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Friday, April 3, 2009

The G20 Summit held in London, England concluded Thursday with an injection into the economy of US$5 trillion by the end of 2010.

Global trade would be supported by $250 billion (169.5 billion pounds). “We are going to act decisively to kickstart international trade. We will ensure availability of at least $250 billion over the next two years,” said Gordon Brown Prime Minister of the United Kingdom.

The International Monetary Fund IMF will have access to $750bn in resources of which $250bn will support special drawing rights.

Developing countries received $100bn which will be dispensed via Multilateral development banks. Towards this end, the IMF will sell off gold reserves.

China will support the IMF fund by $40bn, the European Union by $100bn, and Japan by $100bn.

There will be increased regulation on banking and credit ratings agencies. There was a commitment to clamp down on hedge funds, tax havens and toxic assets. To restore consumer confidence in the financial sector, a new Financial Stability Board will be initiated internationally. There would be new policies implemented to control pay and bonuses paid to the heads of banks and corporations.

The G20 leaders were adverse to protectionism and rallied to support international trade and investment.

The Leaders’ statement said, “We reaffirm the commitment made in Washington: to refrain from raising new barriers to investment or to trade in goods and services, imposing new export restrictions, or implementing World Trade Organization (WTO) inconsistent measures to stimulate exports.”

Eoin O’Malley, senior adviser on international trade at BusinessEurope, said “The measure also needs to be part of wider package to avoid protectionism and conclude the Doha round which will stimulate trade growth. The key point now is to move forward with Doha. The key now is implementation. G20 governments must act quickly to provide this finance to companies that need it urgently.”

Monday, July 11, 2011

China’s National Bureau of Statistics released data Saturday showing that the consumer price index (CPI) for June climbed 6.4% from a year ago. That compares with a 5.5% rise in May, which was the largest since a 6.3% increase in July 2008. The major factor contributing to this figure was the steep rise in food prices which climbed 14.4%. Pork is a major food staple in China, and its price rose 65% from last year.

Analysts predicted that China’s inflation would peak in June, but particularly worrisome was the steep rise in the cost of food from the same time last year and up from 11.7% in May, indicating that Beijing may have difficulty in controlling inflation.

China is the world’s second largest economy, having grown robustly in the last two years driven by a 2009 governmental stimulus package of $586 billion and low interest rates offered by state-owned banks. These were directed at promoting investments in real estate construction and government infrastructure projects, enabling China to lead the global recovery after the collapse of the U.S. mortgage market led to a worldwide recession.

Now Beijing is attempting to slow its fast pace of growth, fearful of inflation, by restricting bank lending and raising interest rates. High inflation along with high property values could hurt the economy. Since October, China’s Central Bank has raised interest rates five times.

Many factors are contributing to China’s inflation, including higher wages for migrant workers, increases in the prices of food and gasoline, as well as diminished output from crucial agricultural areas cause by droughts and flooding this spring.

Today, China’s Premier Wen Jiabao indicated that the war on inflation was continuing and controlling inflation was a top priority for the government, increasing expectations that interest rates would be further increased.

“We must treat stabilising overall price levels as the top priority of our macro-economic controls and keep the direction of macro-economic adjustments unchanged,” Wen said today in comments reported on the central government’s website. He had said in March that the ruling Communist Party is worried that a continuing rise in food prices could result in public protests.

Wen said the government would boost the supply of hogs to keep the price of pork stable, the price of pork being the major contributor to China’s food inflation index and the most closely watched item on it.

“If they signal any comfort with inflation, and inflation is as high as it is now, they could create an environment in which people would panic, and they can have a real problem on their hands,” said Tim Condon, Asian researcher at ING.

As markets worried about the news of Chinese inflation as well as concerns about the European debt crisis, oil dropped below US$95 a barrel today.

Saturday, August 20, 2005

A power outage in Indonesia that left about 100 million people without electricity has caused a political crisis. The country’s state-owned energy monopoly, PLN, has not determined the immediate cause, and the country’s president has ordered the national intelligence agency and police to investigate.

The blackout appears related to deficiencies in Indonesia’s power generation capacity.

The power failure follows attempts to deal with the country’s growing energy crisis, including conservation and trying to allow private companies to provide energy, which was ruled unconstitutional in 2004. In January, the Indonesian government held a special energy summit to attract investment in their energy infrastructure. At the summit they set the goal of adding 22,000 megawatts to Indonesia’s present capacity of 23,000 megawatts, in order to support the country’s growth.

The World Bank and others have warned that without more investment in the country’s energy infrastructure an energy deficit will result. However, foreign investors remain wary of investing in Indonesia. “The power outage has resulted in worries over an energy crisis which could hurt the nation’s industrial sector,” said a trader on Indonesia’s stock market.[1]

The outage began at 10:23 a.m. local time, August 18, 2005, when power failed along the electrical system that connects Java, Bali, and Madura, causing outages in Java and Bali. Almost half of the country depends on the electrical grid that experienced failures. Some of the main lines on the grid are over 20 years old, according to PLN president Eddie Widiono.

The blackout caused traffic jams in Jakarta, forced cancellation of several international and domestic flights at Jakarta’s Soekarno-Hatta International Airport, shut down Jakarta’s electric train service, and disrupted hospital operations. Some larger hospitals were forced to delay surgeries while many smaller hospitals could not receive patients. About 1,800 officers were called into action by Jakarta’s metropolitan police to deal with short-term problems caused by the power failure.

Candles used in place of electric lighting started six fires in Jakarta alone.

Mulyo Aji, a PLN official, said more power failures are likely in the future as energy demand increases, without any corresponding new supplies of electricity scheduled to come online soon.

Monday, June 16, 2008

A Royal Navy pilot has safely ejected from his Harrier GR7 aircraft moments before it crashed in a field near the small village of Ashwell in the county of Rutland in England. The crash occurred at about 1350 BST today.

The pilot was taken by air ambulance to Queen’s Medical Centre in Nottingham for treatment for spinal injuries.

Local resident Vic Harrison spoke to the BBC about the incident: “I thought he didn’t stand a chance, but I looked up and saw the parachute of the pilot. I really thought he had hit the houses. It was a narrow miss – it must have been just 400 yards from our house. It has been an exceptionally lucky escape.”

The plane, from the nearby RAF Cottesmore airbase, was on a training mission and is said not to have been carrying any weapons.

• The following day the scene was preserved under tents Image: Adam Brookes.

• Police and military base of operations the day after the crash Image: Adam Brookes.

Monday, July 11, 2011

China’s National Bureau of Statistics released data Saturday showing that the consumer price index (CPI) for June climbed 6.4% from a year ago. That compares with a 5.5% rise in May, which was the largest since a 6.3% increase in July 2008. The major factor contributing to this figure was the steep rise in food prices which climbed 14.4%. Pork is a major food staple in China, and its price rose 65% from last year.

Analysts predicted that China’s inflation would peak in June, but particularly worrisome was the steep rise in the cost of food from the same time last year and up from 11.7% in May, indicating that Beijing may have difficulty in controlling inflation.

China is the world’s second largest economy, having grown robustly in the last two years driven by a 2009 governmental stimulus package of $586 billion and low interest rates offered by state-owned banks. These were directed at promoting investments in real estate construction and government infrastructure projects, enabling China to lead the global recovery after the collapse of the U.S. mortgage market led to a worldwide recession.

Now Beijing is attempting to slow its fast pace of growth, fearful of inflation, by restricting bank lending and raising interest rates. High inflation along with high property values could hurt the economy. Since October, China’s Central Bank has raised interest rates five times.

Many factors are contributing to China’s inflation, including higher wages for migrant workers, increases in the prices of food and gasoline, as well as diminished output from crucial agricultural areas cause by droughts and flooding this spring.

Today, China’s Premier Wen Jiabao indicated that the war on inflation was continuing and controlling inflation was a top priority for the government, increasing expectations that interest rates would be further increased.

“We must treat stabilising overall price levels as the top priority of our macro-economic controls and keep the direction of macro-economic adjustments unchanged,” Wen said today in comments reported on the central government’s website. He had said in March that the ruling Communist Party is worried that a continuing rise in food prices could result in public protests.

Wen said the government would boost the supply of hogs to keep the price of pork stable, the price of pork being the major contributor to China’s food inflation index and the most closely watched item on it.

“If they signal any comfort with inflation, and inflation is as high as it is now, they could create an environment in which people would panic, and they can have a real problem on their hands,” said Tim Condon, Asian researcher at ING.

As markets worried about the news of Chinese inflation as well as concerns about the European debt crisis, oil dropped below US$95 a barrel today.

Saturday, December 3, 2005

Mayor Scott Jewell of the city of Dyer, Tennessee did not issue a “stop work order” to Dyer Grain Company late Tuesday afternoon as had been expected. The order would have temporarily halted construction of new grain storage tanks.

Dyer Grain’s efforts at expansion have been blocked several times over the past few years both by zoning restrictions on the height of structures and by citizens groups who filed suit against the grain company and the city’s board of zoning appeals. The lawsuit was dismissed two months ago. The Dyer City Council then amended the zoning ordinance to include “grain storage tanks and bins” in a section of the ordinance listing exclusions, such as free standing spires and towers, to the regular 40 foot height restriction on buildings.

Several citizens spoke at the November 28 city council meeting to address alleged deficiencies in the building permit issued to Dyer Grain. The citizens claimed that according to the site plan filed with the application for the permit, the location of the tanks will violate another provision in the zoning ordinance restricting the height of all structures to the distance from surrounding property lines plus ten feet. The citizens were also concerned over a “grain conveyor” that will cross a city street. Mayor Jewell indicated that he would contact the Gibson County building inspector (who is contracted by the city to act as the municipal inspector) to research the citizens’ concerns.

Jewell contacted Ricky Bailey, Gibson County Building inspector, on Wednesday. Bailey reportedly could find no deficiencies with the permit and, based on this advice, Jewell chose not to issue the stop work order himself. The City Council could still meet and vote to issue the order. The council meets the second Monday of each month.

“The main problem is that the grain company is in an industrial zone — which is located smack in the middle of a low-density residential zone.” Nathan Reed, an elected Alderman of Dyer said, “The property values in the area have increased (with inflation) but not at the same rate as other properties.”

Normal buildings, such as offices and warehouses, can’t exceed 40′ plus 10′ to the eave. The requested change in the ordinance changes the status of the towers from a building to the same status of an antenna or tower.

Mr Reed added, “The height to the eave is 76′, the height to the top of the tank is 105′, the height to the top of the elevator (atop the tank) is 133′. The 133′ is the only measurement that matters now because the change to the zoning ordinance means this is no longer a “building”, but rather the same as an antenna or tower.”

“The grain company specifically requested that change to the ordinace — which was opposed by several citizens…They can build it as high as they like so long as it conforms to the overal height restriction for towers, spires, etc.”

Mr Reed commented on additional concerns, “The citizens are concerned about the health effects of (additional) grain dust, noise, and grain explosions.”

The new construction is expected to generate annual property tax revenues of $10,000 to $16,000.

Friday, October 2, 2009

Companies in the United States are shedding more jobs, pushing the country’s unemployment rate to a 26-year high of 9.8%.

The US Labor Department said on Friday that employers cut 263,000 jobs in September, with companies in the service industries — including banks, restaurants and retailers — hit especially hard. This is the 21st consecutive month of job losses in the country.

The United States has now lost 7.2 million jobs since the recession officially began in December 2007. The new data has sparked fears that unemployment could threaten an economic recovery. Top US officials have warned that any recovery would be slow and uneven, and some have predicted the unemployment rate will top 10% before the situation improves.

“Continued household deleveraging and rising unemployment may weigh more on consumption than forecast, and accelerating corporate and commercial property defaults could slow the improvement in financial conditions,” read a report by the International Monetary Fund’s World Economic Outlook, predicting that unemployment will average 10.1% by next year and not go back down to five percent until 2014.

Mark Zandi, chief economist at Moody’s Economy.com, said that “it’s a very fragile and tentative recovery. Policy makers need to do more.”

“The number came in weaker than expected. We saw a lot of artificial involvement by the government to prop up the markets, and now that that is starting to end, the private sector isn’t yet showing signs of life,” said Kevin Caron, a market strategist for Stifel, Nicolaus & Co.

Also on Thursday, the US Commerce Department said factory orders fell for the first time in five months, dropping eight-tenths of a percent in August. Orders for durable goods — items intended to last several years (including everything from appliances to airliners) — fell 2.6%, the largest drop since January of this year.

The US government has been spending billions of dollars — part of a $787 billion stimulus package — to help spark economic growth. There have been some signs the economy is improving.

The Commerce Department said on Thursday that spending on home construction jumped in August for its biggest increase in 16 years. A real estate trade group, the National Association of Realtors, said pending sales of previously owned homes rose more than 12 percent in August, compared to August 2008.

A separate Commerce Department report said that consumer spending, which accounts for more than two-thirds of US economic activity, rose at its fastest pace in nearly eight years, jumping 1.3 percent in August.

Other reports have provided cause for concern. A banking industry trade group said Thursday the number of US consumers making late payments, or failing to make payments, on loans and credit cards is on the rise. A survey by a business group, the Institute for Supply Management, Thursday showed US manufacturing grew in September, but at a slower pace than in August when manufacturing increased for the first time in a year and a half.

Stock markets reacted negatively to the reports. The Dow Jones Industrial Average fell 41 points in early trading, reaching a level of 9467. This follows a drop of 203 points on Thursday, its largest loss in a single day since July. The London FTSE index fell 55 points, or 1.1%, to reach 4993 points by 15.00 local time.