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The White House reactes without using the word

allvoices / contributed news — Tue, 02 Dec 2008 00:42:47 -0600

This is the second time the bureau has declared an economic slump during President Bush's eight-year tenure. It previously declared the U.S. in recession from March to November 2001 in a decline brought on by a stock market crash that struck Silicon Valley exceptionally hard.
Still, today's declaration by the National Bureau of Economic Research that the economy has been in retreat since last December sent Wall Street into a bearish fit that knocked nearly 9 percent off the S&P 500 index.
But this obscure group must be cautious, because recession is such a loaded term.
It took seven economists 11 months to decide what should seem obvious given all the foreclosures, bank failures and layoffs - the United States is officially mired in a recession.
They are under pressure to be quicker, but they have to resist.

Many economists believe the current downturn could be the worst since the recession of 1980-1982, when the U.S. unemployment rate soared above 10 percent. The nationwide jobless rate is currently 6.5 percent. Unemployment in California is 8.2 percent but is lower in the Bay Area.

Apple Store on Simpsons

allvoices / contributed news — Tue, 02 Dec 2008 00:12:33 -0600

The Simpsons spare no one: American Idol and X-Files are just a sampling of the cultural icons that the show has taken a pop shot at. There have been Apple references in past seasons: it was a Mac that was parodied in an attempt by a Springfield bully to use handwriting recognition software.

But Apple or rather Mapple was front and center in the latest episode. Ipods were replaced by MyPods and Steve Jobs was re-christened Steve Mobs. There was even a parody of the famous 1984 commercial featuring Comic Book guy.

I won't give away the plot for those of you still waiting to see it but sounds like Fox lawyers are working to block the clips on YouTube.

Most discussions on technology blogs like CNet seem to have degenerated into arguments regarding the quality of Simpsons episodes through the ages. I'd be interested in seeing if there is a significant spike in sales of Apple products following this informal promotion. Given The Simpsons' cult following, getting on the show can only be good for marketers.

Facebook Struggling to Make Money

allvoices / contributed news — Mon, 01 Dec 2008 23:57:27 -0600

Social networking may be taking the Internet by storm but that doesn't mean investors are thrilled about it. Turns out that monetizing pages where people are exchanging gossip and personal trivia while playing with inane applications isn't that easy.

Marketing research firm IDC has established said that just over half of social network users have even clicked on an advertisement on their territory. Just about 10% have translated into any form of sale. The numbers are not that bad given the volumes of traffic involved, but it still does not justify the kind of investments that a company like Facebook is looking for given its ambitious plans for expansion.

The time is thus ripe for a revolutionary business model to milk this cow. Facebook is resting its hopes on the somewhat controversial Facebook Connect. This service will allow the exchange of some identity information with other sites that are involved in social connecting services. It's brought on board some major players such as Digg.

Through this mechanism, Facebook hopes to build a profile of individual users based on activities they express an interest in through their web footprint. Such information, if used correctly by adverisers, would allow them to better target their audience and may translate into a better acquisition ratio.

Of course you may not be thrilled to know that Facebook is collecting information about you for consumer marketing purposes. Amazon does something similar when suggesting purchasing recommendations, though the footprint it examines is limited to pages you visit within its domain.

Advertisers are excited about the prospects of richer real time consumer data. But for consumers who are generally averse to online shopping endeavors even better targeting may not help.

Bush sorry economic crisis has cut jobs, 401 (k)s

allvoices / contributed news — Mon, 01 Dec 2008 20:07:31 -0600

WASHINGTON – President George W. Bush expressed remorse that the global financial crisis has cost jobs and harmed retirement accounts and said he'll back more government intervention if needed to ease the recession.

"I'm sorry it's happening, of course," Bush said in a wide-ranging interview with ABC's "World News," which was airing Monday. "Obviously I don't like the idea of people losing jobs, or being worried about their 401(k)s. On the other hand, the American people got to know that we will safeguard the system. I mean, we're in. And if we need to be in more, we will."

The U.S. economy fell into a recession in December 2007, the National Bureau of Economic Research reported on Monday. Many economists believe the current downturn will last until the middle of 2009 and will be the most severe slump since the 1981-82 recession.

On the war in Iraq, Bush said the biggest regret of his presidency was the "intelligence failure" regarding the extent of the Saddam Hussein threat to the United States. With the support of Congress, Bush ordered the U.S.-led invasion of Iraq in March 2003 — a decision largely justified on grounds — later proved false — that Saddam was building weapons of mass destruction.

Asked if he would have ordered the U.S.-led invasion if intelligence reports had accurately indicated that Saddam did not have the weapons, Bush replied: "You know, that's an interesting question. That is a do-over that I can't do. It's hard for me to speculate."

During a discussion about what Americans should know about what it is like to be president, Bush was asked what he was most unprepared for going into the office.

"I think I was unprepared for war," he said. "In other words, I didn't campaign and say, `Please vote for me, I'll be able to handle an attack.' In other words, I didn't anticipate war. Presidents — one of the things about the modern presidency is that the unexpected will happen."

On the presidential election, Bush called Barack Obama's victory a "repudiation of Republicans."

"I'm sure some people voted for Barack Obama because of me," said Bush, who leaves office with low approval ratings. "I think most people voted for Barack Obama because they decided they wanted him to be in their living room for the next four years explaining policy. In other words, they made a conscious choice to put him in as president."

As he leaves office, Bush said he felt responsible for the economic downturn because it's occurring on his watch, but he added: "I think when the history of this period is written, people will realize a lot of the decisions that were made on Wall Street took place over a decade or so" before he became president.

He said he would like to see "instant liquidity" in the markets given the extent of the financial rescue plan, yet he understands that fear has paralyzed the markets.

"It is hard for the average citizen to understand how frozen the system became and how over-leveraged the system became," Bush said. "And so what we're watching is the de-leveraging of our financial markets, which is obviously affecting the growth of the economy."

Last week, the Bush administration and the Federal Reserve pledged $800 billion to break through blockades on credit cards, auto loans, mortgages and other borrowing. The latest moves raised U.S. commitments to contain the financial crisis to nearly $7 trillion — though no one thinks the government will actually spend that much.

The figures include loans that are expected to be repaid, loan authorities to back mortgages, purchases of stock in banks, guarantees to support loans among banks and pledges backing other transactions.

"This economy will recover," Bush said in the interview conducted last Wednesday at the Camp David, Md., presidential retreat. "And when it recovers, many of the assets backed by the government now will be redeemed, and we will — could conceivably — make money off of some of the holdings."

Later in the interview, he said: "I can't guarantee that we'll get all our money back, but it's conceivable we could."

Global markets hammered as recession reality sinks in

allvoices / contributed news — Mon, 01 Dec 2008 19:58:36 -0600

(AFP) – A fresh wave of selling hit global stock markets Monday as weak economic news from around the world and confirmation of a US recession prompted a massive pullback from last week's gains.

The Dow Jones Industrial Average sank 679.95 points (7.70 percent) to close at 8,149.09, in the fourth-steepest point loss in history for the blue-chip index.

The Nasdaq composite plummeted 8.95 percent to 1,398.07 and the broad-market Standard & Poor's 500 index tumbled 8.93 percent to 816.21.

A pullback was expected after a huge snapback rally over the past several sessions, with the Dow posting its best five-day percentage increase since 1932 of 17 percent. But selling began early and quickly became a freefall.

Market action came as the economic panel recognized as the arbiter of business cycles said the US had entered recession in December 2007 based on its measure of income, employment and other factors.

"The market has gotten off to a tough start to the week today, as recession fears have now become a reality, and the questions that remain are just how bad and for how long this recession will linger over us," said Michael Fowlkes, analyst for the online investment service Investors Observer.

European markets were also sharply weaker, as the rally from last week came to a grinding halt after news of deeper economic woes in Germany, France and the full 15-nation eurozone and weak data from India and China.

Jocelynn Drake at Schaeffer's Investment Research said the market responded to "a round of weak economic data around the globe that has stoked concerns that we may not have seen the worst of the economic slowdown."

Fresh data released on Monday showed German retail sales fell 1.6 percent in October from the previous month, while in France a closely watched index of manufacturing activity fell to 37.3 in November, its worst-ever reading.

In China, manufacturing activity hit a three-year low in November, underlining the fallout of the global financial crisis on emerging markets.

Meanwhile, India's exports in October tumbled 12 percent from a year ago for the first time in three years, hit by slumping demand in its key US and European markets.

Augustine Faucher at Moody's Economy.com said the confirmation of a US recession by the National Bureau of Economic Research only added to the gloom.

"The important questions now are when will the recession end and how severe will it be," he said.

"Moody's Economy.com expects the current downturn to last through the first half of 2009 and to be the worst of the post-World War II era. Even with a substantial stimulus package, unemployment is likely to peak close to 9.0 percent in early 2010."

In Europe, London's FTSE 100 index closed down 5.19 percent, the Paris CAC 40 shed 5.59 percent while Frankfurt's DAX lost 5.88 percent on the grim news.

"Economic growth figures have outlined the worst global recession since at least the 1980s while gauges of inflation expectation point to growing deflation fears across the G7," said Lena Komileva, an analyst at brokerage Tullett Prebon in London, referring to the Group of Seven rich countries.

A deluge of economic data and company reports Monday suggested economic growth was slowing in powerhouse emerging markets China and India and reinforced expectations of a deep recession in advanced economies.

In the US, a survey from the Institute of Supply Management (ISM) showed a weaker-than-expected reading while separate data showed construction spending down 1.2 percent in October.

The ISM index fell 2.7 points to 36.2 percent, the weakest since May 1982.

The problems appeared worldwide, even in fast-growing Asian economies.

In China, manufacturing activity hit a three-year low in November, according to a survey.

Meanwhile, India's exports in October tumbled for the first time in three years, hit by slumping demand in its key US and European markets.

Exports fell by 12 percent from the same month a year earlier to 12.8 billion dollars as demand shrank, according to government figures.

"It's time for another downturn," said Hideaki Higashi, a strategist at SMBC Friend Securities. "Investors are selling, anticipating a correction after the string of advances."

In other markets, the Toronto S&P/TSX plunged 9.32 percent and Brazil's Bovespa sank 5.07 percent.

Earlier in Tokyo, shares closed down 1.35 percent, Mumbai's stock market lost 2.78 percent and Seoul and Sydney each fell 1.6 percent. Hong Kong rose 1.6 percent and Shanghai gained 1.25 percent.

Global stock markets had soared last week as governments rolled out measures to stimulate the global economy and fight against the credit problems in the financial sector.

But like many times since the start of the financial crisis in mid-2007, a euphoric rally has been followed by a brutal correction.

BREAKING NEWS!!!!--Dow falls again..

allvoices / contributed news — Mon, 01 Dec 2008 16:15:41 -0600

by Judith Stein, financial analyst for Biodun Iginla @ BBC News and the Economist, reporting from New York

Monday, December 1, 2008 -- 4:20 PM ET/9:20 PM GMT/UTC/ZULU

-----

The stock markets took a fall on Monday, diving along with

investors' confidence. Confirmation that the nation is in a

recession and reports of only a modest gain in holiday

shopping sales have prompted many investors to resume selling

after five days of higher closings.

Late-session comments by Treasury Secretary Henry M. Paulson
Jr. that the economic downturn is "significant" but

manageable probably added to the market's gloom, as did more

downbeat data about manufacturing and construction.

The Dow Jones industrials were down 679.95 points, or 7.7

percent, while the broader Standard and Poor's 500-stock

index was down 8.93 percent, or 80 points. The technology

heavy Nasdaq fell 8.95 percent.

http://www.nytimes.com/?emc=na

Indian Stock Markets : Time for Bottom Hunting!!!

allvoices / contributed news — Mon, 01 Dec 2008 14:15:51 -0600

09:20 a.m.- Asian markets have started of with deep cuts taking cues from Europe and US markets, however trading off their lows. MSCI Asia Pacific Index is about 3% down. Nikkei down 4.6%, Hangseng down 4.2% and STI down 1.7%. Royal Bank of Australia has cut the interest rates by 100 bps to 4.25%. is in recession and the present declaration has just caused a knee jerk reaction. Now, the markets will stabilise and will be just looking for signs of recovery and how long it will last. Indian markets may do a somersault today towards the later half or may be tomorrow, wait and see.

New Series for December started on a buoyant note. Sensex opened with a wide gap up at 9163 against a nominal gap up opening expected by me. Despite an unexpected high opening, stocks galloped higher in thin volumes to hit a high of 9327 against my predicted 9323. Thereafter, the markets remained range-bound till early afternoon when one way selling commenced taking the sensex deeper to 8803 and closing at 8840. Volumes were absolutely low, perhaps the lowest in the recent times just 43457 Crores. Market depth remained just negative with AD ratio at 4:5. FII's and DII's were nominal net buyers, just 28 Crores and 45 Crores respectively. In such low volumes when Institutions are playing neutral, it is very easy for the manipulators to take the market in whichever direction he wants. Either way pointer given will be wrong, thus Technical Analysts will have the most difficult times to predict. For e.g. Manipulators need to sell a certain quantity of an index heavy stock like ONGC within few seconds thus tumbling that stock by 10-20 bucks. Index will fall thus prompting other traders to sell whatever they may be holding, thus plunging the indices further. In such falls, no investor or trader will dare to make any fresh purchases. If such concentrated selling is done by a cartel, that too in 3 or 4 counters, say ONGC, Reliance, ICICI Bank and Tata Steel, then the operation is much easier. Sales figures from main auto stocks were announced during trading time, which happened to be drastically down, helping the bears to hammer left, right and centre.

Asian markets opened in negative zone. Only Hangseng managed to go higher to close in green, up by 1.6%. Nikkei was down 1.35% and STI down 2.45%. Bank of Japan is scheduled to have an Emergency Meeting 02 Dec. Hefty stimulus package by China has created suspicion among investors that something is wrong in China too. European markets opened mildly in red and continued to slide through the session, ending at the lowest. FTSE was down 5.2%, Dax down 5.9% and Cac down 5.6%. Euro zone manufacturing activity has slumped to new record lows in November. German retail sales dropped for the second month in a row. Above all 15 Nation Eurozone failed on Monday to commit to a proposed 200-billion-euro economic stimulus target. US Stocks opened with deep cuts and nose-dived further ending at the day's low recording 4th largest ever fall. Dow ended down 7.7%, Nasdaq and S&P both down 8.95%. The US economy has been in a recession since December 2007, according to the National Bureau of Economic Research, a non-profiting organization. US manufacturing shrunk more than expected in November, according to ISM Index national survey. Financial stocks declined whereas Auto stocks held ground anticipating the bail out package this week-end; Black Friday sales were up 3.0%, according to ShopperTrak. Oil prices fall after OPEC postponed the decision to cut output to 17 Dec. Crude has nose-dived at this news to about 49$/bbl thus lowering the energy stocks. Dollar is weaker against Yen at 93.10 but stronger against Rupee at 50.29, Rupee being historically at the lowest ever close. With booming Yen, there exists the risk of unwinding of Yen carry trades.

It is now official that US is in recession since Dec 2007. Having already passed 11 months behind, the current recession is expected to be the 3rd largest since the great Depression of 1919. Two of the recessions since then were just 8 months each and those of mid 1970 and early 1980 were 16 months each. This means the economy will start growing within next couple of months to 6 months. Assuming this time it is tackled well, US economy must be back on rail before mid 2009, Hence, the worst is already behind. Barack Obama will hopefully tackle the situation to be kept well under control.

Prime Minister is expected to take stock of the Financial situation and take some immediate measures to ensure that the GDP growth remains well above 7.6% announced in Q2. Inflation during the ensuing week will be still lower around 8.6 and will go down further, considering the tumbling crude and commodity price. India is one of the biggest beneficiary of lower crude price as the country has to spend heavily on imported crude. Inflation will nose dive soon after fuel price cut is announced which is also expected very soon. PM may convince the RBI the need to cut the rates further. Govt is expected to announce an Infrastructure package which will help companies like GMR Infra. Tata Steel will declare the consolidated Q2 results today which will be lacklustre, however, the stock will start going up soon after.

With very weak global cues, Sensex is expected to open wide gap down and hit the day's low in opening hour itself. Bargain hunting will lift stocks thereafter. Any announcements from RBI or Govt also can influence the turnaround. Investors may buy stocks when Sensex is about 8500 with a medium term outlook of 6 to 9 months. Day traders may buy if Sensex goes above 8990 or when Sensex is closer to the lower end for the day. At this level, the downfall may not be more than yet another 200 points on Sensex or 60 points on Nifty which means we are already at or close to the bottom by a day or two. Whereas I perceive 8466 Sensex and 2564 Nifty being the day's rock bottom, this fall may not be stretching below 8315 and 2500 respectively before a turnaround take place. Investors will hardly lose anything whereas chances of appreciation to 10900 and 3240 respectively during December is more than just a possibility. One can choose from the following stocks: Tata Steel, ICICI Bank, Reliance Ind, L&T, ONGC, GMR Infra, Unitech and Triveni Engg. I am suggesting all these purely on value based. Except Tata Steel, ICICI bank and Triveni, none others are technically giving a buy call. With low volumes, it is extremely difficult for the Bears now to cover their positions entirely without allowing the stocks to flare up. Thus, unexpected, heavy up-move can also be expected, not-withstanding negative global cues. Last Friday was a case similar when market was supposed to have nose-dived on account of terror attack and F&O expiry, bears covered thus maintaining the indices in green.

Sensex: Supports: 8653, 8466 Resistances: 8990, 9177
Likely Trading Range: 8495, 9009

Oil drops 8 percent to below $50 as OPEC defers cuts

allvoices / contributed news — Mon, 01 Dec 2008 12:24:43 -0600

NEW YORK (Reuters) – Oil plunged more than 8 percent to below $50 a barrel on Monday after OPEC deferred a decision on new supply cuts at a meeting over the weekend.

The producer group delayed a decision on output until later this month as Saudi Arabia and other Gulf members called for greater compliance with existing cuts agreed to since September to help stem oil's fall from highs over $147 a barrel struck in July.

U.S. crude traded down $4.63 to $49.80 a barrel by 11:39 a.m EST, while London Brent crude fell $4.91 to $48.58 a barrel.

"The major motivation for sellers is the discounting of the OPEC decision ... but motivation is not hard to find (as) the elements propelling prices from 2003 on have largely dissipated," said Mike Fitzpatrick, vice president at MF Global, in a report.

Surging demand from emerging economies sent oil and other commodities on a six-year rally, but prices have tumbled since July as the economic crisis erodes demand in the United States and other big developed consumer nations.

U.S. stocks extended losses on Monday after manufacturing data showing factory activity fell in November to its weakest level since the 1981-1982 recession increased worries about the world economic slump.

"The OPEC meeting last weekend shows you that there's not a lot the group can do to stop the free-fall in oil prices. On top of that, the latest U.S. manufacturing data is playing into the market psychology," said Phil Flynn, analyst for Alaron Trading in Chicago.

"The weakness in the manufacturing sector foretells a bad demand picture for oil."

OPEC's secretary general said the cartel is ready to cut production by a significant amount when the group next meets on December 17 in Algeria.

"We are all geared toward a cut in Algeria," Abdullah al-Badri told a news conference in Tehran, two days after the group's meeting in Cairo.

"The market is oversupplied because we are seeing stocks as very high, about 55 to 56 days," he told reporters earlier.

Saudi Arabian Oil Minister Ali al-Naimi told Saudi-owned al-Hayat newspaper that OPEC would not need to make a further cut in oil supply when it meets in Algeria if producers comply with previous curbs and fuel stocks decline.

The group has agreed to trim 2 million barrels per day (bpd) from production since September.

Saudi Arabia over the weekend said $75 a barrel would be a "fair" price for oil, the first time in years that the world's biggest exporter has identified a target for crude prices.

"I believe $75 is the price for the marginal producer," Naimi told reporters in Cairo.

(Reporting by Matthew Robinson and Gene Ramos in New York; Jane Merriman in London; Maryelle Demongeot in Singapore and Osamu Tsukimori on Tokyo; editing by Jim Marshall)

US in recession since December 2007: official panel

allvoices / contributed news — Mon, 01 Dec 2008 12:12:04 -0600

WASHINGTON (AFP) – The US economy has been in recession since December 2007, a panel of economists charged with the official designation of business cycles said Monday.

The Business Cycle Dating Committee of the National Bureau of Economic Research said it made the determination during a conference call on Friday.

Although a recession is generally defined as two consecutive quarters of declining activity, the panel has its own criteria for determining a downturn.

"A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators," the panel said.

"A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion."

The committee said it "identified December 2007 as the peak month, after determining that the subsequent decline in economic activity was large enough to qualify as a recession."

According to government data, the US economy contracted at a 0.2 percent pace in the fourth quarter of 2007 but grew 0.8 percent in the first quarter and 2.8 percent in the second quarter of 2008. It then contracted 0.5 percent in the third quarter, based on a provisional estimate.

But the gross domestic product (GDP) data may have been skewed by tax rebates that stimulated consumer spending, according to analysts.

The NBER said "we do not identify economic activity solely with real GDP, but use a range of indicators" in determining the onset of recession.

A major factor in determining recession is employment, which has been declining since last December, the panel said.

The NBER makes no forecast on how long a recession will last, but said that in the past they have run from six to 18 months. The panel said it has no definition of the term "depression."

The White House acknowledged the NBER conclusion and said it has been working to foster recovery.

"NBER determines the start and end dates of business cycles, and they've done that," White House spokesman Tony Fratto said.

"But what's important is what is being done about it. The most important things we can do for the economy right now are to return the financial and credit markets to normal, and to continue to make progress in housing, and that's where we'll continue to focus."

Credit card industry may cut $2 trillion of lines: analyst

allvoices / contributed news — Mon, 01 Dec 2008 12:07:52 -0600

The U.S. credit card industry may pull back well over $2 trillion of lines over the next 18 months due to risk aversion and regulatory changes, leading to sharp declines in consumer spending, prominent banking analyst Meredith Whitney said.

The credit card is the second key source of consumer liquidity, the first being jobs, the Oppenheimer & Co analyst noted.

"In other words, we expect available consumer liquidity in the form or credit-card lines to decline by 45 percent."

Bank of America Corp, Citigroup Inc and JPMorgan Chase & Co represent over half of the estimated U.S. card outstandings as of September 30, and each company has discussed reducing card exposure or slowing growth, Whitney said.

A consolidated U.S. lending market that is pulling back on credit is also posing a risk to the overall consumer liquidity, Whitney said.

Mortgages and credit cards are now dominated by five players who are all pulling back liquidity, making reductions in consumer liquidity seem unavoidable, she said.

"...We are now beginning to see evidence of broad-based declines in overall consumer liquidity."

"In a country that offers hundreds of cereal and soda pop choices, the banking industry has become one that offers very few choices," Whitney wrote in a note dated November 30.

She also said credit lines to consumers through home equity and credit cards had been cut back from the second-quarter levels.

"Pulling credit when job losses are increasing by over 50 percent year-over-year in most key states is a dangerous and unprecedented combination, in our view," the analyst said.

In times of crisis, invest in gold

allvoices / contributed news — Mon, 01 Dec 2008 12:00:17 -0600

CHENNAI: These are troubled times and one can not blame investors out there, who feel that investment is a synonym for risk. Stocks crashed after giving an amazing bull run for 5 years. Oil doubled in less than 12 months but fell even sharply. Commodities, on their part, were the last to go. While risk and reward go hand in hand, has any investment married better returns with lower risk? If you had bought a chunk of 22-carat gold in November 2003, you know the answer.

The yellow metal gave the best rewards for the risk taken by you in the last five years, giving not only superior returns but also exposing you to lower risk, an analysis shows. Simply put, gold gave the best returns for each unit of risk taken by an investor, in the last five years amongst all asset classes. Not even government securities (which carry the lowest risk) managed to match gold's shine when it came to delivering risk-adjusted returns. Returns per unit of risk is calculated by dividing returns with annual risk.

Returns per unit of risk is the highest for gold at 0.74 as it generated a compounded annual growth rate (CAGR) of 15% over the last five years while carrying an annual risk (i.e. volatility) of 20%. As an investor, gold presented you to the lowest annual risk, after government securities which carry volatility of merely 8.7%. But then why did gold take the cake? This is because goverment securities have delivered a measly 5% CAGR over the same period, so its returns per unit of risk stands at 0.58.

Stocks, as represented by the sensex, have managed to give returns of 14% but also posed annual volatility of 28%, lowering their claim as the best asset class in terms of returns for risk taken. Commodities, as represented by the 24-item Goldman Sachs Commodity Index, which delivered 5-year CAGR of 10% lost out due to the 26% annual risk. Crude managed to ring up better-than-commodity returns of 12% CAGR from 2003 but exposed the investor to huge annual risks of 36%.

So, is it a good time to buy gold? "The peak of gold buying season passed last month, but as an investor one should remember that weddings will continue until mid-January, keeping the demand for the yellow metal alive," a top gold trader based out of from Mumbai said. Some like Mark Liinamaa of Morgan Stanley feel that gold has disappointed recently when many observers expected outperformance, leaving room for appreciation.

Others point out that the world economy is not out of woods yet and gold is the best bet in a low-interest rate scenario. "Talk of further interest rate cut in US is in the air, which could provide further support to gold. Hence, buy at dip will be a good strategy," Saurabh Jain of SMC Investment Solutions advised clients.

Manufacturing index at 26 years low: world stocks markets fall back.

allvoices / contributed news — Mon, 01 Dec 2008 10:34:14 -0600

U.S. manufacturing activity fell to a 26-year low in November affects as follows:

AT 16.20 GMT. ON 01.12.2008

EXCHANGE %CHG

DAX,                                -6.2
SANINDPSA                   -2.5
MERVAL                          -6.6
IBSAOPAULO                -5.6
DOW,                                -4.5
SNP500                            -5.3
NASDAQ                          -5.5
IPC                                    -3.1
TSECIDX                         1.3
ALLORDIDX                   -1.5
NIKKEI                             -1.3
SSE180                            1.8
SHANGHAI                      1.2
HANGSENG                    1.6
KLSE                                -2.0
KOSPI                              -1.6
STRAITS                          -2.4
COLOMBOIND               -0.2
JAKARTA                       -1.5
SWISSMKT                    -5.0
ATX                                  -4.6
MADRID                          -4.9
MIBTEL                           -5.1
FTSE                                -4.9
AEXGEN                          -6.4
EUROBEL                      -4.7
CAC40                             -5.2
TASE 100                      -4.2
S&P CNX NIFTY           -2.6

Manufacturing index drops to 26-year low

allvoices / contributed news — Mon, 01 Dec 2008 09:32:05 -0600

WASHINGTON – A measure of U.S. manufacturing activity fell to a 26-year low in November as new orders dropped for the twelfth consecutive month, a trade group said Monday.

The Institute for Supply Management's monthly index of manufacturing activity fell to 36.2 from October's 38.9. The reading is worse than Wall Street economists' expectations of 38.4, according to a survey by Thomson Reuters. A figure below 50 indicates the sector is contracting.

The November reading is the lowest since May 1982, the ISM said, when the economy was in the midst of a painful recession.

The report "indicates a continuing rapid rate of contraction in manufacturing," said Norbert Ore, chairman of the ISM's survey committee.

The survey's new orders index fell to 27.9 from 32.2, the report said, its lowest level since June 1980. The production index fell to 31.5 from 34.6, its third straight month of decline.

Manufacturing employers continue to cut jobs, the survey found. The employment index fell to 34.2 from 34.6, its fourth straight drop.

Manufacturers have been hit hard by the housing slump and financial crisis, which have led to cutbacks in business and consumer spending.

Deere & Co., which makes agriculture and construction machinery, has seen its profit fall amid the economic downturn. The Moline, Ill.-based company said last week that its fourth-quarter earnings fell 18 percent and it forecast that profit will drop by 7 percent in 2009.

Stocks fall sharply after dour economic data

allvoices / contributed news — Mon, 01 Dec 2008 09:21:13 -0600

NEW YORK – Wall Street is down sharply in early trading, but so far showing little reaction to a pair of downbeat economic reports.

Investors were already selling stocks lower on concerns about the holiday shopping season before the Institute for Supply Management, a trade group of purchasing executives, said its index of manufacturing activity fell to a 26-year low in November.

At the same time, the Commerce Department said construction spending fell by a larger-than-expected amount in October.

Both the housing and manufacturing sectors have been suffering for some time, so the reports were ultimately unsurprising. Wall Street is concerned that consumers, by curtailing their spending further, won't be able to help lift the economy from its slump.

The Dow is down about 331 points to the 8,497 level. Broader indexes are down more than 4 percent

Dubai property giant sacks 500 as global crisis bites

allvoices / contributed news — Mon, 01 Dec 2008 07:46:16 -0600

DUBAI: Nakheel, the Dubai property giant behind such grandiose projects as a one-kilometre-tall tower and artifical palm-shaped islands said yesterday it has fired 500 staff as the global economic crisis begins to bite in the booming desert city-state.

Government-controlled developer Nakheel, one of the biggest employers in Dubai, also said it would be scaling back work on some projects. “Approximately 15 percent of the total workforce, which amounts to 500 employees, was made redundant,” it said in a statement. The move is “a responsible action in light of the current global market conditions.”

It is the largest job cut in the wake of the global financial meltdown to be announced in United Arab Emirates and in Dubai, a city of skyscrapers, opulent hotels and malls which hosts hundreds of thousands of workers.

“We have the responsibility to adjust our short-term business plans to accommodate the current global environment,” said an unnamed spokesperson quoted in the statement. “The redundancies are indeed regrettable, but a necessity dictated by operational requirements which are in turn dependent on demand.”

Earlier this month, Damac Group, owner of the region’s largest private developer Damac Properties, said it cut 200 jobs or 2.5 percent of its workforce.

There are still fears for the future of Dubai’s economy after a double-digit growth registered in the past few years, with concern rising over accummulated foreign debt amid the credit crunch. * The Peninsula

UN economists warn that US dollar faces hard landing

allvoices / contributed news — Mon, 01 Dec 2008 07:20:23 -0600

By Harvey Morris

in New York

UN economists warn today that the dollar could be in for a hard landing, in spite of a recent surge in the value of the US currency.

The team, which foresaw a year ago that the global economy would slow to a near-standstill in 2008, says in its annual report that the dollar’s rebound was driven mainly by a flight to the safety of the currency as the global crisis intensified. The overall trend remained downward, however, reflecting perceptions that the US debt position was approaching unsustainable levels, and an accelerated fall of the dollar could bring new turmoil to financial markets.

“Investors might renew their flight to safety, though this time away from dollar-denominated assets, thereby forcing the United States economy into a hard landing and pulling the global economy into a deeper recession,” the report says. Publication of part one of the annual survey by the UN’s Department of Economic and Social Affairs; Unctad, its trade organisation; and UN regional bodies was brought forward by a month in the light of the financial crisis and to coincide with the UN-sponsored development financing conference in Doha. Ban Ki-Moon, UN secretary-general, on Friday lamented the absence of most western leaders from the conference, apart from Nicolas Sarkozy, French president and current head of the European Union. The heads of the International Monetary Fund and World Bank were also absent. UN development officials fear that the preoccupation of the developed world with its own financial crisis will weaken its aid commitment to the developing world.

That concern was reflected in today’s economic report, which proposes that fiscal stimulus packages should be aimed towards long-term sustainable development goals and applied partly to helping developing countries diversify their economies. Rob Vos, a Dutch economist who heads the UN’s policy and analysis division and is responsible for the annual economic review, welcomed statements from the transition team of Barack Obama, the US president-elect, in support of spending on infrastructure and green technology as “the right way to go”. “But I also hope the Obama team will start acting internationally, see what others are doing and co-ordinate,” he told the Financial Times.

“There has been a sea-change in attitudes in favour of government intervention and concerted action.” Financial Times

Garden life in Dubai, Jumeirah Gardens

allvoices / contributed news — Mon, 01 Dec 2008 04:48:37 -0600

Imagine a development with some of the world's tallest buildings, varied microclimates and a mini-Manhattan. Well, this is exactly what Meraas Development, a new real estate developer, has burst on to Dubai's property stage with, and the project is worth a staggering £56bn.

Jumeirah Gardens will be a fully integrated mixed-use development project comprising seven distinct areas, taking up approximately 110 million square feet of land, with the aim of catering to a population of around 60,000 residents.

"Every great city has a great park. London has Hyde Park, New York has Central Park. This will be Dubai Park," said Sina Al Kazim, chief executive of Meraas Development. The park will be surrounded on all sides by residential apartments, duplexes, penthouses, villas and commercial buildings, with handover of phase one expected in 2011.

http://dubaiupdate.co.uk/novdec08/projects.html

Buffett tops 50 American philanthropists list

allvoices / contributed news — Sun, 30 Nov 2008 14:00:27 -0600

New York, Nov 30 Massive erosion of wealth in the economic meltdown has not stopped rich people in the US from making big donations, with legendary investor Warren Buffett topping the list of top 50 American philanthropists, according to a leading American publication. American business publication Business Week has ranked Buffett at the first place in its annual list of "Top 50 American Givers", followed by software czar Bill Gates and his wife Melinda Gates.

On the third spot is George Kaiser and billionaire investor George Soros at the fourth, while former Chief Executive of Hilton Hotels William Barron Hilton stands at the fifth position. "Many of America's ultra-rich continued to give big donations to charity in 2008, despite the worst financial crisis in decades.

In the past year, seven philanthropists gave north of USD 200 million and nine gave more than hundred million dollars to causes ranging from wilderness preservation to fighting malaria. "Warren Buffett and Bill Gates remain far and away the biggest givers overall.

," the magazine said. For the 2004-08 period, Buffett gave away USD 40,655 million while Bill & Melinda Gates donated USD 2,625 million.

Kaiser and Soros gave away USD 2,377 million and USD 2,214 million, respectively, during the same period. Further, Hilton donated USD 1,700 million from 2004-08.

The list has been compiled using data from the magazine, The Chronicle of Philanthropy and Center on Philanthropy at Indiana University. Further, the figure of total amount of donation is based on public records and interviews with donors.

Economy warning from China's President Hu Jintao

allvoices / contributed news — Sun, 30 Nov 2008 12:17:41 -0600

By James Reynolds
BBC News, Beijing

China's President Hu Jintao has warned that the global financial crisis could weaken his country's competitiveness.

Mr Hu gave his warning at a meeting of the Politburo and his words have been made public by the state media.

As growth slows, Mr Hu said that in the coming period China would starkly confront the effects of the international financial crisis.

And he warned that the economic situation was a test of the Communist Party's ability to govern.

"External demand has obviously weakened and China's traditional competitive advantage is being gradually weakened," Mr Hu said, according to the official People's Daily newspaper.

"Whether the pressures can be turned into a driving force and the challenges turned to opportunities ... is a test of our ability to control a complex situation, and also a test of our party's governing ability," he added.

Action

Recent figures show that the government has cause to be worried.

Growth has slowed to 9% - and predictions say that it may drop to 7% or 8% next year.

These are dazzling figures for some economies, but there's a widespread belief - even a superstition - in China that growth needs to stay above 7% in order for social stability to be maintained.

China has already taken action.

This past week the central bank carried out the biggest cut in interest rates in more than a decade.

And earlier this month, the government announced a stimulus package of $586bn (£380bn).

This is enough, the Communist Party will hope, to get this country through the next year or two. bbc news

Tesla Roadster "The seductive appearance"

allvoices / contributed news — Sun, 30 Nov 2008 11:47:24 -0600

THE Tesla Roadster is an electric car that goes fast, looks sensational and excites envy. The seductive appearance, however, obscures some inconvenient truths: its all-electric technology remains woefully immature and don’t-even-ask expensive. If enough billionaires step forward to inject additional capital to keep the doors of its manufacturer, Tesla Motors, open, I’m happy for all parties.

If investors pass up the opportunity, however, why should taxpayers fork over the capital that Tesla needs? The Roadster is not much more than a functioning concept car that sells for $109,000. The company is requesting $400 million in low-interest federal loans as part of the $25 billion loan package for the auto industry passed by Congress last year.

The program is intended to encourage automakers to improve fuel efficiency, but should it be used for a purpose like this, as the 2008 Bailout of Very, Very High-Net-Worth Individuals Who Invested in Tesla Motors Act? Can you conceive any way that federal dollars could be put at greater risk — and for no equity in return, keep in mind — to benefit fewer people?

Tesla Motors, a privately held company based in San Carlos, Calif., has spent almost all of the $145 million in capital it has raised to date. It says it will soon receive another round of $40 million from its private investors to sustain operations.

In the start-up ecosystem of Silicon Valley these would be respectably large numbers, but in the automotive world, fully developing an entirely new line of technology can easily run $1 billion. That is what General Motors’ first attempt at an electric vehicle, the EV1, was estimated to have cost to develop in the 1990s.

Tesla says it cannot move forward on plans to bring out a second-generation car, a less expensive sedan seating five, without federal funds. It’s also counting on rapid improvements in the core component of its powertrain — a thousand-pound pack of lithium-ion batteries — but such improvements don’t happen at the pace Tesla needs them to happen.

Tesla’s backers in Silicon Valley can be forgiven for hoping for a miraculous technical breakthrough, because Moore’s Law makes miracles appear in the Valley every day: costs drop by half every two years, again and again and again. The law is actually a rule of thumb, not a scientific law, and is based on the recurring doubling of transistors placed on an integrated circuit.

Unfortunately for Tesla, batteries are based on chemistry and have nothing to do with Moore’s Law. Lawrence H. Dubois, chief technology officer at ATMI, a semiconductor industry supplier, said, “With batteries, you can’t just squeeze more energy into a smaller and smaller space the way you can squeeze more transistors.”

Elon Musk, the chief executive of Tesla, said his company would benefit from what he called “a weak Moore’s Law,” referring to the 8 percent annual improvements in the price performance of lithium-ion batteries. But 8 percent, compounded, would bring too few benefits, too late to Tesla: it would take nine years to halve the price of its battery pack.

The company would not be saddled with such costly components had it not elected to pursue a design that endows its car with both high performance and a long range between charges — 244 miles, Tesla says. Earlier this month at the Los Angeles auto show, BMW unveiled its all-electric Mini E, with a smaller battery, a motor with about 20 percent less horsepower than Tesla’s and a shorter range, 150 miles. BMW believes that current technologies used in the all-electric vehicles have not been tested enough in real conditions to be ready to be sold to the public. It will begin by leasing for one year a fleet of 500 Mini E’s for $850 a month each. At the end of the lease term, the cars will be returned to BMW for testing.

Tesla would have needed a much smaller battery pack had it forsaken the all-electric design and instead offered a plug-in hybrid, a more affordable design that many auto manufacturers are readying for production, like that for the Chevrolet Volt. An electric motor provides the primary motive force, and a small internal combustion engine serves as an auxiliary source of power to extend the range that the car can go between charges. The battery need be no bigger than what is necessary to provide enough juice to go 40 miles, the maximum daily round-trip commuting distance for 78 percent of surveyed households, according to a widely quoted Department of Transportation study in 2003.

Tesla pitches all-electric cars as the greenest form of personal transportation, eliminating vehicle emissions and helping to wean the United States from its dependence on foreign oil. The cars reduce air pollution indirectly, to whatever degree the power generation on the grid uses energy sources other than coal. And for households that install their own power-generating solar panels, electric cars can rightfully claim to attain truly zero emissions today.

LAST week, I visited the Tesla showroom in Menlo Park, Calif., and took the Roadster out on the highway. As I headed back to the showroom and waited at red lights, ready to hit the accelerator and fly, I realized that I was experiencing a guilty pleasure derived not just from the speed available at my touch but also from temporarily possessing something that shouted to the world its exclusiveness.

Tesla says it is assembling about 15 cars a week and has delivered only about 80 to date. Many of those have gone to the Valley’s billionaires and centimillionaires who are Tesla investors as well as early customers; these include Sergey Brin and Larry Page, the co-founders of Google, and Jeff Skoll, co-founder of eBay. The company’s principal financier is Mr. Musk, who attained considerable wealth as a co-founder of PayPal.

I wonder how Tesla’s course has been influenced by at least some of its investors being helplessly smitten by the world’s quietest dragster.

Mr. Musk said: “I’m not doing this because I think the world has a shortage of sports cars.” But his customers must be loaded with green in order to go green.

Randall Stross is an author based in Silicon Valley and a professor of business at San Jose State University. E-mail: stross@nytimes.com.