Russia and China issued stark warnings on Wednesday about the impact of the crisis on their recently booming economies in 2009, as stocks and oil prices took a hit from economic gloom over Christmas.
A top official in Moscow warned that the crisis could spark popular unrest after a Kremlin economic aide said Russia next year would have its first budget deficit since the 1998 financial crisis, which brought the country to its knees.
Japan also approved a record-high budget aimed at avoiding the worst effects of the crisis and there were reports that Germany was preparing to pump up to 40 billion euros (56 billion dollars) into the economy in a new rescue plan.
"We need to take unprecedented measures when in an extraordinary economic situation," Japanese Prime Minister Taro Aso said at a news conference after his cabinet backed the new 980-billion-dollar (700-billion-euro) budget.
"Japan cannot evade this tsunami of world recession. But by taking bold measures, we aim to be the world's first to come out of recession," he said.
In Asian stock markets, Tokyo tumbled 2.37 percent and Chinese shares closed down 1.76 percent. European stocks also slipped, with the FTSE 100 in London closing down 0.93 percent and the CAC 40 in Paris down 0.39 percent.
There was more bad news coming from the United States, the world's biggest economy, where US government figures showed jobless claims rising by 30,000 over the past week to 586,000 and incomes and spending contracting in November. With oil prices at their lowest level for four years because of weak global demand, the price of light sweet crude for delivery in February shed 1.56 dollars to 37.42 dollars a barrel on the New York Mercantile Exchange (NYMEX).
The low price spells bad news for Russia, the world's second-biggest producer after Saudi Arabia. "The deficit is caused by the fall in oil prices, above all," Kremlin economic aide Arkady Dvorkovich was quoted as saying.
Oil prices reached record highs of more than 147 dollars a barrel in July.
Commenting on the worsening situation, Deputy Interior Minister Mikhail Sukhodolsky warned that unpaid wages, the threat of layoffs and unpopular government anti-crisis measures "may aggravate the protest mood."
China's top economic planner also warned of "great challenges" ahead.
The head of the National Development and Reform Commission, Zhang Ping, told parliament that "grave risks" lay ahead for the government's economic goals if China did not manage to stimulate demand and maintain export growth.
Economists have warned that the global downturn could mean that China will end 2008 with its weakest economic growth for nearly two decades. China has not posted annual growth of less than 7.6 percent since 1991.
The dollar was on the back foot in currency exchanges, falling to 90.37 yen in Tokyo from 90.96 in New York late Tuesday and dropping against the euro in light trading in London to 1.3991 dollars from 1.3924 dollars on Tuesday.
In a sign of the times in Germany, Europe's biggest economy, poodles, terriers and sheepdogs queued up for rations in the country's first soup kitchen for pets in the German capital.
The soup kitchen was opened in October and offers free food for pets belonging to pensioners and the growing ranks of Berlin's unemployed. Julia Raasch, who heads the soup kitchen, said: "We've already signed up nearly 400 people. And our stocks are dwindling fast."
Source: Agencies
Showing posts with label Dow Jones. Show all posts
Showing posts with label Dow Jones. Show all posts
Wednesday, December 24, 2008
Wednesday, December 3, 2008
US slides in slowdown in December 2007; Longer than average
The United States economy officially sank into a recession last December, which means that the downturn is already longer than the average for all recessions since World War II, according to the committee of economists responsible for dating the nation’s business cycles.
In declaring that the economy has been in a downturn for almost 12 months, the National Bureau of Economic Research confirmed what many Americans had already been feeling in their bones. But private forecasters warned that this downturn was likely to set a new postwar record for length and likely to be more painful than any recession since 1980 and 1981.
The Dow Jones Industrial average plummeted 443.80 points (5.03%) to 8,385.24 at 1807 gmt after five winning sessions. The techheavy Nasdaq slid 94.57 points (6.16%) to 1,441.00 and the broadmarket Standard & Poor’s 500 index dropped 53.86 points (6.01%) to 842.38. Part of the drop may have reflected profit-taking after last week’s surge in stock prices,but it also came in response to new data showing that manufacturing activity dropped to its lowest point in 26 years.
Both the chairman of the Federal Reserve, Ben S Bernanke, and the Treasury secretary, Henry M Paulson Jr, vowed to use all the tools at their disposal to restore a measure of normalcy to the economy.
Bernanke, speaking to business leaders in Austin, Tex, said it was “certainly feasible” to reduce the Fed’s benchmark overnight lending rate below its current target of 1%, signaling that the Central bank would lower the rate at its next policy meeting in two weeks.
Investors reacted to Bernanke’s remarks by pouring money into longer-term Treasury bonds, which briefly pushed already-low yields on 10-year and 30-year Treasuries to new record lows. Investors appeared to be reacting mainly to the clear signal from Bernanke that the Fed was preparing to pump money into the economy by buying up longer-term bonds.
Paulson, in a speech in Washington on Monday, vowed to look at new ways to use the $700 billion bailout fund that Congress approved in October. In Congress, Democratic leaders are drawing up a huge new fiscal stimulus plan that could total more than $500 billion. Democrats said they planned to have the measure ready as soon as Congress convened with a strengthened Democratic majority in January. Meanwhile, Democrats could take up legislation next week that would provide financial assistance to the automobile industry.
President Bush, increasingly the odd man out in the last weeks of his term, said his administration would do whatever was necessary to safeguard the system.
Many analysts said they saw no signs yet that the economy was nearing a bottom. American consumers, who for decades have been the country’s tireless source of growth when all else failed, have cut back on their spending more sharply than at any time since the early 1980s.
In officially declaring that the current recession began in December 2007, the National Bureau of Economic Research paid little heed to the fact that the nation’s GDP product actually expanded slightly in the first and second quarters of 2008.
Source: Agencies
In declaring that the economy has been in a downturn for almost 12 months, the National Bureau of Economic Research confirmed what many Americans had already been feeling in their bones. But private forecasters warned that this downturn was likely to set a new postwar record for length and likely to be more painful than any recession since 1980 and 1981.
The Dow Jones Industrial average plummeted 443.80 points (5.03%) to 8,385.24 at 1807 gmt after five winning sessions. The techheavy Nasdaq slid 94.57 points (6.16%) to 1,441.00 and the broadmarket Standard & Poor’s 500 index dropped 53.86 points (6.01%) to 842.38. Part of the drop may have reflected profit-taking after last week’s surge in stock prices,but it also came in response to new data showing that manufacturing activity dropped to its lowest point in 26 years.
Both the chairman of the Federal Reserve, Ben S Bernanke, and the Treasury secretary, Henry M Paulson Jr, vowed to use all the tools at their disposal to restore a measure of normalcy to the economy.
Bernanke, speaking to business leaders in Austin, Tex, said it was “certainly feasible” to reduce the Fed’s benchmark overnight lending rate below its current target of 1%, signaling that the Central bank would lower the rate at its next policy meeting in two weeks.
Investors reacted to Bernanke’s remarks by pouring money into longer-term Treasury bonds, which briefly pushed already-low yields on 10-year and 30-year Treasuries to new record lows. Investors appeared to be reacting mainly to the clear signal from Bernanke that the Fed was preparing to pump money into the economy by buying up longer-term bonds.
Paulson, in a speech in Washington on Monday, vowed to look at new ways to use the $700 billion bailout fund that Congress approved in October. In Congress, Democratic leaders are drawing up a huge new fiscal stimulus plan that could total more than $500 billion. Democrats said they planned to have the measure ready as soon as Congress convened with a strengthened Democratic majority in January. Meanwhile, Democrats could take up legislation next week that would provide financial assistance to the automobile industry.
President Bush, increasingly the odd man out in the last weeks of his term, said his administration would do whatever was necessary to safeguard the system.
Many analysts said they saw no signs yet that the economy was nearing a bottom. American consumers, who for decades have been the country’s tireless source of growth when all else failed, have cut back on their spending more sharply than at any time since the early 1980s.
In officially declaring that the current recession began in December 2007, the National Bureau of Economic Research paid little heed to the fact that the nation’s GDP product actually expanded slightly in the first and second quarters of 2008.
Source: Agencies
Saturday, November 29, 2008
Despite downturn VCs pour into India
The global economic downturn notwithstanding, venture capital investments have continued to flow into India and China, with both countries witnessing a significant surge in the third quarter this year.
According to a study by research firm Venture Intelligence, venture capital investment in India grew 36 per cent at 290 million dollars for the third quarter ended September 30.
Meanwhile in Mainland China, VC investments grew 22 per cent to 964 million dollars at the end of the third quarter, as per the data by Dow Jones VentureSource.
"It's clear that venture capital investors are still eager to put money into the emerging marketplace and, in many areas, they're actually accelerating the pace of their investments," Dow Jones VentureSource Global Research Director Jessica Canning said.
The increased investment by existing players and the entry of new funds contributed to the growth this quarter, the Venture Intelligence study stated.
"The pace of VC investments in India seems to be accelerating despite the turmoil in global financial markets," Venture Intelligence Founder and CEO Arun Natarajan said.
Meanwhile, as the number of VC deals nearly doubled in India to 49, China witnessed a saw the number dipping to 59 from 73 in the same period last fiscal.
"Larger deals drove investment in the third quarter as the median size of a venture deal in China remained at USD 10 million, which is the highest on record and the most out of any region we track, including the US," Canning said.
However, the venture capitalists shied away from investing in the Information Technology and IT-enabled Services (IT & ITeS) industry in China, the sector remained favourite among the VC firms invested in India.
Source: PTI
According to a study by research firm Venture Intelligence, venture capital investment in India grew 36 per cent at 290 million dollars for the third quarter ended September 30.
Meanwhile in Mainland China, VC investments grew 22 per cent to 964 million dollars at the end of the third quarter, as per the data by Dow Jones VentureSource.
"It's clear that venture capital investors are still eager to put money into the emerging marketplace and, in many areas, they're actually accelerating the pace of their investments," Dow Jones VentureSource Global Research Director Jessica Canning said.
The increased investment by existing players and the entry of new funds contributed to the growth this quarter, the Venture Intelligence study stated.
"The pace of VC investments in India seems to be accelerating despite the turmoil in global financial markets," Venture Intelligence Founder and CEO Arun Natarajan said.
Meanwhile, as the number of VC deals nearly doubled in India to 49, China witnessed a saw the number dipping to 59 from 73 in the same period last fiscal.
"Larger deals drove investment in the third quarter as the median size of a venture deal in China remained at USD 10 million, which is the highest on record and the most out of any region we track, including the US," Canning said.
However, the venture capitalists shied away from investing in the Information Technology and IT-enabled Services (IT & ITeS) industry in China, the sector remained favourite among the VC firms invested in India.
Source: PTI
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