Economy highlights

[pretty petals]

Hi All,

Something interesting to shared:

Asian Currencies Drop, Led by Won, Ringgit, on Global Slowdown


By Kim Kyoungwha and David Yong

Jan. 15 -- Asian currencies fell, with the Korean won, Malaysian
ringgit and Taiwan dollar all reaching one-month lows, as a deepening
global recession prompted investors to favor safer bets than emerging-
market assets.

Seven of Asia’s 10 most-active currencies excluding the yen declined
versus the greenback and stocks tumbled across the region after
reports showed U.S. retail sales dropped for a sixth month and
Japanese machinery orders plunged the most on record. South Korea’s
currency snapped a two-day gain after Vice Finance Minister Bae Kook
Hwan said 2009 growth is likely to fall short of central bank
predictions.

“We haven’t seen the worst reports yet; they’re accumulating,” said
Marcelo Ayes, senior vice president for treasury at Rizal Commercial
Banking Corp. in Manila. “That’s what’s driving the fear.”

The won fell 1.6 percent to 1,369.75 per dollar as of 1:45 p.m. in
Seoul. The ringgit dropped 0.6 percent to 3.5925 and the Taiwan dollar
weakened 0.2 percent to NT$33.325. Indonesia’s rupiah declined 0.9
percent to 11,173 and the Philippine peso declined 0.4 percent to
47.30.

U.S. retail sales fell 2.7 percent in December and Japan’s machinery
orders the previous month dropped 16 percent, according to figures
released since yesterday’s close of trading in Asian financial
markets. Economists forecast the declines would be no more than half
those levels, according to the median estimates in Bloomberg News
surveys.

Stronger Yen

The yen strengthened on speculation the deteriorating outlook for the
world economy and slides in global stocks will prompt investors to
repay Japanese loans that were taken out to buy higher-yielding assets
overseas. Japan’s benchmark interest rate of 0.1 percent compares with
4.25 percent in Australia.

The yen rose 0.2 percent to 88.86 per dollar from late yesterday in
New York. It also climbed 0.4 percent versus the euro and 0.7 percent
against the Australian dollar. The MSCI Asia Pacific Index of regional
shares fell 4 percent, headed for its lowest close since Dec. 8,
following a 3.4 percent decline in the Standard & Poor’s 500 Index of
U.S. equities.

“A tumble on Wall Street is unnerving investors globally again,
spurring sentiment for a flight to quality,” said Kim Sung Soon, a
currency dealer with Industrial Bank of Korea in Seoul. “Demand for
dollars is seen intensifying further.”

South Korea’s economic growth this year is likely to be less than the
2 percent forecast by the Bank of Korea in December, Vice Finance
Minister Bae said in Seoul today. The finance ministry last month
predicted expansion would slow to 3 percent from an estimated 3.6
percent in 2008.

Recessions

The ringgit reached 3.5953, the lowest since Dec. 11, and is down 3.9
percent so far this year. Malaysia’s economy will contract for a
second quarter in the three months ending March 31, pushing it into a
technical recession, Citigroup Inc. said this week. The nation’s three
biggest export markets -- Singapore, the U.S. and Japan -- are already
in recessions.

“While most of the bad news is already out, it doesn’t mean that
emerging markets cannot continue to sell off,” said Gan Kok Kim, head
of treasury at OCBC Bank (Malaysia) Bhd. in Kuala Lumpur.

Overseas investors have sold a net $518 million worth of Taiwan
equities this month, dumping $102 million yesterday alone, according
to data compiled by Bloomberg. The island’s currency today reached NT
$33.355 against the greenback, the weakest since Dec. 12.

‘Sustained Pressure’

“There will be sustained pressure on the Taiwan dollar from the stock
selling, which will probably continue over the next few days,” said
Joseph Lau, a Hong Kong-based economist at Credit Suisse Group AG.

Taiwan’s exports fell by a record 42 percent in December and
government estimates suggest the economy slipped into a recession in
the fourth quarter. The deterioration in overseas sales will persist
for at least the next six months, giving the authorities an incentive
to keep the local currency on a weak bias, Lau said.

Elsewhere, the Singapore dollar fell 0.7 percent to a one- month low
of S$1.4978 against the greenback, before trading at S$1.4968. The
Thai baht, China’s yuan and Hong Kong’s dollar were all little changed
at 34.91, 6.8369 and 7.7566, respectively.

[pretty petals]

Hi all,

Hope you enjoy reading this article by Ambrose Evans-Pritchard,


Shipping rates hit zero as trade sinks
Freight rates for containers shipped from Asia to Europe have fallen
to zero for the first time since records began, underscoring the
dramatic collapse in trade since the world economy buckled in October.

The cost of shipping goods from Asia to Europe has tumbled

"They have already hit zero," said Charles de Trenck, a broker at
Transport Trackers in Hong Kong. "We have seen trade activity fall off
a cliff. Asia-Europe is an unmit­igated disaster."

Shipping journal Lloyd's List said brokers in Singapore are now
waiving fees for containers travelling from South China, charging only
for the minimal "bunker" costs. Container fees from North Asia have
dropped $200, taking them below operating cost.

Industry sources said they have never seen rates fall so low. "This is
a whole new ball game," said one trader.

The Baltic Dry Index (BDI) which measures freight rates for bulk
commodities such as iron ore and grains crashed several months ago,
falling 96pc. The BDI – though a useful early-warning index – is
highly volatile and exaggerates apparent ups and downs in trade.
However, the latest phase of the shipping crisis is different. It has
spread to core trade of finished industrial goods, the lifeblood of
the world economy.

Trade data from Asia's export tigers has been disastrous over recent
weeks, reflecting the collapse in US, UK and European markets.

Korea's exports fell 30pc in January compared to a year earlier.
Exports have slumped 42pc in Taiwan and 27pc in Japan, according to
the most recent monthly data. Even China has now started to see an
outright contraction in shipments, led by steel, electronics and
textiles.

A report by ING yesterday said shipping activity at US ports has
suddenly dived. Outbound traffic from Long Beach and Los Angeles,
America's two top ports, has fallen by 18pc year-on-year, a far more
serious decline than anything seen in recent recessions.

"This is no regular cycle slowdown, but a complete collapse in foreign
demand," said Lindsay Coburn, ING's trade consultant.

Idle ships are now stretched in rows outside Singapore's harbour,
creating an eerie silhouette like a vast naval fleet at anchor.
Shipping experts note the number of vessels moving around seem
unusually high in the water, indicating low cargoes.

It became difficult for the shippers to obtain routine letters of
credit at the height of financial crisis over the autumn, causing
goods to pile up at ports even though there was a willing buyer at the
other end. Analysts say this problem has been resolved, but the
shipping industry has since been swamped by the global trade
contraction.

The World Bank caused shockwaves with a warning last month that global
trade may decline this year for the first time since the Second World
War. This appears increasingly certain with each new batch of data.

Mr de Trenck predicts Asian trade to the US will fall 7pc this year.
To Europe he estimates a drop of 9pc – possibly 12pc. Trade flows grow
8pc in an average year.

He said it was "illogical" for shippers to offer zero rates, but they
do whatever they can to survive in a highly cyclical market.

Offering slots for free is akin to an airline giving away spare seats
for nothing in the hope of making something from meals and fees.

[hahac...@gmail.com]

Thomas,

Thanks for sharing it is time to tightened my belt, time is bad out
there. I just came back from Singapore, their port is really scary
scene. Oh boy!! All the cargo ships literally parking at the port. IT
IS not a good SIGN. Salary deduction is the hot topic now, I got to
get ready to faced this, it will be a bonus for me if i don't get it
(at least for this year). Have to consult a feng shui master advised
from that Master Shang Thean. Anything to give me so that i can
escape this nightmare and at the same time 2months bonus.( not
unreasonable demand).

[hahac...@gmail.com]

Well my macha, i have something shared too: Enjoy reading and guys its
time to tighten wallet.


Motorola to Cut 4,000 More Jobs

NEW YORK (Jan. 14) - Mobile handset maker Motorola Inc. says it will
cut 4,000 more jobs in 2009, in addition to 3,000 it announced in
December.
Struggling handset Motorola says that it will cut 4,000 more jobs in
2009, in addition to 3,000 announced last year.

The company says the move will save about $700 million a year starting
in 2009, totaling $1.5 billion in annual savings when combined with
the previous cut.
Most of the new layoffs will hit the mobile devices business, while
about 1,000 jobs are tied to corporate functions and other business
units.
The Schaumburg, Illinois-based company also said Wednesday it expects
revenue for the fourth quarter to be between $7 billion and $7.2
billion, as it saw continued weakness in consumer demand and customer
inventory reductions.
Analysts expected $7.5 billion in revenue.

-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------


UK jobless rise of 40,000 in a week just 'tip of the iceberg.(By
Edmund Conway and Graham Ruddick)


The unemployment total has risen by more than 40,000 in little over a
week, with experts warning that this is only the "tip of the iceberg".

The unemployment total has risen by more than 40,000 in little over a
week, with experts warning that this is only the "tip of the iceberg".

In one of the darkest days for UK employment in recent memory,
companies said they planned to cut over 3,400 jobs, including Barclays
and Jaguar Land Rover.

A further 6,300 jobs are also under threat with companies struggling
to stay afloat in the face of an almost unprecedented slump in
business activity over Christmas.

Households were warned to brace themselves for repeated waves of
redundancies lasting all the way until 2011 as the UK sinks into the
deepest recession since the Second World War.

The number of confirmed job losses in the past 10 days alone has
mounted to over 40,000, with a swathe of businesses joining Woolworths
in either closing down or slashing back their workforces.

News of the latest cuts came as shares in London fell sharply despite
the Government's announcement of a £21.3bn package of guarantees for
lending to small and mid-tier companies.

Barclays announced it is to cut a further 2,100 jobs – on top of the
2,130 it announced on Tuesday – with the latest round of redundanciess
coming from its retail and commercial banking branch.

The bank is one of the few UK institutions to have avoided so far
having to call on the Government for emergency cash injections but has
acknowledged that its balance sheet has been compromised by the
financial crisis.

Elsewhere, Jaguar Land Rover, the troubled car maker, is cutting 450
jobs as it and other manufacturers see their sales slide.

The company, which has been appealing for government support following
steep falls in new car sales, said it had axed staff to "help address
the immediate challenges posed by the credit crunch". Chief executive
David Smith said it was "critical" that the company "becomes a more
efficient and dynamic organisation".

Administrators for music, DVD and games retailer Zavvi closed 18 of
its branches, resulting in 353 job losses, while pharmaceuticals group
Pfizer said it will cut up to 240 UK jobs and manufacturing group
Fenner cut 290 positions.

Freemans Grattan, the home shopping company, owned by the German mail
order company Otto Group said it would undertake a restructuring that
would lead to significant job losses among its 3,800 staff. A
spokesman said the job losses will run into "four figures".

Denby Pottery said its 700-strong workforce could be at risk, while
telecoms equipment group Nortel filed for bankruptcy protection, which
could affect 2,000 UK staff.

A number of economists now expect unemployment to mount tolevels seen
in the early 1990s. Capital Economics predicts that the number of
people out of work will rise to 3.5m – some 11pc of the workforce.

John Philpott, Chartered Institute of Personnel and Development chief
economist, said: "You can't necessarily judge the full picture from
the redundancies that we're seeing.

"A lot of jobs will also be lost by simply not re-hiring staff when
they leave. The redundancies are just the tip of the iceberg."
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The following articles is written By Bloomberg (15/1/2009)

Nikkei 225 tumbles as economic news darkens
Shares across Asia fell sharply, following declines in Europe and the
US yesterday, after Japanese machinery orders and US retail sales
dropped at more than double the pace economists had estimated.

Advantest, the world’s No. 1 maker of memory-chip testing equipment,
lost 9.5pc after machine orders sank by a record 16.2pc. Samsung, the
largest television maker, fell 5.8pc after US retail sales declined
for a sixth month. Woori led South Korean banks lower as the won
weakened and a government official said the nation’s growth would fall
short of estimates.

BHP Billiton declined 6.4pc after metals prices slumped. The MSCI Asia
Pacific Index - a benchmark for the index - declined 3.8pc in early
afternoon trading, set for the lowest close since December 8. The cost
of protecting Asia-Pacific bonds from default rose, while the region’s
currencies fell as investors fled equities.

“The market looks like it’s pointing down for now as investors are
afraid of what could happen next,” said Hiroshi Chano of $7.3 bn at
Yasuda Asset Management. “The market is really not very cheap when
examined from an earnings standpoint.”

Japan’s Nikkei 225 Stock Average tumbled 4.4 percent to 8,068.03. Hong
Kong’s Hang Seng Index dropped the most among the region’s major
markets, losing 5.4 percent to the lowest since Nov. 25.

Yetserday, the FTSE 100 joined a global tumble in stock markets as new
evidence of the scale of the slowdown in America underlined fears that
banks around the world will need more capital.

Royal Bank of Scotland, Barclays, HBOS and Lloyds TSB led the declines
on the FTSE as investors digested the prospect that a deepening
recession will leave banks with bigger losses.

HSBC, one of the banks to have so far escaped the worst of the credit
crisis, tumbled more than 10pc after analysts at Morgan Stanley
estimated it may need to raise $30bn.

“HSBC is the real drag on the market today and it looks like people
are moving their positions away from the banking sector as worries
about profits persist,” Joshua Raymond, a strategist at City Index in
London, told Bloomberg News.

The FTSE's slide accelerated in the afternoon as new figures revealed
an abrupt and to economists deeply worrying slowdown in US consumer
spending over Christmas. Retail sales in December - traditionally the
busiest period of the year - fell 2.7pc, twice as bad as expected and
the worst run on record.

Lee Scott, the head of Wal-Mart, the world's biggest retailer, said
this week that the first six months of 2009 will be "extraordinarily
challenging. Some people are giving up eating out; some people are
giving up movies; some people are giving up other things like
shopping."

A decade-long rise in US consumer spending has been key to driving the
world economy, and stock markets today matched the speed of the
retreat by American spenders in December. On Wall Street, the Standard
& Poor's 500 was down almost 4pc, the Dow Jones Industrial Average was
off a similar amount and the major indices across Europe also
suffered.

In London, losses for the FTSE were deepened as hedge fund group man
fell 6pc and Royal Dutch Shell's share price matched the fall in oil
prices. After rallying for the first three days of the working year,
the index of leading British companies has now fallen for six straight
days.

"Well 2009’s rally was brief," said Simon Denhams of Capital Spreads.
"It’s back to reality with a bump I’m afraid."

[Hope]

Yo! guys i got your messages loud and clear, I have came across this
article..........enjoy reading man, this is real stuff.


Near panic in markets over fears of further US bank write-downs (by
Phillip Inman, Friday 16 January 2009)


America's biggest banks were battling to head off an investor rout ­
following fears that their battered finances would need a further
boost from the US government.

Bank of America saw its share price slump 20% at one point before
closing down 18% at $8.32, while Citigroup dived 18% and closed down
15.5% at $3.83. The falls wiped out the gains the two banks had made
since a faltering recovery began in November.

Bank of America was locked in ­discussion with US treasury officials ­
following its request for a loan. ­Meanwhile, Citigroup is expected to
report its deepest quarterly deficit yet, after suffering net losses
for four consecutive quarters.

The prospect of further write-downs on toxic assets held by the banks
and a collapse in profits were blamed for the near panic selling in
New York early in the session.

But the wider market recovered later in the day on hopes the
seriousness of the situation would prompt further US ­government
intervention. Speculation about a pending Senate vote on ­authorising
the remaining $350bn (£238bn) from the government's financial bail-out
fund helped the Dow close up 12 points at 8212.

Concerns that the US banking system was in bigger trouble than
politicians and regulators had previously thought sent UK bank shares
tumbling, dragging down the FTSE 100 index 1.4% to 4121.

Lloyds TSB plunged to its lowest value since 1989 following successive
days of share price falls. The bank, which officially absorbs HBOS on
Monday, crashed 11.69% to 103p.

Barclays was also hammered by a wave of selling to finish the day at
130.4p, down 8.23%. HSBC, which is believed to be under pressure to
raise further capital, slipped 7% to 567p.

The share price falls posed a problem for Gordon Brown, who may be
forced to bring forward plans for further rescue measures.

Proposals to package toxic assets into a single "bad bank" are not
currently thought to be on the agenda, it is understood the Treasury
is considering offering to underwrite a ­proportion of bank assets to
prevent the need to raise further ­capital. The ­insurance policy
would be paid for by the banks, but would avoid the need for the
government to increase its share-holdings, which exceeds 50% in the
case of Royal Bank of Scotland.

Ministers are keen to avoid full nationalisation of any bank,
preferring at least a veneer of private-sector involvement.

But continued speculation that nationalisation is a real prospect in
the US and the UK, coupled with what is in effect a freeze on dividend
payments as a price for further government funds also ­worried
investors, many of whom have hung on to their holdings through the
worst of the credit crunch and were hopeful of a recovery later this
year.

Economic data in recent days showing the US and Europe faced a long
and deep recession appeared to be at the heart of the decision by
investors to sell bank shares. Analysts said hopes of a recovery in
the latter half of the year were hit by figures showing sharp declines
in manufacturing output and services coupled with rising unemployment.

A prolonged recession would delay any recovery in the value of assets
held by banks, in particular property, which is expected to continue
falling this year and possibly into next year. Without a recovery in
asset values, banks would be forced to make further write-downs.

Citigroup is expected to hive off riskier businesses as part of a
rescue package, while Bank of America could be forced to sell parts of
Merrill Lynch, the investment bank it bought last year.

Citigroup could create a "bank within a bank" to contain its worst-
performing assets in an effort to protect the rest of the operation
and allow a revival in lending. Unwanted assets worth as much as
$600bn – a third of its asset base – could be ringfenced, according to
US reports.

Nick Parsons, chief strategist at the capital-markets house
NabCapital, said: "Many investors held firm last year and saw their
investments decline by 30% or 40%. They have learned from that and
when they see a LONGER recession looming they are more prepared to
sell."

[Cheerio]

Hi guys,

This problem already at our back yard.

Monday January 19, 2009 (The STAR)
Downturn deals crushing blow to millionaire

HE was once a millionaire living in a condominium with his wife and
three children in Singapore.

But following the economic downturn, Mr Wu – as he was identified –
was forced to sell his luxurious home and move his family into a three-
room flat.

They also had to depend on handouts such as foodstuff from the
generous public.

China Press reported yesterday that the 40-year-old had been operating
a factory in the island city for more than 10 years.

Wu’s problems was said to have started when his factory’s machinery
broke down, forcing him to borrow money for repairs.

“Before I could start repaying the bank, the economy tumbled, forcing
my customers to cancel their orders,” he said, adding that the housing
loan also escalated following the economic crisis.

Seeing his savings almost used up, Wu was forced to put up his dream
home which he bought two years ago for sale at a loss.

His wife has also been forced to go back to work after a 10-year
break.

[n c chan]

I came across this article while reading about world economic
situation. I think its best to share this with everyone here. The doom
and gloom situation is yet to reach our shores but its better to be
prepared for the worse than not knowing that the worse is coming. Good
luck everyone.

25% of Retailers May Go Bankrupt

Retailing has always been a tough business. Now it's a brutal
business. Some observers now predict that more than 25% of retailers
may go bust in the the next two years.

Paul Kedrosky:

A great WSJ quote driving home how this truly is retail's
Schumpeterian moment:

Analysts estimate that from about 10% to 26% of all retailers are
in financial distress and in danger of filing for Chapter 11.
AlixPartners LLP, a Michigan-based turnaround consulting firm,
estimates that 25.8% of 182 large retailers it tracks are at
significant risk of filing for bankruptcy or facing financial distress
in 2009 or 2010. In the previous two years, the firm had estimated 4%
to 7% of retailers then tracked were at a high risk for filing.

More here.

Granted, many retailers are perpetually on the verge of bankruptcy,
but these are still unprecedented numbers. Retail, as we know it, is
going to look very, very different a decade from now.

The Wall Street Journal:

The first retail casualty of the weak holiday season could be Goody's
Family Clothing Inc., a Southeast apparel retailer. The 287-store
chain emerged from bankruptcy court in October but its holiday sales
were below plan and financing it was counting on didn't materialize,
according to a person familiar with the situation. The retailer is
negotiating with lenders to avoid potential liquidation, say two
people familiar with the matter.

A representative for Goody's was unavailable to comment. But in
October, Chief Executive Paul White was upbeat about its prospects,
saying "we are energized by the opportunity in front of us and are
focused on continuing to fulfill the Goody's mission."

Other retailers are saying they will trim inventory and reduce the
number of suppliers. That, in turn, will cause a ripple effect,
prompting a number of weaker manufacturers, small brands and
underfunded fashion labels to fail. New retail formats and concepts
stores are likely to be curtailed in the coming year. And luxury-goods
makers already are working to cut the long lead times between orders
and store delivery as a way to reduce risk.

"We will have a lot fewer stores by the middle of 2009," says Nancy
Koehn, professor of business administration at Harvard Business
School. "It's happening very, very quickly because of the financial
crisis and the recession."

[Cheerio]

Hi Guys got to read this By Ron Harui (Bloomberg)

Yen Gains to Record Versus Pound on Concern Bank Losses to Rise

Jan. 20 -- The yen rose to a record against the pound and gained
versus the euro on speculation credit-market losses will widen after
the U.K. increased aid to banks, curbing demand for higher-yielding
assets funded in Japan’s currency.

The British pound fell to a six-year low versus the dollar after the
U.K. government said it would spend an extra 100 billion pounds ($142
billion) to support the nation’s banks, a second lifeline in three
months, and increase its stake in Royal Bank of Scotland Group Plc.
The Australian and New Zealand dollars slumped against the yen as
financial stocks led a decline in Asian shares.

“Investors are risk averse given ongoing worries that credit losses
will spread,” said Masanobu Ishikawa, general manager of foreign
exchange at Tokyo Forex & Ueda Harlow Ltd., Japan’s largest currency
broker. “The markets are concerned whether the government can resolve
this crisis. The bias is for the yen to be bought.”

The yen rose 2.4 percent to 127.69 per pound as of 7:55 a.m. in London
from 130.71 late yesterday. It reached an all-time high of 127.44.
Japan’s currency climbed to 117.08 per euro from 118.47, and advanced
to 90.39 against the dollar from 90.64. The yen may gain to 125 per
pound and 90 against the dollar today, Ishikawa said.

Australia’s dollar slumped 2.4 percent to 59.90 yen and New Zealand’s
currency declined 3 percent to 48.17 yen from late in Asia yesterday.
The MSCI Asia-Pacific index of regional shares fell 2.3 percent,
ending a two-day gain.

‘Sell Any Sterling’

“I would urge you to sell any sterling you might have,” said Jim
Rogers, chairman of Singapore-based Rogers Holdings, in an interview
with Bloomberg Television. “It’s finished. I hate to say it, but I
would not put any money in the U.K.”

Rogers correctly predicted the start of the commodities rally in 1999.
In January 2008, he advised investors to sell the U.S. currency. The
Dollar Index traded on ICE futures, which tracks the greenback against
six major trading partners, rose 6 percent last year.

The euro dropped to $1.2959 from $1.3069 late in London yesterday. It
touched $1.2942, the weakest level since Dec. 10. The pound fell to
$1.4138 from $1.4420, after touching $1.4133, the lowest since March
2002. Europe’s single currency advanced to 91.73 pence from 90.59
pence, after reaching 91.85 pence, the highest in two weeks.

‘Big Losses’

“Sterling has struggled due to the announcement of the new policy
measures, in addition to reports of big losses in the U.K. banking
sector,” Ashley Davies, a currency strategist at UBS AG in Singapore,
wrote in a research note today. “We continue to see bearish sterling
views being expressed through the dollar.”

The pound weakened versus all of the 16 most-active currencies before
a government report today economists say will show the inflation rate
fell in December, giving the Bank of England more room to cut interest
rates.

U.K. consumer prices rose 2.6 percent from a year earlier, the least
since March, after a 4.1 percent increase in November, according to a
Bloomberg News survey. The Office for National Statistics will release
the data at 9:30 a.m. in London.

The Bank of England reduced its benchmark rate to 1.5 percent this
month, the lowest in the bank’s history. Policy makers will probably
cut the rate to 1 percent at their Feb. 5 meeting, according to a
separate Bloomberg survey.

Trade Surpluses

At a time when interest-rates are sinking toward zero around the
world, the biggest currency traders are recommending countries that
have the largest trade surpluses, led by Japan, Norway and
Switzerland.

BNP Paribas SA, the best currency forecaster in a 2007 Bloomberg
survey, says the yen will strengthen about 14 percent against the
dollar by June. Goldman Sachs Group Inc. made Norway’s krone one of
its top 2009 picks, with possible gains of 17 percent versus the
dollar. Bank of America Corp., the largest U.S. lender by assets, says
the Swiss franc will advance against every major currency.

“When the dollar-yen breaks 85, the Bank of Japan would be in the
market to intervene” to sell the yen, Eisuke Sakakibara, a former top
currency official at Japan’s Ministry of Finance, said in a Bloomberg
Television interview. “This is just an indication of the fact that
Japanese authorities are afraid of an abrupt appreciation of the
currency at the time when the Japanese economy is in recession.”

Investors Confidence

The euro declined to the lowest level in almost six weeks against the
dollar before a German report today that economists say will show
investor confidence fell for an 18th month.

The ZEW Center for European Economic Research may say at 11 a.m. in
Mannheim that its index of investor and analyst expectations was at
minus 43.1 in January, from minus 45.2 the prior month, a Bloomberg
survey shows.

Europe’s single currency also declined for a second day versus the yen
as the euro-area economy will likely shrink 1.9 percent in 2009 and
will probably grow 0.4 percent next year, the Brussels-based European
Commission said yesterday.

“We still believe that these estimates are likely to be surprised on
the downside,” analysts led by Hans-Guenter Redeker, global head of
foreign-exchange strategy at BNP Paribas in London, wrote in a
research note yesterday. “We expect the euro to remain under
pressure.”

The euro will decline to $1.20 and to 94 yen by the end of June, BNP
Paribas forecasts.

[Peace]

Just want to contribute some latest news coming out from our own
backyard.

Intel to shut facilities in Malaysia, Philippines, US

Intel Corp., the world's biggest computer chip maker, announced plans
on Wednesday to close facilities in Malaysia, the Philippines and the
United States.

The Santa Clara, California-based company said the moves were expected
to affect between 5,000 and 6,000 employees worldwide.

"However, not all employees will leave Intel," the company said in a
statement. "Some may be offered positions at other facilities."

Intel said it will close two assembly test facilities in Penang,
Malaysia, and one in Cavite, Philippines, in addition to wafer
production facilities in Santa Clara and Hillsboro, Oregon.

The closures, Intel said, will take place between now and the end of
2009.

The moves were designed to "align its manufacturing capacity to
current market conditions," the company added.

Intel reported last week that the economic slowdown and slumping
demand for personal computers sent net profit sharply lower in the
fourth quarter of the year.

It said net profit in the last three months of the year plunged to 234
million dollars, down 90 percent from a year ago.

Intel has also warned that it expects even worse results this quarter
than the previous three months, with an expected revenue of seven
billion dollars.

[Ivan Teo]

Even the Grand master Yap had spoken:


Thursday January 22, 2009
Grand Master Yap: Hard times ahead

PETALING JAYA: The year ahead will be hard for many but it will also
be a time for opportunities, reveals feng shui Grand Master Yap Cheng
Hai.

In an interview with The Star at Studio V at 1Utama, Bandar Utama here
yesterday, the 82-year-old grand master predicted that despite the
difficult times, one would be able to survive with perseverance and
hard work.

“When times are hard, you must work hard and not be lazy. God helps
those who help themselves.

“Luck comes from hard work and your own ability, and from being
thrifty,” he said during the 28-minute Mandarin programme hosted by
reporters Noorsila Abd Majid and Rashita A. Hamid.
Early warning: Yap telling Noorsila (centre) and Rashita that the
economy will only bounce back in 2013 during the interview at Studio V
in 1Utama yesterday.

He also warned that because cash flow would dry up from July onwards,
people should be careful to keep their money and not invest in dubious
schemes.

“Money is the king in these bad times. The worse is yet to come. The
years 2009 until 2012 will be bad,” he said, adding that the economy
would only bounce back in 2013.

However, Yap said the year ahead would be a “golden moment” for young
men as this would be the time when “new rich men” were made and “young
people would come up” after the era with young successful women,
adding that this would last until 2024.

For those born under the sign of the Ox and the Sheep, Yap cautioned
them to be very careful as it would not be a good year for them.

He said they should not to take unnecessary risks.

“For those born under the Sheep sign, do not do any digging, repairs
or renovation, especially the south-west area,” he said, adding that
they should keep quiet and assume a low profile.

Yap said the third and fifth days of the Chinese New Year would be
best time to start work and they should go in before 9am and not after
9.30am.

“People should also pray between 11pm and 1am towards the eastern
direction for wealth and the southern direction for nobility,” he
said.

On the political scene, Yap said there would be many changes before
things settle down in the middle of the year.

[Thomas]

GONG XI FA CHAI to all of you. Any way happy reading.


Iceland: Financial Crisis Brings Down Government
January 26, 2009

Please take note that the Governments across Europe are taking note as
the financial crisis claims another victim.

Violent protests and growing dissatisfaction with the government’s
handling of the economic crisis caused Iceland’s Prime Minister Geir
Haarde to call for early elections Friday.

Iceland had its worst street riots in 50 years as 2,000 protesters—out
of a population of just 320,000—took to the streets of Reykjavik on
Thursday, hurling paving stones at Iceland’s parliament building. The
day before, protesters threw eggs and soft drinks at Haarde’s limo.

Iceland’s economy has been hit hard by the financial crisis, and the
people are holding the government responsible. Unemployment has risen
sharply; inflation is also rising. Economists predict the economy will
shrink by 10 percent.

Iceland will hold elections in May. Geir Haarde says he will not run
again, due to a malignant tumor in his throat. Polls suggest that left-
wing parties will make big gains in the elections. Haarde’s
Euroskeptic party is set to lose a lot of votes.

This is about more than Iceland though. Leaders across Europe are
worried that their governments could share Iceland’s fate. Mass
protests have also hit Bulgaria, Latvia, Lithuania, Hungary and
Greece.

The head of the International Monetary Fund, Dominique Strauss-Kahn,
predicts the downturn will cause more unrest. It could happen “almost
everywhere, in Europe certainly, and also in emerging countries,” he
said in an interview with the bbc last Wednesday. “You’ve had some
strikes that look like normal, usual strikes, but it may worsen in the
coming months.” Later, he added, “The situation is really, really
serious.”

EU ambassadors in Brussels are closely monitoring the issue. European
leaders have organized a summit in March to discuss the rising
protests.

Social unrest caused by the credit crisis is certainly a trend to
watch. A whole swath of right-wing parties took power in the wake of
unrest and economic collapse in the 1929 Depression.

[Thomas]

Hi guys,


Enjoy Reading.......by * Richard Wray ,Tuesday 27 January 2009


Global recession costs 80,000 jobs a day
Grim picture for world leaders gathering at Davos
Philips, Pfizer, Caterpillar and Corus add to toll

Fortnum And Masons Re Opens After Refurbishment.The venerable gourmet
paradise Fortnum & Mason is to shed 100 of its 530 staff.

The depth of the global recession was glimpsed yesterday when almost
80,000 jobs were lost or put under threat in the UK, Europe and US,
making it one of the bleakest days in recent memory.

Household names, including electronics retailer Philips, construction
equipment maker Caterpillar, and drug group Pfizer announced thousands
of job losses, with many of them expected to be lost in the UK. Steel
company Corus, for instance, is axing 2,500 British workers as it
dumps 3,500 worldwide.

Even the expensive retailer Fortnum & Mason is suffering. It emerged
yesterday that the department store, which can trace its roots back to
1705 at its London flagship in Piccadilly, wants to cut 100 of its 530
staff as shoppers seek out cheaper alternatives to products such as
its £500 picnic hampers stuffed with champagne, vintage marmalade and
smoked salmon.

The scale of the challenge faced by world leaders as they grapple with
the worst downturn since the second world war was underlined yesterday
when Gordon Brown issued a stark warning that the global economy would
be undermined unless countries worked together to tackle the crisis.
The prime minister said the world needed to "ensure that we do not
experience a new form of financial protectionism, of mercantilism, of
retreat into domestic financial markets".

In the US, where General Motors cut 2,000 jobs, Barack Obama warned
that it was imperative Congress passed his $825bn (£590bn) package of
spending and tax cuts as soon as possible. "We cannot afford
distractions," he said. "We cannot afford delays in getting
legislation to boost the economy through Congress."

Research from the Institute of Directors showed British business
leaders were not only pessimistic about their companies' prospects but
had recently seen a marked deterioration in performance.

"In previous IoD surveys, companies were saying 'it's going to be hell
out there in the future but we're not doing too badly at present'. Now
they're saying the problem is much closer to home," said the IoD chief
economist and director of policy, Graeme Leach. "We're a long way into
the financial crisis, but the economic crisis is only just beginning."

Managers across the UK, meanwhile, have accepted their own redundancy
as "inevitable", according to the Chartered Management Institute
(CMI), which has examined calls to its helpline. "Quite clearly, any
suggestion that there is already light at the end of the tunnel is
misplaced," said Ruth Spellman, chief executive of the CMI.

The job losses announced yesterday fell mainly across industry.
Europe's largest consumer electronics company, Philips, is cutting
6,000 jobs after announcing its first loss for half a decade. US
mobile phone company Spring Nextel is axing 8,000, and Pfizer is
shedding 19,000.

The biggest losses announced yesterday were from Caterpillar. The
Illinois-based manufacturer of heavy-duty earth-moving equipment is
cutting almost 20% of its workforce, 20,000 people.

The news has raised fears for the company's 10,000 employees in the
UK, which is Caterpillar's largest operation outside the US, and
Ireland.

It has factories dotted across the UK from Teesside, Leicester and
Peterborough to Shrewsbury and Slough. In Ireland its electricity
generator business FG Wilson is Europe's largest assembler of such
equipment.

A further 5,450 jobs in the footwear industry have been put under
threat with the collapse of Stylo, owner of Barratts and PriceLess
shoe stores.

Elsewhere, Sofa Workshop has called in administrators, putting another
170 British jobs at risk.

[Cheerio]

Gong Xi Fatt Chai to all of you. Governments across Europe tremble as
angry people take to the streets.



According to Ians Traynors France's trade-unions call on workers to
strike all over the country .
Arcellor Mittal workers demonstrate during a protest march in
Marseille.

France paralysed by a wave of strike action, the boulevards of Paris
resembling a debris-strewn battlefield. The Hungarian currency sinks to
its lowest level ever against the euro, as the unemployment figure
rises. Greek farmers block the road into Bulgaria in protest at low
prices for their produce. New figures from the biggest bank in the
Baltic show that the three post-Soviet states there face the biggest
recessions in Europe.

It's a snapshot of a single day – yesterday – in a Europe sinking into
the bleakest of times. But while the outlook may be dark in the big
wealthy democracies of western Europe, it is in the young, poor,
vulnerable states of central and eastern Europe that the trauma of
crash, slump and meltdown looks graver.

Exactly 20 years ago, in serial revolutionary rejoicing, they ditched
communism to put their faith in a capitalism now in crisis and by
which they feel betrayed. The result has been the biggest protests
across the former communist bloc since the days of people power.

Europe's time of troubles is gathering depth and scale. Governments
are trembling. Revolt is in the air.
Athens

Alexandros Grigoropoulos, a 15-year-old middle-class boy going to a
party in a rough neighbourhood on a December Saturday, was the first
fatality of Europe's season of strife. Shot dead by a policeman, the
boy's killing lit a bonfire of unrest in the city unmatched since the
1970s.

There are many wellsprings of the serial protests rolling across
Europe. In Athens, it was students and young people who suddenly
mobilised to turn parts of the city into no-go areas. They were sick
of the lack of jobs and prospects, the failings of the education
system and seized with pessimism over their future.

This week it was the farmers' turn, rolling their tractors out to
block the motorways, main road and border crossings across the Balkans
to try to obtain better procurement prices for their produce.
Riga

The old Baltic trading city had seen nothing like it since the happy
days of kicking out the Russians and overthrowing communism two
decades ago. More than 10,000 people converged on the 13th-century
cathedral to show the Latvian government what they thought of its
efforts at containing the economic crisis. The peaceful protest
morphed into a late-night rampage as a minority headed for the
parliament, battled with riot police and trashed parts of the old
city. The following day there were similar scenes in Vilnius, the
Lithuanian capital next door.

After Iceland, Latvia looks like the most vulnerable country to be
hammered by the financial and economic crisis. The EU and IMF have
already mounted a €7.5bn (£6.6bn) rescue plan but the outlook is the
worst in Europe.

The biggest bank in the Baltic, Swedbank of Sweden, yesterday
predicted a slump this year in Latvia of a whopping 10%, more than
double the previous projections. It added that the economy of Estonia
would shrink by 7% and of Lithuania by 4.5%.

The Latvian central bank's governor went on national television this
week to pronounce the economy "clinically dead. We have only three or
four minutes to resuscitate it".
Paris

Burned-out cars, masked youths, smashed shop windows, and more than a
million striking workers. The scenes from France are familiar, but not
so familiar to President Nicolas Sarkozy, confronting the first big
wave of industrial unrest of his time in the Elysée Palace.

Sarkozy has spent most of his time in office trying to fix the world's
problems, with less attention devoted to the home front. From Gaza to
Georgia, Russia to Washington, Sarkozy has been a man in a hurry to
mediate in trouble spots and grab the credit for peacemaking.

France, meanwhile, is moving into recession and unemployment is going
up. The latest jobless figures were to have been released yesterday,
but were held back, apparently for fear of inflaming the protests.
Budapest

A balance of payments crisis last autumn, heavy indebtedness and a
disastrous budget made Hungary the first European candidate for an
international rescue. The $26bn (£18bn) IMF-led bail-out shows scant
sign of working. Industrial output is at its lowest for 16 years, the
national currency - the forint - sank to a record low against the euro
yesterday and the government also announced another round of spending
cuts yesterday.

So far the streets have been relatively quiet. The Hungarian misery
highlights a key difference between eastern and western Europe. While
the UK, Germany, France and others plough hundreds of billions into
public spending, tax cuts, bank bailouts and guarantees to industry,
the east Europeans (plus Iceland and Ireland) are broke, ordering
budget cuts, tax rises, and pleading for international help to shore
up their economies.

The austerity and the soaring costs of repaying bank loans and
mortgages taken out in hard foreign currencies (euro, yen and dollar)
are fuelling the misery.
Kiev

The east European upheavals of 1989 hit Ukraine late, maturing into
the Orange Revolution on the streets of Kiev only five years ago. The
fresh start promised by President Viktor Yushchenko has, though,
dissolved into messy, corrupt, and brutal political infighting, with
the economy, growing strongly a few years ago, going into freefall.

Three weeks of gas wars with Russia this month ended in defeat and
will cost Ukraine dearly. The national currency, at less than half the
value of six months ago, is akin to the fate of Iceland's wrecked
krona. Ukrainians have been buying dollars by the billion. In November
the IMF waded in with the first payments in a $16bn rescue package.

The vicious power struggles between Yushchenko and the prime minister,
Yuliya Tymoshenko, are consuming the ruling elite's energy, paralysing
government and leaving the economy dysfunctional. Russia is doing its
best to keep things that way.


Reykjavik

Proud of its status as one of the world's most developed, most
productive and most equal societies, Iceland is in the throes of what
is, by its staid standards, a revolution.

Riot police in Reykjavik, the coolest of capitals. Building bonfires
in front of the world's oldest parliament. The yoghurt flying at the
free market men who have run the country for decades and brought it to
its knees.

An openly gay prime minister takes over today as head of a caretaker
government. The neocon right has been ditched. The hard left Greens
are, at least for the moment, the most popular party in the small
Arctic state with a population the size of Bradford.

The IMF's bailout teams have moved in with $11bn. The national
currency, the krona, appears to be finished. Iceland is a test case of
how one of the most successful societies on the globe suddenly failed.

[Peace]

Hi Guys,

Get ready for the shits to hit the ceiling........ enjoy reading and
be careful with your spending bad times are coming!!!!!


This article is written By Michael Whitney

Eastern Europe is about to blow . If it does, it could take much of
the EU with it. It's an emergency situation but there are no easy
solutions. The IMF doesn't have the resources for a bailout of this
size and the recession is spreading faster than relief efforts can be
organized. Finance ministers and central bankers are running in
circles trying to put out one fire after another. Its only a matter of
time before they are overtaken by events. If one country is allowed to
default, the dominoes could begin to tumble through the whole region.
This could trigger dramatic changes in the political landscape. The
rise of fascism is no longer out of the question.

The UK Telegraph's economics editor Edmund Conway sums it up like
this:

"A 'second wave' of countries will fall victim to the economic
crisis and face being bailed out by the International Monetary Fund,
its chief warned at the G7 summit in Rome....But with some countries'
economies effectively dwarfed by the size of their banking sector and
its financial liabilities, there are fears they could fall victim to
balance of payments and currency crises, much as Iceland did before
receiving emergency assistance from the IMF last year." (UK Telegraph)

Foreign capital is fleeing at an alarming rate; nearly two-thirds gone
in matter of months. Deflation is pushing down asset prices,
increasing unemployment, and compounding the debt-burden of financial
institutions. It's the same everywhere. The economies are being
hollowed out and stripped of capital. Ukraine is teetering on the
brink of bankruptcy. Poland, Latvia, Lithuania, Hungary have all
slipped into a low-grade depression. The countries that followed
Washington's economic regimen have suffered the most. They bet that
debt-fueled growth and exports would lead to prosperity. That dream
has been shattered. They haven't developed their consumer markets, so
demand is weak. Capital is scarce and businesses are being forced to
deleverage to avoid default. All of Eastern Europe has gotten a margin
call. They need extra funds to cover the falling value of their
equity. They need a lifeline from the IMF or their economies will
continue to crumble.

The UK Telegraph's economics correspondent Ambrose Evans-Pritchard has
written a series of articles about Eastern Europe. In "Failure to save
East Europe will lead to Worldwide meltdown" he says:

"Austria's finance minister Josef Pröll made frantic efforts last
week to put together a €150bn rescue for the ex-Soviet bloc. Well he
might. His banks have lent €230bn to the region, equal to 70pc of
Austria's GDP.

"A failure rate of 10pc would lead to the collapse of the Austrian
financial sector," reported Der Standard in Vienna. Unfortunately,
that is about to happen.

The European Bank for Reconstruction and Development (EBRD) says
bad debts will top 10pc and may reach 20pc....

Stephen Jen, currency chief at Morgan Stanley, said Eastern Europe
has borrowed $1.7 trillion abroad, much on short-term maturities. It
must repay – or roll over – $400bn this year, equal to a third of the
region's GDP. Good luck. The credit window has slammed shut.

Almost all East bloc debts are owed to West Europe, especially
Austrian, Swedish, Greek, Italian, and Belgian banks. En plus,
Europeans account for an astonishing 74pc of the entire $4.9 trillion
portfolio of loans to emerging markets. They are five times more
exposed to this latest bust than American or Japanese banks, and they
are 50pc more leveraged (IMF data). (Ambrose Evans-Pritchard UK
Telegraph)

An economic crisis is quickly turning into a political crisis. Riots
have broken out in capitals across Eastern Europe. Mr. Geithner had
better be paying attention. The prospects for political upheaval are
growing. Public anxiety can spill out onto the streets at a moments
notice. Governments must act quickly and with resolve. These countries
need hard currency and guarantees of support. If they don't get help,
the simmering public fury will turn into something much more lethal.

UK Telegraph's economics correspondent Ambrose Evans-Pritchard:

"Global banks have so far written down half the $2,200bn losses
estimated by the IMF. On top of this, EU banks have $1,600bn of
exposure to Eastern Europe -- increasingly viewed as Europe’s subprime
debacle, and EU corporate debts are 95pc of GDP compared to 50pc in
the US, a mounting concern as default rates surge.

“It is essential that government support through asset relief
should not be on a scale that raises concern about over-indebtedness
or financing problems. Such considerations are particularly important
in the current context of widening budget deficits, rising public debt
levels and challenges in sovereign bond issuance." (UK Telegraph)

It's the same wherever banks merged their commercial and investment
branches. Debt has skyrocketed to unsustainable levels destabilizing
the entire economy. The banks have been operating like hedge funds,
concealing their activities on off-balance sheets operations and
maximizing their leverage through opaque debt-instruments. Now the
global economy is caught in the downdraft of a collapsing speculative
bubble. East Europe has been hit hard, but it's just the first of many
bowling pins that will fall. All of Europe has been infected by the
same virus which originated on Wall Street. Monday's New York Times
summarizes developments in the EU:

"Europe sank even deeper into recession than the United States in
the closing months of last year, according to figures published
Friday...The economy of the 16 countries sharing the euro currency
declined by 1.5 percent in the fourth quarter, (an annualized drop of
roughly 6 percent) according to the European Union's statistics
office. That is even worse than the 1 percent decline in the United
States economy during that period, compared with the previous quarter.


“Today’s data wipes out any illusion that the euro zone is getting
off lightly in this global downturn,” said Jörg Radeke, an economist
at the Center for Economics and Business Research in London. ("Europe
Slump Deeper than Expected" New york Times)

The "liquidationists" would like to see governments cut off the flow
of funds to ailing financial institutions and let them fail by
themselves. It's Darwinian madness, like waiting out a heart attack on
the kitchen floor instead of rushing to the hospital for emergency
care. The global economy is decelerating at the fastest pace on
record. 40 percent of global wealth has been wiped out. The banking
system is insolvent, unemployment is soaring, tax revenues are
falling, the markets are in shock, housing is crashing, deficits are
soaring, and consumer confidence is at its lowest point in history.
This is no time to cling to half-baked ideology. The global economy is
undergoing a massive system-wide contraction which could spin out of
control and plunge us into another world war. Political leaders need
to grasp the urgency of the moment and keep the vehicle from careening
into the ditch.