03.08.10
Posted in business, economic, news, shortly, world of money tagged finance, life, markets, news, reviews at 7:06 pm by carydalton
LISBON, Portugal – Portugal announced new austerity measures Monday to avoid a debt crisis like the one engulfing Greece, cutting welfare benefits and government hiring as well as selling assets and raising taxes on the well-off.
The announcement comes two days ahead of a bond issue in which Portugal will try to raise euro750 million ($1.02 billion). Greece was able to tap bond markets last week after also announcing more deep cutbacks to shore up its finances.
The two countries’ troubles have fueled a Europe-wide debt crisis that has undermined the euro and led the European Union to consider setting up a new European monetary fund to help support the euro.
Portugal aims to raise euro6 billion ($8.2 billion) from privatizations, trim welfare benefits and slash other state expenditure in an effort to reduce the country’s heavy debt load, Finance Minister Fernando Teixeira dos Santos said.
The measures are part of a four-year austerity plan devised to convince financial markets and other eurozone countries that Portugal has its finances in order.
The plan “rests, essentially, on a reduction in public spending,” Teixeira dos Santos told a news conference.
Portugal’s budget deficit is projected to have hit a record 9.3 percent of gross domestic product last year, prompting fears it could face similar problems to Greece where a budget crisis has brought violent demonstrations, rattled the European Union and undermined the 16-country euro currency, of which Portugal is a member.
Portugal’s public debt is expected to climb to 85.4 percent of GDP this year, up from 76.6 per cent in 2009, and Teixeira dos Santos said he predicts it will peak at 90.1 percent of GDP in 2012 before falling back.
Teixeira dos Santos said he expected the privatizations over the next four years to bring revenue equivalent to 3.6 percent of Portugal’s gross domestic product.
The center-left Socialist government also wants to keep annual pay hikes for state employees below the rate of inflation up to 2013, cut welfare benefits and scrap some tax breaks personal business card.
Teixeira dos Santos said he would create a new tax rate of 45 percent for people earning more than euro150,000 ($205,000) a year and raise the ceiling on entitlements for tax breaks, but otherwise he ruled out tax increases.
“We are focussing on reducing spending and avoiding tax hikes,” Teixeira dos Santos said.
Planned spending on new military equipment projected for the next four years will be cut by 40 percent, and a plan to build a high-speed rail link to Spain will be postponed for at least two years.
The minority government was consulting Monday with opposition parties over the plan, though it has not said whether the measures will be put to a vote in Parliament.
The government has included some of the the planned austerity measures, including a contested pay freeze for civil servants, in its 2010 state budget, which parliament is expected to approve on Friday. The budget was delayed by a general election last year.
State spending cuts will be across the board, Teixeira dos Santos said. About 75 percent of current expenditure goes on salaries and welfare policies.
He said that increasing pay by less than the inflation rate would cut the state’s wage bill to 10 percent of GDP from just over 11 percent.
Staffing levels will be cut by allowing one new employee to be hired for every two that leave the civil service.
The government also wants to reduce outlays on welfare by 0.5 percent by 2013 by trimming benefits. Temporary measures introduced in recent years to ease the effects of the economic downturn, including financial help for companies hiring new workers, will be phased out.
The government is also expecting some relief from an improving economic growth rate which Teixeira dos Santos said is forecast to reach 1.7 percent in 2013.
The government estimates the economy contracted 2.7 percent last year. It predicts growth of 0.7 percent this year.
Portugal adds austerity measures
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03.02.10
Posted in .com, Free blog Tips, hot news, online, world of money tagged business, finance, life, marketing, world at 6:05 pm by carydalton
LONDON – Inflation in the 16 countries that use the euro fell in February, official figures showed Tuesday, in a further sign that price pressures remain subdued in the wake of the recession.
Eurostat, the EU’s statistics office, said that eurozone prices are estimated to have risen by 0.9 percent in February from the year before. That rate is down from the 11-month high of 1 percent recorded in January.
The decline was unexpected — the consensus in the markets was for inflation to hold steady at 1 percent.
No further details were provided, but more information will come when Eurostat publishes its full release on March 16.
Nevertheless, the figures give further evidence that inflationary pressures remain constrained by a near 10 percent unemployment rate and subdued money growth.
This view was further underlined by another release from Eurostat showing that prices at the factory gate fell by 1 percent in January from the year before.
The figures are also likely to reinforce market expectations that the European Central Bank will not be raising its benchmark interest rate from the current record low of 1 percent anytime soon business card. The bank is tasked with keeping inflation at or just below 2 percent.
“In all, then, we still expect headline inflation to ease back towards zero over the remainder of the year, suggesting that it will be a long while yet before the ECB begins thinking about raising interest rates,” said Ben May, European economist at Capital Economics.
Though an interest rate increase is not thought to be imminent, the central bank’s president Jean-Claude Trichet is expected to announce on Thursday, at the conclusion of the latest monetary policy meeting, that special liquidity measures introduced to prop up the banking system during the financial crisis and the recession will continue to be wound down.
Eurozone inflation drops to 0.9 percent in Feb
Hot News: Titanium Metals reports sharp drop in 4Q profit
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02.24.10
Posted in business, money, online, shortly, world of money tagged All, business, financial, life, world at 7:12 am by carydalton
The wobbly state of the housing market was made clear on Tuesday with the release of data showing that home prices managed a modest increase in December even as many more Americans owed more on their properties than they were worth.
The Standard & Poor’s/Case-Shiller index of home prices in 20 metropolitan areas rose 0.3 percent in December on a seasonally adjusted basis, with most of the cities improving from November.
It was the seventh consecutive month that the index showed rising prices, a welcome respite after several years of wrenching declines. But another 600,000 households slipped underwater during the fourth quarter, with their homes valued at less than their mortgages, according to the data firm First American CoreLogic, a real estate research company.
The total number of households with negative equity is now 11.3 million, or 24 percent of all residential properties with mortgages, up from 23 percent in the third quarter, First American said.
Negative equity is a major concern among policy makers because it can compel disillusioned borrowers to forsake their properties, contributing to the foreclosure problem. The breaking point for homeowners, research shows, is when negative equity reaches about 25 percent.
Five million people are now at or beyond that point, First American estimates, up from 4.5 million in the third quarter.
The research firm recalibrated its data in the third quarter, which means earlier negative equity numbers are not comparable. But it said that the number of severely underwater borrowers was growing even faster than it expected a few weeks ago.
“Home prices in the worst areas — Florida, Nevada and Arizona — fell more than we had expected, increasing the amount of negative equity,” a First American senior economist, Sam Khater, said.
First American’s home price index, released last week, fell for both December and the fourth quarter. That contrasted with the improving Case-Shiller numbers.
The two firms measure different groups of homeowners using different methodologies. The disparate results indicate how difficult it is at the moment to get a fix on the housing market.
There is a widespread feeling among analysts that the market is being kept afloat by the government’s emergency measures, especially the tax credit for buyers. The market’s true level will become apparent only after the tax credit ends in the spring — assuming it is not renewed as it was in the fall payday loans.
Prices in the West Coast cities tracked by Case-Shiller, including Los Angeles, Phoenix and San Diego, increased the most in December. Laggards were Chicago, New York and Tampa, Fla.
“The recovery has slowed since the summer months, but it has not completely fallen apart,” Maureen Maitland, S.& P.’s vice president for index services, said. “We’re in a bit of a flat period.”
Las Vegas, the worst hit of all the major housing markets, managed its second consecutive monthly gain. “Vegas was so battered there is now a tiny bit of hope,” Ms. Maitland said. “You can only fall so much.”
In the case of Las Vegas, that was apparently a drop of 57 percent from its peak. Seven of 10 homeowners with mortgages in Nevada owe more on their properties than they are worth, according to the First American data. In Arizona and Florida, about half the owners are underwater.
Further price declines could give many of these owners the impetus to walk away. If interest rates rise and the tax credit is not renewed, another slump is expected. Nationally, prices are already about where they were in summer 2003. Further declines could add up to a lost decade for housing prices.
Joshua Shapiro, chief United States economist for MFR Inc., said he expected the market to drop after the tax credit expired. At that point, he said, “more of the true fundamentals will come through on pricing.”
In the spring, the seasonal adjustment factors will tend to weigh on Case-Shiller prices, rather than bolster them as they do now. Without the adjustments, most of the cities in the index fell in December. The composite dropped 0.2 percent for the second consecutive month.
On an annual basis, the 20-city index was down 3.1 percent. That figure has improved consistently for a year. Only three cities — Detroit, Tampa and Las Vegas — are still showing double-digit annual declines.
The quarterly return for the Standard & Poor’s/Case-Shiller index of national home prices, which incorporates data from a broader slice of the country, was also released on Tuesday. That index fell 2.5 percent in the fourth quarter compared with the same period in 2008.
Despite a Price Gain in December, Signs of Worry on Housing
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02.23.10
Posted in All, hot news, money, news, top tagged All, blogs, life, marketing, political at 1:48 pm by carydalton
Filed at 2:06 a.m. ET
* Forecasts lower beer consumption in many regions in 2010
* Price increases set to be less than in 2009
* 2009 operating profit 2.095 bln euros vs forecast 2.10 bln
(Adds details, background)
BRUSSELS, Feb 23 (Reuters) - Heineken NV , the world’s third-largest brewer, forecast lower beer consumption in many regions, limited price increases and few cost benefits this year after reporting 2009 results broadly in line with expectations.
Heineken, like other brewers, suffered from recession-conscious consumers drinking less beer in 2009 but succeeded in pushing through price increases.
“The global economic environment will continue to lead to lower beer consumption and down-trading in a number of regions in 2010,” Heineken said in a statement on Tuesday.
The Dutch company, whose chief brands are Heineken and Amstel, Europe’s No.1 and No.3 beers, said it was committed to maintaining or increasing prices and would continue to pass on excise duty rises to consumers.
However, it said that price increases would not be as steep this year as they were in 2009.
The likely fall in raw material costs per hectolitre due to a temporary decline in the price of brewing barley would be offset by higher energy costs, rising advertising rates and increased marketing costs.
It would continue to drive through its three-year total cost management plan, which yielded 155 million euros in savings to operating income its first year in 2009 easy fast payday loans.
Heineken said that earnings before interest, tax (EBIT), and one-offs rose by 14 percent on a like-for-like basis to 2.095 billion euros ($2.85 billion) in 2009. The average forecast in a Reuters poll of 14 analysts was 2.10 billion euros.
That came despite a 5.4 percent fall in underlying consolidated beer volumes. A 4.5 percent improvement in pricing and sales mix translated into a 0.2 percent drop in revenue. Cost cutting then explained the profit increase.
World No.2 SABMiller said last month that its underlying beer volumes were flat in the last three months of 2009 as consumer demand in emerging markets offset declines in Europe, North America and South Africa.
Heineken’s pain has been greater than its peers given that some 70 percent of the Dutch brewer’s operating profit comes from the more sluggish European and North American markets.
Heineken bought Scottish & Newcastle with Carlsberg for 7.8 billion pounds ($12.06 billion) in 2008, chiefly getting the British assets.
However, it is set to boost its emerging market presence to 40 percent by buying the beer business of Mexico’s FEMSA. [ID:nLDE60A0DL]
Carlsberg also reports 2009 results on Tuesday. ($1=.7340 euros) ($1=.6469 pounds)
Heineken Sees Difficult 2010
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02.13.10
Posted in All, economic, hot news, news, top tagged All, campaign, life, opinion, personal at 11:12 pm by carydalton
The global coal industry is in the midst of a permanent structural shift in the form of the emerging dominance of the Asia-Pacific region.
China and India are at the heart of the transformation, firmly placed as the world's No. 1 and No. 3 biggest coal producing nations, respectively. (The U.S. is No. 2.)
And demand in the world's two most populous nations is growing rapidly.
India's imports of thermal coal, used in power generation, rose 60% in 2009 to 57 million tons. China shifted to a net importer last year to the tune of 70 million tons of thermal coal, despite large domestic resources of the black rock.
Both countries are also experiencing a spike in demand for metallurgical coal, a main ingredient of steel, as their economies continue to mushroom.
At the end of January, Peabody Energy (NYSE:BTU - News) said it is expanding a mine in Australia at a cost of $70 million to boost capacity by 1 million tons within several years to meet growing demand for metallurgical, or met coal, used by steel companies in China, India and other Asian nations.
"China and India have permanently changed the seaborne metallurgical and thermal coal market landscape," CEO Gregory Boyce said. Peabody enjoyed a 37% increase in Australian coal shipments in the second half of 2009.
Alpha Natural Resources (NYSE:ANR - News) said it sees much strength in the metallurgical markets in 2010. It raised its metallurgical shipment guidance by about 1 million tons, to 11 million to 13 million tons for this year.
Meanwhile back in the U.S., the enormous stockpiles of coal racked up by utilities during the depths of the recession are starting to shrink after extremely cold weather in December and January.
According to U.S. utilities, which use coal to generate nearly half of America's electricity, roughly 50 to 60 gigawatts of coal will go offline over the next 10 years or so.
The U.S. will need to replace that energy, and renewables such as solar, wind, small hydro, modern biomass, geothermal and biofuels are one of the paths to take to fill that void.
1. Business
IBD's Energy-Other group includes any energy source that is not oil or natural gas. The group's 800-pound gorilla is coal.
Coal mining, especially underground, is a capital- and labor-intensive business. It is also a very high fixed-cost business.
Electricity demand has been the primary value driver for thermal and steam coal for a long time, with steel being the other big driving force.
In 2009, the U.S. produced 1.08 billion tons of coal, mined primarily from four major coal basins with smaller ones spread across the country. The four are the northern and central Appalachian basins, the Illinois basin and northern Wyoming's Powder River Basin.
Peabody is the largest U.S. coal miner, producing 215 million tons last year. It is the only U.S.-based company in the group with international mining operations, in this case Australia.
Arch Coal (NYSE:ACI - News) is the second-largest company in the group; Alpha Natural Resources moved into the No. 3 slot with last year's acquisition of Foundation Coal for $1.4 billion in stock. Consol Energy (NYSE:CNX - News) and Massey Energy (NYSE:MEE - News) are fourth and fifth, respectively.
The U.S. is capable of generating roughly 1,000 gigawatts of electricity per year. Coal generates some 325 gigawatts, natural gas kicks in 400 and nuclear makes up another 100, according to Brian Gamble, an analyst at Simmons & Co. The rest, he says, is split between hydropower, solar, wind, geothermal and biomass.
"The segment of the U.S. power grid that is made up of renewables is quite small," Gamble said. "It is a growing market, albeit from a small base, but we don't expect solar, wind or any other renewable to gain significant market share for some time."
The group includes several solar companies, including Chinese firms like Trina Solar (NYSE:TSL - News) and Suntech Power (NYSE:STP - News).
First Solar (NMS:FSLR) is the largest U.S.-based solar company by market share. Other American firms include Real Goods Solar (NMS:RSOL), GT Solar International (NMS:SOLR) and SunPower (NMS:SPWRA).
While multinationals such as GE (NYSE:GE - News) and Siemens (NYSE:SI - News) have made a strong push into wind power, those diversified industrial giants are listed in other stock groups. In the Energy-Other group, Danish company Vestas Wind Systems (OTCBB:VWDRY.ob - News) is the largest wind-power company.
Ormat Technologies (NYSE:ORA - News) and U.S. Geothermal (AMEX:HTM.a - News) operate plants of geothermal energy, power generated from heat stored in the Earth payday advance.
Name Of The Game: It's simple: produce and supply coal, wind, solar, hydropower and other renewables to fulfill the world's energy needs, which are expected to grow rapidly over the next 20 to 30 years, says Michael Dudas, an analyst with Jefferies & Co.
2. Market
U.S. utilities are the biggest customers for coal producers and renewable energy alike.
Steel makers are the next biggest consumers of coal.
The entire coal market, which is dominated by the publicly traded miners and small mom-and-pops, is estimated at roughly north of $52 billion. The U.S. is expected to produce 1.07 billion tons of coal this year, with public coal companies churning out more than half that output.
The renewables market is a bit tougher to size as the adoption of these alternative energies is still in early phases. But rough estimates for the global wind and solar market is roughly $100 billion, with 70% of that produced by wind. The U.S. wind market is roughly $20 billion, according to Simmons' estimates.
3. Climate
The biggest issue facing the coal industry is permits being held up by the Environmental Protection Agency that are needed to continue producing coal. Environmentalists contend coal mining is destroying landscapes where these basins are located.
"The problem here is that we are going to experience energy usage growth of 50% over the next 25 years, and we can't do it without coal, which is one of the cheapest forms of energy," Dudas said.
Coal stockpiles rose last year as demand fell. Businesses were forced to close and shutter production, while consumers used less heat to save on their energy bills, Dudas says.
"Coal producers will have to manage their output and in some cases shut mining operations down until the stockpiles begin to decline, which has already begun," he said.
Last week, U.S. industry executives from the wind, solar, hydropower, geothermal and biomass sectors pushed for a federal renewable energy standard, which would set a percentage of how much energy must come from renewable sources in the U.S.
The group wants an extension of tax incentives and said stimulus funds powered most renewable expansion last year. President Barack Obama has urged Congress to set a national standard that would require 25% renewable power by 2025.
A federal standard, which they say will foster economic growth and create jobs, could spur these industries at a time when China is moving swiftly into alternative energy production.
4. Technology
Most technological advances in this industry group have occurred in renewables.
For example, ethanol producers, such as BioFuel Energy (NMS:BIOF) and Pacific Ethanol (NMS:PEIX), use corn oil extraction technologies to produce the biofuel.
Companies such as Hy-Drive Technologies provide natural gas or hydrogen-generating systems for diesel and commercial fleets.
And FuelCell Energy (NMS:FCEL) makes stationary fuel cells, which electrochemically produce electricity directly from hydrocarbon fuels for commercial, industrial, utility and government customers.
Solar power companies have to be tech-savvy to generate electricity from sunlight. This can be direct as with photovoltaics, or indirect as with concentrating solar power, where the sun's energy is focused to boil water, then used to generate power.
5. Outlook
Over the next decade, coal plant retirements will take roughly 50 to 60 gigawatts of coal generation offline.
The U.S. will need to replace that lost energy, and renewables are the answer, Gamble says.
"It will take a mix to fill the void, and there will be a shift, but renewables won't fill that need overnight," he said. "In order to make this happen, there will have to be additional infrastructure built, which becomes an expensive proposition no matter how you slice it."
Nuclear, natural gas and renewable energy can each fill part of that role, but additional coal assets must be built in the meantime.
Upside: The world has unquenchable thirst for energy as emerging economies continue their rapid growth and populations in developed nations continue to swell. That demand should fuel business for traditional sources like coal as well as renewables.
Risks: Another recession could further sap demand for coal, which could increase stockpiles and restrain mining operations. Also, tougher regulation in the U.S. would make starting new projects difficult.
A Renewed Sense Of Energy
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02.07.10
Posted in Free blog Tips, money, online, shortly, top tagged All, life, money, opinion, personal at 3:00 am by carydalton
SHORTLY after Sept. 11, 2001, a soon-to-be familiar figure appeared in the news media. He was a young Muslim who wanted nothing more than to strap on a belt laden with explosives and blow himself up in an area crowded with infidels. He thought his reward would be eternity in paradise with 72 virgins.
But was he truly the face of Islamic terrorism? Eli Berman, a professor of economics at the University of California, San Diego, says otherwise in “Radical, Religious, and Violent: The New Economics of Terrorism” (M.I.T. Press, 300 pages).
“The pious Jihadist, programmed with an ideology of hate to be a human guided missile, or dreaming of virgins in heaven, makes for compelling news broadcasts and emotional sound bites, but in concept does not stand up to scrutiny,” he says.
Professor Berman has written an engaging book that brings new insight to an extremely polarizing subject. He argues that many terrorists are actually more rational than we might like to think. And that, of course, is a chilling notion.
The author is neither a pacifist nor an apologist for terrorists. He says, however, that if we stop looking at them as cartoon characters, we may do a better job of deterring them. In his view, we need to understand the economic forces that govern their behavior.
Professor Berman says that some of the most effective and resilient groups with terrorist links are in some ways economic clubs, run by “radical altruists.” He puts Hamas, Hezbollah and the Taliban (the United States has tied all three to terrorism) in this category. Some of these militant soldiers of Islam may sometimes commit atrocities. But Professor Berman contends that they genuinely want to help their members. They raise money from foreign governments — or, in the case of the Taliban, by selling opium — and provide social services and jobs to adherents.
The author notes that in South Lebanon, Hezbollah operates two private hospitals and a number of schools. It collects garbage, provides water and even manages an electricity grid. He says the Taliban operate 13 “guerilla law courts” in Afghanistan where locals can have disputes resolved.
Granted, the Taliban’s underground judicial system may not be as expensive to operate as a hospital or a garbage pickup service, but it has the same effect of forging a tighter bond of between the operation and its constituents.
However, Professor Berman writes, radical Islamic groups extract sacrifices from their members that have economic consequences. Families are encouraged to have lots of children, and the women are less likely to get jobs and have money to spend.
Professor Berman says that these organizations also prefer that their members send their children to Islamic schools, whose graduates are less likely to obtain jobs that pay them enough money to explore the market and its temptations cashadvance. Indeed, he says, these are some of the ways that radical believers ensure that their followers remain loyal.
Now there have been many so-called terrorist groups. But most of them don’t last because the authorities find someone who will give them information, which short-circuits the activities of the groups.
Professor Berman points out that Israeli security forces had little trouble shutting down the Jewish Underground, a less tightly organized group linked to terrorist acts, because its members were more willing to become informants than many of their Islamic peers. Al Qaeda does not offer social services, he says, and it has had more trouble historically with disloyal members.
So what does Professor Berman think should be done to put terrorists out of business? He says we need to do more to stop their revenue streams. He recommends that we discourage gulf states from contributing money to Hamas and cut off the Taliban’s inflows of cash from illegal activities.
In Professor Berman’s opinion, the United States needs to compete by offering the same kind of social services in Iraq and Afghanistan, though he concedes that terrorist groups will do everything to stop such efforts. He says aid providers must be protected — and he concedes that this will be expensive. But he points out that we are already spending billions of dollars on domestic security.
“In the long run,” Professor Berman writes, “those constructive approaches may well be cost-effective for the United States and other developed countries that are subject to international terrorism, because they are potentially sustainable.” In other words, they could be good investments.
Professor Berman is shrewd enough not to repeat the left-wing fallacy that terrorism itself is a product of economic deprivation. He seems reluctant, however, to explore why Islam is such a breeding ground for these practices.
He says the rise of militant Islam is just another wave of religious extremism, the likes of which have occurred throughout history. As he points out, the peace-loving Mennonites belong to a branch of Christianity that was once considered radical and dangerous.
Then again, today’s terrorists may soon get their hands on a nuclear device. Would Mennonites of old have detonated it? We don’t know. But Professor Berman’s “radical altruists” might.
Off the Shelf: Terrorism and the Pocketbook
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02.02.10
Posted in .com, hot news, money, online, world of money tagged blogs, economy, events, life, personal at 9:47 pm by carydalton
NEW YORK – Shares of several staffing agencies ticked higher Tuesday after Manpower Inc. posted fourth-quarter results that beat analysts’ expectations, and its CEO said he is confident about the sustainability of an economic recovery.
Manpower said quarterly earnings plunged 62 percent as employers still feared taking on more workers and unemployment continued to hover around 10 percent. Still, the results topped estimates and CEO Jeffrey Joerres said revenue should start to grow in the first quarter for the first time since late 2008.
“(The) CEO’s commentary regarding the recovery was much stronger and more positive than his comments out of Davos last week,” Deutsche Bank analysts wrote in a note to investors Tuesday, referring to the annual World Economic Forum in Switzerland.
The Milwaukee-based company said it’s continuing to see improving trends across its businesses and is more confident that the global economic recovery is sustainable. It also announced it will acquire fellow staffing firm Comsys IT Partners Inc installment payday loans., which provides temporary employees for information technology jobs.
Shares of Manpower Inc. rose $2.08, or 3.9 percent, to $55.24 in afternoon trading.
Other staffing companies also advanced. Shares of Robert Half International Inc. gained 32 cents to $27.19. The owner of Accountemps and OfficeTeam last week reported a 65 percent drop in its fourth-quarter earnings as high unemployment persisted but also still beat Wall Street expectations. The company placed more temporary and more permanent workers in new jobs than it had in the third quarter, providing some evidence of a recovery.
Shares of blue-collar staffer True Blue Inc. added 28 cents, or 2 percent, to $14.47 and jobs Web site operator Monster Worldwide Inc. climbed 35 cents, or 2.3 percent, to $15.94. Kelly Services Inc. rose 24 cents to $13.80.
Shares of staffing cos. rise on Manpower results
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01.24.10
Posted in .com, All, business, economic, online tagged finance, life, personal, politics, world at 3:36 pm by carydalton
Wall Street tumbled for a third day on Friday as a three-day slide pushed the markets down almost 5 percent. For the Dow, Friday was the lowest close since early November.
For a second day, shares declined on concerns about President Obama’s proposal for tighter restrictions on the activity of banks as the markets finished the week with a three-day losing streak.
The president on Thursday proposed to ban banks with federally insured deposits from casting risky bets in the markets, and to resist further consolidation in the financial industry — moves the caught bankers and traders by surprise.
In response, the Dow Jones industrial average fell more than 200 points on Thursday. Declines in Asian and European markets followed and then carried over a second day Wall Street. Concerns of earnings sent shares lower on Wednesday.
At the close, the Dow Jones industrial average was down 216.90 points, or 2.1 percent, at 10,172.98. The broader Standard & Poor’s 500-stock index fell 24.73 points or 2.2 percent, to 1,091.75, while the technology-heavy Nasdaq composite fell 60.41 points or 2.67 percent, at 2,205.29. For the week, the Dow was down about 4.1 percent.
Quincy M. Krosby, a markets strategist at Prudential Financial, said investors were also weighing news that Ben S. Bernanke’s confirmation for a second term as chairman of the Federal Reserve faced growing opposition.
“What they’re sensing is this has taken on a political visceral momentum,” Ms. Krosby said. “They makes them hesitant about the future of the banking system.”
As they did on Thursday, financial shares led the decline. On Wall Street, shares of Morgan Stanley declined 6.3 percent; Goldman Sachs dropped 5.2 percent; Bank of America, 4.5 percent; and Citigroup, 1 percent. In Europe, Barclays lost 6 percent. UBS of Switzerland was off 5.1 percent, while Santander of Spain gave up 3 percent.
“There’s no doubt that there will be a significant amount of regulation in the banking industry in the next year,“ said Henk Potts, equity strategist at Barclays Wealth in London. “But there’s a long road to travel and lots of discussions and negotiations before we find out exactly what this will entail no fax payday loan.”
Questions about the banks, analysts said, could push the markets into another period of uncertainty.
Other analysts saw President Obama’s announcement of tighter banking rules was taken as a sign that government leaders are looking beyond the financial crisis.
“It’s clear that politicians are starting to have enough confidence that the global economy has been saved and are starting to try to find ways of paying the bills,” analysts at Deutsche Bank said Friday in a research note. “The risk is that they do this too early and the timing of this announcement is unfortunate given it coincides with the escalation of problems in peripheral Europe and in a week where China has effectively tightened policy.”
The comments about peripheral Europe were a reference to the budgetary problems in Greece that have rattled bond markets here.
Earnings from two companies helped to offset some of the declines. General Electric topped expectations despite a 19 percent drop in fourth-quarter income. For the quarter, G.E. posted net income of $2.94 billion, or 28 cents a share. That compared with $3.65 billion, or 35 cents, a year earlier.
And the fast-food restaurant chain, McDonald’s said fourth-quarter profit was $1.22 billion, or $1.11 a share, up from $985.3 million, or 87 cents a share, a year earlier. The company said sales overseas had helped to offset a weakness in American sales. G.E. shares were up 1 percent and McDonald’s rose 0.35 percent.
Markets in Europe were also lower. In London, the FTSE 100 was down 32.11 points or 0.6 percent, and the DAX shed 51.65 points, or 0.9 percent, in Frankfurt.
In Asia, the Nikkei 225 index, Japan’s leading market gauge, led the region’s declines with a drop of 2.56 percent. The Shanghai composite index in mainland China fell nearly 1 percent, while the Hang Seng index in Hong Kong dropped 0.6 percent, with the international banks Standard Chartered and HSBC both down.
Bettina Wassener reported from Hong Kong and Matthew Saltmarsh from Paris.
3-Day Slide Sends Markets Down About 5 Percent
Hot News: Report: Barclays to defer bonuses
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01.20.10
Posted in All, Free blog Tips, business, news, online tagged economics, finance, life, markets, politics at 10:24 am by carydalton
The possibility that the dynamics of the health care debate could changed helped spur the market on Tuesday, overshadowing fresh concerns about banks and the American consumer.
Investors were preparing for the prospect that a Republican might win the Senate seat once held by Edward M. Kennedy in Massachusetts and, with it, deny Democrats the 60th vote needed to surmount Republican filibusters and advance the health legislation.
As voters headed to the polls in Massachusetts, shares of pharmaceutical companies surged. The possibility of disarray over the bill eased concerns that profits would suffer at insurance and drug companies. Merck climbed nearly 3 percent, and Pfizer was up 2 percent. Rising health stocks pulled the broader market higher.
In midday trading, the Dow Jones industrial average climbed 0.73 percent or 76.94 points. The broader Standard & Poor’s 500-stock index rose 0.8 percent, and the technology-dominated Nasdaq was up 0.94 percent.
Amid Tuesday’s zeal, however, there were indications that financial firms face high hurdles as they try to escape the worst recession in decades. The banking giant Citigroup reported a loss for a second consecutive year, held back by losses on mortgages and credit cards.
Citigroup’s figures followed similarly cautious results from JPMorgan Chase last week. Taken together, the reports suggest Americans are still struggling to pay the bills amid high unemployment and depleted savings accounts, leaving banks looking for fertile revenue streams.
“What’s going to be critical for banks is their ability to cut their loan losses — that’s going to be the principal source of earnings growth,” said David A payday loans with no fax. Rosenberg, chief economist and strategist for Gluskin Sheff. “Citigroup’s loss certainly raises a bit of a cautionary flag in terms of the entire financial sector.”
Still, investors said Citigroup’s results could have been much worse, and they were pleased its $1.6 billion loss in 2009 was a stark improvement from the $27.7 billion loss in 2008. Shares of Citigroup rose 0.58 percent, while JPMorgan Chase fell 0.23 percent and Bank of America dropped 0.92 percent.
In other markets, the dollar gained and the euro fell amid continuing concern about the ability of several European nations, including Greece, to pay off debt. Oil dropped.
Investors were also encouraged by heavy merger and acquisition activity over the holiday weekend, analysts said. Cadbury agreed to a takeover offer from Kraft on Tuesday, worth about $19 billion, that would create the world’s largest confectioner. Cadbury rose 5.34 percent.
In addition, Berkshire Hathaway said it would acquire part of the Swiss Reinsurance Company for nearly $1.3 billion, sending shares of Berkshire up 1.23 percent.
Overseas, European markets were poised to close higher. The FTSE 100 in London was up 0.52 percent, the CAC 40 in Paris rose 0.9 percent, and the DAX in Frankfurt climbed 0.96 percent.
Drug Companies Lead Markets Higher
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01.12.10
Posted in All, Free blog Tips, business, shortly, top tagged economics, events, life, money, writing at 8:54 pm by carydalton
LONDON (AFP) – The leading stock exchange fell on Tuesday as investors reacted to weak earnings data from US aluminium producer Alcoa, which kicked off the latest results season in the world's biggest economy.
The FTSE 100 index slumped 0.71 percent to 5,498.71 points, dragged down by heavyweight mining groups whose share prices suffered after Alcoa's earnings missed analyst expectations.
Lloyds was the most traded stock, seeing 187 million units change hands, followed by telecom giant Vodafone, which saw 128 million shares switch owners.
Land Securities topped the leader board, gaining 10.50 pence — or 1.54 percent — to finish at 693.50.
The day's second-best performer was wholesale firm Wolseley, up 21 instant payday loan.00 pence — or 1.47 percent — to stand at 1,447.
The session's biggest loser was silver miner Fresnillo, which lost 44.00 pence — or 5.16 percent — to close at 808, as metal prices tumbled.
It was followed by peer Lonmin, which shed 88.00 pence — or 4.08 percent — to finish at 2,069.
Sterling gained ground against the euro and the dollar.
At 17:06, the pound was trading at $1.6181, up from $1.6115 at Monday's close. Against the euro, the pound stood at 0.8975 euros, up from 0.8962 over the same period.
FTSE 100 closes lower
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01.11.10
Posted in All, Free blog Tips, business, news, top tagged business, events, life, personal, politics at 2:00 pm by carydalton
HONG KONG (Reuters) – Asian stocks hit a 17-month high on Monday as a strong rebound in China's exports raised investor optimism about Asia's economies while the dollar suffered its biggest loss in six weeks after poor U.S. jobs data.
European shares were expected to gain, financial spreadbetters said, as the dollar's weakness pushed the euro to a three-week high. U.S. stock futures were up 0.4 percent.
China's exports and imports last month blew past expectations, with exports surging 17.7 percent from a year earlier to break 13 months of declines. The trade data, released on Sunday, triggered a shift into Asian assets as investors shrugged off Friday's disappointing U.S. non-farm payrolls data.
Gold pushed up to a five-week high at $1,157.65 an ounce at one point as the data showed a sharp rise in China's commodities imports and sent the Australian dollar to a 26-month peak against the euro.
Chia-Liang Lian, a senior vice president at bond fund PIMCO, said Asia's fundamentals made it highly attractive.
"We have seen how Asia has navigated successfully through a tough year with a score card that is nothing short of spectacular," Lian told Reuters in an interview.
The MSCI index of Asia Pacific stocks traded outside Japan (.MIAPJ0000PUS) hit its highest level since July 2008, gaining 1.2 percent. The Thomson Reuters index of Asian shares (.TRXFLDAXPU) was 0.8 percent higher.
Japanese financial markets were closed for a public holiday.
Australia's leading share index (.AXJO) climbed 0.8 percent to a 15-month high as the China data lifted resource companies that benefit from Chinese demand.
"People are gradually getting more comfortable with the recovery story. You have seen some reasonably good data out of China, and there have been no disasters, no more Dubais," said Greg Goodsell, equity strategist at RBS Australia.
The Australian dollar soared to its highest in more than two years against the euro and to a five-week high against the dollar.
OIL TOPS $83
Resource-related shares gained in Hong Kong, including Aluminum Corp of China (Chalco) (2600.HK) (601600.SS), the country's top aluminum company, which surged 5 percent, and Jiangxi Copper (0358 allstate insurance company.HK)(600362.SS), China's top metals producer, which rose more than 3 percent.
Chinese brokerage shares gained in Shanghai after news late last week that Beijing had decided to allow stock index futures and margin trading.
The dollar, however, extended losses stemming from the jobs report, which dampened expectations of an early rise in U.S. interest rates.
A member of the U.S. Federal Reserve monetary policy committee, James Bullard, said on Monday that rates may remain low for quite some time, reiterating the central bank's long-standing position.
The dollar dropped 0.5 percent against a basket of currencies (.DXY) and was quoted at a three-week low at around $1.4533 against the euro.
The U.S. economy shed 85,000 jobs in December, confounding expectations that the job market was finally stabilizing. Still, analysts argued the outcome was consistent with economic recovery because the pace of job losses had dropped sharply since the height of recession.
Oil jumped more than 1 percent, topping $83 a barrel, on the back of the weak dollar, extremely cold weather in the northern hemisphere and a surge in China's crude oil imports last month.
China's export rebound fueled expectations China could soon let the yuan start rising again and helped push Asian currencies higher as a stronger yuan would benefit pricing for fellow Asian exporters.
The high-yielding Indonesian rupiah jumped 1 percent to 9,120 to the dollar, despite suspected intervention by the central bank. It has gained 3.3 percent so far this year as investors have sought out higher-yielding assets.
South Korean authorities were also seen intervening to curb the won which touched a 15-month high of 1,117.5 to the dollar.
PIMCO's Lian said Asian currencies were still undervalued on a trade-weighted basis and cited the yuan, the won and the Singapore dollar among his top currency picks. He also likes Indonesian debt which offers better yield than other Asian debt.
(Additional reporting by Saikat Chatterjee in HONG KONG and Victoria Thieberger in MELBOURNE; Editing by Jan Dahinten)
Asia stocks hit 17-month high on China export surge
Hot News: Fed unlikely to be swayed by jobs data: Bullard
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01.07.10
Posted in .com, All, Free blog Tips, economic, hot news tagged campaign, life, markets, news, political at 10:30 am by carydalton
TOKYO (MarketWatch) — Japan’s newly appointed Finance Minister Naoto Kan sent his nation’s currency significantly lower against its U.S. counterpart Thursday, as he used his inaugural press conference to talk down the yen.
Kan said many Japanese companies are in favor of the dollar trading around 95.00 yen, and that he will work with the Bank of Japan to get the currency to “appropriate” levels. The dollar spiked to 92.63 yen, from 92.15 yen before Kan spoke.
It is unusual for Japanese ministers to make comments on specific foreign-exchange levels.
The currency market trend “has been corrected a lot toward yen weakness since the Dubai shock … but I’m hoping the correction will make a bit more progress, making the yen weaker,” Kan was quoted as saying by Dow Jones Newswires.
Japanese Prime Minister Yukio Hatoyama on Wednesday appointed the deputy prime minister — who will also keep that title — to replace Hirohisa Fujii, who stepped down for health-related reasons.
Kan “is a bit of a contrast to Fujii, who had, in our view, adopted a ‘benign neglect’ stance’” through December toward the Japanese yen, said strategists at Barclays Capital.
By contrast, Kan “has been expressing his preference” for a weaker yen, they said payday loan online.
“Thus, the government’s stance to prevent renewed [Japanese yen] strength has become clearer, and we think Kan’s appointment is likely to reduce the upside risk” for the yen, they wrote in a note to clients.
Ironically, Fujii once did the opposite of what Kan did Thursday.
In September, even before he was sworn in as finance minister, Fujii inadvertently sent the yen soaring when he was quoted as telling reporters that a strong yen had some economic benefits and that the recent foreign-exchanges moves weren’t rapid.
Not all analysts believe a weaker-yen stance is a given from now.
“We continue to expect the government to give priority to more pressure on the BOJ for additional easing and to reserve intervention as the last resort,” said Tomoko Fujii, a rates and currency strategist at Bank of America Securities-Merrill Lynch.
“We also think that the BOJ is likely to remain reactive. The BOJ probably intends to ease policy further only after sharp [Japanese yen] appreciation increases risks of deeper deflation,” she said in emailed comments.
Japan’s new finance minister call for weaker yen
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12.30.09
Posted in .com, economic, hot news, money, world of money tagged All, business, campaign, life, world at 11:29 pm by carydalton
WASHINGTON (Reuters) – The Obama administration said on Wednesday it would provide GMAC Financial Services an additional $3.8 billion of government aid, and said it was raising the government's stake in the company to 56 percent from 35 percent.
"These actions offer the best chance for GMAC to complete its overall restructuring plan and return to the private capital markets for its debt financing and capital needs in 2010," the Treasury Department said in a statement.
GMAC, which was formerly owned by General Motors , had already received $12.5 billion of aid from the U.S. government since December 2008. The latest cash infusion will bring total taxpayer aid to $16.3 billion.
The money will help shore up the auto loan and mortgage company as it wrestles with the worst housing market in decades.
Many analysts see GMAC's mortgage assets, which make up about a third of the company's $178.2 billion balance sheet, as the main obstacle to the company reaching profitability.
In a separate statement, the company said the government's investment put it in a position to explore strategic alternatives for its mortgage business.
One bondholder, speaking on condition of anonymity, said that the best route for GMAC to follow now would be to sell off GMAC's mortgage servicing business, which collects payments from borrowers and is worth more than $3 billion on the company's books.
The bondholder said the company could continue to make new home loans through its Ally Bank unit. GMAC's remaining mortgage assets could be used to pay off coming debt obligations, he added easy fast payday loans.
GMAC's auto finance operations were profitable in the third quarter, earning about $164 million after taxes, while the mortgage business lost nearly $600 million.
The company has already received $12.5 billion of aid from the U.S. government since December 2008, representing about half of the bank's equity as of September 30.
It has been speaking to the Treasury about its capital needs for months, after a government "stress test" found that the former financing unit of General Motors needed about $11.5 billion. The company has been unable to raise private capital.
In November, GMAC Chief Executive Al de Molina resigned and was replaced by Michael Carpenter, a board member and former Citigroup executive.
GMAC said in November that it asked the Treasury to postpone decisions about putting more capital into GMAC until Carpenter and other managers had assessed the company's condition.
On news reports of the planned capital infusion, the cost to insure GMAC's debt against default in the credit derivatives market fell to around 4.4 percentage points, or $440,000 a year for five years, from 4.66 percentage points at Tuesday's close, according to market data company Markit.
(Additional reporting by Corbett B. Daly and Tim Ahmann in Washington, and Dan Wilchins and Karen Brettell in New York; Editing by Derek Caney, Dave Zimmerman and Steve Orlofsky)
Treasury to dole out $3.8 billion to GMAC, raise stake
Hot News: Currencies: Dollar higher after home-price, confidence data
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