Friday, January 2, 2009
Sunday, December 14, 2008
Fed to press rates toward zero
WASHINGTON (Reuters) – The U.S. Federal Reserve is expected to drop interest rates close to zero on Tuesday, but anticipated remarks on unconventional methods to dispel a year-old recession are what will really matter.
Economists forecast a clear statement that the U.S. central bank will aggressively deploy so-called quantitative easing measures to shelter the economy from a steepening downturn, but do not expect details of what steps it will actually take.
Those words would accompany a decision by the Fed to lower its target for overnight rates by at least a half-percentage point, economists believe.
A half-point cut would take the bellwether federal funds rate to just 0.5 percent, the lowest on records dating to July 1954, as the central bank battles a recession many think will stretch well into next year.
The announcement is expected around 2:15 p.m. on Tuesday at the end of a two-day meeting. The gathering had initially been scheduled for a single day, but was extended so policy-makers could study options for unusual steps to spur the economy with little room left to lower borrowing costs.
"From here on out, monetary policy has to rely primarily on non-traditional tools, tools other than the funds rate, to try to stimulate the economy," said former Fed Governor Lyle Gramley, who expects the Fed to spell this out.
More >> http://news.yahoo.com/s/nm/20081214/bs_nm/us_usa_fed_3
By Alister Bull Alister Bull – Sun Dec 14, 12:19 pm ET
Economists forecast a clear statement that the U.S. central bank will aggressively deploy so-called quantitative easing measures to shelter the economy from a steepening downturn, but do not expect details of what steps it will actually take.
Those words would accompany a decision by the Fed to lower its target for overnight rates by at least a half-percentage point, economists believe.
A half-point cut would take the bellwether federal funds rate to just 0.5 percent, the lowest on records dating to July 1954, as the central bank battles a recession many think will stretch well into next year.
The announcement is expected around 2:15 p.m. on Tuesday at the end of a two-day meeting. The gathering had initially been scheduled for a single day, but was extended so policy-makers could study options for unusual steps to spur the economy with little room left to lower borrowing costs.
"From here on out, monetary policy has to rely primarily on non-traditional tools, tools other than the funds rate, to try to stimulate the economy," said former Fed Governor Lyle Gramley, who expects the Fed to spell this out.
More >> http://news.yahoo.com/s/nm/20081214/bs_nm/us_usa_fed_3
By Alister Bull Alister Bull – Sun Dec 14, 12:19 pm ET
Wednesday, December 10, 2008
World Bank: Global recession possible next year
World Bank says deep global recession possible in 2009 due to international banking crisis
WASHINGTON (AP) -- Economic growth prospects for both high income and developing countries have deteriorated substantially and the possibility of a very deep global recession cannot be ruled out, the World Bank said Tuesday.
The international banking crisis that erupted in September after more than a year of less acute financial turmoil has substantially reinforced the cyclical downturn that was already under way, the bank said in a report devoted to assessing economic prospects for 2009.
"Following the insolvency of a large number of banks and financial institutions in the United States, Europe and the developing world, financial conditions have become much tighter, capital flows to developing countries have dried up and huge amounts of market capitalization have evaporated," the bank said.
The bank predicted world economic growth will be 2.5 percent in 2008 and 0.9 percent in 2009. It said developing countries will likely grow 4.5 percent next year, down from 7.9 percent in 2007, while the economies of high income countries will shrink.
Even if the strong measures governments took to restore confidence in the international banking system work and credit begins to thaw, a number of developing countries are likely to face substantial strains, possibly including bank failures and currency crises, the bank said.
"In these very uncertain circumstances," the bank said, "policy makers must place a premium on reducing the likelihood of domestic turmoil by reacting swiftly and forcefully to emerging difficulties, including, if necessary, seeking assistance from the International Monetary Fund.'"
The IMF provides rescue packages to countries in financial crises while the bank, its sister institution, lends money or makes grants for development projects.
"People in the developing world have had to deal with two major external shocks ---- the upward spiral in food and fuel prices followed by the financial crisis, which has eased tensions in commodity markets but is testing banking systems and threatening job losses around the world," said Justin Lin, the bank's chief economist. "Urgent steps are needed to help reduce fallout from the crisis on the real economy and on the poorest."
In response to the crisis the bank said it was increasing its support for developing countries, through new spending commitments of up to $100 million over the next three years. The bank said its private sector arm, the International Finance Corp., would help by providing trade financing, helping banks recapitalize or aiding infrastructure projects facing financial distress.
By Harry Dunphy, Associated Press Writer, Wednesday December 10, 9:21 am ET
http://www.accesstradingmgmt.com/index.html
WASHINGTON (AP) -- Economic growth prospects for both high income and developing countries have deteriorated substantially and the possibility of a very deep global recession cannot be ruled out, the World Bank said Tuesday.
The international banking crisis that erupted in September after more than a year of less acute financial turmoil has substantially reinforced the cyclical downturn that was already under way, the bank said in a report devoted to assessing economic prospects for 2009.
"Following the insolvency of a large number of banks and financial institutions in the United States, Europe and the developing world, financial conditions have become much tighter, capital flows to developing countries have dried up and huge amounts of market capitalization have evaporated," the bank said.
The bank predicted world economic growth will be 2.5 percent in 2008 and 0.9 percent in 2009. It said developing countries will likely grow 4.5 percent next year, down from 7.9 percent in 2007, while the economies of high income countries will shrink.
Even if the strong measures governments took to restore confidence in the international banking system work and credit begins to thaw, a number of developing countries are likely to face substantial strains, possibly including bank failures and currency crises, the bank said.
"In these very uncertain circumstances," the bank said, "policy makers must place a premium on reducing the likelihood of domestic turmoil by reacting swiftly and forcefully to emerging difficulties, including, if necessary, seeking assistance from the International Monetary Fund.'"
The IMF provides rescue packages to countries in financial crises while the bank, its sister institution, lends money or makes grants for development projects.
"People in the developing world have had to deal with two major external shocks ---- the upward spiral in food and fuel prices followed by the financial crisis, which has eased tensions in commodity markets but is testing banking systems and threatening job losses around the world," said Justin Lin, the bank's chief economist. "Urgent steps are needed to help reduce fallout from the crisis on the real economy and on the poorest."
In response to the crisis the bank said it was increasing its support for developing countries, through new spending commitments of up to $100 million over the next three years. The bank said its private sector arm, the International Finance Corp., would help by providing trade financing, helping banks recapitalize or aiding infrastructure projects facing financial distress.
By Harry Dunphy, Associated Press Writer, Wednesday December 10, 9:21 am ET
http://www.accesstradingmgmt.com/index.html
Sunday, December 7, 2008
Job Losses increase - future bleak
WASHINGTON (Reuters) – U.S. employers axed 533,000 jobs from payrolls in November, the most in 34 years, as the year-old recession hammered the economy and hardened calls for dramatic government action to restore growth.
The Labor Department said Friday the unemployment rate hit 6.7 percent last month, the highest since 1993, which adds up to 10.3 million Americans out of work, 2 million more than the population of New York City.
The jobless rate, which stood at 6.5 percent in October, would have been even higher but for people leaving the labor force in discouragement over their search for work.
A number of U.S. companies have announced jobs cuts this week, including General Motors Corp and asset manager Legg Mason Inc Friday, a day after phone giant AT&T said it was letting 12,000 workers go. Economists expect the unemployment rate to top 8 percent by late next year.
"You can't get much uglier than this. The economy has just collapsed, and has gone into a free fall," said Richard Yamarone, chief economist at Argus Research in New York.
The collapse of the U.S. housing market last year sparked a global credit crisis that has killed growth, panicked investors and destroyed some of the oldest names in banking.
Saturday, December 6, 2008
Automakers - 3 million Jobs Gone
Three million jobs could be at stake if one of the big three automakers fails, and the prospect of a bailout is looking bleak. Michelle Miller reports.
Three million jobs could be at stake if one of the big three automakers fails, and the prospect of a bailout is looking bleak. Michelle Miller reports.
(CBSNewsOnline)
Three million jobs could be at stake if one of the big three automakers fails, and the prospect of a bailout is looking bleak. Michelle Miller reports.
(CBSNewsOnline)
Wednesday, December 3, 2008
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