The International Monetary Fund warned on Saturday that debt-ridden banks were pushing the global financial system to the brink of meltdown and rich nations had so far failed to restore confidence.
The United States appealed for patience as world leaders raced to stabilize financial markets and avert the deepest global recession in decades, but the IMF said more steps would be needed in the coming months.
“Intensifying solvency concerns about a number of the largest U.S.-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown,” IMF chief Dominique Strauss-Kahn said.
President George W. Bush huddled with Group of Seven economic chiefs and officials from the IMF and World Bank, and said top industrial nations grasped the gravity of the crisis and would work together to solve it.
“I’m confident that the world’s major economies can overcome the challenges we face,” Bush said, adding that Washington was working as fast as possible to implement a $700 billion financial bailout package approved a week ago.
“The benefits will not be realized overnight, but as these actions take effect, they will help restore stability to our markets and confidence to our financial institutions.”
Confidence has been in short supply and panic has swept through global markets, driving stocks to a five-year low on Friday and prompting banks to hoard cash. That has choked off lending to businesses and households, threatening to turn a global economic slowdown into a dangerously deep recession.
U.S. Treasury Secretary Henry Paulson said risks to the global economy were “the most serious and challenging in recent memory.”
As the White House and Congress hammer out the details of a rescue plan for embattled financial institutions, Americans worry that it may reward bad behavior but they also fear that doing nothing may hurt the economy, according to a poll released Tuesday.
In a CNN/Opinion Research poll, 79% of 1,020 respondents said they were worried that the economy could get worse if the government takes no action.
However, 77% also said they believed that a government bail-out would benefit those responsible for the economic downturn in the first place. The poll was taken on Sept. 19-21 and had a margin of error of plus or minus 3 percentage points.
The Bush administration, under the guidance of Treasury Secretary Henry Paulson, has proposed that the federal government buy up approximately $700 billion in problematic assets from financial institutions in order to give them the liquidity they need to stay afloat.
Democratic lawmakers have pushed for a number of additions to the bill, including additional oversight, protections for homeowners and caps on executive compensation.
According to the CNN poll, fully half of respondents said there is too little regulation of the stock market and financial institutions.
The two presidential candidates, Democrat Barack Obama and Republican John McCain have also said there needs to be more government oversight of the bailout plan.
Through it all, Americans remain optimistic cheap payday loans http://abc-cashadvance.com. While a great majority said they believed the economy was struggling, according to the poll, more than two-thirds said they thought the economy would be in good shape a year from now.
The Confederation of British Industry, the nation's top business lobby, said the central bank should slash its benchmark interest rate in November by the most in seven years to halt a recession.
“Our members are having a tough time,'' Richard Lambert, director of the CBI, told reporters in London. “There's scope for a half-point cut in November,'' assuming the inflation outlook doesn't change. “We are now almost certainly in a mild recessionary phase.''
The Bank of England has kept its main rate at 5 percent since April on concern that the fastest inflation in at least a decade will become embedded in the economy. The European Commission says the U.K. has already entered its first recession since 1991 after growth ground to a halt in the second quarter, ending the longest stretch of uninterrupted expansion in a century.
Lehman Brothers Holdings Inc. plans to file for bankruptcy protection and Merrill Lynch & Co. agreed to sell itself this weekend, adding to the risk of further deterioration in Britain's financial services industry after the yearlong credit squeeze. The Bank of England pledged today to “take appropriate actions if necessary'' to stabilize money markets.
The central bank, which hasn't cut its key rate by more than a quarter point since the aftermath of the September 2001 terrorist attacks, should reduce its benchmark to 4.5 percent this year and to 4 percent in early 2009, the CBI said.
Recession Forecast
The economy will contract 0.2 percent in the third quarter and 0.1 percent in the final three months of the year, the CBI said. The lobby cut its full-year projection to 1.1 percent from a forecast of 1.7 percent in June. Growth will slump to 0.3 percent next year, the new forecasts show.
The flagging economy is hurting Prime Minister Gordon Brown's popularity first cash advance faxless cash advance. The ruling Labour Party has the weakest support in at least a decade and has ousted two officers in the past three days who have called for a leadership challenge against Brown.
The economic slowdown may cool inflation and make it easier for the Bank of England to help the economy, Lambert said. Inflation will reach 5 percent this year before slowing to 2.3 percent by the fourth quarter of 2009, the CBI's forecasts show.
“We hope and believe that this will give the Bank of England scope to cut interest rates,'' said Lambert, who sat on the central bank's Monetary Policy Committee between 2003 and 2006. “There is a significant risk that in 2010 inflation will actually be undershooting the 2 percent target by quite a way.''
Inflation Concern
Figures tomorrow will probably force Bank of England Governor Mervyn King to write a letter to Chancellor of the Exchequer Alistair Darling.
Inflation accelerated to 4.6 percent in August from 4.4 percent in the previous month, according to the median of 28 forecasts in a Bloomberg News survey of economists. That would be the fastest pace in at least 11 years. The central bank's mandate requires the governor to write a letter to the chancellor when the rate strays more than 1 percentage point from the target.
King will also release the bank's proposals for changing its money-market operations this week and invite comments from financial institutions and investors. The central bank will introduce a new facility to replace the Special Liquidity Scheme, an emergency lending program for banks which expires in October.
Home sales on Oahu plunged by more than 30 percent in June and are off by more than 25 percent for the first half of 2008.
But sellers are hanging tough on asking prices. Even though single-family home prices fell 9 percent in June from a year ago, the median price for the month was $625,000, still a strong number.
Only 232 single-family homes sold last month on Oahu, a drop of more than 31 percent from June 2007 when 338 homes sold, according to the figures released Tuesday by the Honolulu Board of Realtors.
Sales of single-family homes for the first six months of the year were 1,413, down 26 percent from the first half of 2007.
Condominium sales fell 35 percent last month, to 355 units sold, down from 547 in June 2007.
The figures count only existing homes, not new construction.
The total number of units sold so far this year was 2,158, a 27.5 percent drop from the first six months of 2007.
"While median prices have remained rather stable, the number of sales continued to drop in June and the annual sales rate has fallen below 8,000 units," said Harvey Shapiro, the board's research economist.
Shapiro noted that the peak of the Oahu market was in 2005, with an annual sales rate of 13,000 payday loans get a free credit report. The low point occurred in the mid-1990s when sales fell below 4,000 units.
"The residential markets could see further slowing throughout the summer, but this reduction in demand may ease toward the end of this year," he said.
The median price of a single-family home a year ago was $685,000.
The median price of a condo was $327,500, down 2 percent from last year when it was $334,000.
"Sales demand in the Oahu housing market has been slowing, but median prices are remaining within the same range we've seen since 2005," said Dana Chandler, president of the Honolulu Board of Realtors. "The median price paid for a single-family home in June was 8.8 percent lower than a year ago, but remember that the price in June 2007, at $685,000, was the highest median ever achieved."
Consumer spending and personal spending both increased at a slow pace in April, according to a government report released Friday that was in line with analyst expectations.
The Commerce Department said personal spending by individuals in current dollars rose 0.2% in April, in line with the 0.2% increase expected by economists surveyed by Briefing.com. March’s gain was a revised 0.4%.
The report showed personal income increased 0.2% in April, also in line with the 0.2% increase expected by economists. March’s gain was 0.3%.
In inflation-adjusted dollars, personal income remained flat from the prior month. Personal spending, in inflation-adjusted dollars, was also flat from the previous month. If inflation-adjusted personal spending is flat, that means that the increase in spending is entirely due to rising prices, not an increase in consumption.
"In the past couple of months, personal income and personal consumption have been moving in lockstep," said Michael Niemira, chief economist with the International Council of Shopping Centers.
"If your income is only growing at the same pace as consumption, it just means you are holding even and more money is going to food and energy," given the current situation of food and energy prices increasing in recent months, said Niemira. "Any leftover money from nondiscretionary spending and other living expenses is shrinking."
In the coming months, Niemira predicts the consumer spending numbers will show improvement as consumers spend their tax rebate checks no fax payday loan credit scores.
A measure in the report that tracks prices consumers pay on items, excluding food and energy, rose 0.1% over the previous month, in line with analyst expectations.
The so-called core PCE rose 2.1% from the same month a year, the same as the month prior. The Federal Reserve is widely believed to prefer that this year-over-year core inflation number stay in a range of 1% to 2%.
Personal savings increased 0.7% in April, flat from a revised 0.7% in March. That means for every $1,000 that Americans bring in after taxes, they are only saving $7.
As inflation numbers tick up, concerned consumers should pull back slightly in their spending and start saving a little bit more. "That savings rate increasing is good and bad news," said Niemira because a sagging economy depends on consumers spending their greenbacks to pump the economy back to health.
Consumer spending fuels more than two-thirds of the nation’s economic activity and is closely watched as a gauge of the economy’s health.
A report on first-quarter gross domestic product, a broad measure of the nation’s economic activity, came in at a revised 0.9% annual rate increase Thursday.
The Conference Board’s latest reading consumer confidence, released Tuesday, dropped to the lowest level in 16 years.
The addition to my telephone bill came weeks after I saw an advertisement on the Internet and took a chance at winning a fancy cellphone. I assumed the manufacturer or distributor were behind it, but I was wrong.
That led to my second mistake. I did not check carefully for pricing details. They were set out in the fine print at the bottom of the ad, and in abbreviated form in a follow-up text message, which you would have to scroll to the bottom to read in full.
It turned out I was billed $2 per message, three to four times a week, whether I replied to a trivia question or not. Had I known, I would have replied "STOP" sooner, or have not entered.
Several readers have written to say they were similarly surprised by charges. Some had dealt with the same game provider, some with others. Some had no recollection of signing up. Some felt tricked, some merely foolish. Some got refunds from their telephone company.
The marketer of my contest – TMG Co. of Amsterdam – informs me I actually attempted to register four times. How stupid was that?
Maybe my readers and I are all exceptionally gullible, impatient or green in the use of cellphones. But, after testing the sign-up procedure for another TMG contest, this one for an Apple laptop computer, I have a suggestion:
USE LARGER TYPE.
President Hans de Back pointed out in an interview: "We are not using the word free." In a lengthy reply to questions, the company said: "Unfortunately, we cannot force someone to read the information we provide; however, we can only hope that when the user decides to participate and subscribe, he/she has educated him/herself fully on the consequences of the service."
That is all true freecreditscore bad credit payday loans. But if it’s possible for even a minority of customers to miss the pricing information, maybe it’s not prominent enough.
The online advertisement for the contest for the laptop computer has large moving text at the top. Images of the computer float in and out of view. The small print on the bottom is in a light colour on a dark background. The $2 price appears at the far right, and within the large block of text after 118 words. It would not be visible on some computer screens without scrolling down.
From what I have seen and what the company says, TMG complies with rules set down by the Canadian Wireless Telecommunications Association. But those standards do not specify the size or positioning of text used when disclosing prices.
TMG, and spokespersons for Bell Mobility, Rogers, Fido and Telus insist they receive relatively few complaints about billings for premium message servives. Unsolicited advertising is a far greater source of complaints, says Jim Johannsson of Telus.
At my request, Kenneth Hardy, a professor of marketing at the Richard Ivey School of Business in London, Ont., looked at TMG’s ad. He found the manner for disclosing the price was lacking.
"I think it is essentially a common sense standard that, if there is a charge, that it be prominent enough that a customer realizes there is a charge, and that it hinges on the number of messages that are sent. The (secret to) long-term success of marketing enterprises is to be completely forthcoming, and have satisfied users."
James Daw, CFP, appears Tuesday, Thursday and Saturday. He can be reached at jdaw@thestar.ca
Japan's economy grew 3.3 percent last quarter, faster than economists estimated, as exports to Asia and emerging markets helped the nation weather the U.S. slowdown.
Gross domestic product in the three months ended March 31 was better than the 2.5 percent median estimate of 32 economists surveyed by Bloomberg. Fourth-quarter growth was revised to 2.6 percent from 3.5 percent, the Cabinet Office said today in Tokyo.
Today's figures came a day after Germany reported its economy expanded at the fastest pace in 12 years, resisting the U.S. slowdown. Japan's Nikkei 225 Stock Average has surged 21 percent in the past two months as companies including Matsushita Electric Industrial Co. forecast record profit.
“The big slowdown isn't happening,'' said Jesper Koll, director of Tantallon Research Japan, a hedge fund. “The world is resilient. Global demand is strong.''
The yen traded at 104.38 per dollar at 4:11 p.m. in Tokyo from 104.87 before the report. The currency has fallen 7 percent against the dollar since climbing to a 12-year high of 95.76 on March 17, easing the burden on exporters' earnings. The yield on Japan's 10-year bond rose 2 basis points to 1.695 percent.
From the fourth quarter, Japan expanded 0.8 percent, the fastest pace in a year. Figures yesterday showed Europe grew a more-than-anticipated 0.7 percent, led by the 1.5 percent expansion in Germany. The U.S. economy grew only 0.1 percent in the same period, and 0.6 percent on an annualized basis.
Middle East, Russia
Matsushita President Fumio Ohtsubo last month said the Beijing Olympics and demand for Panasonic televisions in the Middle East and Russia will help profit climb 10 percent to a record in the year ending March 31.
Other companies are less optimistic. Toyota Motor Corp., the nation's biggest automaker, expects falling U.S. sales, higher commodity prices and the stronger yen to erode earnings. Sony Corp. this week said profit at its electronics division will fall this year because of the currency's gains.
Companies plan to pare orders of machinery, a key indicator of capital spending, by 10.3 percent this quarter, a report showed yesterday.
Finance Minister Fukushiro Nukaga and Economy Minister Hiroko Ota said today that they're concerned about the outlook for business investment, which fell 0.9 percent last quarter.
“The negative effect of the U.S. slowdown is going to hit after a time lag,'' said Seiji Shiraishi, chief economist at HSBC Securities in Tokyo. “Both households and the corporate sector could be in pretty bad shape, at least through summer.''
Consumers Pessimistic
Household confidence slumped to a five-year low in April, a separate report showed today, as inflation quickened to the fastest pace in a decade bad credit payday loan payday loan. Consumer spending, which accounts for more than half of the economy, grew 0.8 percent last quarter.
Prices of everyday goods rose at more than twice the pace of wages in March. Japanese workers are likely to see summer bonuses increase by the smallest amount since 2002, the Nikkei newspaper reported this week.
“Real income is declining'' and households may tighten their purse strings, said HSBC's Shiraishi. “Inflation in prices of necessities has a negative impact on psychology.''
The risk of weaker growth prompted the Bank of Japan last month to shelve its policy of gradually raising interest rates. Governor Masaaki Shirakawa and his board are expected to hold the key rate at 0.5 percent, the lowest in the industrialized world, at the end of their next meeting on May 20 and most economists say borrowing costs will stay unchanged this year.
Export Growth
Net exports — the difference between exports and imports — accounted for most of Japan's growth, contributing 0.5 percentage point to the quarterly increase. Domestic demand added 0.3 percentage point.
“Even if the U.S. goes into recession, demand from Europe and Asia should hold up reasonably well,'' said Julian Jessop, chief international economist at Capital Economics Ltd. in London.
Goldman Sachs Group Inc. and Morgan Stanley last month dropped predictions the world's second-largest economy would slip into a recession, ending the nation's longest postwar expansion.
Residential investment rose 4.6 percent from the previous three months. Housing starts are recovering after plunging since June because of a permit logjam caused by government regulations designed to stop building fraud.
The higher cost of imports probably means that the real GDP growth rate overstates the strength of the economy. In nominal terms, which don't take into account price changes, Japan expanded 0.4 percent on the quarter, half the pace of real growth.
“Imported inflation is squeezing domestic profit margins and wages,'' said Hiroshi Shiraishi, an economist at Lehman Brothers in Tokyo.
Goldman Sachs says annual earnings at Japanese companies will fall for the first time in seven years. That could stifle investment and hiring.
Today's numbers may have also exaggerated growth because some components don't adjust for the leap year. Yuji Shimanaka, chief economist at Mitsubishi UFJ Research and Consulting in Tokyo, said the extra day in February accounted for about half of the increase in consumer spending.
The Spanish government approved 18 billion euros ($28 billion) of emergency tax cuts and spending to shore up an economic expansion undermined by a slumping housing market and the global credit shortage.
The measures, passed by decree today and enacted immediately, will provide a 400-euro tax rebate to all workers and pensioners, part of 10 billion euros of outlays this year. The remaining 8 billion euros are earmarked for next year.
Prime Minister Jose Luis Rodriguez Zapatero is tapping a budget surplus to cushion the effect of a slowing economy, which the International Monetary Fund forecasts will ease by more than half this year to 1.8 percent. House prices in Spain fell in real terms for the first time in 10 years in the first quarter after tripling in the past decade.
“The economic and budget policy of this government in the last four years has allowed us to accrue a surplus in the public accounts,'' Deputy Prime Minister Maria Teresa Fernandez de la Vega said at a press conference in Madrid “This lets us take measures to stimulate the economy, to reinvigorate job creation and to help people and families in greatest difficulty.''
Home sales imploded in the first quarter, declining 23 percent on the year, while shares of real-estate developers have collapsed. The stock of unsold homes in Spain is more than 600,000, according to Alberto Espelosin, a strategist at Zaragoza, Spain-based Ibercaja Gestion.
Developers' Shares
Inmobiliaria Colonial SA, Spain's third-largest developer, has lost three-quarters of its value in six months. This week, Barcelona-based Grupo Aisa SA fell to the lowest since the shares first traded in Madrid in 1999 after a court said it will consider whether to declare it insolvent.
The global credit crunch stemming from the collapse of the U.S pay day loans cash advance flexible payments. housing market is exacerbating Spain's own housing slump by restricting funds available for banks and homebuyers. Mortgage lending fell 28 percent on the year in January.
“If this episode is prolonged, its effects on the Spanish economy may be significant, since it is an economy in which external financing is a basic element of its growth,'' Bank of Spain governor Miguel Angel Fernandez Ordonez said April 15. “That the real estate cycle matured at the same time as international financial tensions emerged has been particularly unfortunate for our economy.''
Jobs, Services
There are signs that the housing slowdown is beginning to drag down other areas of the economy. Jobless claims have jumped by more than 280,000 in the past six months and activity in services plunged in March, an index of purchasing managers indicated. Manufacturing contracted for a fourth month.
The stimulus package will add 0.2 or 0.3 percentage point to economic growth this year, Finance Minister Pedro Solbes said at the same press conference.
One measure waives the fees charged by banks and notaries to extend a mortgage for the next two years, making it cheaper for homeowners to lower their payments by stretching out the life of the loan. The government also abolished the wealth tax and announced a 200 million-euro program to help unemployed construction workers find jobs.
The Ministry of Public Works has already accelerated its tendering process this year, Solbes added. The ministry awarded 6 billion euros of contracts in the first quarter, almost double the amount in the year-earlier period.
Thousands of protesters took to the streets of Slovenia’s capital on Saturday to denounce low pay and corporate greed across Europe as politicians and central bankers called for wage restraint to combat inflation.
At a time of surging food and energy prices worldwide, the European Trade Union Confederation organized what it described as a show of anger and determination to improve on the “poverty wages” of more than 30 million workers across the continent.
“This is a protest against the situation in the whole of Europe,” said Reinhard Dombre, head of Germany’s trade union federation. He was one of a crowd that police estimated at 10,000 and organizers at 35,000.
“We only want higher wages, the inflation we can’t stop,” said Elmer Zubrovic, 41, a Ljubljana worker.
Company profits have risen for more than a decade, but the share of wealth going into wages has shrunk and the divide has widened between those at the top and bottom, ETUC, an umbrella body for unions across the continent, said.
John Monks, head of the European Trade Union Confederation, said Saturday’s rally was a show of anger and determination on pay and also the injustice of top managers earning as much as 300 times the wage of their workers.
“We cannot accept the sermons and lectures of European central bankers and finance ministers,” Monks said payday advance online no fax payday loans. “Europe’s workers want their fair share.”
MINISTERS SOUND INFLATION ALARM
Growth in lending to Australian consumers and businesses by banks and other financial institutions slowed in February after the central bank raised borrowing costs to cool the fastest inflation in 16 years.
Total credit climbed 0.7 percent from January, when it gained a revised 1 percent, and advanced 15.5 percent from a year earlier, the Reserve Bank of Australia said in a report released in Sydney today. The median estimate of 21 economists surveyed by Bloomberg News was for a 1.1 percent gain.
Credit growth may slow further in coming months after Governor Glenn Stevens increased the benchmark rate to 7.25 percent on March 4, the highest in almost 12 years and the fourth increase since August. The bank's policy makers will probably leave borrowing costs unchanged tomorrow to gauge fallout from the global credit squeeze, according to all 24 economists surveyed by Bloomberg News late last week payday loans in one hour credit reports.
Lending to businesses rose 0.5 percent in February and 22.3 percent from a year earlier, the slowest annual pace in four months, today's report showed.
Loans to consumers to buy houses in February advanced 0.9 percent for an annual increase of 11.4 percent. Credit provided to consumers for purchases other than housing fell 0.1 percent from a month earlier and gained 10.8 percent on the year.
Powered by WordPress -- XHTML 1.0