Regional venues in brief

9-Feb-11, 08:34

The latest hotel happenings from around Asia

Sofitel Phnom Penh Phokeethra has opened. The new-build hotel includes the Cambodian capital’s largest ballroom, which seats 2,000 guests as well as Chinese, Italian, Japanese and international restaurants.

 

Marina Bay Sands will host The Lion King at the Sands Theatre from March.

 

Traders Hotel, Tale has opened in the Maldives. The 14-storey hotel includes 117 guestrooms, a 300-seat ballroom three F& B outlets and a rooftop infinity pool.

 

Pan Pacific Nirwana Bali is upgrading its Greg Norman-designed golf course.

 

Starwood Hotels will soon launch in-house spa brand Explore Spa by Le Meridien in Asia.

 

Playboy Club Macau has opened on the top floor of Sands Macau.

 

InterContinental Kuala Lumpur is now open. The 473-room former Hotel Nikko is located within the KLCC district and marks the brand’s Malaysia debut.

 

W Retreat & Spa Bali-Seminyak will open on April 1. The 158-room resort includes 79 villas, private Balinese percussion classes and rainforest event facilities.

 

Mandarin Oriental Pudong, Shanghai will open in 2013.

 

New World Hotel Haikou will open on Hainan Island, China in 2014. The 350-room beachfront hotel will offer 1,700 sqm of function space and is directly linked to the planned convention centre.

Tiger launches new beer in Singapore

9-Feb-11, 14:45

Boutique hotel provides desired backdrop

Event Tiger Crystal launch

Company Asia Pacific Breweries Singapore

Organiser iris Singapore

Venue Klapsons

Attendees 400

Date December 2

 

The brief

Asia Pacific Breweries wanted the official launch of its new beer, Tiger Crystal to be a fun, engaging evening with catering for 400 trade guests. The event was designed and produced by iris.

 

Challenges

“The event required a team effort from the Tiger brand team, partner agencies, iris for brand activation, and Ogilvy Public Relations Worldwide Singapore for media relations,” says Mei Wai Wong, head of marketing, Asia Pacific Breweries Singapore.

“We started planning a couple of months back. The roles and responsibilities were clear from the beginning, and plans for the event ran pretty smoothly.  The venue provided a blank canvas for us to work with, which provided its share of challenges and opportunities.”

 

Execution

Venue selection was a large part of the planning process. “We wanted to use a centrally located venue that matched the brand promise,” says Wong. “The Klapsons hotel rooftop was chosen for its amazing views and its design, which featured floor-to-ceiling windows and a crystal-like exterior. This enabled us to make use of the abundant natural light by creating a clean vibe.”

 

The event set-up included a reception desk, stage, branded photo backdrop, custom ice sculpture, DJ booth and several sheer installations featuring a bottle of Tiger Crystal inside.

 

“Guests were immediately treated to the arresting sight of the Singapore skyline at sunset,” says Wong. “This contrasted nicely with the deliberately stark interior of the event space, creating an experience that conveyed the clean, sophisticated image of the brand.”

 

Guests were served cold bottles of Tiger Crystal and canapés designed to bring out the flavour of the beer. Singapore DMC Champion DJ Rattle and JC Electric Violin formed an unusual partnership combining R& B with a live violin solo.

 

Comment

“The central location and impressive views made this the ideal launch venue for Tiger Crystal,” says Wong. “We are pleased with the launch, which tied in well with the positioning and Tiger Crystal brand.”

The IEA's World Energy Outlook Is Full Of Questionable Assumptions and Major Omissions

The World Energy Outlook 2010 makes quite a number of assumptions that seem wrong, and omits important ideas. Here are a few that Oil Drum staff members have mentioned. You may have others you think should be added to the list.

See key charts from the report here >

1. Net Energy. The WEO assumes all energy resources are equal, without considering " Net Energy" or " Energy Return on Energy Invested." Society needs a certain level of energy to maintain its current state of development. The resources we are talking about using now are of lower and lower net energy (oil sands, oil shale, arctic oil, very deep oil, coal-to-liquids also many of the " renewables" ). It is not at all clear that all of the resources being examined in the WEO are really of value in solving our energy problems.

2. Quality of Energy. One cannot simply substitute one type of energy for another. Even if we have a temporary surplus of natural gas, the vast majority of our cars cannot run on natural gas. Ethanol can be substituted for a small share of the gasoline in today's cars (10% for cars made prior to 2007 and 15% for those made since then), but if the amount of gasoline declines, so will the amount of ethanol that can be used for substitution--this is a major reason that work today is being done on " drop-in" fuels. Electricity is not substitutable for liquid fuels, without major changes in the machines now using liquid fuels--for example, a semi-truck or bulldozer will generally not run on electricity, and of course electricity does nothing to replace the many non-fuel uses for oil such as medicines, synthetic fabrics, herbicides and pesticides. Variable electricity, such as from wind and solar PV, reduces the fuel needed for electric generation, but it is not otherwise a replacement for fossil fuels.

If one wishes to have substitutability across qualities of energy, there are long term changes that can be undertaken to make this happen (for example, replace cars of one type with another type), but such changes are neither quick nor cheap.

3. Recession from High Prices (Low Net Energy). If we try to use lower and lower quality energy resources, prices can be expected to rise higher, because low net energy and high cost pretty much go hand in hand. There are strong indications that oil above $85 a barrel (in 2009$) sends the US economy into recession. (See this post by Dave Murphy. Others have come to a similar conclusion.) The recessionary impact may be the signal that the amount of net energy that the economy is receiving is too low. The IEA assumes that OECD economies can continue to grow, regardless of oil price or of alternative energy price, even though this is very questionable.

4. OPEC Politicized Reserves. Many of the countries that the WEO is hoping to obtain increased oil production from between now and 2035 are countries that have very politicized reserves.

Graph showing historical oil reserves by Rune Likvern.

Back in the early years of development, reserves were set by International Oil Companies, including some from the US, doing work in these countries. But after National Oil Companies took over, upward reserve " adjustments" were made by a number of OPEC countries, in moves that seems to be designed to help with getting increased OPEC quotas, or to elevate the countries in the eyes of their citizens and of people around the world. Very recently, there have been additional upward adjustments, which seem also to be political in nature. None of these amounts are audited.

It is possible that if we had 10,000 years for extraction, and could afford oil that sells for $500 a barrel, these countries might have the amount of oil claimed. But no one has reviewed how many resources can legitimately be claimed as reserves, in a reasonable time frame, at a cost that economies can afford to pay.

5. Questionable USGS Reserves. USGS published its last major set of reserve estimates in 2000, but it is not clear that these estimates are very useful in determining how much is actually extractable at prices economies can afford to pay. There are also questions as to whether there have been major mistakes in estimates. Just last week, the USGS announced that most of the oil resources it was expecting in the National Petroleum Reserve in Alaska were in fact, natural gas resources. (Natural gas reserves in this location are of little economic value, because the natural gas is too far away from markets--yet another low " net energy" issue.) How do we know that other resources (for example, the supposed resources in the Arctic National Wildlife Refuge), are not as badly mis-estimated?

6. Omission of Export Analyses. Oil exports available to importers have been declining for five years now. Oil use by oil exporters rises each year, since populations of these countries are growing, and since leaders want to keep their citizens happy. The oil available to oil importers is only what is left, after oil exporters have taken what they see as necessary for their own needs. WEO does not look at this issue. (See this post.)

7. Overly Rosy View of Unconventional Natural Gas. Production of shale gas is currently high and prices are low. The question is whether this is a temporary market aberration (to be followed by bankruptcies and reduced production) or something one can count on as a major offset for future natural gas shortages. The Oil Drum has published articles such as this one by Art Berman, and this one by myself, Gail Tverberg, suggesting that production costs are much higher than current market prices.

High costs here again are no doubt related to low net energy return. The typical Wall Street view is that prices can rise as much as needed to get the natural gas, but as with oil, this assumption may prove to be wrong. If natural gas prices rise very high, the result may simply be worse recession. This result could mean that extraction is taking more energy than the gas itself is producing--especially if one takes a broader view of required energy, including required infrastructure such as roads. So if the energy return of unconventional gas is too low, it may have to be left in the ground.

8. Failure to address why world oil production has been flat for six years. If the amount of available oil reserves is so great, why hasn't new oil been rushed into production in the last six years, as oil prices spiraled to $147 barrel? If there was difficulty raising production in the last six years, how can one possibly assume in the " Current Policies" scenario that oil production would continue to rise in the future.

One of the issues in the recent flat production is the flow rate of reserves. Some of the unconventional oil is extremely slow to extract. Reserves to production ratios can be extremely misleading, because the fact reserves are there, doesn't mean a reasonable amount can be extracted in a given year. It is a little like having a bank account with $5 billion dollars, that you can only remove $100 a year from.

9. Assumption that smart grid will be of more benefit than it will be. Great hopes are placed in the smart grid, but if use an approach that gets electricity from more renewable energy, our fluctuations in electricity availability will be more seasonal (spring and summer when rains greatest for hydroelectric local seasonal variations for wind summer vs winter for solar). A smart grid will do nothing to solve this issue. (See this post.) Having each electric company send out time of day and time of week rates, the way telephone companies did years ago (Call on Sunday when rates are low!) would seem to accomplish much of the same objective, at a lower cost.

10. Assumption that major improvements in energy intensity of GDP can be expected in the future. In the past, improvements in energy intensity of GDP have been observed for a variety of reasons--shift in the nature of the economy to one more focused on services ability to substitute modern energy-efficient cars, appliances, power generating units for less efficient ones and building of more energy efficient buildings, for example. WEO 2010 assumes huge continued improvements in energy intensity, particularly oil energy intensity:

Perhaps some improvement in energy intensity of GDP can be made, but I wonder whether we are kidding ourselves about the extent of the possible improvement. As energy availability reduces, the shift toward a service economy may very well reduce. This could especially be the case, if certain types of imports become too expensive relative to locally produced goods, and it is necessary to shift production back more to OECD countries. Also, it takes energy to make new cars, appliances, and power generating stations, and to build new energy-efficient buildings. If energy is more scarce, replacing these is likely to take place at a slower rate than in the past, not at a faster pace. Some proposed activities like carbon sequestration and coal to liquids would seem to act in the opposite direction of lower energy intensity of GDP. At a minimum, this issue needs to be examined more closely.

11. Failure to consider constraints other than oil. There are many limiting factors, other than oil. Water is already a problem in many parts of the US and in much of the rest of the world. Lack of availability of water may be a problem if carbon capture and storage is considered, or if new fossil fuel or nuclear generating capacity is added for other reasons. Minerals ores are becoming more and more depleted, and some, such as those for rare earth minerals and lithium, are available in only a few places on earth. Maintaining or increasing production will take an increasing portion of what oil is available. Biofuels are clearly limited by the amount of arable land available to plant them, and by their impacts on soil depletion. Normally, the soil is enhanced each year by the recycling of organic matter to it. If this is removed, soil quality can be expected to degrade.

12. Failure to put together all of the costs. Under any scenario there will be huge costs involved. For example, if we use a scenario with a significant amount of wind power, there will need to be an expensive networks put into place, with an upgraded grid, electrical storage, and fossil fuel backup generation. Carbon capture and storage applied to coal would require greatly increased coal mining, new railroads for all of the coal, greater fresh water use, and would reduce energy efficiency. Without putting all of the costs together, it is hard to see what is feasible and what is not.

One of the big concerns when considering all of the costs is the capital needed to finance all of these improvements. At this point, major governments are spending far more than they are taking in in taxes. All of the enhancements that are planned through government spending will need to be considered in addition to collecting current revenue shortfalls. The total costs may well put a cap on what can realistically be done.

• Head of the Bundesbank Axel Weber will not run for the position of ECB president, according to reports. Weber is considered a hawk on the subject of bailing out the eurozone's fringe, and the news has led to a selloff in the euro. 

• Talks between North and South Korea collapsed this morning over the North's refusal to apologize or take responsibility for recent attacks on the South. North Korea says the South provoked them into attacking Yonpyeong. 

• A new WikiLeak suggests that U.S. government officials have doubts over the legitimacy of Saudi oil claims. One official believes the Saudis might be overestimating their oil holdings by as much as 40%.

• The stability of the Italian government has been brought into question this morning, as Italian prosecutors have demanded an immediate trial of Prime Minister Silvio Berlusconi on sex and miscondut charges. A judge still must approve the trial's progression. 

• The new iPad is already in production, and will be delivered for Verizon and AT& T, according to the Wall Street Journal. It will include several updates, but will not yet be released for other major U.S. mobile phone providers.

• The London Stock Exchange and Canada's biggest stock exchange have agreed to a merger. The deal will see the creation of a trading platform with the most mining companies in the world. 

• Information on the struggles within Nokia has leaked, with a memo from the company's CEO saying the company is on a " burning platform." It suggests the firm is aware of how far behind it is terms of the smart phone market.

• Two hearings on Capital Hill today will target the Fed. One, at 10:00 AM ET where Chairman Bernanke will appear before the House Budget Committee, the other, conducted by Rep. Ron Paul, on the Fed's role regarding unemployment.  >

• Pakistan's cabinet resigned today in a move to appease opposition demands for a smaller, more economically efficient executive. The U.S. is in the midst of considering  revoking its aid to the country. 

• Bonus: Jude Law and Sienna Miller have broke up. This is the second time the pair have split.

NOKIA'S CEO DEMONSTRATES TRUE LEADERSHIP: Drop The Rah-Rah Crap And Tell It Like It Is

You can handle the truth.

In the memo, Elop likens today's stumbling Nokia to a " burning oil platform," in which everyone who remains on deck will quickly be burned alive. The only chance Nokia has to save itself, Elop says, is to behave wildly differently than it has in the past--namely, to jump off the edge of the platform into the frigid waters of the North Sea.

We've been in business for nearly two decades now, and we don't recall another CEO ever being this honest and vivid about the desperate straits his company is in. (We recall MANY companies being in these straits, however).

The normal CEO approach in a situation like this is either delusional denial--(" this concern about BlackBerry's future is ridiculous--iPhones are just fluffy consumer devices" )--or a more nuanced evaluation of the company's strengths and weaknesses combined with confident assurances that the company will overcome its obstacles (" failure is not an option!" )

The latter approach is easier and feels safer, but it has a huge hidden risk, which is that the CEO will dash hopes and lose credibility.  In recent years, new CEOs like AOL's Tim Armstrong and Yahoo's Carol Bartz have taken this approach. Although it may have temporarily raised hopes and confidence, it inevitably led to a big let-down.

(RIM's Jim Balsillie, meanwhile, continues to take the other common approach--outright denial of the obvious--and in the process has shattered his credibility.  One reason Balsillie has taken this tack, presumably, is that he himself is responsible for the situation RIM is in. It's easier to be objective about a company's situation when it was prior management who put it there.)

In any event, more CEOs should take Stephen Elop's approach, and just tell it like it is.

Yes, Elop's memo is risky: It will no doubt rattle and anger many employees, and the resulting shockwaves may temporarily hurt the company's productivity. It may also scare suppliers and customers, who presumably also don't want to be burned alive if Nokia goes down.

But as Elop himself suggests, this sort of shock treatment may be the only chance anyone has to save the company.

Elop's memo also accomplishes three important things:

First, it buys him instant credibility with everyone, from employees to customers to suppliers to journalists. People may not like what they're hearing from Elop, but they can certainly be confident that he's giving it to them straight. And no one will follow a leader they don't trust, especially in a crisis.

Second, it allows him to act with the urgency and scope that the situation demands.  Nokia's situation IS desperate, and when your choices are certain-death by doing nothing and small-possibility-of-survival by doing something that seems crazy, people understand when you do the thing that seems crazy.

Third, it paves the way for him to slay sacred cows, fire popular but obstructionist managers, and give orders that might otherwise result in quiet mutiny.  Everything that Elop does will now be viewed in the context of his trying to save the company, and it's hard to fault him for trying to do that.

CEOs tend to be optimistic by nature (" We have not yet begun to fight!" ), and they rightfully worry that if they give the impression that even they aren't confident the company will succeed, everyone else will just give up.

But there's a difference between confident leadership and empty-headed delusion or cheerleading. And this is a difference that many CEOs miss.

Captain Sullenberger

On this tape, there was no panic. There was also no delusion about the seriousness of the situation or cheerleading about success. There was just swift, calm decision-making.

In these 100 seconds, in which Captain Sullenberger turned an almost certain disaster into a miraculous escape, he said only three words to the plane's passengers.

These words were carefully chosen: Sully wanted to alert the passengers to the situation, but did not want to trigger panic. He also did not want the passengers fumbling under their seats for flotation devices when the plane hit the water.

The three words Captain Sullenberger chose?

" Brace for impact."

Then Captain Sullenberger ditched the plane in the Hudson, ordered the evacuation, and made certain everyone had gotten out safely before he himself left the plane.

THAT is leadership in a crisis. THAT is understanding what many CEOs don't, which is that their people can handle the truth (and, what's more, want the truth). THAT is what gives CEOs and airline captains some chance of overcoming huge odds and pulling their people through.

Every CEO should read Elop's memo. And more CEOs should follow his example.

1. Move along, there's nothing to see here.   Experts say that fears of widespread defaults on municipal bonds are " overblown."  

2. " Overblown" fears aside, President Obama is proposing a large aid package for state's struggling to cope with huge unemployment insurance costs.

3. Seventy-one percent (71%) of all mortgages in Clark County, Nevada are under water.   Clark County is Las Vegas, basically.

4. The city of Detroit continues to teeter on the edge of financial ruin.   Mayor David Bing has turned to crowd-sourcing for ideas on how the city might be turned around.

5. Texas Governor Rick Perry says that balancing the state's budget will involve tough choices, but will not require tax increases.   Texas House and Senate leaders are planning to cut school aid by $10 billion.   Billion with a " b."

6. Tea Party Republicans joined Democrats to defeat an extension of the Patriot Act  that was expected to pass the U.S. House with relative ease.   The GOP House leadership embarrassed itself by not having a firm head-count on the measure. 

7. U.S. allies in the Middle East are urging President Obama to take great care with regards to the " situation" in Egypt.   The leaders of Israel, Saudi Arabia and the United Arab Emirates are all concerned about " regional destabilization," which is of course code for " regime change."  

8. Huge crowds gathered in Cairo yesterday, keeping up the pressure on the Mubarak regime.   Meanwhile, the US pressed for a speedier " transition," which is of course code for regime change.

9. An Iranian opposition leader said yesterday that a demonstration next week in solidarity with the protest movements of Egypt and Tunisia would be a significant challenge for both the Iranian government and the Iranian " green" movement. 

10. Republican presidential candidates will be speaking at the CPAC conference in Washington, DC.   There will no doubt be a straw poll.   None of it will matter but it will get a lot of coverage.  

Rumors Tie India's Fourth Richest Man To The Massive Telecom Scandal

India's giant telecom scandal is picking up steam and has just ensnared the country's fourth richest man.

Rumors that Anil Ambani met with telecom minister Kapil Sabil as part of a government probe caused all stocks related to his $81-billion-conglomerate to collapse.

(If you're joining us late, the scandal involves 2G allocations granted on the cheap to certain companies in exchange for kickbacks.)

Reuters:

Reliance Infrastructure (RLIN.BO) plunged the most and eroded 18.8 percent, with more than 4 million shares traded on the BSE, which is nearly 12 times the average 30-day volume.

Reliance Communications (RLCM.BO)  tumbled as  much as nearly 18 percent to an all-time low of 90.80 rupees. It later recovered some losses and closed down 14.3 percent. Around 6 million shares exchanged hands, which is more than four times their average 30-day volume. Other group companies Reliance Capital (RLCP.BO), Reliance MediaWorld (RELM.BO), Reliance Power (RPOL.BO) dropped between 8.9 percent and 16.1 percent.

Ambani blamed the selloff on " vicious and illegal bear hammering" and asked the Securities and Exchange Board to investigate, according to Business Standard.

Stock in another big company, DB Realty, dropped yesterday after Managing Director Shahid Balwa was arrested in connection with the scandal.

This Is The Central Bank That's Really Causing Global Inflation

For years now we’ve been hearing stories about how the US central bank was going to expand its balance sheet and reserves would fly out of banks like they were being dropped from helicopters and hyperinflation would quickly ensue.  Of course, no such thing happened, however, we did see a remarkable increase in the money supply.  No, not the US money supply, but the Chinese money supply.

Two years ago I said the Chinese were venturing into dangerous territory with a massive stimulus plan that was likely unnecessary and excessively large.  I believed it had the real potential for an inflation scare in China.  Two years later that appears to be the case.  And we need look no further than the money supply to put this into perspective.  Over the course of the last three years the Chinese M2 money supply has skyrocketed higher by over 70%:

Given the extraordinary actions of the Fed in recent years you might assume that the USA has an equally awful looking situation.  But the evidence simply doesn’t support such a conclusion.   The USA’s M2 money supply has expanded by a meager 16% over the last three years.  That’s a 5% increase per year during one of the most destructive recessions the USA has ever experienced.  Broader measures of the money supply show that the M3 supply is still contracting (see Shadow Stats or nowandfutures.com for some perspective).  This is not to say that the Fed has not encouraged imprudence, speculation and no loser capitalism, but if high inflation is their goal it’s difficult to say that they have succeeded.  After all, inflation in the USA is running at 1.5%-2.25% depending on your source.

China has vowed to combat inflation, however, there are little to no signs that they are serious about tackling the issue.   After all, they have elections coming up and a national target of 8% GDP growth that you can be certain they will maintain at any cost.  Even if it means rapidly increasing inflation and ensuing commodity price increases that only hurt the rest of the global economy.

-------------

Chinese shares lead global retreat after rate hike

By PAN PYLAS
AP Business Writer

(AP:LONDON) Chinese shares led a general stock market retreat Wednesday as investors in the country returned from their weeklong Lunar New Year holiday to be greeted by the second interest rate increase in a little over a month.

Though markets elsewhere have generally shrugged off the news on Tuesday that China's monetary authorities were raising interest rates again, property stocks took a pounding in Shanghai and in Hong Kong. One of the main motivations behind the interest rate increases is to boost incentives to save as opposed to risky speculative trades.

As a result, the benchmark Shanghai Composite dropped 0.9 percent to 2,774.07 and the Shenzhen Composite Index for China's smaller, second market was off 1 percent to 1,186.22. Hong Kong's Hang Seng fell 1.4 percent to 23,164.03.

Elsewhere, stock markets, particularly in Europe, took Tuesday's news in their stride. Despite being down slightly on Wednesday, many remain near their highest levels since June 2008.

In Europe, the FTSE 100 index of leading British shares was down 0.3 percent at 6,073.80 while Germany's DAX fell around 0.1 percent to 7,320. The CAC-40 in Paris was 0.1 percent lower too at 4,106.

Wall Street was poised for a modest retreat at the open, too _ Dow futures were down 0.2 percent at 12,179 while the broader Standard & Poor's 500 futures fell 0.3 percent to 1,318.

Stocks have been buoyant of late, particularly in the U.S., where both the Dow and the S& P have pushed up above where they were in the summer of 2008, before the collapse of Lehman Brothers prompted the biggest bear market since World War II.

" Equity markets remain resilient in shrugging off a wide variety of potentially negative risks, whether it be political tensions in the Middle East, higher interest rates in emerging markets or rising inflation pressures," said Neil MacKinnon, global macro strategist at VTB Capital.

Rising inflation pressures are indeed becoming an increasingly important topic of discussion in the markets.

In a survey, Fitch Ratings revealed Wednesday that the majority of investors now see a high risk of inflation during 2011, in stark contrast to the findings three months ago, when most fretted more over deflationary pressures.

" Fitch's survey suggests that investors are increasingly skeptical that higher inflation simply reflects the one-off effects of higher food and fuel prices, and that central banks may come under increasing market pressure to 'normalise' monetary policy sooner rather than later," said David Riley, Fitch's head of global sovereign ratings.

Rate-setters at the Bank of England are beginning their two-day meeting with the knowledge that higher oil and food prices have pushed up the rate of inflation to 3.7 percent. That's far higher than the Bank's target of 2 percent.

Though some of the nine-member rate-setting panel, including governor Mervyn King, have tried to explain that the inflation spike is due to one-off factors, there are concerns in the markets that higher inflation may become embedded if wage demands start accelerating.

At the moment, the markets are pricing in a one in five chance of the Bank of England raising its benchmark interest rate from the current record low of 0.5 percent, but the fact that there is a chance, however small, has given the pound a boost in recent days, particularly against the dollar.

By late morning London time, the pound was 0.2 percent higher at 1.6081.

The euro has also been buoyed of late by mounting expectations that the European Central Bank will have to raise borrowing costs sooner than anticipated just a few weeks ago, as it tries to lower above-target inflation. Though its president Jean-Claude Trichet appeared to dampen market speculation that a move is imminent, other members of the rate-setting governing council, including Yves Mersch, have sounded a distinctly hawkish tone.

The euro gets buoyed against the dollar by rising interest rate expectations only if the Federal Reserve does not alter its super-loose policy. At the moment, there are few signs that the Fed will change course anytime soon despite growing pressure from lawmakers in Congress and non-voting Fed officials to review the current $600 billion money injection into the U.S. economy. In that context, there will be interest later on Fed chairman Ben Bernanke's testimony to the House Budget Committee.

Ahead of the testimony, the euro was trading 0.2 percent higher at $1.3649.

Earlier in Asia, Japan's Nikkei 225 stock average dropped 0.2 percent to close at 10,617.83 while Australia's S& P/ASX added 0.3 percent to 4,904.80.

Benchmark crude for March delivery was up 48 cents at $87.42 a barrel in electronic trading on the New York Mercantile Exchange, more or less what it shed Tuesday.

____

Pamela Sampson in Bangkok contributed to this report.

The euro moved sharply lower on the news

Korean Talks Collapse After North Refuses To Apologize Or Admit To Recent Attacks

Details of the conflict are unclear, but South Korean officials say the North refused to accept the two conditions for a higher-level meeting, according to Voice Of America:

South Korea has insisted that North Korea must first apologize for the shelling of Yeonpyeong Island on November 23 and admit its responsibility for the sinking of a South Korean warship, the Cheonan, in March. North Korea denies any role in the Cheonan sinking and claims that South Korea provoked the Yeonpyeong incident.

That's right, they still haven't shown contrition after what looked to the world like two random acts of war. It's hard to move forward without that, especially because there's no guarantee they won't strike again.

Koreas Agree On Humanitarian Talks As Military Dialogue Breaks Down