Samsung surges past Apple in smartphones, upbeat on Q4

(Reuters) - Samsung Electronics Co overtook Apple Inc as the world's top smartphone maker in the July-September period with a 44 percent jump in shipments, and forecast strong sales in the current quarter in a clear warning to its rivals.

Samsung (005930.KS) only entered the smartphone market in earnest last year, but its sales have skyrocketed thanks to a sleek production system that rapidly brings new products to market. Apple (AAPL.O) introduced its first iPhone in 2007.

"In the handset division, Samsung has no real rival models to challenge its products except for the iPhone 4S. Apple and Samsung will continue to dominate the market in the fourth quarter," said Kim Hyun-joong, a fund manager at Midas Asset Management, which owns Samsung shares.

Profits from the South Korean firm's telecoms division, announced on Friday, more than doubled from a year ago to a record 2.5 trillion won ($2.2 billion) and accounted for 60 percent of Samsung's total profit, offsetting a plunge in earnings from its bread-and-butter memory chips.

Shipments of smartphones jumped 44 percent from the preceding quarter to 27.8 million units, up nearly four times from a year ago, according to research firm Strategy Analytics.

Apple's iPhone sales shrank by 16 percent to 17.1 million units in the third quarter. Samsung had 23.8 percent of the global smartphone market in the third quarter, 9 points higher than Apple. Samsung's flagship Galaxy line of products is powered by Google's (GOOG.O) Android software.

Apple sold fewer phones in the third quarter, missing street expectations for the first time in year, as customers held off buying iPhones until the October launch of the latest version.

Samsung shares were up 1.6 percent by 0500 GMT (1 a.m. EDT), versus a 0.6 percent gain in the wider market .KS11.

The world's biggest technology firm by revenue reported a 4.25 trillion won operating profit for the July-September quarter, broadly in line with its earlier estimate of 4.2 trillion won.

That was down from 4.9 trillion won a year ago but up from 3.8 trillion won in the preceding quarter.

Samsung said its fourth-quarter earnings could be better than the third, boosted by one-off gains from its $1.4 billion sale of its hard disk drive business to Seagate Technology (STX.O).

"I am cautiously optimistic on the fourth quarter outlook at this point," Robert Yi, head of Samsung's investor relations, told analysts.

"Looking ahead into the fourth quarter, when industry demand is traditionally at its peak, Samsung expects sales of mobile devices to remain strong and flat-panel TV shipments to increase," the company added in an earnings statement.

Apple, whose iPhone sales account for nearly half the firm's total sales, reported a 40 percent gross margin, or the percentage of sales left after subtracting the cost of goods sold. Samsung's phone division reported a 16.9 percent operating margin, which further takes account of marketing costs.

Nevertheless, Samsung faces challenges as the new iPhone introduced earlier this month is notching up strong sales.

Nokia is also fighting back with its first phones based on Microsoft's (MSFT.O) Windows software. And Sony Corp (6758.T) announced on Thursday it would take full ownership of its mobile venture, Sony Ericsson, in a bid to exploit its music and video library.

Samsung on Thursday announced the launch of its Galaxy Note mobile device, adding to the flagship Galaxy lineup of products. The device, powered by Android, will square off against a series of new models released by Apple, Nokia and HTC Corp (2498.TW).

The iPhone, introduced in 2007 with the touchscreen template now adopted by its rivals, is still the gold standard in the smartphone market.

Samsung may not have come up with the concept, but it has adopted Apple's breakthrough smartphone idea perhaps better than any other handset maker. It tries to offer the Apple experience at a better price with better functionality.

"Samsung's rise has been driven by a blend of elegant hardware designs, popular Android services, memorable sub-brands and extensive global distribution," said Alex Spektor at Strategy Analytics.

"Samsung has demonstrated that it is possible, at least in the short term, to differentiate and grow by using the Android ecosystem."

Q4 SEEN BETTER THAN Q3

Profits from Samsung's chip business more than halved to 1.59 trillion won, but the division held up well as its relatively high exposure to lucrative mobile chips helped the firm offset a sharp plunge in prices of commodity computer memory chips.

Samsung was the sole profitable firm among major global dynamic random access memory (DRAM) chip makers in the third quarter.

Second-ranked computer memory chip maker Hynix Semiconductor (000660.KS) and Japan's Elpida Memory (6665.T) swung to deep losses as prices of DRAM chips used in PCs tumbled about 50 percent in the third quarter.

Samsung's chip business is also benefiting from strong demand for mobile processor chips used in Apple's iPhone and iPad tablet as well as its own Galaxy smartphones.

Samsung expected demand for PCs to remain weak in the fourth quarter because of weak seasonality, while demand for mobile devices and servers will be relatively strong.

"I see some signs that chip prices have hit bottom as inventories are running out. However, we don't yet know when the industry is going to pick up since macroeconomic uncertainties overshadow the demand outlook," said Park Hyun, an analyst at Tong Yang Securities.

Samsung's display business posted losses for a third consecutive quarter on weak demand for TVs and PCs.

But losses narrowed from the previous quarter, helped by strong earnings from the OLED display, which is widely expected to replace LCD as the next-generation flat-screen in mobile devices and TVs.

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Maasinhon Trio takes on controversies

MANILA, Philippines – Less than a week after being declared “Pilipinas Got Talent 3” winners, Andrew Sanchez, Licinio Lolo and Bonifacio Salubre a.k.a.the Maasinhon Trio find themselves at the receiving end of criticisms.

Asked to address this issue, Lolo told Bulletin Entertainment and other members of the media in an interview on Thursday, “Para sa amin, siguro opinyon nila yun. Sa amin naman, kasi marami namang sumusuporta sa amin. Alam namin ‘yon. Kasi sa amin alam namin na todo-suporta ang mga tao sa amin [sa Southern Leyte].” He also maintained, “yung 12 finalists po [ay] deserving lahat yun eh.”

For his part, Salubre said, “Sa ‘min lang yung feeling namin siguro [yung mga nag-comment against us ay] mga supporters ‘to sa kabila.”

On people’s comment that “PGT” should change their title to “Pilipinas Got Singing Talent” – given that singers have been declared from the first season up to now – Lolo replied, laughing, “Hindi naman namin kasalanan yun eh.”

Also present during the interview was business unit head for TV production Alou Almaden, who stressed that "PGT" winners have always been determined by the most number of text and online votes.

“We didn’t miss naman on reminding the people it’s texting and online voting. The grand winner will be based on the total number of text votes. Every gap yun eh, the hosts and the judges [say it]. So it’s really up to the public. If they favor somebody, they really just have to vote,” she said, adding that she’s “proud” of all the finalists.

“So it’s really up to the public, the voting public, kasi may ‘public’ na magco-comment lang eh pero hindi naman boboto ‘di ba? Sinong gusto niyong ilagay? Saka it’s the rule eh worldwide. Nobody’s exempted, no country is exempted to that rule na text and online [voting] lang talaga ‘to.

“So given all these elements, yung public talaga… kailangang irespeto eh, ‘di ba, whatever the outcome is,” Almaden explained.

In another part of the interview, she mentioned, “But again it’s not enough that you comment or you scream. You have to vote.”

The TV exec also offered her personal take on the “Pilipinas Got Singing Talent” comment.

“Kasi ang Pinoy… when we talk of talent kasi sa Pilipinas, mostly singing eh ‘di ba? Kasi how do we compare dun sa mga acrobats, sa mga gymnastics… Aminin ko talaga what the other contestants did na non-singing, talagang amaze na amaze ako. And they’re not professionals,” said she, but also opined that the talent of Filipinos in other aspects are evolving.

“Kasi yung industriya, ano nga naman ang venue for other talents outside singing or acting? Wala tayong masyadong venue eh,” she added.

On the same evening of the “PGT 3” finals night, one of its hosts Luis Manzano posted on his Twitter account that finalist El Gamma Penumbre “will always be my grand winner fr[om] season 3.” Asked to react on this, Almaden said, “As a unit head, probably I would not have agreed [with what Luis did], pero he has always been like that. He has been consistent from day one, very outspoken talaga.

“Again ano, for everyone who made their comments on social networks or kung saan man, I respect all your comments and all your take. Even that of Luis, probably. Pero kasi Twitter is a personal ano rin naman talaga eh. And Luis, from day one [and] even long before ‘PGT,’ talaga namang nagga-ganyan siya eh. Personality na niya yun,” she explained.

The Maasinhon Trio are also being compared to the APO Hiking Society, but Salubre said, “Iba sila eh. Talagang magagaling sila.”

Lolo shared this sentiment, adding, "Siguro kasi trio [rin] naman kami eh. Kaya na-compare kami. Pero ang APO, para sa amin, idol na idol namin sila. Talented talaga [sila].”

The Maasinhon Trio are set to return on Monday to Leyte where a victory party will be held to celebrate their triumph. Almaden said that part of the trio’s contact is to make an album, but she’s yet to discuss this aspect with Sony Music. Sony apparently handles all the winners of the "Got Talent" franchise.

Meanwhile, the trio expressed willingness to settle in Manila for good should the opportunity to further their singing career here arises.

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Maasinhon Trio proclaimed Pilipinas Got Talent Season 3 winner

Pilipinas Got Talent Season 3 named Maasinhon Trio grand winner.

The Maasinhon Trio sang Basil Valdez’s “Nais Ko.” Though they are the oldest among the "Pilipinas Got Talent Season 3" finalists, these three singers are determined to bring pride to their hometown.

The Maasinhon Trio

Andrew Sanchez

Bonifacio Salubre

Licinio Lolo

Hometown

Maasin City, Southern Leyte

The three used to be members of Menzvoyz Band which has disbanded. They are all soloists and they became barkada after joining several contests. They formed Maasinhon Trio with the encouragement of Fr. Dodong Cordovez and Fr. Sammy Papa. Today, they continue to entertain and play beautiful music on weddings, birthdays and other special occasions in the city, province and wherever they are invited. Andrew who is the base, plays the guitar very well and Licinio, the tenor plays the keyboard and drums. Both are music composers.

Bonifacio Salubre who works as Fire Officer I of Bureau of Fire Protection, is happily married to Rachiel Cutamora and blessed with two children. Andrew Sanchez is warehouse chief of Southern Leyte Electric Cooperative and Licino Lolo is a supply officer II of the Province of Southern Leyte.

source:

abs-cbnnews

Facebook Page/Maasinhon Trio

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Straight Talk All You Need Plan

This is a Sponsored post written by me on behalf of Straight Talk for SocialSpark. All opinions are 100% mine.

 

Being a current Straight Talk user, I decided to introduce their “All you Need Plan” to my wife who is dissatisfied with her phone provider. She was skeptical at first knowing that she had been on her phone provider for years already. And introducing her to a new one made her doubt my decision. But she gave in to my coaxing later on. I decided to emphasize on the great benefits of Straight Talk. I told her, I love the idea that I feel richer with Straight Talk because I cut my cell phone bill in half. And that you have to be crazy to be on a contract these days when you can get everything you need without one. I told her to imagine the amount of money she could save switching to Straight Talk. There are no contracts, no surprise bills and no credit checks. Great nationwide coverage and excellent reception/connectivity. Straight Talk only uses trusted phone manufacturers like LG, Motorola, Kyocera, Nokia and Samsung. I asked her, “What would you buy with the extra money you save?” She was batting her eyelashes as if she was already sure what she would buy.

Straight Talk phones have all the apps and games you need. You will be smiling with The power of Android phones, at only $45/month for unlimited use. I Feel Richer with Android because of it's affordability. It’s a smart phone with a smart plan, and as always, no contract. Reconditioned phones are available from $10.00 with camera, mp3 player, mobile web access, and blue-tooth capability. Great for young users! The “All You Need Plan” meets even the needs of heavy phone users with 1,000 minutes, 1,000 texts and 30 MB of web data. Unlimited Monthly service is only $45, and includes calls, text, picture messaging, and web. Imagine unlimited calls, text, picture messaging and web for a whole year, for only $499.00! 411 calls are included at no extra charge. Free from activation, reactivation, or termination fees. When you need to call abroad, Straight Talk International Long Distance Service is a flexible prepaid calling service that enables you to make international calls from your home, cell or office phone at low rates.

For more information on what these phones offers, check out these videos:

The getting richer effect has expanded... by LittleBard95

The Straight Talk Image... by LittleBard95

<iframe frameborder="0" width="480" height="270" src="http://www.dailymotion.com/embed/video/xlhbcs"></iframe><br /><a href="http://www.dailymotion.com/video/xlhbcs_the-getting-richer-effect-has-expanded_tech" target="_blank">The getting richer effect has expanded...</a> <i>by <a href="http://www.dailymotion.com/LittleBard95" target="_blank">LittleBard95</a></i>

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Gadhafi's death should be probed, U.N. agency says

According to CNN Joe Sterling, the circumstances of late Libyan leader Moammar Gadhafi's death are "unclear" and need to be investigated, the Office of the U.N. High Commissioner for Human Rights said Friday.

"More details are needed to ascertain whether he was killed in the fighting or after his capture," the agency said.

"There seem to be four or five different versions of how he died. As you are aware, there are at least two cell-phone videos, one showing him alive and one showing him dead. Taken together, these videos are very disturbing."

The agency said it's important that "justice is done" to bring "closure on the legacy of Gaddafi's 42-year despotic rule, and on the bloody conflict this year." It said "human rights must be the cornerstone of all policies and actions" in a new Libya.

"The thousands of victims who suffered loss of life, disappearance, torture and other serious human rights violations since the conflict broke out in February 2011, as well as those who suffered human rights violations throughout Gadhafi's long rule, have the right to know the truth, to see the culture of impunity brought to an end, and to receive reparations," the office said.

"In order to turn the page on the legacy of decades of systematic violations of human rights, it will be essential for alleged perpetrators to be brought before trials, which adhere to international standards for fair trial, and for victims to see that accountability has been achieved."

Mahmoud Jibril, Libya's transitional prime minister, said Gadhafi was captured alive and unharmed on Thursday as troops from the National Transitional Council overran his hometown of Sirte. But a gunbattle erupted between transitional council fighters and Gadhafi's supporters as his captors attempted to load him into a vehicle, Jibril said, leaving Gadhafi with a wound to his right arm.

More shooting erupted as the vehicle drove away, and Gadhafi -- overthrown in August -- was hit in the head, Jibril said, Gadhafi died moments before arriving at a hospital in Misrata, Jibril said, citing the city's coroner.

Amnesty International urged the NTC "to make public" the "full facts" on Gadhafi's death.

"It is essential to conduct a full, independent and impartial inquiry to establish whether Colonel Gadhafi was killed during combat or after he was captured," the group said on Thursday.

Amnesty urged the NTC "to ensure that all those suspected of human rights abuses and war crimes" get humane treatment and are given fair trials if captured. That includes Gadhafi's family members and his inner circle.

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WORST AIRPORTS 2011

SLEEPING IN AIRPORTS...

The following airports listed below have been chosen by airport sleeper's as least favourite or below service standards for justification such as:

Safety concerns

Lack of comfortable seating

Rude staff

Hostile security

Poor facilities

No (or few) services to pass the time

Bribery and thier exists

Being kicked out

General hassles of being in the airport

The list is based on poll votes and user reviews for most sleepovers adventurers.

1 MANILA AIRPORT TERMINAL 1 (PHILIPPINES) 

2 PARIS BEAUVAIS AIRPORT (FRANCE)

3 REYKJAVIK KEFLAVIK INTERNATIONAL AIRPORT (ICELAND)

4 BERGAMO ORIO AL SERIO INTERNATIONAL AIRPORT (ITALY)

5 KIEV INTERNATIONAL AIRPORT (UKRAINE)

6 FRANKFURT HAHN AIRPORT (GERMANY)

7 LONDON LUTON AIRPORT (ENGLAND)

8 PISA GALILEO AIRPORT (ITALY)

9 PARIS CHARLES DE GAULLE AIRPORT - Terminals 3 and 2A,B,C,D (FRANCE)

10 LOS ANGELES INTERNATIONAL AIRPORT (CALIFORNIA, USA)

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Wimbledon champion Kvitova wins Linz Open

(Reuters) - Wimbledon champion Petra Kvitova won her fifth WTA title of the year on Sunday when she brushed aside Dominika Cibulkova to take the Linz Open.

The 21-year-old Czech won 6-4 6-1 to notch up her fourth win in as many meetings with Cibulkova and dash her Slovakian opponent's hopes of winning a first WTA title.

"It wasn't as clear as the result suggests," said Kvitova after adding to her titles at Wimbledon, Brisbane, Madrid and indoors at Paris. "It was only easy for me toward the end."

Kvitova broke in the first game but Cibulkova hit back to level at 4-4 before Kvitova broke again to take the set. The pair swapped service breaks at the start of the second set before Kvitova took control, winning five games in a row to wrap up the match.

"In the first set, I thought that maybe I could do it, but in the end I was on the defensive too often and she deserved the win," said Cibulkova.

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Murray passes Federer in rankings with third win

(Reuters) - Andy Murray beat Spain's David Ferrer 7-5 6-4 to claim the Shanghai Masters tennis title on Sunday and move ahead of Swiss Roger Federer in the rankings for the first time in his career.

The victory completed a stunning Asian hat-trick for Murray and allowed the seemingly unstoppable Scot to leapfrog 16-times grand-slam champion Federer into third spot in the ATP list.

Murray's 25th victory from 26 matches sends Federer out of the top three for the first time in eight years.

Murray has now won three titles in as many weeks on the Asian swing of the ATP World Tour - his best winning streak - after his victories in Bangkok and Tokyo.

"If you finish in front of Federer in a year, then there's not many people in the last five, six, seven years that have been able to say that," said Murray.

"I'm still not guaranteed to finish (the year) at number three; I'm still going to have to win some more matches," the Scot added.

"This is the best tournament run of my life. I was very nervous as I wanted to retain the title."

The defending champion broke the third-seeded Ferrer in the first game but a catalog of errors then undermined his hard work.

Spaniard Ferrer, hoping for revenge for his 6-2 6-3 semi-final loss to Murray last weekend, double-faulted with the first set poised at 5-5.

Murray leaped on the error and produced a pair of aces to secure the set.

World number five Ferrer was seeking his first Masters title but his hopes were dashed by an increasingly dominant Murray who ran him ragged for much of the second set.

The Briton lobbed to break Ferrer at 1-1, broke again to repel the Spaniard's last-ditch rally and finished off the match with a sizzling forehand.

"It is difficult to beat Andy at the moment; he is playing very confidently," said Ferrer. "Maybe in the first set I had my chance at 5-5 30-30 but I played so bad in that game. After that, I served badly for a very long time."

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Robot movie "Real Steel" tops box office again

(Reuters) - Boxing robot movie "Real Steel" won the domestic box office for the second straight weekend, edging a remake of 1980s dance classic "Footloose."

"Real Steel" brought in about $16.3 million at U.S. and Canadian theaters, according to studio estimates released on Sunday. The action movie starring Hugh Jackman landed slightly ahead of "Footloose," which brought in an estimated $16.1 million.

Third place went to horror movie "The Thing" with $8.7 million.

"Real Steel" was produced by DreamWorks and distributed by Walt Disney Co. "Footloose" was released by Paramount Pictures, a unit of Viacom Inc. Universal Pictures, a unit of Comcast Corp, distributed "The Thing."

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Superman idolization of Herbert Chavez

Photos taken by Reuters Cheryl Ravelo

These are snapshots of the cosmetic transformation  of Herbert Chavez, a pageant trainer and a  custome store owner somewhere in Calamba Laguna, South of Manila, Philippines whose idolization and obsession of the famous comic book and movie character SUPERMAN turns himself  to look most likely the "Man of Steel".

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Apple - iPhone4S - a tribute for Steve

Apple Inc's new iPhone went on sale in stores across the globe on Friday, with fans snapping up the final gadget unveiled during Steve Jobs' lifetime, many buying the phone as a tribute to the former Apple boss.

The iPhone 4S -- introduced just a day before Jobs died.

The dual-core A5 chip delivers even more power. The 8MP camera with all-new optics also shoots 1080p HD video. And with Siri, iPhone 4S does what you ask. Talk about amazing.

for complete Apple - iPhone4S features click HERE

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Raj Rajaratnam sentenced to 11 years for hedge-fund insider trading scheme

Galleon Group LLC’s Raj Rajaratnam is sentenced to 11 years on Thursday for masterminding the biggest hedge-fund insider trading scheme in U.S. history, that stretched from Silicon Valley to Wall Street.

U.S. District Judge Richard Holwell in Manhattan presided over the jury trial in which Rajaratnam was convicted of 14 counts of securities fraud and conspiracy. It was the stiffest sentence ever given for trading in the stock market using confidential corporate information.

The longest insider-trading sentence before Galleon was 10 years, given to former Credit Suisse Group AG banker Hafiz Muhammad Zubair Naseem, who was convicted in 2008 of leading a $7.8 million scheme.

Sri Lankan born Rajaratnam's rapid flight to billionaire hedge fund chief was undone with the arrest of a former Atherton resident who became a federal informant.

The informant, Roomy Khan, had been caught faxing confidential information to Galleon in 1998 when she worked at Intel. She pleaded guilty in 2002. Caught again in 2007, Khan agreed to cooperate in an investigation of Galleon. 

Rajaratnam, 54, was at the center of a seven- year conspiracy to trade on inside information from corporate executives, bankers, consultants, traders and directors of public companies.

He is fined $10 million and was also ordered to forfeit $53.8 million in illegal profits by the U.S. District Judge Richard J. Holwell, his "crimes and the scope of his crimes reflect a virus in our business culture that needs to be eradicated." Said Howell.

In court papers, the government urged Holwell to make an example of Rajaratnam, saying he "represents the worst of illegal insider trading." Prosecutors compared him to Enron Corp.'s Jeffrey Skilling and WorldCom Inc.'s Bernard Ebbers, convicted in what prosecutors called "the worst of accounting frauds," and Bernard Madoff, the man behind history's biggest Ponzi scheme.

Rajaratnam's lawyer has asked for leniency based on medical conditions he said would be life-threatening if he's sent to prison.

Also caught up in the case Danielle Chiesi, the former beauty queen turned stock trader sentenced to two-and-a-half years in jail for her role in the biggest insider-dealing case in decades. She pleaded guilty to three counts of conspiracy to commit securities fraud arising from an insider trading scheme.

Chiesi, 45, was the former confidante of hedge fund billionaire Raj Rajaratnam, founder of the Galleon hedge fund.

Alan Kaufman, her lawyer, argued that Chiesi, said she was the victim of a "toxic" sexual relationship with Mark Kurland, her former boss and lover at trader New Castle Partners.

Chiesi was the 10th person to be sentenced after an insider-dealing investigation that has secured 46 guilty pleas and convictions.

The investigation caught many prominent valley figures. Among them were Anil Kumar, of Saratoga, a McKinsey & Co. executive who gave Rajaratnam a tip about an Advanced Micro Devices acquisition; Rajiv Goel, of Los Altos, an Intel executive who furnished advance word on Intel's earnings and an acquisition of broadband company Clearwire; and Ali Harari, of San Jose, an Atheros Communications executive who was accused of divulging confidential information. Richard Choo-Beng Lee and Ali Far, who ran the short-lived Spherix hedge fund in San Jose.

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Euro zone debt crisis on G20 Paris meeting

G20 finance chiefs and central bank heads from the world's biggest economies meet in Paris on Friday needing to find a solution to a deepening euro zone debt crisis that has fanned fears of a global recession.

Underlining the challenge for European policymakers, Standard and Poor's cut Spain's long-term credit rating, citing the country's high unemployment, tightening credit and high private sector debt.

"This meeting takes place in a context where the absolute priority for the success of the G20 is to find the elements for the stability of the euro zone," a source at the French finance ministry said.

French and German officials are battling to flesh out the bones of a crisis resolution plan in time for a European Union summit on October 23.

Fears about the damage a default by Greece -- and possibly others -- could inflict on the financial system have driven a confidence-sapping bout of market volatility since late July, with global stocks falling 17 percent from their 2011 high in May.

With impatience growing over the crisis, and its implications for the rest of the world, finance chiefs from outside the bloc are expected to speak frankly.

"This meeting is an important staging point before (a G20 summit in) Cannes and a valuable opportunity to put pressure on the euro zone," said a non-euro zone G20 delegate.

Canadian Finance Minister Jim Flaherty set the tone late on Thursday, telling reporters before leaving Ottawa that euro zone actions were short of what is needed.

Japan would urge its European partners to support the continent's banks, Finance Minister Jun Azumi said.

RISK OF DIVISION

Unlike in 2009 when the G20 launched a coordinated stimulus to pull the world out of crisis, the forum is at risk of division as the rest of the world chafes at Europe's dithering over a debt crisis that started two years ago in Greece, and as Washington and Beijing spar over the yuan currency.

Paris and Berlin are taking time to agree on how to recapitalize banks and while Germany favors a second round of losses for Greek bondholders, Paris is reluctant. The two euro heavyweights also differ on the idea of joint bond issuance for the euro zone, with Germany loath to see its debt costs rise.

The Franco-German crisis plan is likely to ask banks to accept big losses on their Greek debt and should lay out a system for recapitalizing troubled banks, whose shares have been pounded by fears about Greek exposure.

At its core will be an agreement on how to increase the firepower of the EFSF rescue fund, and it should also set out a timeframe for ramping up economic coordination, with closer governance and explicit national laws on balancing budgets.

A key concern has been that, whilst the EFSF has the resources to cope with bailouts for Greece, Portugal and Spain, it would be overwhelmed by the need to rescue a bigger economy such as Italy or Spain.

The latter two countries, the bloc's third and fourth biggest economies respectively, have seen their bond yields pushed up by markets worried at high public and private debt levels and weak growth.

In Spain, some banks are seen as vulnerable after the bursting of a property bubble, and the country is still struggling with labor market reforms.

"Despite signs of resilience in economic performance during 2011, we see heightened risks to Spain's growth prospects due to high unemployment, tighter financial conditions, the still high level of private sector debt, and the likely economic slowdown in Spain's main trading partners," S&P said.

The agency's downgrade of the nation's long-term rating to AA- from AA mirrored a similar move last week by rival Fitch.

The G20 may refer to the euro crisis in its communique and in closing news conferences on Saturday evening, but little else of substance is likely to be inked in.

CHINA MAY OFFER GROWTH, NO YUAN SHIFT

This week's talks may give the green light to regulators for new rules on banks deemed 'too big to fail', including capital surcharges, due to be officially approved in Cannes.

Yet any concrete progress on bigger goals such as setting parameters to measure global imbalances and reining in commodity market volatility and speculative capital flows is unlikely to come before a November 3-4 summit in Cannes, where France passes the G20 baton to Mexico.

The finance ministry source said that for Cannes, France hoped to have two or three measures agreed for countries showing imbalances: consolidation measures for those with high deficits and stimulus measures for those with surpluses.

"We are going to try to make some progress and obtain, perhaps not tomorrow or Saturday but by Cannes, a list of measures country by country which corresponds to what is needed to relaunch global economic activity," he said. "These must be measures which will have an impact on the real economy."

A separate G20 source said after preparatory talks late on Thursday that China would commit in Paris to boost its consumption through a five-year plan, via households and companies as well as infrastructure, as the G20 seeks tough fiscal commitments from the euro zone and the United States.

The G20 countries make up 85 percent of global output.

An April G20 meeting placed seven large economies under review -- the debt-burdened United States, export-rich China, France, Britain, Germany, Japan and India. Officials have said privately the aim was to get Beijing to discuss the yuan, and China's cooperation is essential to the success of the process.

France has dangled the prospect of the yuan entering the basket of currencies making up the IMF's Special Drawing Right (SDR) in a bid to divert the debate away from its value and onto the criteria of free "usability" required for this.

But the euro zone crisis has derailed French President Nicolas Sarkozy's hopes of using his G20 presidency to launch a fundamental rethink of the global financial system and its reliance on the U.S. dollar.

China and the United States sparred this week over a U.S. Senate bill to press Beijing to raise the yuan's value, and the issue is likely to create a sideshow at the G20 talks, even if the euro zone crisis pushes it off center stage.

source: Reuters

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