Global Economy

[Guest]

<b>Britain's unemployment rises to two million</b>

[Guest]

<b>Indian Rupee to Extend Losses as Volatility Rebounds, BNP Says </b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Jan. 22 (Bloomberg) -- Volatility in India’s rupee will rebound from a four-month low as the currency declines on sales of the nation’s assets by overseas funds, BNP Paribas SA said.
....

The rupee has lost 0.7 percent this month, adding to the 19 percent slump last year, <b>as global funds sold $728 million more Indian stocks than they bought</b>. All of the 10 most-active Asian currencies outside of Japan fell against the dollar this month.

<b>The rupee, which closed at 49.13 per dollar in Mumbai yesterday, will weaken to 50 in the coming weeks,</b> Thio said.

<b>Implied volatility on one-month dollar-rupee options was at 14.75 percent </b>yesterday, the lowest since Sept. 26, Bloomberg data show. <b>The gauge of fluctuations touched 33 percent on Oct. 27, the highest in at least nine years</b>. Traders quote implied volatility, a gauge of expected swings in exchange rates, as part of option prices
<!--QuoteEnd--><!--QuoteEEnd-->

[Guest]

<b>•Japan's Exports Plunge Record 35%, Signaling More Cuts in Jobs, Production </b>
<b>•South Korea's Economy Contracts More-Than-Expected 5.6% as Exports Plunge</b>

[Guest]

‘<b>Year of The Ox’ Signals Drop for Asian Stocks, Astrologers Say</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Jan. 23 (Bloomberg) -- Tony Tan, a Singapore-based astrologer, is urging investors heading into the ‘Year of the Ox’ to emulate the beast that lends its name to the lunar new year -- be patient and deliberate.

....
Just like the ox, “investors should be patient and position for a potential market upturn in 2010,” said Tan, a former broker at the securities arm of DBS Group Holdings Ltd. He predicted correctly last year that markets would peak and investors will suffer losses. <!--QuoteEnd--><!--QuoteEEnd-->

[shamu]

^^^ These astrologers read normal economic trends to make their predictions.

[Guest]

Chinese and Koreans take astrologers predictions very seriously.
It only means less investment from oriental countries.

[Guest]

<b>The Euro Won't Be around in 20 Years: Jim Rogers</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->"Not being in the euro is a competitive disadvantage," Rogers told UK paper "Metro."

"It makes it more expensive and more cumbersome to do business with the rest of the world. But I am not sure the euro (BIS: EUR-TN) will last 20 years," he said. <b>"The Italians and Germans will be in chaos because they have no plan B."</b>

Also in the <b>next 20 years China "may well be the largest economy in the world," </b>Rogers said.

<b>He reiterated his view that the pound (BIS: GBP-TN) will continue to weaken, as the City of London suffers because of the financial crisis and North Sea oil is drying up</b>.
<!--QuoteEnd--><!--QuoteEEnd-->

[Guest]

<!--QuoteBegin-Mudy+Jan 27 2009, 01:38 AM-->QUOTE(Mudy @ Jan 27 2009, 01:38 AM)<!--QuoteEBegin--><b>The Euro Won't Be around in 20 Years: Jim Rogers</b><!--QuoteBegin--><div class='quotetop'>QUOTE<!--QuoteEBegin-->"Not being in the euro is a competitive disadvantage," Rogers told UK paper "Metro."

"It makes it more expensive and more cumbersome to do business with the rest of the world. But I am not sure the euro (BIS: EUR-TN) will last 20 years," he said. <b>"The Italians and Germans will be in chaos because they have no plan B."</b>

Also in the <b>next 20 years China "may well be the largest economy in the world," </b>Rogers said.

<b>He reiterated his view that the pound (BIS: GBP-TN) will continue to weaken, as the City of London suffers because of the financial crisis and North Sea oil is drying up</b>.
<!--QuoteEnd--><!--QuoteEEnd-->
[right][snapback]93892[/snapback][/right]
<!--QuoteEnd--></div><!--QuoteEEnd-->

China does well only when the world does well.

[ramana]

Harpers magazine has agood article on the next bubble

Next Bubble

Looks like the $12T that got wiped out never existed. And bailing out businesses based on that will make the bogus wealth into real debt. The way out is the stimulus to create new jobs and to ease the pain of the bubble jobs.

[Guest]

It is a perfect storm. Combination of lot of factors. High Oil price, corruption at worldwide institutional level, US election. Creating of job is important but before that creating a demand is must. California unemployment rate is near 10%. Today even ACLU had laid of SF staff.

Why I think this was well planned but extent had crossed beyond expectation?

If you remember I have discussed this 2-3 yrs back in IF/BR meet.

Whole thing will expose China economy, Euro vulnerability and will strengthen dollar. India is out of equation. Middle East is nobody.

[acharya]

More woe as 76,000 jobs axed in one day

By FT Reporters

Published: January 27 2009 02:00 | Last updated: January 27 2009 02:00

Corporate bellwethers in the US and Europe slashed more than 76,000 jobs from their payrolls to confront the deepening economic downturn, marking one of the most brutal days yet for workers on both sides of the Atlantic.

US corporate groups such as Caterpillar, General Motors, Sprint Nextel and Home Depot led the retreat, as the domestic recession coupled with tough export markets continued to take a heavy toll on their businesses. Pfizer, the drugs group, added to the tally saying jobs would be lost in its takeover of Wyeth.

Large European companies such as Philips, the Dutch electronics company, financial group ING and the Anglo-Dutch steelmaker Corus, which is owned by India's Tata Group, struck the same downbeat tone as they unveiled plans to axe staff.

In many cases, the cutbacks accompanied disappointing quarterly results or bleak outlooks for 2009, when many of the world's largest economies are expected to be hit by severe downturns.

Raymond Torres, head of the International Labour Organisation's research institute, said employers were shedding workers far more quickly in this recession than in the early 1990s.

"We have a vicious circle of depression, where job losses lead to falling consumption, which lowers industrial confidence, which leads to less investment, which results in more job losses, and so on," he said.

Caterpillar, the world's largest maker of construction equipment, said it would cut 20,000 jobs as it reported fourth-quarter profits more than 32 per cent lower than a year ago and warned earnings would be under pressure in 2009. The news comes a month after the US group slashed executive salaries by up to half and cut jobs at large plants.

Sprint Nextel, the US mobile-phone operator, is to cut 8,000 jobs, or 14 per cent of its workforce, while DIY retailer Home Depot is shedding 7,000 posts and freezing salaries as it battles a consumer slowdown in the US.

Pfizer said 19,500 people would lose their jobs after its takeover of US rival Wyeth, while General Motors, the troubled carmaker, announced 2,000 job losses at two plants in Michigan. After the US markets closed, chipmaker Texas Instruments eliminated 3,400 positions. The news in the US came after ING said it would axe 7,000 of its 130,000 global staff and Philips announced the loss of 6,000 jobs as it accelerated restructuring plans.

Corus, Britain's largest steelmaker, announced cuts of 3,500 from its global workforce of 41,000, with more than 2,000 jobs to go in the UK where it employs 20,000.

Reporting by Justin Baer and Francesco Guerrera in New York, Andrew Ward in Washington, Hal Weitzman in Chicago, Richard Milne in London and Frances Williams in Geneva

Pfizer's Wyeth deal, Page 17 Job cuts, Pages 20 and 21 www.ft.com/recession www.ft.com/usdailyview

Copyright The Financial Times Limited 2009

[Guest]

<b>EU Imposes Tariffs of Up to 85% on Chinese Screws and Bolts </b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Jan. 26 (Bloomberg) -- The European Union imposed tariffs as high as 85 percent on Chinese screws and bolts in a case that may prompt China to complain to the World Trade Organization.

<b>The five-year duties apply to EU imports of iron or steel fasteners worth about 575 million euros ($746 million) in 2007</b>. Fasteners, used for everything from automotive parts to furniture, are made in the EU by companies such as Italy’s Fontana Luigi SpA that demanded the levies to counter below- cost, or dumped, sales in Europe by Chinese competitors.
<!--QuoteEnd--><!--QuoteEEnd-->

[Guest]

<!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Banks May Cut Chinese Financial Stakes to Bolster Cash, FT Says </b>
By Steven McPherson
Jan. 26 (Bloomberg) -- <b>Foreign financial companies are likely to continue selling holdings of Chinese banks to increase cash</b>, the Financial Times said. A new round of sales may come in April when agreements to hold shares of Industrial & Commercial Bank of China Ltd. expire, the newspaper said. <b>Goldman Sachs Group Inc.'s 5 percent holding could earn $7 billion</b>, according to the report. UBS AG, Royal Bank of Scotland Group Plc and Bank of America Corp. have sold shares in Chinese banks, the report said. Temasek Holdings Pte. and HSBC Holdings Plc are among institutions with large stakes in Chinese banks, it said
<!--QuoteEnd--><!--QuoteEEnd-->

[Guest]

<b>India’s Economy May Grow at Slowest Pace Since 2003 </b>

[Guest]

<b>Why Davos Matters, Especially This Year</b>

[Guest]

<b>China Tells Obama What to Do With His Yuan Views: William Pesek</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Jan. 28 (Bloomberg) -- China took Barack Obama’s views on the yuan seriously. So seriously that it is doing the exact opposite of what the U.S. president would like.

China let the yuan fall the most in a month on Jan. 23, right after Timothy Geithner, Obama’s pick for Treasury secretary, relayed Obama’s campaign position that China was “manipulating” its currency. The reaction was China’s way of telling the new U.S. leader what he can do with his foreign-exchange views.

<b>What should currency traders do now? Is a trade war brewing between the world’s No. 1 and No. 3 economies? Is the yuan about to strengthen? Will Obama risk the ire of the most populous nation to make good on his protectionist campaign-trail rhetoric? Perhaps the answer is for everyone to relax.</b>

<b>Yes, China manipulates its currency. Arguably, so do Singapore, Argentina, Saudi Arabia and any nation that either pegs its currency, maintains a tight trading band or oversees a “managed float” system. Even Hong Kong, routinely ranked as the world’s freest economy by the Heritage Foundation, manipulates its currency. It has to maintain its link to the U.S. dollar.</b>

“Manipulate” is a charged word, and it’s politically incorrect in financial circles. And yet it was hard to keep a straight face when a Commerce Ministry official argued on Jan. 24 that “China has never tried to gain advantage in international trade by manipulating its currency.”
...
<!--QuoteEnd--><!--QuoteEEnd-->

[Shambhu]

http://finance.yahoo.com/news/The-Euro-Won...c-14156486.html

<b>The Euro Won't Be around in 20 Years: Jim Rogers</b>
Monday January 26, 2009, 2:06 pm EST

The euro will not be around in the next 20 years, but Britain would have been better off had it joined the single European currency when it had a chance, legendary investor Jim Rogers told a British newspaper.

"Not being in the euro is a competitive disadvantage," Rogers told UK paper "Metro."

"It makes it more expensive and more cumbersome to do business with the rest of the world. But I am not sure the euro (BIS: EUR-TN) will last 20 years," he said. "The <b>Italians </b>and Germans will be in chaos because they have no plan B."

Also in the next 20 years China "may well be the largest economy in the world," Rogers said.

He reiterated his view that the pound (BIS: GBP-TN) will continue to weaken, as the City of London suffers because of the financial crisis and North Sea oil is drying up.

Britain is "a deeply indebted nation, the government is spending gigantic amounts of taxpayer money propping up banks which should have been allowed to fail," Rogers said. "If I was a British taxpayer I'd be totally outraged!"

He could not forecast an end for the economic troubles.

"We're certainly not out of whatever we're in and whatever we're in is getting worse," Rogers said.

For those worried about their future prospects, his advice was: "if you speak Chinese, go to China. Or try farming. I'm more optimistic about agriculture than any other industry. If not farming, anything to do with raw materials or natural resources."

http://rajeev2004.blogspot.com/

[Guest]

<b>Chinese Manufacturing Shrinks After Exports Collapse </b><!--QuoteBegin-->QUOTE<!--QuoteEBegin--><b>Japan is headed for its worst postwar recession after output slumped an unprecedented 9.6 percent in December from November</b>. Hitachi Ltd., the world’s third-largest maker of hard- disk drives, tumbled 14 percent in Tokyo trading today after forecasting a record loss.

<b>South Korea’s exports declined 32.8 percent in January, the most since figures were first compiled in 1957,</b> adding to the likelihood of the nation’s first recession since the Asian financial crisis a decade ago.

<b>Australia’s manufacturing contracted for an eighth month in January</b>, a report showed today.

<b>China has lowered its key lending rate five times since September,</b> pressured state-owned banks to increase lending, reduced export taxes and agreed to provide support for 10 industries, from steel to autos
<!--QuoteEnd--><!--QuoteEEnd-->

[Guest]

<b>Grimmest’ Davos Ever Brings Anger, Finger-Pointing at Bankers</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Turkish Prime Minister Recep Tayyip Erdogan stormed out of a panel discussion and Russian Prime Minister Vladimir Putin hectored the U.S. as the font of the world’s economic woes. Almost everyone blamed the few bankers who showed up for the near-collapse of the financial system.

Attendees were “less reluctant to criticize, and sometimes very vocally criticize, the U.S. and its capitalist system because of the problems we’re having,” said David Rubenstein, co-founder of the Carlyle Group, who first came to Davos a decade ago. “Maybe that’s deserved, but it’s a big change.”
....

“God knows, some really stupid things were done by American banks and by American investment banks,” Dimon said. “To policy makers, I say: ‘Where were they?’”
...

Anyone who thought Barack Obama’s election as president would temper criticism of U.S. policies would have been disappointed. Economists questioned his $819 billion stimulus plan, urged him to deliver another rescue package for banks and fretted about soaring national debt.
<!--QuoteEnd--><!--QuoteEEnd-->

[Guest]

<b>20 million Chinese migrants lose jobs</b><!--QuoteBegin-->QUOTE<!--QuoteEBegin-->Beijing About 20 million Chinese rural migrants have lost jobs as the nation's economic growth has faltered, a senior official said on Monday, promising policies to boost incomes and a softer approach to potential unrest.
Chen Xiwen, director of the Office of the Central Rural Work Leading Group, told a news conference that a recent survey showed 15.3 per cent of the 130 million migrants moving from villages to cities and factories had returned jobless to the countryside.

Adding this year's 6 to 7 million new entrants into the rural labor market, Chen added, China will this year have about 25 million jobless and potentially restive rural unemployed.
.........

The rising joblessness is also a political threat. <!--QuoteEnd--><!--QuoteEEnd-->