World economy talk

[tidus1203]

China should be thankful they are savers. That's why we should save for times like this. Now they can stimulate without resorting to jeopardizing the future bu acutually using present money instead of tapping from future money (if there is future money at all ).

[tidus1203]

FYI lang. Citigroup is now $2.80/share (once upon a time $60/share) OUCH! The once mighty financial supermarket down in its knees. I wonder what Prince Bin Talal is thinking right now?

[uls]

the prince lost $8.6B Q4

--

the big US and UK banks are very close to becoming nationalized

the market is already factoring in nationalization

nationalization will wipe out shareholders

shareholders are selling bigtime

look at RBS the other day

--

great way to welcome a new president huh?

[uls]

Fiat saves Chrysler

Fiat gets a 35% stake in Chrysler with no cash out

Fiat will just cover the cost of retooling a Chrysler plant to produce Fiat cars for the US market

retool 1 plant, get 35% of Chrysler

amazing

[tidus1203]

And Obama's answer to the deepening crisis another $800B++ of stimulus. GW Bush did it before and it was wa-epek. And I assume throwing money into the economy will change things this time around?

[uls]

the amazing shrinking banks

[uls]

British PM Gordon Brown saved the world!

[ame="http://www.youtube.com/watch?v=7iPaiylUYW0"]YouTube - gordon-brown-save-the-world.flv[/ame]

but see the reaction

haha

[uls]

British PM Gordon Brown saved the world!

[ame="http://www.youtube.com/watch?v=7iPaiylUYW0"]YouTube - gordon-brown-save-the-world.flv[/ame]

but see the reaction

haha

[uls]

^^^

sorry mods, 2 post, di ko na ma-edit

---

Japan Exports Plummet Record 35%, Signaling Job Cuts (Update3)
http://www.bloomberg.com/apps/news?p...n1A&refer=asia

Jan. 22 (Bloomberg) -- Japan’s exports plunged by a record in December, signaling companies will be forced to shut factory lines and fire more workers, driving the economy deeper into recession.

Exports plummeted 35 percent from a year earlier, the sharpest decline since 1980, the earliest year for which there is comparable data, the Finance Ministry said today in Tokyo. The December drop eclipsed a record 26.7 percent decline set the previous month. Economists predicted a 30.3 percent contraction.

Shipments to the U.S., China and Europe fell by the most ever, as the global recession dried up demand for Japanese cars and electronics. Toyota Motor Corp., Sony Corp. and Honda Motor Co. are shedding thousands of workers and closing production lines as profits and sales dwindle.

[Negus]

^^ definitely feeling the recession here. My work days reduced to 2 days a week (tech. sector). first time kong makakita ng mga homeless sa Tokyo when I visited my relatives.

[tidus1203]

Microsoft is not spared as well. They will cut jobs in the tune of 5000 jobs and they miss earnings estimate and incidentally MSFT is down to $17/share and change. I haven't seen MSFT stock this low in my trading career... I will post as the news develops.

[Monseratto]

Something that will happen sooner than we expect... with Pres. Obama complete lack of administrative experience will hit hard on the economy.

Jan. 16 (Bloomberg) -- A decline in U.S. stock indexes below the 2008 lows from November may trigger a rout that pushes benchmark averages to levels not seen since the mid-1990s, according to two leading technical analysts.

“Hopefully we don’t make new lows, because if we do, all bets are off,” said Ralph Acampora, who retired from Knight Capital Group Inc. in October 2007 after four decades on Wall Street. Should the Dow Jones Industrial Average fall below the 7,552.29 it touched on Nov. 20, it might tumble to 6,000, Acampora said. That’s 27 percent below yesterday’s close of 8,212.49 and a level last reached in October 1996.

The lows reached by the Dow average and the Standard & Poor’s 500 Index in November are “a very, very significant area” because they are roughly where the last bear market ended in 2003, said John Murphy, chief technical analyst at StockCharts.com and the author of three books on market analysis. “If that’s broken, it becomes very negative.”

[Monseratto]

Cheap is in!

In Lean Times, McDonald's Only Gets Fatter

Well, add one more reason to spite Ronald: as the global economy spirals downward, McDonald's is minting money. The company addicts us to its food, and now it's making out on our misery? But maybe it's time to change our attitudes about the Golden Arches. What may be bad for the waistline may be good for the wallet. In these tough times, those $3.50 Big Macs never tasted so good.

"In the worst of times for the restaurant industry, it's the best of times for McDonald's," says Burt Flickinger III, managing director of the Strategic Resources Group, a retail-consulting company. McDonald's reported global same-store-sales growth throughout 2008 — and in November, global sales rose 7.7% over 2007 (sales jumped 4.5% in the U.S.). In fact, the company's sales have increased for 55 straight months. Profits grew 11%, to $1.2 billion, in the third quarter of 2008 (the company will report its fourth-quarter results on Jan. 26). McDonald's and Walmart were the only two companies in the Dow Jones industrial average whose share prices rose during 2008.

http://www.time.com/time/business/ar...872629,00.html

[uls]

This is what happens when trillions of dollars vanish from the global economy

Sony:

Sony Shares Decline After Company Forecasts Record Annual Loss
http://www.bloomberg.com/apps/news?p...d=aERW8aK_r7ZU

Jan. 23 (Bloomberg) -- Sony Corp., the world’s second- largest consumer electronics maker, fell to the lowest in a month in Tokyo trading after the company yesterday forecast a record full-year operating loss of 260 billion yen ($2.9 billion).

---

Samsung:

Samsung Electronics Reports First Quarterly Loss
http://www.bloomberg.com/apps/news?p...d=aHXDodmmqlcM

Jan. 23 (Bloomberg) -- Samsung Electronics Co., the world’s largest maker of memory chips, liquid-crystal displays and televisions, reported its first quarterly loss as the global recession deepened and drove down prices.

The fourth-quarter net loss was 22.2 billion won ($16 million), compared with a profit a year earlier, the Suwon, South Korea-based company said in a statement today. Revenue in the quarter was 18.45 trillion won. The statement didn’t have year- earlier figures.

---

Microsoft May Cut Jobs Companywide as Demand Cools (Update1)
http://www.bloomberg.com/apps/news?p...d=adOpTIe6A.Ds

Jan. 22 (Bloomberg) -- Microsoft Corp., reporting second- quarter earnings today, may announce its first companywide job cuts as the software maker trims costs amid slumping demand.

The company will probably reduce full-time positions, contract workers and outside vendors, said Heather Bellini, an analyst at UBS AG in New York. Microsoft will probably slice 5 percent to 7 percent, or $1.37 billion to $1.92 billion, from annual operating expenses, she estimates.

Microsoft, the largest software maker, is under pressure to lower costs as sales growth dries up in what may be the worst recession since World War II. The flagship Windows business may report a decline in revenue after personal computer shipments rose at the slowest rate in six years. The sales gain this year will be the smallest Microsoft’s history, analysts estimate.

Microsoft Cuts 5,000 Jobs as Recession Curbs Growth (Update5)
http://www.bloomberg.com/apps/news?p...d=aqXx2B0cypi4

Jan. 22 (Bloomberg) -- Microsoft Corp. will cut as many as 5,000 jobs, the first companywide firings in its 34-year history, and said sales and profit will probably drop as the recession eats into software demand. The stock fell the most since 2000.

The reductions, about 5 percent of the workforce, will take place in almost all areas and help save $1.5 billion a year, the company said today in a statement. Microsoft also posted second- quarter sales and profit that missed projections, prompting the company to pull its full-year forecast.

---

South Korean Economy Shrinks More-Than-Expected 5.6% (Update2)
http://www.bloomberg.com/apps/news?p...d=ae8GppPb_7yk

Jan. 22 (Bloomberg) -- South Korea’s economy shrank a larger-than-expected 5.6 percent last quarter, the biggest decline since the Asian financial crisis a decade ago as exports, business investment and consumer spending plunged.

The contraction followed growth of 0.5 percent in the third quarter and was more than twice the 2.1 percent drop forecast in a Bloomberg News survey of 10 economists. The economy shrank 3.4 percent from a year ago, the central bank said in Seoul today.

[uls]

the shrinking bank pic i posted earlier was just a draft pala

here's the final version:

[Monseratto]

Will Geitner make the move?

Will US be forced to nationalize banks?


NEW YORK - The US government's latest bank rescue, this time a multi-billion dollar lifeline handed to Bank of America, has led to more talk of what once would have been unthinkable -- European-style nationalization of major American banks.

Few see the government nationalizing the entire banking system the way Sweden did in the 1990s, but the US is growing more willing to put significant pressure on the largest banks.

Over time, the government could exercise the same day-to-day control over major US banks as with IndyMac Bank, a failed California thrift that the US government operated for much of last year.

"We're nationalizing banks one at a time now. The real question is, will the biggest ones need to be nationalized?" said Roy Smith, professor at New York University's Stern School of Business.

The US banking system desperately needs capital. Shortfall estimates range from $700 billion to more than $2 trillion.

That money will not come from the private sector as long as the pending losses are all but impossible to estimate.

Without private investors bailing out the sector, whose functioning is key to reviving an economy mired in recession, the US government will have little option but to step up.

There are reasons to question whether full nationalization of the biggest banks is likely any time soon.

Nationalizing just one of JPMorgan Chase & Co., Bank of America Corp., or Citigroup, which together have about half the assets in the banking system, would double the Federal Reserve's balance sheet instantly.

That could weigh on the dollar, which has already fallen some 17 percent against the Japanese yen since August.

And if the government were to nationalize one large lender, shareholders would likely lose confidence in other marginal banks.

"If you nationalize Citigroup, you'll have to nationalize 10 other banks. It won't just stop with one," said Marc Snyder, senior financial stock analyst at Symphony Asset Management in San Francisco.

The banking industry itself is obviously opposed to nationalization.

"If it weren't for the political power of the industry, nationalizing is what you'd want to do. It's almost a no-brainer," said Dean Baker, co-director of the Center for Economic and Policy Research.

But over time, the government will likely have little choice but to step in more completely, said Sean Egan, founding principal at rating agency Egan-Jones Ratings.

"It's a slow-moving train wreck, and nothing can be done," he said.

[tidus1203]

A pox on him if he ever tries to do it. Capitalism will die and creativity, risk taking and the risk-reward system will all die if the banks get nationalized. It will become a bailout nation.

[uls]

The US govt is trying to avoid nationalization

final option yan

they will try other stuff before nationalizing the banks

there's a plan to create an "aggregator bank"

a govt owned bank that will buy the toxic assets from the banks

the problem will be pricing of the toxic assets

--

if they nationalize the banks, shareholders will be wiped out

bondholders could get wiped out too

or take hits

the biggest bondholders are pension funds and other institutional investors

it could get ugly

[Monseratto]

Pres. Obama is pissed at John Thain...

Jan. 23 (Bloomberg) -- President Barack Obama promised to impose more restrictions on future bailout money to prevent it from being used for such things as Wall Street bonuses.

There has been a “lack of accountability and transparency in how we are managing some of these programs to stabilize the financial system,” Obama said before a meeting with congressional leaders at the White House.

Obama cited “the reports that we’ve seen over the last couple of days about companies that have received taxpayer assistance, then going out and renovating bathrooms or offices or in other ways not managing those dollars appropriately.”

While Obama didn’t mention any individuals or companies, his comments followed reports that John Thain, the former Merrill Lynch & Co. chief executive officer ousted yesterday, spent $1.2 million redecorating his downtown Manhattan office last year as the company was firing employees.

Thain oversaw the sale of Merrill Lynch to Bank of America Corp. last month. Merrill’s $15.4 billion fourth-quarter loss forced Bank of America to seek additional aid from the U.S. government, which last week agreed to provide $20 billion in capital and $118 billion in asset guarantees.

[Monseratto]

Banks are no longer the darlings of western capitalism...

Don't insure the banks - nationalize them

LONDON: The nationalization of weak banks in Britain and the United States may be preferable to current plans for insurance and "bad banks," which risk being swamped by future losses as assets, especially real estate, continue to fall.

Nationalization is not a good outcome; it is failure defined in a word. And nationalizing banks raises the problem of reprivatizing. Who will want to buy banks from a government with a recent track record of what some will inevitably term confiscation? But few would commit capital to banking now, given that governments have been unable to explain how they will treat capital in the banking system.

If banks are to be taken into state control, there needs to be a process to deal with the rights of shareholders; any bank that stays under state control needs to be run at arm's length and the period it stays under state control should be as short as possible.

Easy to say, tough to do, and no doubt nationalization will have its disasters.

http://www.iht.com/articles/2009/01/...3.1-413345.php