit, defaulted.

Rating downgrades on asset-backed debt are increasing, according to S&P. Last year, the New York-based company cut 17.8 percent of its 9,320 ratings of the bonds, almost eight times the proportion in 2007, S&P said Jan. 27.

Credit quality is deteriorating because Europe’s economy shrank 1.6 percent in the fourth quarter, the most in at least 13 years and faster than economists estimated, the European Union said April 7.

“The market has been crying out for this data for ages,” said Harpreet Parhar, a credit analyst in London at Calyon, the securities unit of Paris-based Credit Agricole SA “It needs it if it’s to restore faith.”

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The Bank of Canada, which pared its key lending rate close to zero this week, will outline new rules today for the possible use of extraordinary measures if the economy needs another boost.

The central bank will release the guidelines along with a Monetary Policy Report at 10:30 a.m. in Ottawa. Economists say Governor Mark Carney may avoid large-scale use of quantitative and credit easing policies because the country’s banks are expanding credit through the biggest global financial crisis since the 1930s.

Canada’s economy is in a deepening recession and inflation will remain below target for more than two years, policy makers said April 21. The bank said cutting its lending rate to a record low 0.25 percent and likely keeping it there for more than a year should be enough to revive the economy and eventually return inflation to its target of 2 percent.

“They have said with absolute clarity to the market that we are done” with interest rate cuts, said Derek Holt, economist at Scotia Capital in Toronto. “They have tipped their hat. They are going to take a very tepid move to quantitative easing in Canada.”

The central bank would most likely purchase assets to inject cash into the economy, according to 14 of 24 economists surveyed by Bloomberg News from April 8 to April 16. The other 10 said existing programs to purchase securities and sell them back to investors would most likely be broadened, without expanding the money supply.

‘Very Dangerous Bet’

The Bank of Canada probably won’t lay out any schedule for extraordinary monetary policy action today, Holt said. “The main idea is to signal policy intentions and to lay it out clearly that if the markets have something other than the bank’s intentions in mind, they could be placing a very dangerous bet,” Holt said.

The new policies could lead the bank to add between C$10 billion ($8.1 billion) and C$50 billion starting by July, the survey found.

“I expect them to basically put forward a ‘Canada-light’ version of quantitative easing and it won’t be as aggressive as the U.S.,” said John Clinkard, economist at Deutsche Bank in Toronto no fax payday loans. “Our economy hasn’t been as stressed.”

The U.S. Federal Reserve has more than doubled the size of its balance sheet, to $2.2 trillion last week from $884 billion a year ago. The Bank of Canada balance sheet grew 53 percent from April 2008 to the end of March this year, rising from C$53 billion to C$81 billion.

Not ‘Pre-ordained’

The central bank this month posted definitions of extraordinary policies on its Web site. It said quantitative easing involves creating new money to purchase government or private assets to encourage new bank lending. Credit easing involves purchasing assets in “credit markets which are important to the functioning of the financial system,” and may not involve creating new money, the central bank said.

Carney has said that publishing the rules doesn’t mean using the policies is “pre-ordained.”

No Canadian bank has sought a bailout since credit worldwide seized up in August 2007, and Carney said in an April 1 speech that foreign banks would need to raise $1 trillion in new capital to reduce their leverage to Canadian levels.

Those stronger balance sheets have helped keep credit flowing through Canada’s economy. Consumer and business credit has risen 11 percent since August 2007 to C$2.53 trillion.

“You can afford to do less and still have the desired impact,” said Eric Lascelles, chief economics and rates strategist at TD Securities in Toronto. “If conditions improve, it might never happen at all.”

Carney will also give more details today of the bank’s forecast for an economy that he said is slipping into a deeper recession. The Bank of Canada two days ago said the economy will shrink 3 percent this year, instead of the 1.2 percent contraction predicted in January. Next year, the central bank says the economy will grow 2.5 percent, down from an earlier growth projection of 3.8 percent, with 2011 growth forecast at 4.7 percent.

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The Bank of Canada may keep its lending rate unchanged at a record low today as policy makers mull more aggressive, extraordinary measures designed to revive a shrinking economy.

Economists are almost split on whether Governor Mark Carney will keep the target rate for overnight loans between commercial banks at 0.5 percent or cut it to 0.25 percent. A slim majority — 13 of 25 economists in a Bloomberg survey — expect no change in the rate, with the other 12 calling for a quarter-point cut. The decision is due at 9 a.m. New York time.

“With interest rates already very low, the Bank of Canada may opt to pursue more unconventional initiatives,” said Paul Ferley, assistant chief economist at Royal Bank of Canada in Toronto. “We are getting indications from other central banks that given the nature of other problems in financial markets, they are better addressed by credit easing.”

Carney has cut the rate from 4 percent since becoming governor in February 2008. Economists say another cut could disrupt the same money-market and banking operations that policy makers are trying to support during the biggest financial crisis since the 1930s. Another cut also wouldn’t give much help to an economy struggling with its first recession since 1992.

“Cutting rates further seems destined to cause more grief than it is worth,” said Stewart Hall, an economist at HSBC Securities in Toronto.

Policy Guidelines

The Bank of Canada said on March 3 it may cut rates again, and lay out guidelines for using “credit and quantitative easing” policies on April 23. Carney has also said he will reduce the bank’s growth projections in the Monetary Policy Report to be published Thursday. The central bank’s January report predicted a contraction of 1.2 percent this year and growth of 3.8 percent in 2010.

The bank aims to keep inflation at 2 percent and has said that a sluggish economy and lower commodity prices will keep increases in consumer prices below that pace until mid-2011.

Even with a record low overnight rate, the central bank’s April 13 survey of loan officers found those who said credit had become more expensive outnumbered those who said it was cheaper by a record 80 percentage points faxless payday loan.

The world’s eighth-largest economy probably contracted by 5.8 percent in the first three months of this year, the most since 1991, according to a separate Bloomberg survey of economists. Consumer confidence is also being eroded because companies have fired more than 2 percent of the country’s workers since October — a total of 356,600. It’s the fastest pace of job reduction since 1982.

Pressure Banks

Cutting the benchmark rate to 0.25 percent could disrupt returns on money-market funds that charge management fees of about 0.50 percent. As well, under the Bank of Canada’s current operations, a lower rate would push to zero the rate the bank pays on overnight deposits it accepts from commercial banks.

A cut in the central bank rate would also put pressure on commercial banks to lower the prime rate on loans for their best customers, even if their costs don’t fall, said Krishen Rangasamy, an economist at Canadian Imperial Bank of Commerce in Toronto.

“That’s a problem for chartered banks. This would reduce profit margins,” he said.

If the bank does cut its rate, it should narrow the discount on deposits so the return remains greater than zero, a shadow panel canvassed by the C.D. Howe Institute said April 16.

Keeping the rate unchanged may also be another signal the central bank won’t be “aggressive” right away with policies aimed to pump new money into the economy, said Michael Gregory, senior economist at BMO Capital Markets in Toronto.

Carney said after an April 1 speech that publishing the guidelines on quantitative and credit easing doesn’t mean their use is “preordained.”

“They will exhaust conventional tools before they move on to unconventional,” said Dana Peterson, an economist with Citigroup Global Markets in New York.

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U.S. builders probably broke ground on fewer homes in March after an unexpected jump the month earlier as they sought to reduce inventories, economists said before a report today.

Housing starts dropped 7.4 percent to an annual rate of 540,000, according to the median forecast of 72 economists in a Bloomberg News survey. A separate report from the Federal Reserve Bank of Philadelphia may show manufacturing is shrinking in the region at a slower pace this month, economists said.

A glut of unsold properties is pulling home prices down across the U.S., prompting builders to scale back projects. President Barack Obama’s administration has pledged measures to limit foreclosures and the Fed is buying back securities to drive down mortgage rates and spur demand.

“Market fundamentals do not support a near-term recovery,” said Ryan Sweet, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania. “While spring has brought some positive signs on the housing front, a rebound is not in the foreseeable future.”

The Commerce Department’s housing report is due at 8:30 a.m. in Washington. Estimates in the survey ranged from 500,000 to 608,000, following a 22 percent gain in February to a 583,000 pace as condo construction almost doubled.

Building permits, a sign of future construction, likely fell 2.7 percent to a 549,000 annual pace, according to the median forecast.

Manufacturing Woes

Home starts have plunged from a peak rate of 2.27 million in January 2006, which capped the biggest housing boom in six decades. Falling construction has weighed on economic growth and plunging prices helped ignite the global credit crisis that led to what may become the worst recession in seven decades.

Manufacturing is another of the hardest-hit parts of the economy, even as the factory industry’s contraction shows signs of slowing. The Philadelphia Fed’s index may rise to minus 32 this month from minus 35 in March, economists said before the 10 a fast cash savings account.m. release. Readings less than zero indicate contraction.

In a sign the housing slump may be nearing a bottom, the National Association of Home Builders/Wells Fargo’s confidence index rose this month to the highest level since October, the group said yesterday. Confidence rose to 14 from 9, as record- low mortgage rates and falling prices started to stir demand. Readings below 50 mean respondents view conditions as poor.

Sales of both new and existing home rose in February. Still, rising unemployment continues to stifle demand as Americans shy away from big-ticket purchases. Job losses have totaled 5.1 million since the downturn began in December 2007, and economists surveyed by Bloomberg predict the jobless rate will reach 9.5 percent by the end of the year.

Jobless Claims

A report from the Labor Department at 8:30 a.m. may show initial jobless claims last week rose to 660,000 while the number of people receiving benefits the prior week rose to a record 5.89 million, according to economists’ forecasts.

With job losses mounting, foreclosure filings rose 30 percent in February from a year earlier, RealtyTrac Inc., a seller of default data, reported. Property values may fall further as foreclosures put even more homes back on the market. Home prices in 20 U.S. cities tracked by the S&P/Case-Shiller index have dropped 29 percent since their peak in July 2006.

Southern California house and condominium sales climbed 52 percent in March from a year earlier as buyers took advantage of prices 35 percent lower than the same period in 2008, MDA DataQuick, a San Diego-based research company, said yesterday.

Homebuilders, having to compete with cheaper resale prices, continue to feel the pinch. Lennar Corp., the fourth-largest in the U.S., reported a wider first-quarter loss than a year earlier and falling orders.

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Singapore’s economy probably shrank for a fourth straight quarter as manufacturing and exports collapsed, adding pressure on the central bank to allow the currency to weaken to revive growth.

Gross domestic product fell an annualized 9.6 percent last quarter from the previous three months, after shrinking 16.4 percent between October and December, according to the median estimate of 13 economists surveyed. The trade ministry will release the data at 8 a.m. tomorrow, and the Monetary Authority of Singapore will give its semi-annual review of the currency.

The worst global economic slump since World War II has pushed trade-dependent Singapore into the deepest recession in its history. Government efforts to prevent job losses by handing out cash to companies haven’t stopped manufacturers such as Creative Technology Ltd. from firing workers, and economists expect the island to loosen monetary policy this week.

“Singapore’s economy is still in contraction mode and not out of the woods yet,” said Irvin Seah, an economist at DBS Bank Ltd. in Singapore. “With growth likely to be below potential until next year, the central bank will adjust its currency policy to be consistent with the economic conditions.”

The Monetary Authority of Singapore, which uses the currency to manage inflation, stopped favoring gains in the local dollar in October. The central bank may devalue the Singapore dollar and allow it to drop 4 percent against its U.S. counterpart by June 30 to aid exporters, economists surveyed by Bloomberg News last month said.

Currency Policy

Policy makers will shift the mid-point of the Singapore dollar trading band, in which the exchange rate is allowed to fluctuate against a basket of currencies, 15 of 17 economists surveyed said emergency cash loans. The central bank will also maintain a neutral stance, in which it seeks neither gains nor losses, after the one-off depreciation, the survey showed.

Singapore in January cut corporate taxes for the second time in three years and unveiled S$20.5 billion ($13.5 billion) in tax rebates and cash handouts to help businesses and workers survive the slowdown.

Overseas shipments by Singapore, the world’s busiest container port, have dropped for 10 consecutive months. The country’s industrial production has fallen into the longest slump in eight years.

Tourist arrivals have declined, private home prices plunged by the most in at least 16 years last quarter and consumers are rolling over an unprecedented amount of credit-card debt.

Cutting Forecast

The government will have to cut its current estimate that the economy will contract in a range of 2 percent to 5 percent this year, the Straits Times cited Prime Minister Lee Hsien Loong as saying last week. Still, the decline is likely to be less than 10 percent, he said.

Singapore’s $161 billion economy declined 9.1 percent in the three months ended March from a year earlier, compared with a 4.2 percent drop in the fourth quarter of 2008, economists predicted.

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European Central Bank council member Ewald Nowotny said cutting the benchmark rate below 1 percent is still open for debate and it would be “sensible” for the bank to buy corporate debt.

“It’s my personal opinion that the benchmark rate should not go below 1 percent, but this is a point that’s open for discussion,” Nowotny, who heads Austria’s central bank, said in a telephone interview from Vienna late yesterday. The purchase of commercial paper and corporate bonds is “a sensible and efficient measure,” Nowotny said, adding it may not be introduced immediately because it would take time to prepare.

The comments suggest the ECB council is split over the best way forward amid signs the euro-region economy is slipping deeper into recession. While Germany’s Axel Weber has signaled he’s opposed to buying corporate debt and doesn’t want to take the benchmark rate below 1 percent, Greece’s George Provopoulos this week indicated both remain options.

The euro dropped more than half a cent to $1.3268 after Nowonty’s comments were published. The ECB’s key rate is currently at 1.25 percent.

“All the Governing Council so far appears to have agreed upon is that there could be a 25 basis point cut in May,” said Julian Callow, chief European economist at Barclays Capital in London. “They have clearly not yet determined whether that would then mark the low for the refinancing rate or not.”

New Measures

The ECB this month cut the rate by a quarter point, less than economists forecast, and delayed a decision on new tools until May. The Federal Reserve, Bank of England and Bank of Japan are already pumping money into their economies by buying government and corporate debt.

The Bank of England today left its benchmark interest rate at 0.5 percent and said it will keep buying government bonds to fight the deepest recession in a generation.

“If you’re aiming at intensifying credit supply, measures which focus directly on credit supply are of interest,” Nowotny said. “For example the purchase of commercial paper, corporate bonds and similar things.”

Still, he said this would “take longer to prepare” than offering banks longer-term loans to ease credit tensions. The ECB currently lends banks as much as they want at the prevailing benchmark rate for up to six months.

‘Need for Speed’

Lengthening maturities is “the best option” as far as speed of implementation is concerned, Nowonty said. “That means going beyond the current six months to an extension of, for example, 12 months totally free credit score. That’s something that can be implemented immediately and takes effect promptly.”

The comments are “helpfully transparent on the evolution of unconventional policy measures,” said Ken Wattret, an economist at BNP Paribas in London. “In short, if there’s a need for speed, then repo maturity extensions are the best option.”

Longer loans pose some complications. Banks may not take up the offer unless the ECB signals rate cuts are at an end, and securing cheap money for a year may distort efforts to raise borrowing costs once an economic recovery sets in.

“I would happily accept this problem if indeed the economic recovery comes faster than expected,” Nowotny said. “I think our task is currently to fight the worst economic slump in the post-War period with all available tools. If an improvement becomes apparent, I’d be happy about it.”

Legitimate Pessimism

The Organization for Economic Cooperation and Development predicts the euro-region economy will shrink 4.1 percent this year. By comparison, the ECB on March 5 projected a 2.7 percent contraction.

While Nowotny said the OECD’s forecast is a “pessimistic assessment,” he added: “Regrettably, I’m aware that pessimism in the past was often legitimate.”

He expects inflation to remain below the ECB’s 2 percent limit “over the medium term,” giving the bank room to keep interest rates at historically low levels for some time.

“In a situation like the current one” an expansionary monetary policy “is absolutely necessary,” Nowotny said. “If the recovery is very weak we have to continue to follow an expansive path with both monetary and fiscal policy.”

Weber said March 10 that 1 percent would be his “bottom line” for the ECB’s benchmark rate, while Provopoulos in an April 6 interview said he doesn’t consider 1 percent to be “a threshold.” The Greek Central Bank later issued a statement saying the remark was “inaccurate” and that Provopoulos’s view was the benchmark “could go down from the present level, although in a very measured way.”

When asked about the debate on the council, Nowotny said: “You can’t say we’re divided, rather it’s a discussion we will have. In the past, the decisions in the Governing Council were always consensual. I don’t expect that this will change in the future.”

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Homebuilder Centex Corp. announced Wednesday its board of directors has approved a plan to merge with Pulte Homes Inc. In announcing the deal, Centex stated that the combined company will have $3.4 billion in cash on hand to weather the current homebuilding doldrums.

In the transaction, Dallas-based Centex (NYSE: CTX) shareholders will receive 0.975 shares of Pulte’s (NYSE: PHM) common stock for each share of Centex common stock.

The merger is a stock-for-stock transaction valued at $3.1 billion, which includes $1.8 billion of net debt, Centex said.

When the merger is complete, Pulte shareholders will own 68 percent of the combined home building entity, while Centex shareholders will own 32 percent.

“We believe this is the right combination at the right time in the business cycle," said Centex Chairman and Chief Executive Officer Timothy Eller said. "By acting decisively now, we’re creating unrivaled firepower to capitalize on the opportunities in home building that are now becoming visible on the horizon. We will have a deeper and more expanded presence that we are confident will allow us to begin realizing the benefits of our combined scale immediately. Moreover, our shareholders will receive an immediate premium for their shares as well as participate in the upside potential of the combined company."

At the end of March, Bloomfied Hills Mich instant cash advance.-based Pulte (NYSE: PHM) and Centex each had approximately $1.7 billion of cash on hand. Last year, both builders combined had 39,000 home closings and a combined revenue of $11.6 billion

“Combining these two industry leaders with proud legacies into one company puts us in an excellent position to navigate through the current housing downturn, poised to accelerate our return to profitability,” said Pulte President and Chief Executive Officer Richard J. Dugas, Jr. “Centex’s significant presence in the entry level and move-up categories is complemented by Pulte’s strength in both the move-up and active adult segments, the latter through our popular Del Webb brand. Together we will have considerable presence in more than 59 markets across America. In addition, both organizations share an unwavering focus on delivering unparalleled customer satisfaction, maximizing the influence of strong brands and setting new standards of achievement in operational efficiency."

The companies’ leaders added that the merger will allow the combined building entity to capitalize on Centex’s land position and holdings in key markets like Texas and in the Carolinas.

In early Wednesday trading, Centex shares were up 28% at about $9.75, and Pulte shares were down 6% at $10.12.

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Prime Minister Gordon Brown will meet with Bank of England Governor Mervyn King today to discuss how the U.K. should implement new financial rules laid out by leaders of the Group of 20 nations last week.

Financial Services Authority Chairman Adair Turner, Chancellor of the Exchequer Alistair Darling and Trade Minister Mervyn Davies also will attend, a spokeswoman for Brown said. He also plans to meet with commercial bank executives.

“Our first priority” is “getting the economy onto a growth path, recognizing that it’s a global recession and that we have got to cooperate with other countries,” Brown said yesterday on Sky News television. “I am going to call the banks in, and the governor of the Bank of England is coming to see me on Monday.”

World leaders including President Barack Obama and China’s Hu Jintao agreed to impose tighter controls on banks and hedge funds and to require institutions to set money aside for bad times. Brown, who enjoyed a popularity boost in a poll conducted after he hosted the summit in London, wants to act on the G-20 promises to help curtail the recession in the U.K.

Support for Brown’s Labour Party gained three points to 31 percent in a YouGov Plc poll conducted in the two days following the G-20 summit. That narrowed the Conservative opposition’s lead over Labour to seven points, the least in three months.

Brown also wants to prod commercial banks into returning lending to 2007 levels. Banks are writing about a third of the mortgages they approved each month two years ago even after tapping the government for 40 billion pounds ($59 billion) of support, according to Bank of England data.

‘Still Very Weak’

“Credit availability remains poor, bank assets continue to shrink and housing activity is still very weak,” Michael Saunders, chief Western European economist for Citigroup Inc., wrote in a note to clients on April 3. “The conditions for recovery are not yet in place.”

Darling’s annual budget statement is due April 22 health insurance quote. Yesterday the chancellor said the recession had been worse than he expected in November, suggesting the deficit will be wider than the 118 billion pounds expected by the Treasury. That would limit Brown’s ability to use government spending to bolster economic growth before the next election, due by mid-2010.

While Brown’s actions on the global stage may have impressed some voters, Britain this weekend resisted ceding regulatory powers to the European Union.

The U.K. rejected a plan suggested by the bloc’s finance ministers over the weekend to give the two new agencies the authority to overrule national banking and insurance regulators. Britain also resisted a push for the European Central Bank to run a panel monitoring risks to the economy of the 27-nation group.

Constraints for ECB

“The ECB clearly has an important role to play in strengthening and enhancing macro-prudential supervision, but the precise role has yet to be determined,” U.K. Financial Services Secretary Paul Myners said on April 4 at a meeting of ministers in Prague.

Darling last month said he won’t accept giving the new agencies power that would bind the actions of the U.K. Financial Services Authority.

“The British have a somewhat different view,” Dutch State Secretary of Finance Jan Kees de Jager said in an interview in Prague. “We hope that in the next couple of weeks these hesitations will be overcome.”

Brown sees the G-20 regulatory overhaul as necessary to restoring people’s confidence in the banking system and a step toward reassuring businesses about the availability of credit, the prime minister’s spokeswoman said.

The prime minister also will write to the U.K.’s overseas territories and crown dependencies, urging them to open now- secret tax arrangements to scrutiny in step with G-20 demands, the spokeswoman said.

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Time Warner Cable San Antonio has added the Major League Baseball Network on HD just in time for the upcoming season.

Customers with a digital set-top box are now able to watch the 24-hour sports network on channel 119 on the digital basic tier.

The MLB Network was first carried as a standard channel on Channel 255 in early January. It is now carried in high-definition, making it Time Warner Cable’s 77th HD channel.

“Our commitment to bringing our customers the best in high definition sports and entertainment continues with the addition of this great HD channel,” says Gavino Ramos, vice president of communications for Time Warner Cable San Antonio classic car insurance.

The San Antonio division of Time Warner Cable is one of the company’s leading markets in HD content and subscribers. Time Warner Cable Inc. (NYSE: TWC) is based in New York.

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Job prospects for Japanese workers just got worse.

The Bank of Japan’s Tankan survey yesterday showed plunging demand has saddled companies with too many employees, signaling more people may lose their jobs. Rising unemployment threatens consumer spending, the strongest part of an economy that shrank an annualized 12.1 percent in the fourth quarter.

“We’re running into a domestic crisis,” said Martin Schulz, a senior economist at Fujitsu Research Institute in Tokyo. “This started with exports but the infection has spread; we’re going to see another round of layoffs.”

The quarterly Tankan index of labor supply at Japan’s biggest companies rose to 20, the highest level since March 2003. A positive number indicates an excess of workers.

Japan’s unemployment rate climbed to a three-year high of 4.4 percent in February and economists surveyed last month said it will reach 5.5 percent in the first quarter of 2010, matching a postwar high set in April 2003.

An unprecedented collapse in sales abroad has already prompted companies from Nissan Motor Corp. to Panasonic Corp. to fire thousands of workers, cut production and restrain wages.

Confidence among large manufacturers slid to minus 58, the lowest since the quarterly Tankan survey began in 1974, the central bank said. Sentiment at the country’s biggest service companies fell to minus 31 from minus 9, a record drop.

Next Victim

“The really bad news is that domestic non-manufacturers are now expecting to get hammered by the crisis,” Schulz said. “Falling employment and decreasing household demand makes them the next victim.”

Consumer spending fell 0.4 percent in the fourth quarter from the previous three months, a fraction of the record 13.8 percent drop in exports that drove the worst quarterly contraction in gross domestic product since the 1974 oil crisis business cards.

The deteriorating job outlook has since started to take a toll. Retail sales dropped at the fastest pace in seven years in February and weakening demand prompted supermarket operators Ito-Yokado Co. and Seiyu Ltd. to cut prices of food, clothing and household products last month.

Nippon Steel Corp., the world’s second-largest mill, said yesterday it will require workers at five domestic plants to take one or two extra days off a month and cut executive pay.

Employees on temporary contracts have borne the brunt of the job cuts. The Labor Ministry estimates that 192,061 non- regular workers will have lost their jobs by June since October.

Safety Net

Some 90 percent of workers are worried about being fired or having their pay reduced, a separate central bank survey showed yesterday. Prime Minister Taro Aso this week promised new spending by mid-April to help patch a benefit system that covers less than a quarter of the country’s unemployed.

“They’ve got what looks like a safety net but in the real world it doesn’t work,” said Jesper Koll, chief executive officer at hedge fund TRJ Tantallon Research Japan in Tokyo.

Some 77 percent of jobless people aren’t getting unemployment benefits, the highest figure among Group of Seven nations except Italy, whose data weren’t available, the International Labour Organization said in a report last week.

The government will offer money to unemployed workers of Japanese descent to return to their native countries in exchange for giving up their permanent and residential visas, the Health Ministry said on March 31.

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