An economic Grand Bargain? Reuters Video , US President Barack Obama

An economic Grand Bargain?
(01:57) Report Reuters Video

Mar. 11 - As Finance Ministers from the G20 prepare to meet in London, some analysts hope the US and Europe can reach a kind of "grand bargain" on stimulus and regulation.
Deborah Lutterbeck reports.
SOUNDBITE:
# US President Barack Obama

Despite the doom and gloom, the Baltic Dry Index has been ticking up for much of 2009

Despite the doom and gloom, the Baltic Dry Index has been ticking up for much of 2009, and that’s typically a sign we’ve got demand in the economy again. Yes and no, says my guest investor and blogger Paul Kedrosky.
It is a sign that the economy isn’t going to zero: That’s good. But amid the late 2008 panic inventories had gotten so low that an increase in orders is more a re-stocking than it is a recovery.
That said, there are a few speculative bets for investors with a high risk tolerance, especially among semiconductors. Watch the video for Kedrosky’s picks.

Citi: Pandit's Defense Boosts Wall Street

Citi: Pandit's Defense Boosts Wall Street
The bank CEO's talk of profits sparks a stock rally, but others still worry about Citi's toxic assets

(Source Business Week)
Strip away the billions of toxic assets and the billions more that the feds have pumped into Citigroup (C), and what you have is a dandy little bank that actually makes money. At least that was the upbeat takeaway from Citi's beleaguered CEO Vikram Pandit, who distributed a memo to employees late on Mar. 9 about the bank's bright prospects, despite the current $1-a-share price tag.
Pandit emphasized in the memo that the bank was adequately capitalized, had passed stringent self-imposed stress tests, and was profitable through the first two months of 2009, delivering its best performance since the third quarter of 2007. In coming weeks the Treasury Dept. will conduct its own stress tests of banks—assuming further deterioration in the economy, employment, and home prices—on which will hinge further U.S. assistance.

Citigroup has posted more than a year of losses, totaling more than $37.5 billion since it reported a $2.1 billion profit in the third quarter of 2007. Just two years ago, Citigroup was the world's biggest bank by market value, at about $270 billion. But its shares had plummeted from an all-time high of 55 to below 1 last week, for the first time ever, as investors continued to lose confidence in the government bank bailout. At that point, Citi's value had fallen to about $6 billion. Read Article...
http://www.businessweek.com/bwdaily/dnflash/content/mar2009/db20090310_761018.htm?chan=investing_investing+index+page_top+stories

Gold outlook retains luster

Gold outlook retains luster
(01:57) Report Reuters Video

Mar. 10 - Gold fell from its $1,000 an ounce peak but fund managers said financial uncertainties will keep alive a safe-haven bid for the precious metal.
Many analysts expect gold to jump back above that high unless the global economic recession takes a turn for the better. Conway Gittens reports from New York.SOUNDBITES:
# Frank Holmes, chief executive, U.S. Global Investors
# Thomas Winmill, president and fund manager, Midas Fund

Uptick Rule. What Does It Mean?

Uptick Rule
What Does It Mean? (Source Investopedia)
What Does Uptick Rule Mean?
A former rule established by the SEC that requires that every short sale transaction be entered at a price that is higher than the price of the previous trade. This rule was introduced in the Securities Exchange Act of 1934 as Rule 10a-1. The uptick rule prevents short sellers from adding to the downward momentum when the price of an asset is already experiencing sharp declines. The SEC eliminated the rule on July 6, 2007.

The uptick rule was also be known as the "plus tick rule".
Investopedia Says
Investopedia explains Uptick Rule
By entering a short sale order with a price above the current bid, a short seller ensures that his or her order is filled on an uptick. The uptick rule is disregarded when trading some types of financial instruments such as futures, single stock futures, currencies or market ETFs such as the QQQQ or SPDRs. These instruments can be shorted on a downtick because they are highly liquid and have enough buyers willing to enter into a long position, ensuring that the price will rarely be driven to unjustifiably low levels.

S&P jumps 5 percent after uptick rule talk

NEW YORK (Reuters) - Stocks jumped on Tuesday, extending strong gains after Rep. Barney Frank said he expects the SEC's uptick rule to be restored in about a month.The uptick rule, which only allowed a stock to be sold short when the last sale price was higher than the previous price, was repealed by the SEC in 2007 because the agency found that changes in trading strategies made it ineffective.
Frank added that mark-to-market accounting rule must be improved and made more flexible. A congressional panel is set to conduct a hearing on Thursday.
The Dow Jones industrial average (DJI:^DJI - News) jumped 326.72 points, or 4.99 percent, to 6,873.77. The Standard & Poor's 500 Index (^SPX - News) rallied 38.42 points, or 5.68 percent, to 714.95. The Nasdaq Composite Index (Nasdaq:^IXIC - News) shot up 77.19 points, or 6.08 percent, to 1,345.83.

Google on the way to the $200 boundary?

Google struggles to rebound to $300

(Source: By John Letzing, MarketWatch
Last update: 4:30 p.m. EDT March 9, 2009)
SAN FRANCISCO (MarketWatch) -- Shares of Google Inc. remained below the $300 mark Monday, as investors soured on the search giant in the wake of sobering comments made by its chief executive last week.
(GOOG 290.89, -17.68, -5.7%) stock dipped below $300 on Friday for the first time since late January, and closed Monday's session more than 5% lower at $290.89.
The shares' slide comes roughly a week after Chief Executive Eric Schmidt told an audience at a technology conference that he doesn't see the economy rebounding until 2010. In addition, analysts have issued increasingly negative outlooks for the online-advertising industry. See related story on Schmidt's comments..
Google has also taken the unusual step of allowing employees to exchange their stock options, a move that some analysts have criticized as short-changing outside investors.
On Friday, the company disclosed in a regulatory filing that it's allowing employees -- who may have seen their options become virtually worthless thanks to the falling stock price -- to acquire new options priced at $308.57.
Google has said it needs to implement the stock-option exchange to help retain top talent. However, the net effect is to potentially enable company insiders to profit from gains in Google's stock price in advance of investors who bought shares in the recent past.
The move also comes as Google, along with its peers, is facing increasingly difficult online-advertising conditions.
Last week, Thomas Weisel Partners analyst Christa Quarles lowered her estimates for Google's current fiscal year as well as for 2010, citing "sustained and perhaps increasing weakness in the online-advertising market."

A Rising Dollar Lifts the U.S. but Adds to the Crisis Abroad

Business
A Rising Dollar Lifts the U.S. but Adds to the Crisis Abroad
By PETER S. GOODMAN Published: March 9, 2009 (New York Times Permalink)
As American investors and foreign central banks flock to safe investments like Treasury bills, poorer countries are having a harder time raising money.

How the Crash Will Reshape America

How the Crash Will Reshape America

(Source: The Atlantic Monthly, March 2009)
The current economic crisis is unlikely to result in the same kind of shared experience. To be sure, the economic contraction is causing pain just about everywhere. In October, less than a month after the financial markets began to melt down, Moody’s Economy.com* published an assessment of recent economic activity within 381 U.S. metropolitan areas. Three hundred and two were already in deep recession, and 64 more were at risk. Only 15 areas were still expanding. Notable among them were the oil- and natural-resource-rich regions of Texas and Oklahoma, buoyed by energy prices that have since fallen; and the Greater Washington, D.C., region, where government bailouts, the nationalization of financial companies, and fiscal expansion are creating work for lawyers, lobbyists, political scientists, and government contractors.

No place in the United States is likely to escape a long and deep recession. Nonetheless, as the crisis continues to spread outward from New York, through industrial centers like Detroit, and into the Sun Belt, it will undoubtedly settle much more heavily on some places than on others. Some cities and regions will eventually spring back stronger than before. Others may never come back at all. As the crisis deepens, it will permanently and profoundly alter the country’s economic landscape. I believe it marks the end of a chapter in American economic history, and indeed, the end of a whole way of life.

The economic mess is getting bigger by the day. The bottom, AEX 145, DJIA 4500?

The economic mess is getting bigger by the day, where is the bottom?

(Amsterdam, March 9, 2009, 12.00 CET)
For more than 7 months we have predicted the bottom of the stock market around 180 points for the AEX (Amsterdam, Netherlands) and approximately 6000 for the Dow Jones Industrial Average (Wallstreet, U.S.) but now we have to take a more bearish outlook.
For the AEX we expect something around 140 to be reached this year and for the Dow 4500.
The banking troubles are for from over, there is much more bad news on the horizon.
First and 2nd quarter company results do not look very well, McDonald cautions already on the stronger dollar and commodity costs squeezing the first quarter results.
Today the markets get a short impulse of the Merck/Schering-Plough deal, but that's no more than a trickle of good news and not a turn around. Besides, with the markets in a continuous slump the weight of stocks and shares is beginning to look less important, the focus is turning more to the 'real economy'. And the next worry (or disaster?), all this money, the impact on future inflation, etcetera.
The restoration of the global economy will take longer, instead of returning to healthy growth levels in 2010 we reckon with 2012.

A general lack of insight and new ideas is still the prevailing factor worldwide, the public is losing confidence in politicians to get the world out of this mess.
We are waiting for the next wave of innovation, new ideas, solutions and products from the 'Tech sector' to give a boost to the world economy.
Politicians and authorities apologizing for their mistakes or saying the equivalent of "Wir haben es nicht gewusst" are just out and not worth listening to! (Anyway they are a great resource to analyze and study their body language. So they're not completely useless!)

Dow 5000, Revisited
(From the Tech Ticker)
Wall Street is now talking openly about the possibility of the DOW dropping to 5,000 and the S&P 500 to 400-500. This is actually good news. The more negative everyone gets, the more likely we're getting close to a bottom.
(Unfortunately, few strategists are actually predicting the market will hit this level yet. But at least they're talking about it.)
The bad news is that 400-500 on the S&P would still be higher than previous major bear market lows on a price-earnings basis (See Robert Shiller's chart above and "How Low Can The Market Go?"). Fortunately, it's not that much higher.
In the WSJ's story on DOW 5000 today, here's one fact that jumped out:
Between April 8, 1932, and July 8, 1932, stocks fell 34% -- a little more than what it would take to get the S&P to 500.
A level of 500 would take declines for the S&P to 68% since its October 2007 high, compared with the peak-to-trough depression-era slump of almost 90%.
The most persuasive argument we've heard as to why stocks won't crash toward the Depression lows is Paul Kasriel's observation that the government has not yet blown it to the extent that the Hoover administration did. See the post...

Crisis Reveals Growing Finance Gaps for Developing Countries

Crisis Reveals Growing Finance Gaps for Developing Countries
Research shows poorer countries are short of $270- $700 billion for 2009

Washington, March 8, 2009 — Developing countries face a financing shortfall of $270-700 billion this year, as private sector creditors shun emerging markets, and only one quarter of the most vulnerable countries have the resources to prevent a rise in poverty, the World Bank said.
In a paper for next Saturday’s meeting of the Group of 20 finance ministers and central bank governors, the World Bank said that international financial institutions cannot by themselves currently cover the shortfall -- that includes public and private debt and trade deficits -- for these 129 countries, even at the lower end of the range. A solution will require governments, multilateral institutions, and the private sector. Only one quarter of vulnerable developing countries have the ability to finance measures to blunt the economic downturn, such as job-creation or safety net programs.“We need to react in real time to a growing crisis that is hurting people in developing countries,” said World Bank Group President Robert B. Zoellick. “This global crisis needs a global solution and preventing an economic catastrophe in developing countries is important for global efforts to overcome this crisis. We need investments in safety nets, infrastructure, and small and medium size companies to create jobs and to avoid social and political unrest.”
The global economy is likely to shrink this year for the first time since World War Two, with growth at least 5 percentage points below potential. World Bank forecasts show that global industrial production by the middle of 2009 could be as much as 15 percent lower than levels in 2008. World trade is on track in 2009 to record its largest decline in 80 years, with the sharpest losses in East Asia.

For more information read:
Swimming Against the Tide:
How Developing Countries Are Coping with the Global Crisis (235k pdf)
http://siteresources.worldbank.org/NEWS/Resources/swimmingagainstthetide-march2009.pdf

For more information on the World Bank please visit:
www.worldbank.org

Retail Sales Probably Fell in February: U.S. Economy Preview

Retail Sales Probably Fell in February: U.S. Economy Preview

March 8 (Bloomberg) -- Sales at U.S. retailers probably fell in February for the seventh time in eight months as soaring unemployment battered consumers, economists said before a government report this week.
Purchases dropped 0.5 percent, according to the median estimate in a Bloomberg News survey ahead of Commerce Department figures due on March 12. Another report may show the trade gap shrank in January as Americans bought fewer goods made abroad.
Consumers are shopping at discounters like Wal-Mart Stores Inc. to make ends meet as home values plunge and the jobless rate climbs, forsaking purchases of expensive items like automobiles. President Barack Obama, trying to maintain support for his $787 billion stimulus plan, last week said the deteriorating economy demands “bold action and big ideas.”
“The headwinds are coming from everywhere,” said Jonathan Basile, an economist at Credit Suisse Holdings in New York. “Persistent job losses and reports of pay cuts have become embedded in consumer expectations and they think that incomes are going to shrink.”

Investors seek safety in tech

Investors seek safety in tech

14 Trading Firms Settle Charges for $69 Million

14 Trading Firms Settle Charges for $69 Million
By DIANA B. HENRIQUES Published: March 5, 2009
More than a dozen Wall Street trading firms systematically cheated their customers of millions of dollars by improperly slicing bits of profit from countless trades, federal regulators said on Wednesday.
Business (New York Times Permalink)

Economy in 'Free-Fall': Unemployment Rate Surges to 8.1%, Highest in 25 Years

Economy in 'Free-Fall': Unemployment Rate Surges to 8.1%, Highest in 25 Years
(Source Tech Ticker) Another 651,000 U.S. jobs were lost in February, the Labor Department said today, bringing the total number of jobs lost since the recession began in December 2007 to 4.4 million. The unemployment rate jumped to 8.1%, it's the highest level in 25 years.

P/E ratios (finally) nearing acceptable levels.

P/E ratios going to acceptable levels.
By some measures, P/E ratios are near lows, though it depends how you slice it
(Source MarketWatch)
"There's no doubt that people can look at market valuations and determine that stocks are relatively inexpensive -- but that doesn't mean they're going to quit going down," said Michael Gibbs, director of equity strategy at Morgan Keegan & Co. in Memphis, Tenn.
The price-to-earnings ratio of stocks in the S&P 500 has sunk to 10.6 from nearly 17 at the end of 2007, says FactSet Research. That's based on the Thursday close of the S&P 500 compared to index members' past four quarters of operating earnings, or net income excluding what analysts consider to be extraordinary charges and gains.
Thomson Reuters, which publishes similar analysis, estimates the trailing P/E ratio for the S&P 500 is around 11.
Those numbers are well below the valuations reached during the market low of the 2001 recession, when the ratio stopped at 19. They're also lower than the P/E ratio of 13 touched at the market bottom during the 1990-1991 recession, says Morgan Keegan, which used data compiled by Yale University's Robert Shiller for its historical research.
But widen out the lens, and P/E ratios have dropped even further in some earlier recessions. During the market low of the early 1980s recession, for example, stocks in the index were trading at a mere 8 times earnings. Read Article...

http://finance.yahoo.com/banking-budgeting/article/106697/Stocks-look-cheap-but-they-could-get-cheaper

Putin's Circus Lions Are Hungry -- and Angry

Putin's Circus Lions Are Hungry -- and Angry
02 March 2009
Putin's Circus Lions Are Hungry -- and Angry

(Source Moscow Times, by Dmitry Oreshkin)
For most countries of the world, the global crisis is strictly economic. But Russia is experiencing two crises simultaneously -- economic and political.
Economic downturns, including the current one, come and go, but Russia's political crisis will never go away. This is because Russia's political model has always been deeply grounded in the myth of monism: one monolithic state, one party, one ideology, one national leader and one people. Those who lived during the Soviet period remember the ubiquitous overblown slogans of "the unity of all Soviet nationalities" or "the unified Soviet nation."
Russia under Vladimir Putin's leadership is doomed by historical inertia and tradition to continue the Soviet monistic model. United Russia is Putin's modern version of the Soviet Union's "United U.S.S.R." -- that is, the Communist Party. Nonetheless, United Russia is not as unified as Putin would like. There is the United Russia faction loyal to State Duma Speaker Boris Gryzlov, and there is the one loyal to Mayor Yury Luzhkov. Luzhkov rigidly controls the party's membership in Moscow and won't let any federal functionaries get within a mile of holding power.
Of course, you don't have to look very hard to see how empty the concept of a "unified people" really is. A large percentage of the Russian population don't hide their opposition to being "unified" or placed on the same level as the people from the Caucasus. This leads to the country's social schizophrenia. On one hand, Russians passionately supported the Russia-Georgia war to protect their "fellow citizens" in South Ossetia, in accordance with myths of a unified, monolithic superpower. But on the other hand, if they happen to meet one of their repatriated fellow citizens at any one of Moscow's street markets, they are quick to complain that the capital is being invaded by the "dark-skinned scum" from the Caucasus. Read Article...
The article Part I and II is also on the well informed blog 'La Russophobe', http://larussophobe.wordpress.com/2009/03/03/part-i-putins-russia-is-collapsing/

http://www.themoscowtimes.com/article/1016/42/374919.htm

The Economist Intelligence Unit expects the global financial crisis to have a strong negative impact on Brazil's economic growth

Brazil Outlook Economy, the Economist Intelligence Unit expects the global financial crisis to have a strong negative impact on Brazil's economic growth.

(Source Economist Intelligence Unit) A severe economic slowdown in 2009 and rising unemployment as a result of recession in the developed world will make it much more difficult for the ruling leftist Partido dos Trabalhadores (PT) to secure a third term in the October 2010 presidential election.
The Economist Intelligence Unit expects the global financial crisis to have a strong negative impact on Brazil's economic growth in the first half of the outlook period. Growth is forecast to decelerate from an estimated 5.3% in 2008 to 1.6% in 2009, before it recovers only modestly to 3.2% in 2010. The 4.1% average annual growth projected for 2011-13 is significantly weaker than the 4.5% average of 2004-08. We anticipate higher inflation (eroding real disposable incomes) and severe credit rationing in 2009, which will weigh on private consumption and investment. We assume that policy continuity will facilitate a modest recovery from 2010 onward, in tandem with trends in the global economy. Brazil's reduced external vulnerability should help the domestic economy to cope with the global economic downturn. However, we expect a weaker exchange rate in 2009-13. The current account will slip into deficit in 2008 and remain in the red in the rest of the forecast period.

Unemployment hits 25-year high

Unemployment hits 25-year high Jobless rate hits 8.1% in February as a record-high 12.5 million people are unemployed.

NEW YORK (CNNMoney.com) -- The U.S. economy continued to hemorrhage jobs in February, bringing total job losses over the last six months to more than 3.3 million, and taking the unemployment rate to its highest level in 25 years.
The government reported Friday that employers slashed 651,000 jobs in February, down from a revised loss of 655,000 jobs in January. December's loss was also revised higher to a loss of 681,000 jobs, a 59-year high for losses in one month.
Economists surveyed by Briefing.com had forecast a loss of 650,000 jobs in February.
"The economy is headed south with a vengeance," said Kurt Karl, head of economic research for the U.S. unit of insurer Swiss Re.
The unemployment rate rose to 8.1% from 7.6% in January. It was the highest reading since December 1983 and higher than economists' projections of 7.9%.
Most workers who have jobs today are not old enough to have worked in a labor market this bad, while 13% of workers weren't even alive the last time unemployment was at this level.

http://money.cnn.com/2009/03/06/news/economy/jobs_february/index.htm?postversion=2009030610

Franse werkloosheid onverwacht sterk gestegen

Franse werkloosheid onverwacht sterk gestegen


(Source DFT, De Telegraaf) PARIJS (AFN) - De werkloosheid in Frankrijk is in het laatste kwartaal van vorig jaar onverwacht sterk gestegen tot 8,2 procent van de beroepsbevolking. Dat maakte het Franse bureau voor de statistiek donderdag bekend.
Een kwartaal eerder zat 7,6 procent van de Franse beroepsbevolking zonder baan. Analisten hielden voor het vierde kwartaal rekening met een stijging tot 7,7 procent. Het aantal werklozen in Frankrijk nam, afgezien van de overzeese departementen, in de laatste drie maanden van het jaar met 187.000 toe tot bijna 2,2 miljoen.
Werkgevers verwachten dat de werkloosheid de komende maanden door de economische recessie steeds sneller zal oplopen. Vorige week maakte het Franse ministerie van Werkgelegenheid al bekend dat er alleen in januari van dit jaar alweer 90.000 nieuwe werklozen bij zijn gekomen.

French January jobless figures at historic high
Wednesday 25 February 2009
The number of unemployed people in France jumped 90,200 in January (+4.3%), according to figures released by the economic ministry.

152nd (Ordinary) Meeting of the OPEC Conference in Vienna, March 15

152nd (Ordinary) Meeting of the OPEC Conference

Next OPEC Meeting in Vienna
Sunday, 15 March 2009
Vienna, Austria
http://www.opec.org/home/

Organization of the Petroleum Exporting Countries
Monthly Oil Market Report, February 2009 (Download PDF)
The Monthly Oil Market Report contains a wealth of information, including developments in the world economy, data on oil prices, supply and demand, crude and product stocks and much more.

World Oil Outlook 2008 (Download PDF)
OPEC’s World Oil Outlook 2008 is part of the Organization’s commitment to market stability and a means to highlight and further understand many of the possible future challenges and opportunities that lie ahead of the oil industry. The publication is also a channel to encourage dialogue, cooperation and transparency between OPEC and others within the industry.

ECB expected to cut rates to lowest level since the introduction of the Euro

ECB expected to cut rates to lowest level since the introduction of the Euro
(March 5, 2009)

Online and in real time: ECB press conference, from its premises in Frankfurt am Main, Germany.
At 2.30 p.m. CET the ECB President and Vice-President explain the Governing Council's monetary policy decisions and answer journalists' questions.
Webcast of ECB press conference on 5 March 2009
http://www.thomson-webcast.net/de/dispatching/?ecb_090305_stream_video

The European Central Bank has cut its main interest rate by a half percentage point to 1.5 percent amid increasingly grim economic news.

The Bank of England earlier Thursday cut its rates by a half percentage point to 0.5 percent.

Bank of England (BoE) expected to move towards Quantitative Easing (QE)

G20 London Summit. On the 2 April 2009 world leaders will gather in London to address the global financial crisis.

The London Summit (April 2, 2009)
On the 2 April 2009 world leaders will gather in London to address the global financial crisis.
The London Summit brings together leaders of the world’s advanced and emerging economies, including the G20, and representatives of international financial institutions to work cooperatively to restore stability and stimulate global economic growth.

The Summit aims to reach international agreement on:
* coordinated actions to revive the global economy - to stimulate growth and employment
* reforming and improving financial sectors and systems - to deliver progress on the Washington Action Plan to build better financial systems
* principles for reform of international financial institutions (IFIs) - the International Monetary Fund, Financial Stability Forum and World Bank.
http://www.londonsummit.gov.uk/en/

Global update - Global Crisis - London Summit
This website is a global hub for debate for the London Summit. As the Summit draws closer we're highlighting contributions to this global conversation from around the world - including in local languages.
Highlighting the debate in all countries that are significantly affected by this global crisis.

Brown's global call
(02:12) Report Reuters Video
Mar. 4 - UK Prime Minister Gordon Brown told a joint session of the US Congress that the economic crisis calls for a global response.

Brown will host a Group of 20 summit next month in London. He'll seek agreement on a coordinated plan to boost the global economy as it faces its worst crisis in decades. Deborah Lutterbeck reports from Washington. SOUNDBITES:
# Morris Goldstein of the Peterson Institute for International Economics
# UK Prime Minister Gordon Brown

Investors fret over GE Capital, as GE shares slide

Investors fret over GE Capital, as GE shares slide

BOSTON/NEW YORK (Reuters) - General Electric Co investors have one big worry these days: Is its hefty GE Capital finance arm -- the main reason for a 2008 profit drop -- poised to handle the worst economic downturn in decades?
Analysts and investors have pounded the U.S. conglomerate's shares to their lowest level since the early 1990s this week as they wrestle with the question of whether the finance operation -- which a few years ago represented half of GE's profits -- is adequately prepared for a surge in defaults by increasingly unemployed consumers and tottering mid-sized businesses.
The fear is that GE's planning for the unit, which anticipates a 42 percent fall in profit and rising defaults, may not be sufficiently bearish.
"It's not as if the world has confidence in any security, but this team has managed to just shatter investor confidence by continually being more upbeat than they deserve to be," said Charles Ortel, managing director of securities research firm Newport Value Partners in New York, which does not hold a position in GE shares.
Investors fear GE Capital's reserves for losses are too low in comparison with the top U.S. banks. Read more...

http://www.reuters.com/article/ousiv/idUSTRE5235NJ20090304

World stock markets rebound on Chinese stimulus hopes, Shanghai leads recovery

World stocks rebound on China stimulus hopes
Wednesday March 4, 6:43 am ET

World stock markets rebound on Chinese stimulus hopes, Shanghai leads recovery

LONDON (AP) --(From Yahoo Finance) Stock markets in Europe and Asia rebounded Wednesday amid mounting hopes that China will soon announce a big stimulus package that could help limit the length and depth of the recession in the industrialized world.
A legislative meeting starts Thursday in China and top of the agenda is what the government can do to lift growth rates, which have fallen in the wake of the global economic downturn. As one of the few major economies still expanding, China is being closely watched amid hopes its demand and trade can help the world weather the most severe global slowdown in decades.

Chinese shares led Wednesday's advance, with Shanghai's index jumping more than 6 percent to close at 2,198.11.
"Obviously, this unusual rally suggests that investors are overly optimistic about what to expect from the legislature. They think the government will do more to boost spending to stimulate the economy," said Peng Yunliang, an analyst with Shanghai Securities in Shanghai.

Elsewhere in Asia, Japan's Nikkei 225 stock average was up 61.24 points, or 0.9 percent, to 7,290.96, while Hong Kong's Hang Seng added 297.27, or 2.5 percent, to 12,331.15. South Korea's Kospi climbed 3.3 percent to 1,059.26.
Markets in Singapore, Taiwan and New Zealand also gained. Australia's index shed 1.6 percent.
In Europe, the FTSE 100 index of leading British shares recovered from six-year lows to rise 66.42 points, or 1.9 percent, to 3,578.51, while Germany's DAX was up 99.38 points, or 2.7 percent, at 3,790.10. The CAC-40 in France was 54.05 points, or 2.1 percent, higher at 2,608.60.

The Markets today (March 3, 2009, 19.00 CET)

Asian Markets closed slightly down with the exception of the Shanghai market (minus 2.30 percent).
European Markets were in the green most of the day but turned red after Wall Street 's opening. However the losses were limited except for the Footsie with a more than 3 percent loss.
In Amsterdam the AEX closed just above the 200 points level at 202.57 with a 3 percent loss.
Wallstreet was up at the beginning of the morning session, than turned negative and is now (19.00 CET, Amsterdam) hoovering around yesterday's close and going down again.
Ford came out with a dismal report about the February U.S. car sales which fell 48 percent despite huge rebates and low-interest financing.

Inside the Bear Stearns boiler room

Inside the Bear Stearns boiler room
Exclusive book excerpt: Bestselling author William Cohan uncovers the inner workings of the misadventure that brought down Bear Stearns and foreshadowed the financial crisis to come.
By William D. Cohan Last Updated: March 3, 2009: 9:45 AM ET

NEW YORK (Fortune) -- Years from now, when academics search for causes of the stock market crash of 2008, they will focus on the pivotal role of mortgage-backed securities. These exotic financial instruments allowed a downturn in U.S. home prices to morph into a contagion that brought down Bear Stearns a year ago this month - and more recently have brought the global banking system to its knees.
What scholars should not miss is the role that the human element - call it greed or ignorance - played in this tragedy. In an exclusive excerpt from William Cohan's new book, "House of Cards: A Tale of Hubris and Wretched Excess on Wall Street," to be published March 10 by Doubleday, the bestselling author sheds light on the bankers who thought they had mastered what Warren Buffett has called "financial weapons of mass destruction."


By looking back to the roots of the misadventure in which Bear Stearns traders Ralph Cioffi and Matthew Tannin lost roughly $1.6 billion while allegedly misleading investors, Cohan illustrates how the missteps of the few can have consequences for the many.

Is the Dow's next stop 5,000 or 10,000?

Is the Dow's next stop 5,000 or 10,000?
(Source TIME Permalink Read Article)
To get answers, TIME's John Curran spoke with Jim Paulsen, chief investment strategist at Well Capital Management:
If the stock market rallies in the weeks ahead, is there any reason to believe in it?
Well, I don't know why there wouldn't be. But I'm interested in the way you phrased your question because it is exactly where the consensus is today. There is absolutely every belief that we could go lower; and while we could rally, the belief is that it won't stick. It just says volumes about where we are right now. It's not just you. Even bulls like myself have that same feeling in their depths.

The Eurozone has contracted significantly in the last quarter and the beginning of 2009 (CNBC Video)

The Eurozone has contracted significantly in the last quarter and the beginning of 2009. As such, Rainer Guntermann, Eurozone economist at Dresdner Kleinwort doesn't expect things to deteriorate much further from here. He speaks with CNBC's Rebecca Meehan & Maura Fogarty.

Governments must maintain reforms for long-term growth during crisis, says OECD

Governments must maintain reforms for long-term growth during crisis, says OECD

Watch the webcast of the press conference

03/03/2009 - The current crisis offers governments the opportunity of combining emergency action with the important structural reforms needed to improve long-term growth and resilience in their economies, according to OECD’s latest Going for Growth.
"The debacle in financial markets does not call into question the beneficial effects of recommended reforms of product and labour markets”, said OECD Chief Economist Klaus Schmidt-Hebbel. Read his speech in full.
Going for Growth identifies key reforms to raise living standards in each OECD country. It points out that a number of policies, if carefully implemented, can both boost demand in the short term to soften the impact of the recession, and also raise economic growth over the long term.
http://interwebcast.oecd.org/conferences/1_403/en/event_medias/video.wvx

World's Most Admired Companies 2009(Fortune/CNN)

World's Most Admired Companies 2009(Fortune/CNN)
For the 50 most admired companies overall, FORTUNE's survey asked businesspeople to vote for the companies that they admired most, from any industry.
http://money.cnn.com/magazines/fortune/mostadmired/2009/full_list/index.html

363 Most Admired companies
An alphabetical index of all Most Admired companies from the top 50 survey and industry rankings this year.
http://money.cnn.com/magazines/fortune/mostadmired/2009/top363/index.html

Economy Much Worse Than Roubini Predicted (Tech Ticker Video)

Even 'Dr. Doom' Is Scared: Economy Much Worse Than Roubini Predicted

A year ago Roubini was forecasting an 18-month recession with a U-shaped recovery; now, he's now expecting the downturn to last at least 24 months and possibly 36-months. He also sees rising risks of a Japanese-style L-shaped stagnation, i.e. a prolonged period with little or no economic growth.
"I was one of most bearish people [but] the economy has surprised the bears on the downside," says Roubini of NYU's Stern School and RGE Monitor. "What's happening in the world now is scary."

A Bloody Monday?

A Bloody Monday?

(Amsterdam 14.00 CET. March 2, 2009)
With Asian Markets closing with near 4 percent losses, AIG reporting a very bad 4th quarter with a stunning $ 62.7 Billion loss, and European Markets approaching 4 percent losses in the morning sessions it does not look very well for World Stock Markets today.
The Futures Opening for U.S. Markets do not help to create an optimistic mood, and rumours about "A Bloody Monday" are popping up on the Internet.
What is true we will see at the end of the day in another 9 hours, but the outlook is as worst as possible with the Dow closing well below 7000.

Wall Street heads for another big drop
Monday March 2, 8:46 am ET By Madlen Read, AP Business Writer
(Source Yahoo Finance) Stock futures lower despite higher personal spending, incomes as AIG gets more gov't funding
NEW YORK (AP) -- Wall Street headed for another big drop even as the government reported gains in personal income and spending.
Stock futures pared losses only slightly after the Commerce Department said Monda that incomes rose 0.4 percent and personal spending rose 0.6 percent in January. Both gauges were better than expected.
Dow Jones industrial average futures were down 125, or 1.77 percent, to 6,927. Standard & Poor's 500 index futures and Nasdaq 100 index futures were also down about 2 percent.
Stock futures were already lower after American International Group Inc. posted a quarterly loss of $61.7 billion. The government, which has already given AIG $150 billion in loans, said it would give the insurer another $30 billion.


US Futures & Markets Indicators (14.30 CET Amsterdam)
Dec 2008 Change Level Last Update
S&P 500 -17.20 717.00 3/2 8:21am S&P 500 FUTURES
Fair Value 734.18 2/28 1:48pm
Difference* -17.18
NASDAQ -21.00 1096.00 3/2 8:15am NASDAQ FUTURES
Fair Value 1116.96 2/28 1:48pm
Difference* -20.96
Dow Jones -122.00 6930.00 3/2 8:18am
Although markets can get hit and will close down today we do not expect (another) genuine crash.

(Source: DFT De Telegraaf. Nieuwe AEX indeling)
Beleggers op Beursplein 5 moeten vanaf morgen rekening houden met de nieuwe indeling van de Amsterdamse beurs. In de AEX verdwijnen financiële concern Fortis en uitzender USG People. Hun plaats wordt ingenomen door luchtvaartmaatschappij Air France KLM en baggeraar Boskalis. De nieuwe rangschikking wordt maandag nabeurs ingevoerd.

ASEAN leaders want a EU style Community by 2015

ASEAN leaders want a EU style Community by 2015

(Source Yahoo) CHA-AM, Thailand (AP) -- Southeast Asian leaders vowed Sunday to push ahead with ambitious plans to become a European Union-style economic community by 2015 despite roadblocks posed by the global financial crisis and Myanmar's dismal human rights record.
The 10-nation Association of Southeast Asian Nations concluded its 14th annual summit with a statement saying leaders had agreed to refrain from imposing new trade barriers and would stand firm against protectionism in their quest to create a single market in the next seven years.

Press Statement on the Global Economic and Financial Crisis
Cha-am, Thailand, 1 March 2009


ASSOCIATION OF SOUTHEAST ASIAN NATIONS (ASEAN)
The Association of Southeast Asian Nations or ASEAN was established on 8 August 1967 in Bangkok by the five original Member Countries, namely, Indonesia, Malaysia, Philippines, Singapore, and Thailand. Brunei Darussalam joined on 8 January 1984, Vietnam on 28 July 1995, Lao PDR and Myanmar on 23 July 1997, and Cambodia on 30 April 1999.
As of 2006, the ASEAN region has a population of about 560 million, a total area of 4.5 million square kilometers, a combined gross domestic product of almost US$ 1,100 billion, and a total trade of about US$ 1,400 billion

Of Recessions and Recoveries

Of Recessions and Recoveries
V-Shaped. L-Shaped. Shallow but long. Deep but short.
Economists use phrases like these to characterize recessions. Use this graphic to compare the current recession -- and the eventual recovery -- to other downturns and to put the current crisis in perspective. Data will be updated regularly over the next two years. (Interactive Grapic on WSJ online)

http://online.wsj.com/article/SB123574078772194361.html#articleTabs%3Dinteractive

Economy in Worst Fall Since '82
Output Sank 6.2% Last Quarter; Plunging Trade, Investment Signal Trouble Ahead

Berkshire net sinks; Buffett says economy in shambles

Berkshire net sinks; Buffett says economy in shambles

NEW YORK (Reuters) - Berkshire Hathaway Inc, Warren Buffett's insurance and investment company, barely broke even in the fourth quarter because of losses on derivatives contracts tied to the stock market, which caused its net worth to tumble $10.9 billion.
Buffett also offered a gloomy outlook for the economy, saying in his annual letter to Berkshire shareholders: "The economy will be in shambles throughout 2009 -- and for that matter, probably well beyond."
Quarterly net income for Omaha, Nebraska-based Berkshire sank 96 percent to $117 million, or $76 per Class A share, from $2.95 billion, or $1,904, a year earlier, based on company filings. Revenue fell 12 percent to $24.59 billion.
Results were battered by $4.61 billion of pretax losses on about 251 derivative contracts largely tied to the longer-term performance of four stock market indexes and the creditworthiness of higher-risk "junk" bonds. The losses were twice what Berkshire suffered in the prior nine months.
A deteriorating economy and tight credit led to steep declines in stock prices and an increase in junk bond defaults, resulting in losses for Berkshire. While the losses exist on paper, accounting rules require Berkshire to report them with earnings.
Berkshire's net worth fell to $109.27 billion at year end from $120.16 billion at the end of September, and $120.73 billion at the end of 2007.
For all of 2008, profit at Berkshire fell 62 percent to $4.99 billion, or $3,224 per share, from $13.21 billion, or $8,548. Earnings were the lowest since 2002. Revenue fell 9 percent to $107.8 billion.

Warren Buffett loses billions
Berkshire Hathaway drops $10.9bn in investor's worst year since 1965.

(Source The Telegraph.co.uk)
Mr Buffett described derivatives as "dangerous", but he remained convinced that they were a good bet. "I believe each contract we own was mispriced at inception, sometimes dramatically so. If we lose money on our derivatives, it will be my fault," he wrote.
Nineteen of top 20 stocks in Berkshire's US portfolio, valued at $51.9bn, fell last year. Coca-Cola, its top holding, dropped 26pc and American Express plunged 64pc.
Mr Buffett, 78, said he would maintain Berkshire's "Gibraltar-like financial position" during 2009 by retaining "huge amounts of excess liquidity, near-term obligations that are modest and dozens of sources of earnings".
But he offered a gloomy outlook, saying: "The [US] economy will be in shambles throughout 2009 – and probably well beyond."
He also upped his attack of the US government's bail-out of his insurance and banking rivals. "Though Berkshire's credit is pristine – we are one of only seven AAA corporations in the country – our cost of borrowing is now far higher than competitors with shaky balance sheets but government backing," he wrote. "At the moment, it is much better to be a financial cripple with a government guarantee than a Gibraltar without one."

Warren Buffett's Letters to Berkshire Shareholders
Updated February 28, 2009
BERKSHIRE HATHAWAY INC. SHAREHOLDER LETTERS (Link Download PDF)

Buffett prefers to release the annual report and shareholder letter on Saturdays, when markets are closed and investors can digest his thoughts slowly and in peace.

A Look at the Autos on the Chopping Block

A Look at the Autos on the Chopping Block
1/16/2009 (Video MarketWatch)
Detroit's Big Three automakers are looking to downsize. WSJ's John Stoll talks about some of the brands that might be sold or scrapped, including the Hummer.

Most expensive real estate markets in 2009

Most expensive real estate markets in 2009
(Source) Global Property Guide

Last Updated: Feb 15, 2009
No surprise - Monte Carlo is No 1 in the Global Property Guide's list of World's Most Expensive Residential Real Estate Markets 2009, more than twice as expensive, at US$45,000 per square metre, as the runner up.
Battling for the number 2 position are prime central Moscow and London. Prime central Moscow's US$20,853 per square metre price tag slightly outpaces core Prime London's US$20,756 per square metre, though it is fairer to say the two cities are neck-and-neck.
London residential property prices have fallen for much of 2008, while Moscow property price declines only started in the last quarter, allowing Moscow to catch up with London. Both countries have experienced strong currency declines.
Tokyo and Hong Kong come in fourth and fifth, respectively.
New York, the only US city included in the survey , is 6th, with an average price of US$15,000 per sq. m.
Completing the top ten most expensive real estate markets are two European cities (Paris at 7th and Rome at 9th) and two other Asian cities (Singapore at 8th and Mumbai at 10th). Average prices range from US$9,000 per sq. m. to US$12,000 per sq. m.
The figures are based on the average price of a 120 sq. m., good-condition high-end used apartment in the city centres of more than 110 cities around the world, typically the economic centres where most foreigners are likely to buy.

http://www.globalpropertyguide.com/investment-analysis/Most-expensive-real-estate-markets-in-2009

Economy Opinion: Climate of Change (New York Times)

Op-Ed Columnist
Climate of Change (New York Times Permalink)
By PAUL KRUGMAN Published: February 27, 2009
President Obama’s budget represents a huge break from policy trends. If he can get it through Congress, he will set America on a fundamentally new course.

Economic Scene

A Bold Plan Sweeps Away Reagan Ideas
(New York Times Permalink)

By DAVID LEONHARDT Published: February 27, 2009

The budget proposals seek to reverse the rapid increase in economic inequality over the last 30 years.

Economy shrinks at worst pace in 25 years. GDP down 6.2 percent in 4th quarter 2008

Economy shrinks at worst pace in 25 years
Economy shrinks at faster-than-expected 6.2 percent pace in fourth quarter, worst in 25 years

Friday February 27, 8:35 am ET By Jeannine Aversa, AP Economics Writer
WASHINGTON (AP) -- The government says the economy shrank at a staggering 6.2 percent pace at the end of 2008, the worst showing in a quarter-century. Consumers and businesses ratcheted back spending, plunging the country deeper into recession. The Commerce Department figure shows the economy sinking much faster than the 3.8 percent annualized drop for the October-December quarter first estimated by the government last month.
It also was a considerably weaker performance than the 5.4 percent annualized decline economists expected
The faster downhill slide in the final quarter of last year came as the financial crisis -- the worst since the 1930s -- intensified.
Consumers at the end of the year slashed spending by the most in 28 years. They chopped spending on cars, furniture, appliances, clothes and other things. Businesses retrenched sharply, too, dropping the ax on equipment and software, home building and commercial construction..

AEX zakt naar laagste stand sinds 1995

AEX zakt naar laagste stand sinds 1995

(Source DFT De Telegraaf) AMSTERDAM - De AEX-index dook aan het begin van de middaghandel nog dieper in de rode cijfers en bereikte de laagste intradag-stand sinds december 1995.
Rond half twee noteerde de hoofdgraadmeter 2,6% lager op 217,70. Op 12 maart 2003 was er nog een laagste stand van 217,80 punten.
Het waren met name de financiële waarden, die de beurs omlaag trokken. ING en Aegon gingen 8% respectievelijk 11% onderuit. Ook de futures van Wall Street zakten steeds verder weg door tegenvallend nieuws over Citigroup.

Alle beurzen in Europa in het rood! (3 % tot 4% lager, Amsterdam 14.45 CET). Update 19.00 CET, European Stock Markets closed down between 1,5 and 2.5 percent. U.S. Markets moderately lower.
U.S.Futures point to considerably lower opening after the U.S. GDP data release.

What is the lipstick indicator?

What is the lipstick indicator?

After World War I, Victorian-era prudishness began to melt away as adventurous girls dared to display more calf below their skirts. Flappers bedecked in headbands and short, shapeless dresses characterized the decadence of the Roaring '20s. But women's style shifted following the stock market crash in 1929, and during the Great Depression, hemlines dropped back down toward the floor.
In 1926, economist George Taylor noticed that fluctuating fashion. Like the stock market, the length of many women's dresses also fell with a peculiar synchronicity. Perhaps this hemline index, as Taylor coined it, reflected the grim economy's psychological effect on the public. It wasn't a time for rash celebration and risk taking; instead, the Great Depression called for a return to fiscal modesty. Read More...

http://money.howstuffworks.com/lipstick-indicator.htm

Hungary Seeks $230 Billion Package for Eastern Europe

Hungary Seeks $230 Billion Package for Eastern Europe

Feb. 27 (Bloomberg) -- Hungarian Prime Minister Ferenc Gyurcsany wants the European Union to arrange a package of as much as 180 billion euros ($230 billion) to help east European economies, banks and companies weather the financial crisis.
A “European Stabilization and Integration Program” would include short-term financing for governments, coordinated restructuring for private debt, the recapitalization of banks and liquidity for companies in as many as 12 countries, Gyurcsany, 47, said in an interview in Budapest yesterday. He will present the plan at a March 1 EU summit in Brussels.
Some Eastern European economies are in meltdown as the global crisis throttles demand for their exports while investment and credit evaporate. Hungary, Ukraine, Latvia, Serbia and Belarus have sought international bailouts. Regional currencies, stocks and bonds plunged as investors fled riskier assets.
Read more...
http://www.bloomberg.com/apps/news?pid=20601087&sid=aMovouCgIclA

Analysis of East Europe bailout
(01:05) Rough Cut Reuters Video

Feb 27 - Analyst Nigel Rendell of RBC Capital Markets in London says more euros will be needed.

Global development banks have launched a 25 billion euro rescue package to prop up banks and businesses in central and Eastern Europe.
In a communique obtained by Reuters, the coordinated plan calls for the World Bank, the European Bank for Reconstruction and Development and the European Investment Bank to provide quick large scale funding to strengthen banks and give insurance firms access to credit.
Details on the banks and countries involved were not immediately available.
The massive expansion of international banks into the former Communist countries of central and Eastern Europe has made the region vulnerable to the credit strains that arose in the U.S.

NOTE: Natural sound; no reporter narration.
SOUNDBITE:
# Analyst Nigel Rendell of RBC Capital Markets in London

Orders for big-ticket goods signal continuing weakness in U.S. industrial sector

Orders for big-ticket goods weaker than expected
Orders for manufactured goods plunge in Jan.; posts record 6 straight months of declines

WASHINGTON (AP) -- Manufacturers saw orders for big-ticket goods plunge a bigger-than-expected 5.2 percent in January as global economic troubles cut into demand from customers in the United States and abroad.
The latest report on U.S. factory activity, released Thursday by the Commerce Department, showed orders falling for a record sixth straight month. The previous record of four straight monthly declines came in 1992.
The weakness in January was widespread with orders for autos, metal products, machinery, computers and electrical equipment, and household appliances all posting declines.
Not only was last month's drop steeper than the 2.5 percent decline analysts expected, but activity in December turned out to be much weaker. Updated figures showed a 4.6 percent drop in orders, versus a 3 percent decline previously estimated.
Manufacturers have trimmed production and payrolls as they race to cut costs to survive the recession. The collapse of the U.S. housing market has especially crimped demand for all kinds of building materials and equipment, as well as a range of consumer goods, including furniture, carpet and household appliances.
Consumers at home and abroad are cutting back, which is hurting U.S. manufacturers.
The department's report showed that orders for autos dropped 6.4 percent in January, from the previous month. Orders for primary metals -- a category that includes steel -- fell 4.6 percent. Demand for fabricated metal products declined 1.1 percent.
Machinery orders dipped 2 percent. Orders for computers and related products plunged 16 percent. Orders for electrical equipment, household appliances and other components fell 6.1 percent.
Stripping out volatile transportation orders, all other orders sank 2.5 percent in January, also the sixth straight monthly decline. Economists expected a 2.1 percent drop for this category.

http://finance.yahoo.com/news/Orders-for-bigticket-goods-apf-14476718.html

Will The Economic Crisis Split East And West In Europe?

Will The Economic Crisis Split East And West In Europe?
Nouriel Roubini, 02.26.09, 12:01 AM EST
The meltdown puts huge pressure on the E.U.'s free-market rules.

(Nouriel Roubini co-wrote this essay with Mary Stokes, Jelena Vukotic and Elisa Parisi-Capone, analysts at Roubini Global Economics.)

The Central and Eastern Europe region is the sick man of emerging markets. While the global crisis means few--if any--bright spots worldwide, the situation in the CEE area is particularly bleak. After almost a decade of outpacing worldwide growth, the region looks set to contract in 2009, with almost every country either in or on the verge of recession.
The once high-flying Baltics--Estonia, Latvia, Lithuania--look headed for double-digit contractions, while countries relatively less affected by the crisis--the Czech Republic, Slovakia and Slovenia--will have a hard time posting even positive growth. Meanwhile, Hungary and Latvia's economies have already deteriorated to the point where International Monetary Fund (IMF) help was needed late last year.
Central and Eastern Europe's ill health is primarily driven by two factors: collapsing exports and the drying up of capital inflows. Exports were key to the region's economic success, accounting for 80% to 90% of gross domestic product in the Czech Republic, Hungary and Slovakia. By far the biggest market for CEE goods is the Eurozone, now in recession.
Meanwhile, the global credit crunch has sapped capital inflows to the region. An easy flow of credit fueled Eastern Europe's boom in recent years, but the good times are gone. According to the Institute of International Finance, net private capital flows to emerging Europe are projected to fall from an estimated $254 billion in 2008 to $30 billion in 2009. Whether this is formally considered a "sudden stop" of capital or not, it will necessitate a very painful adjustment process. Read more...
http://www.forbes.com/2009/02/25/eastern-europe-eu-banks-euro-opinions-columnists_nouriel_roubini.html

Official: Budget projects $1.75 trillion deficit

Official: Budget projects $1.75 trillion deficit
Thursday February 26, 6:43 am ET By Martin Crutsinger, AP Economics Writer
Official: Obama budget projects $1.75 trillion deficit, seeks Medicare cuts

WASHINGTON (AP) -- President Barack Obama is sending Congress a budget Thursday that projects the government's deficit for this year will soar to $1.75 trillion, reflecting efforts to pull the nation out of a deep recession and a severe financial crisis. A senior administration official told The Associated Press that Obama's $3 trillion-plus spending blueprint also asks Congress to raise taxes on the wealthy in 2011 and cut Medicare costs to provide health care for the uninsured.
The president's first budget also holds out the possibility of spending $250 billion more for additional financial industry rescue efforts on top of the $700 billion that Congress has already authorized, according to this official, who spoke on condition of anonymity before the formal release of the budget.
The official said the administration felt it would be prudent to ask for additional resources to deal with the financial crisis, the most severe to hit the country in seven decades. He called the request a "placeholder" in advance of a determination by the Treasury Department of what extra resources will actually be needed.
The spending blueprint Obama is sending Congress is a 140-page outline, with the complete details scheduled to come in mid- to late April, when the new administration sends up the massive budget books that will flesh out the plan.

http://biz.yahoo.com/ap/090226/obama_budget.html

RBS reports record anual loss ($34.4 Billion), the biggest in British corporate history

The Royal Bank of Scotland posted an annual loss of 24.14 billion pounds ($34.4 billion) -- the biggest in British corporate history -- and unveiled a massive restructuring plan on Thursday that will offload many of its international businesses.
The already part-nationalized bank also said it will dump 325 billion pounds of toxic assets into a government insurance program, a step that could result in the state increasing its stake to as high as 95 percent.
RBS Chairman Philip Hampton blamed the massive 2008 loss, which compared with a 7.3 billion pound profit in 2007, on the "unprecedented turbulence" in financial markets and deteriorating conditions around the world.
The bank's revenue fell 15 percent to 25.87 billion pounds.
RBS Chief Executive Stephen Hester, who replaced Fred Goodwin after he resigned in the wake of the bank's financial downfall, refused to make forecasts for the current "difficult" year but said he was confident the restructuring and the government assistance would return RBS to "standalone strength."
The bank said it planned to shift 240 billion pounds, or 20 percent, of its funded assets to a noncore division. Those assets will then be disposed of or run down over the next three to five years.

The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble

The Wealth of the Baby Boom Cohorts After the Collapse of the Housing Bubble
Boomer wealth is evaporating
(CEPR) Center for Economic Policy and Research

This report builds upon previous CEPR projections to more accurately describe the current wealth prospects for the baby boom cohorts aged 45 to 54 and 55 to 64. The severity of the housing market meltdown, coupled with the recent collapse of the stock market, has had a severe negative impact on the wealth of these cohorts. Using data from the 2004 Survey of Consumer Finance and the November 2008 Case-Shiller 20 City Price Index, the authors create three possible scenarios for baby boomer wealth and find these households will enter retirement with little wealth beyond Social Security. For each cohort in 2004 and 2009, the paper analyzes net worth, financial assets, equity in real estate, percent of households in each cohort who will need cash to close on their primary residence, net worth of homeowners, net worth of non-homeowners, and the percent of homeowners who would need cash to close on their primary residence.

Download PDF: http://www.cepr.net/documents/publications/baby-boomer-wealth-2009-02.pdf

Plummeting house prices and investment losses will leave millions of baby boomers dependent on Social Security in their retirement
Press Release: February 25, 2009

Turkish Airlines plane crash at Amsterdam airport. Breaking News

Turkey plane crashes in Amsterdam, Turkish Airlines plane at Amsterdam airport, The plane crashed away from the runway
(Source BBC News, Photo NOS.nl)
For our Turkish readers, Reports say: 135 people on board, no or very few fatalities. According to Eye Witness reports, the plane simply dropped out of the air from very low altitude on near approach to the runway, the accident looks like a technical failure - with a heroic effort from the pilots to keep the plane in the air and reach the runway.
Update 18.45 CET Amsterdam, according to the latest report on NOS.nl (Dutch Television), there were 8 fatalities, 6 critical wounded and 86 wounded victims of the crash.
We apologize for the delay in reporting but we only put this on the site for our Turkish Visitors before we had to leave for other activities. However, reporting about the crash has been all afternoon on the Dutch, Turkish and International Media and TV.

A Turkish Airlines plane has crashed on landing at Amsterdam's Schiphol international airport.
The plane, with 135 passengers on board, crashed near the A9 motorway and suffered significant damage.
It was Flight 1951 from Istanbul and was a 737-800 aircraft.
One person has been killed, and 20 passengers were injured. But Turkish media said at least 50 people had survived unhurt and some 20 people were seen walking away from the plane.
The BBC's Geraldine Coughlan in the Hague says Dutch television has been showing pictures of helicopters at the scene, with about 20 ambulances and fire engines.
Schiphol is the fifth-largest passenger airport in Europe.

http://news.bbc.co.uk/2/hi/europe/7909683.stm

Stock Markets down to pre 1997 levels

Stock Markets down to pre 1997 levels

(Amsterdam,Feb 24, 1300 CET)
With stock markets in a continuous slump and reaching pre 1997 levels it's about time to make an analysis and/or prediction.
The markets are going down to the pre dot.com levels but the dot.com was an overoptimistic and unrealistic bubble as well, so in fact what we witness now is a double (or triple?) correction, the correction of the subprime lending bubble and the dot.com bubble. It is also a late correction of the after 9/11 bubble, the flood of the markets with cheap capital to stimulate the economy and keep up consumer levels. Anyway it's more or less a reckoning of the last 15 years.

In the mean time the world has dramatically changed, the more than 25 years old warnings about the dangers of the unlimited use of fossil fuels and the Global Warming (CO2 levels) got more media attention, and last years record Oil Price was a clear warning for the whole world and all levels of Society
The most powerful nation in the world, the United States of America, was first hit by the banking crisis, the credit crunch and the economic downturn. The Global Economy and the Financial system is interconnected and the crisis spreads very fast, as could have been expected.
But the U.S. has already made a shift with the election of Barack Obama as the new President. The large and enthousiastic groups of new voters like the 'millenials' or generation X and the reduced influence of the 'baby boomers' has been largely responsible for this.

The new U.S. Administration needs some time to restore and turn around the economy, huge amounts of money are needed to repair the crumbling infrastructure and the neglected health care system.
Until now the new President has not been challenged by international political developments and events. But the international credibility of the U.S. is heavily damaged in the past 9 years. The financial crisis is still far from over and trust in banks is further decreasing instead of increasing.

How about the rest of the World?
Although the recession is beginning to have an impact worldwide and politicians are becoming aware of the dangers (even the D word, e.g. "Depression" is heard occasionally), we do not expect a thirties style recession. May be for the population of industrialized nations it will mean a few vacations less a year, not buying all kinds of useless crap, postponing of the buying of the latest up to date car every year, quitting all kinds of unnecessary services, and in general literally the trimming of fat and becoming leaner.
Which is not such a bad idea to start with anyway.

Now, a couple hours later (17.00 CET), and the U.S. markets open and slightly up it is time to reflect.
Today (February 24) some rather dismal figures were released, U.S. Consumer Confidence index is plummeting, Housing prices dropped at a record rate in December 2008 and Fed Chairman Ben Bernanke warning the U.S. Economy is in its worst slide since the 1930's and recovery could start in 2010, not 2009.
In all this means there is no recovery and the bottom of the economic slump has not been reached yet.
So the global markets will go down further as well as will World Trade.

The European Governments are on a frantic mission with regular international meetings which probably will continue all Spring and part of Summer until the summer holiday season.
Protectionism and Nationalism is on the rise -as always in these circumstances- and has to be avoided at almost all costs. However, the French President Nicolas Sarkozy is in a 'catch as catch can' situation in his own country and has to push a soft protectionst agenda.
This will cause a turmoil in the EURO Zone and possibly a setback. May be a lot of European goverments have to pay the bill, because they simply forgot they have a more than 300 million population with it's own wishes and dreams. People want solutions, a better life and fast, they have no message for Eurocrats.
In it's first major crisis in 50 years the EU is facing a difficult time ahead.

(Feb 27, 2009, Amsterdam)
We think this global recession will turn out to be worser than expected an take longer than predicted by most experts. It is regrettable to reach this conclusion (and prediction) but we have no other choice. Goverments and Institutions around the world have to get used to new realities and have to come up with new strategies for economic restoration and development. New '21st Century Economy' strategies and this means the (long and difficult) road to new ways of thinking and changing habits. It is not going to be easy and it won't happen without troubles and disasters along the road, but there is no alternative.

More to follow...

European leaders meet amid euro-zone worries

European leaders meet amid euro-zone worries

BERLIN (Reuters) - European leaders met in Berlin on Sunday to agree a common stance on overhauling global financial rules but their summit risked being overshadowed by concerns about the fragility of euro zone and eastern European states.
The host, German Chancellor Angela Merkel, wants the meeting to reaffirm a commitment to free trade, stronger regulation of financial markets and coordinated action to shield the bloc from the worst downturn in the postwar era.
European countries would then take this message of unity to a broader summit of G20 nations in London on April 2, showing they are serious about delivering on an action plan agreed last November in Washington to combat the financial crisis and guard against future meltdowns.
But new tensions within the single currency bloc and the financial woes of European Union members to the east have cast a cloud over the meeting in the German capital.
Ahead of the gathering, the IMF threw its weight behind the idea of a common European bond to alleviate pressure on euro states such as Ireland and Greece that are being forced to pay hefty premiums over stronger bloc members to finance their debt.

(Dutch officials arriving in Berlin, source video NOS.nl)

The Doing Business project...Download Free Reports

The Doing Business project...
provides objective measures of business regulations and their enforcement across 181 economies and selected cities at the subnational and regional level.

Compiled with the help of 6,700 business experts and government officials around the world, "Doing Business 2009" analyzes how difficult it is to comply with 10 different sets of business regulations that affect company lifecycles, from startup to closure. The World Bank's research team examined the number of procedures required to start a business and the ease and cost of transactions such as obtaining construction permits, hiring workers, getting credit, paying taxes, enforcing contracts and declaring bankruptcy. Each category is given equal weight to create an overall "ease of doing business" index and ranking.
http://www.doingbusiness.org/

Doing Business 2009 -- Full report now available for download! Azerbaijan was the top reformer in doing business, while Eastern Europe and Central Asia led the world’s regions in regulatory reforms, according to Doing Business 2009. Download the entire 211-page report to learn more about reforms and other changes to the business environment in 181 economies.
Download full report (PDF, 4.7MB) or by chapter
Also available in Arabic (PDF, 9MB), French (PDF, 5MB) and Spanish (PDF, 5MB)
http://www.doingbusiness.org/documents/fullreport/2009/DB09_Full_Report.pdf

Study: Singapore is No. 1 spot in the world for small businesses
The U.S. ranks third in a World Bank survey of the friendliest regulatory environments for startups and small companies. (Source CNN Money, read Article)

With the world in economic turmoil and the quest for a new 21st century economy gainig momentum, these reports provide (this report) very usefull information for business people, start ups, entrepreneurs, innovators and inventors who want to be part of the new business wave.
A hundred years ago a wave of innovation happened, almost 50 years ago a new wave started in California in what later became Sillicon Valley. The spirit of these entrepreneurs and innovators is still very much alive but lots of them today are simply looking for the best places to set up business.

For our Dutch readers we would like to point out that The Netherlands is not even in the first 20 of the best places to do business.

Meredith Whitney starts her own business; Meredith Whitney LLC.

Meredith Whitney: A league of her own
In an exclusive interview with Fortune, the influential banking analyst talks about why it was time to go independent.

NEW YORK (Fortune) -- Meredith Whitney, the Oppenheimer & Co. banking analyst who called Wall Street's meltdown, is leaving to start her own business. And she says Fortune had a hand in her decision.
"It was the incredible women I met at the Fortune Most Powerful Women's summit that gave me the final push and confidence to go for it," says Whitney. "I am overwhelmed with support from incredibly inspiring people, many of whom I met at that conference." (Conference organizer, senior editor Pattie Sellers, shares her own thoughts about Whitney's move.)
But even before the summit, she was already laying the foundation of her new business, to be called Meredith Whitney LLC. To keep her shop truly independent, she rebuffed interested investors and put up all of the capital herself. (Read More about Meridith Whitney's new business...)

http://money.cnn.com/2009/02/19/news/economy/meredith_whitney.fortune/index.htm?postversion=2009021913

Brookings Institute: Vice President, Economic Studies William Gale about the Stimulus Package

Brookings Institute: Vice President, Economic Studies William Gale
Gale says that the stimulus package should give the economy the jolt that it needs but adds that it generates a few far reaching concerns.
As President Obama signs the much anticipated stimulus package into law, William Gale, vice president and director of Economic Studies at Brookings, says the economy will likely respond as anticipated. But, Gale says, one of the critical elements for the nation’s economic solvency is to ensure that there’s an end in sight for this unprecedented spending bill.


Transcript, read more
"The stimulus package is really only the first component of an overall recovery package. I see four components overall. The stimulus package, housing fix, a finance fix, and some sort of global coordination with other countries. I think the administration, now that it has passed the first of those it’s focused on the second and third, but we cannot forget that we are part of the global economy. If the global economy doesn’t recover that will not be good news for us, so we need to work with other countries on some sort of integrated package."

"...One of the issues that is always a topic of conversation in Washington is who gains and who loses? The stimulus package has a huge number of provisions that effect particular groups, but I think this is a case where the overall impact is gonna dominate any specific group impact. If the fiscal package, the stimulus, can turn the economy around, get people back to work, get businesses hiring again, consumers spending that is going to have a much larger impact on families than any particular $400 tax cut."

A Swiss Bank Is Set to Open Its Secret Files

Business / World Business (New York Times Permalink)
A Swiss Bank Is Set to Open Its Secret Files
By LYNNLEY BROWNING Published: February 19, 2009
UBS, Switzerland’s largest bank, has agreed to divulge the names of well-heeled Americans suspected of using offshore accounts at the bank to evade taxes.

Fed downgrades economic forecast for this year

Fed downgrades economic forecast for this year, warns of long road to recovery

WASHINGTON (AP) -- The Federal Reserve on Wednesday sharply downgraded its projections for the country's economic performance this year, predicting the economy will actually shrink and unemployment will rise higher.
Under the new projections, the unemployment rate will rise to between 8.5 and 8.8 percent this year. The old forecasts, issued in mid-November, predicted the jobless rate would rise to between 7.1 and 7.6 percent.
The Fed also believes the economy will contract this year between 0.5 and 1.3 percent. The old forecast said the economy could shrink by 0.2 percent or expand by 1.1 percent.
The last time the economy registered a contraction for a full year was in 1991, by 0.2 percent. If the Fed's new predictions prove correct, it would mark the weakest showing since a 1.9 percent drop in 1982, when the country had suffered through a severe recession.
The bleaker outlook represents the growing toll of the worst housing, credit and financial crises since the 1930s. All of those negative forces have plunged the nation into a recession, now in its second year.
"Given the strength of the forces currently weighing on the economy," Fed officials "generally expected that the recovery would be unusually gradual and prolonged," according to documents on the Fed's updated economic outlook.
Against that backdrop, unemployment -- now at 7.6 percent, the highest in more than 16 years -- will keep climbing and stay elevated for quite some time, the Fed predicted.

For now, Fed officials are more worried about falling prices, than rising ones.
The Fed didn't use the word "deflation," which is a dangerous bout of falling prices, but officials noted "some risk of a protracted period of excessively low inflation."
Falling prices sound like a gift at first -- at least to consumers. But a widespread and prolonged decline can wreak more havoc on the economy, dragging down Americans' wages, and clobbering already-stricken home and stock prices. Dropping prices already are hurting businesses' profits, forcing them to slice capital investments and lay off workers.
America's last serious case of deflation was during the Great Depression in the 1930s. Japan was gripped with a period of deflation during the 1990s, and it took a decade for that country to overcome those problems. More on Finance/Yahoo