Bad news (economic), belt-tightening galore
Saturday, 22 November 2008
From Fazle Rashid
NEW YORK, Nov 21: Economic news, what a reputed newspaper said, was uniformly bad across the world. US workers filing for jobless benefits soared to 542,000, Japan is facing a severe slump in its exports, Swiss central bank slashed interest rates by one full percentage point and China said employment outlook was turning grim in the wake of more factory closures.
Air France-KLM will cut capital investment by $17 billion, over the next two years as it moves to save cash rather than buy new aircraft in the face of economic uncertainty. JPMorgan will slash ten percent of its workforce. The New York Times will cut dividend to preserve cash in a souring advertising market. Dell the PC maker announced a big drop in revenue earning. American Airlines is awaiting government approval for a merger with a foreign airline. Asian airlines facing a worldwide downturn in passenger travel will face a 20 percent drop in cargo revenue
To add to the woes is the news that international shipping lines would avoid the Suez Canal due to increased frequency of piracy thus raising the freight charges making imports/exports costlier.
Investors are growing increasingly worried that big banks like Citigroup, JPMorgan Chase and Bank of America which have all received billions of dollars from the government to bolster their finances are still too weak.
The price of Citigroup's shares plunged 26.4 percent and other financial shares fell to fresh lows, the New York Times reported today. Goldman Sachs suffered similar reverses.
Decision by Prince Walid bin Talal of Saudi Arabia to raise his stake in the bank by 5.0 per cent failed to restore confidence in the Citigroup. The prince had also bailed out the bank in 1990s. Investors are panic-striken, fearing more bad news from the banks as the economy slows.
Traders have begun making jokes comparing Citigroup to Titanic.
The chief executives of the collapsing automakers seeking government support to survive flew into Washington from Detroit by private jets thus infuriating the lawmakers. The automakers have been given 12 days time to prepare papers to allay fears of both the lawmakers and the people that the bailout money will be well spent. It is all about accountability and viability, Ms Nancy Pelosi, the speaker of the House of Representatives said.
With stock market plunging and the credit market entering new freeze cries are being heard for a new government intervention to prop up major financial institutions before president-elect Obama takes office, the NYT said.
President George Bush has promised to a sign a bill now pending in the Congress to extend unemployment benefits to workers by at least seven weeks.
The world in the meanwhile is witnessing a shift towards a multi-polar system with less dominant US and more powerful China. A historic transfer of wealth from west to east is taking place. The US will remain the most powerful country but the rise of emerging powers and regional blocs will debilitate Washington's ability to dictate terms and to call the shots across the world. The multiplicity of influential actors and distrust of vast power means less room for the US to call the shots, a reputed paper reported Friday quoting the National Intelligence Council.
Arab States frustrated by the delayed engagement of the previous US administrations in the Arab-Israeli conflict called upon President elect Obama to give priority to resolving the vexing Palestine -Israel problem.
Saudi foreign minister said the issue of the Middle East is of paramount importance to all the problems in the region.
NEW YORK, Nov 21: Economic news, what a reputed newspaper said, was uniformly bad across the world. US workers filing for jobless benefits soared to 542,000, Japan is facing a severe slump in its exports, Swiss central bank slashed interest rates by one full percentage point and China said employment outlook was turning grim in the wake of more factory closures.
Air France-KLM will cut capital investment by $17 billion, over the next two years as it moves to save cash rather than buy new aircraft in the face of economic uncertainty. JPMorgan will slash ten percent of its workforce. The New York Times will cut dividend to preserve cash in a souring advertising market. Dell the PC maker announced a big drop in revenue earning. American Airlines is awaiting government approval for a merger with a foreign airline. Asian airlines facing a worldwide downturn in passenger travel will face a 20 percent drop in cargo revenue
To add to the woes is the news that international shipping lines would avoid the Suez Canal due to increased frequency of piracy thus raising the freight charges making imports/exports costlier.
Investors are growing increasingly worried that big banks like Citigroup, JPMorgan Chase and Bank of America which have all received billions of dollars from the government to bolster their finances are still too weak.
The price of Citigroup's shares plunged 26.4 percent and other financial shares fell to fresh lows, the New York Times reported today. Goldman Sachs suffered similar reverses.
Decision by Prince Walid bin Talal of Saudi Arabia to raise his stake in the bank by 5.0 per cent failed to restore confidence in the Citigroup. The prince had also bailed out the bank in 1990s. Investors are panic-striken, fearing more bad news from the banks as the economy slows.
Traders have begun making jokes comparing Citigroup to Titanic.
The chief executives of the collapsing automakers seeking government support to survive flew into Washington from Detroit by private jets thus infuriating the lawmakers. The automakers have been given 12 days time to prepare papers to allay fears of both the lawmakers and the people that the bailout money will be well spent. It is all about accountability and viability, Ms Nancy Pelosi, the speaker of the House of Representatives said.
With stock market plunging and the credit market entering new freeze cries are being heard for a new government intervention to prop up major financial institutions before president-elect Obama takes office, the NYT said.
President George Bush has promised to a sign a bill now pending in the Congress to extend unemployment benefits to workers by at least seven weeks.
The world in the meanwhile is witnessing a shift towards a multi-polar system with less dominant US and more powerful China. A historic transfer of wealth from west to east is taking place. The US will remain the most powerful country but the rise of emerging powers and regional blocs will debilitate Washington's ability to dictate terms and to call the shots across the world. The multiplicity of influential actors and distrust of vast power means less room for the US to call the shots, a reputed paper reported Friday quoting the National Intelligence Council.
Arab States frustrated by the delayed engagement of the previous US administrations in the Arab-Israeli conflict called upon President elect Obama to give priority to resolving the vexing Palestine -Israel problem.
Saudi foreign minister said the issue of the Middle East is of paramount importance to all the problems in the region.