US house prices tumble further

US house prices tumble further
31-12-2008

Prices of single-family homes in the United States plunged a record 18 percent in October from a year earlier, Standard & Poor's said. Prices fell at the fastest monthly pace since March, an indication that government steps, such as encouraging lenders to modify delinquent loans, have not cushioned the housing bust, which continues to weigh on the economy.

US consumer confidence 'hits new low'

US consumer confidence 'hits new low'
31-12-2008

Consumer confidence in the United States has plunged to a historic low this month amid the deepening recession, according to a private research firm, Conference Board. The company, which has been measuring consumer confidence since 1967, said the index tumbled to 38.0 in December from 44.7 in November, owing to deteriorating economic conditions in the fourth quarter. Consumers' outlook for the first half of 2009 remains "quite dismal", and they see "only a modest recovery" in the second half of the year, said Lynn Franco, research director at the Conference Board.

HSBC slammed in Legco over mini-bonds

HSBC slammed in Legco over mini-bonds
31-12-2008

Legislators have slammed HSBC for helping to sell Lehman Brothers mini-bonds. They questioned whether the bank should have done more to protect investors from products that may be worthless in the aftermath of the Wall Street firm's collapse. More than 40,000 local people bought Lehman-backed investment products through banks, with the total outstanding value of the products estimated at HK$20 billion. Investors have complained that sales staff misled them and failed to fully explain the products connections to Lehman Brothers. At a Legco financial affairs panel meeting, Abraham Shek said HSBC had "betrayed" investors. HSBC provided the directors for the company that was set up to issue the mini-bonds. The bank also served as the trustee that held the collateral that backed the investment products. Other Hong Kong banks, not HSBC, sold the mini-bonds to retail investors. HSBC officials told legislators that the bank wasn't involved in designing the mini-bonds and didn't have a responsibility to ensure their quality. The company created to issue the bonds, known as a special purpose vehicle, was "for all intents and purposes a creature of Lehman's design," said Susan Sayers, deputy head of legal affairs for the Hongkong and Shanghai Banking Corporation. "It is not our responsibility as trustee to comment or have any view on the product that is being sold," she said. But legislators argued that HSBC bore more responsibility to the investors. "You said you are not a designer of that scheme, but knowing that as a bank, an experienced bank, an international bank, you must be aware that this is a product that is an entrapment of people," said Mr Shek. "To society, you cannot really wash your hands of the entire matter ... You are the director," said another legislator James To. Ms Sayers said Lehman Brothers had a high credit rating when the mini-bonds were sold and that the Hong Kong government had approved the products. "None of us, unfortunately, had the benefit of foresight to know what terrible circumstances would happen," she said.

New trading ban rule postponed

New trading ban rule postponed
30-12-2008

The Stock Exchange has postponed a plan to extend the trading ban period for directors dealing in their own companies' shares before announing earnings. The new rule was supposed to come into effect on Thursday, but will now be delayed for three months. Leading business figures had objected to the move, saying it would damage Hong Kong's status as a financial centre, and a Legco panel has passed a motion calling for the change to be scrapped. The measure was intended to counter insider trading an improve corportate transparency. The head of the Hong Kong Exchanges listing division, Richard Williams, said the measure was being postponed because of the concerns expressed. But he said it would not be withdrawn completely. The listing committee believed the rule was in the long-term interests of Hong Kong and the investing public.

Revised bid stops PCCW vote

Revised bid stops PCCW vote
30-12-2008

The two biggest shareholders of Hong Kong telecoms giant PCCW have made a surprise move to raise the price of their buyout offer shortly before minority shareholders were to vote on the bid. David Ford, chairman of the extraordinary general meeting of PCCW, told minority shareholders they were only notified about the revised offer from the company's chairman Richard Li, and his mainland state-owned partner, China Netcom, this morning. "The company has just received a letter from the joint offerers proposing the cancellation price increase from HK$4.20 per share to HK$4.50 per share," he said at the beginning of the meeting. The meeting was adjourned after a vast majority of the shareholders present agreed they needed more time to consider the revised offer. It was made after shareholder advisory firm Glass, Lewis & Co. recommended earlier this month that independent shareholders should reject the original offer, citing a low price and a lack of "compelling strategic rationale for the deal." But some shareholders remained dissatisfied and said they would object to the privatisation proposal. The bid will require the support of 75 percent of minority shareholders to pass. PCCW shares closed 3 percent higher yesterday at HK$3-45. Trading was suspended today.

HSI 156 higher in morning session

HSI 156 higher in morning session
30-12-2008

The Hang Seng Index ended the morning at 14,485 - that's 156 points up on the last close. Turnover was HK$412.9 billion. The American dollar's trading at 90.29 yen.The euro is standing at US$1-40. And the pound is worth HK$11-22.

Wall Street slides as oil prices surge

Wall Street slides as oil prices surge
30-12-2008

Shares on Wall Street slid a third of a percent as oil prices surged in volatile trade in response to the Israel-Hamas conflict. Sentiment was also dampened by Dow Chemical's loss of a major deal with Kuwait. It's feared the pullout - announced yesterday by the Kuwaiti government - could jeopardize financing of Dow's agreed 18.8-billion-dollar acquisition of Rohm and Haas.

Cuban economy suffers slowdown

Cuban economy suffers slowdown
29-12-2008

Cuba has said it has experienced one of its most difficult years economically since the collapse of its former ally, the Soviet Union, in 1991. The economy of the communist-run Caribbean island has grown by 4.3 percent in the past year, falling well short of the 8 percent forecast by the government. The authorities have partly blamed the three hurricanes which hit this year, causing US$10 billion worth of damage, and the continuing US trade embargo.

Beijing makes record Tibet investment

Beijing makes record Tibet investment
29-12-2008

Beijing has invested a record 16 billion yuan this year in Tibet, following the unrest which erupted in March and damaged the regional economy, Xinhua news agency reported. Tibet's industrial economic growth fell 11 percent year on year in the first half of 2008, while fixed asset investment dropped 10.3 percent owing to the violence, Xinhua reported, citing the Tibetan Development and Reform Committee. To prop up the economy, Beijing in July ordered special subsidies and incentives focusing on sectors such as tourism and infrastructure development, the report said. Beijing counters critics' charges of oppression in Tibet by pointing to its investment in the region.

HK exports drop 5.3% in November

HK exports drop 5.3% in November
30-12-2008

Hong Kong's exports have declined for the first time in five months - slipping 5.3 percent last month. Imports fell 7.9 percent, leaving a trade deficit of $8.2 billion. The government says the global economic downturn is taking its toll on world trade, adding that Hong Kong's exports are bound to be negatively affected in the near-term.

European stocks surge ahead of break

European stocks surge ahead of break
30-12-2008

European stock prices surged in subdued trading on Monday ahead of the New Year's holiday break. London's FTSE 100 index gained 2.44 percent to close at 4,319. In Frankfurt, the Dax index rose 1.49 percent to 4,698 and the CAC 40 index in Paris went up 0.47 percent to close at 3,130.

US stocks markets fall

US stocks markets fall
30-12-2008

Share prices on Wall Street closed lower. The Dow slipped 31.62 points, or 0.37 percent, to 8,483. The Standard & Poor's 500 Index fell 3.38 points, or 0.39 percent, to 869. The Nasdaq Composite Index dropped 19.92 points, or 1.30 percent, to 1,510. The price of oil rose on concerns that supplies could be disrupted by tensions between Israel and the Hamas-ruled Gaza Strip. US light, sweet crude settled up $2.31 at $40.02 a barrel. Gold was also trading higher supported partly by broad weakness in the US dollar.

SME's in new help plea

SME's in new help plea

30-12-2008
Small and medium-sized enterprises are calling on the government to amend the special SME loan guarantee scheme to help them survive the economic downturn. They say banks are charging too much interest on the money they lend, despite the introduction of the scheme, which guarantees 70 percent of loans for successful applicants. A representative of a pressure group, the SMEs Survival Alliance - Vincent Mak - urged the administration to raise the guarantee ratio.

Consultation call over blackout rules

Consultation call over blackout rules
30-12-2008

The government has been urged to re-open consultation on new stock market rules that would extend the period in which company directors are barred from trading shares in their own firms. The call came from legislator Abraham Shek, days before the rules are scheduled to come into effect. The Hong Kong Exchanges and Clearing says it's aware of the views expressed recently. But it said it had consulted the market on the issue in January and the majority of the 105 respondents did not oppose or comment on the proposal.

Privatisation of PCCW clears hurdle

Privatisation of PCCW clears hurdle
30-12-2008

PCCW's largest shareholders have cleared the first hurdle in their bid to privatise the telecom company. Shareholders of Pacific Century Regional Developments in Singapore agreed to the proposal by chairman Richard Li and China Netcom to privatise the firm at a cost of HK$14.9 billion. This now leaves the final decision up to minority shareholders, who will cast their ballots in Hong Kong tomorrow. PCCW shares closed 3 percent higher at HK$3-45 cents today.

China raising export tax rebates

China raising export tax rebates
30-12-2008

China will raise export tax rebates on hundreds of products on Thursday. This adds to a wide range of tax incentives offered to makers of thousands of other items since October. The move is aimed at helping exporters ride out the financial crisis amid reduced overseas demand for goods. The latest rebates cover motorcycles, machinery and electronic products.

Xmas retail sales plunge in US - poll

Xmas retail sales plunge in US - poll
28-12-2008

Christmas retail sales plunged in the United States. According to a new poll, sales dropped by nearly eight percent for the traditional November-December shopping period, making it one of the worst holiday shopping periods in decades. Japan also reported record cuts in production; and there are more signs that Spain has entered recession.A leading think tank in London also forecasts that the British economy will shrink by 2.9 percent next year, in the biggest contraction since the end of World War II-as retailers slash prices in a bid to boost post-Christmas sales.

China's foreign debt soars more than 18%

China's foreign debt soars more than 18%
28-12-2008

China's foreign debt increased by more than 18 percent in the first nine months of the year, with short-term debt rising especially fast, state media reported. At the end of September, overseas borrowing stood at 442 billion dollars, a rise of 18.3 percent from the end of last year. Despite this, China remains in a position to service its debt, as it also holds the world's largest foreign exchange reserves. Fuelled by its large trade surplus, China's forex reserves reached 1.9 trillion dollars in late September.

Harrods sale opens amid anti-fur demo

Harrods sale opens amid anti-fur demo
28-12-2008

Hundreds of bargain-hunters braved the cold as luxury London retailer, Harrods, opened its post-Christmas sale, amid protests from anti-fur campaigners. Mezzo-soprano, Katherine Jenkins, opened the department store in Knightsbridge. The boos and chants from those taking part in the protest, organised by the Coalition to Abolish Fur Trade, were soon drowned out by clapping and cheering from would-be shoppers who queued overnight. Some came from as far afield as Slovenia.

Move to scrap old cars to help sales

Move to scrap old cars to help sales
28-12-2008

China plans to offer incentives for car owners to scrap their old models in favour of new ones, in a bid to lift the auto industry as it enters a period of crisis. State media reports the measure is part of a new package being prepared in Beijing aimed at avoiding a US-style collapse of the local auto sector. Chinese auto sales fell 14.6 percent in November from a year earlier. Other measures that China may adopt to bolster auto sales include cuts in the 10-percent vehicle purchase tax and easier access to car loans.

S Korean economy could shrink in 2009

S Korean economy could shrink in 2009
28-12-2008

S Korea's President Lee Myung-Bak says his country's economy could shrink in the first half of next year, for the first time since the 1997 Asian financial crisis. He said that for the whole of 2009, they might achieve positive economic growth, but might also suffer an economic contraction in the first and second quarters. Mr Lee's remarks come after the government cut its 2009 economic growth forecast by one percentage point, to three percent, citing the deepening global economic crisis.

Woolworths to close 200 UK stores

Woolworths to close 200 UK stores
28-12-2008

The end for Woolworths, the British retail institution, which is buckling under the weight of the economic crisis, moves a step closer this weekend with the closure of a quarter of its stores. Woolworths's administrators at the accountancy firm, Deloitte, have chosen 200 stores, of the 813 nationwide, which will shut their doors for the final time. The company itself is likely to become one of the most high-profile victims of the global credit crunch and Britain's economic slowdown unless a buyer materialises before January 5th.

Japanese share prices show gains

Japanese share prices show gains
25-12-2008

Japanese share prices have gained 0.2 percent this morning, with dealers relieved that Wall Street snapped a five-session losing streak. A short while ago, the Nikkei index was up 19-points at 8,536, In currencies, the U.S. dollar was trading at 90.4 Japanese yen. The euro was standing at 1 American dollar 40 cents...and the pound was worth 11 Hong Kong dollars and 41 cents.

China plans to save automotive sector

China plans to save automotive sector
25-12-2008

The mainland's top economic planning agency is drafting a stimulus package to save the automotive sector from a US-style crisis. The Shanghai Securities News said the measures will include cuts in the 10 percent vehicle purchase tax to boost consumption, and direct government funding to help automakers upgrade their technologies. If approved, the plans are expected to be implemented next month. China's auto sales fell 14.6 percent last month, from the same month a year earlier, because of the economic slowdown.

Markets mixed in light holiday trading

Markets mixed in light holiday trading
2008-12-25 HKT 06:51

Wall Street rose modestly in light holiday trading. Investors had largely been factoring in bad numbers for the fourth quarter as Americans adjusted to the slumping economy. The Dow Jones industrial average rose almost 49-points or point six of a percent, after falling for five straight sessions. Broader stock indicators also made slight gains with the Standard & Poor's 500 index rising five points and the Nasdaq, just over three points. On the other side of the Atlantic, London's FTSE 100 was down almost one percent, the Paris CAC fell point 39 of a percent and Frankfurt's Dax ended point two of a percent down.

Hutchison loses interest in Greek deal

Hutchison loses interest in Greek deal
25-12-2008

Global transport operator, Hutchison Whampoa, has scuppered talks on the concession for container facilities at Greece's main northern port of Thessaloniki. The port authority chairman, Lazaros Kanavouras, said a consortium, headed by the Hong Kong-based operator, had withdrawn its interest in the deal. He attributed the decision to the global financial crisis. Hutchison, which had outclassed rival operators Cosco and Dubai World Port with a 586-million US dollar bid, has not commented.

Australian retailers expect bumper sales

Australian retailers expect bumper sales
26-12-2008

Thousands of Australian shoppers rushed to department stores Friday to pick up post-Christmas bargains, leaving retailers predicting bumper sales despite the economic crisis. Crowds gathered outside major shops in Sydney, Melbourne and other major cities hours before the dors opened from 5:00 am, to be the first to snap up the traditional Boxing Day discounts. "We probably had two or three thousand people come through the door when we first opened," Andrew Vaz, regional manager for department store Myer, told national news agency AAP. "It certainly exceeded our expectations." The Australian Retailers Association said sales were likely to top A$6.3 billion dollars (US$4.3 billion) - a two percent increase on last year - in the next two weeks as those not normally drawn to sales splash out.

Gloomy outlook for UK retail figures

Gloomy outlook for UK retail figures
26-12-2008

British retail sales figures for December will reflect a poor Christmas season, according to the British Retail Consortium, as fears grow that Britain is entering a deep recession. A traditional last minute rush for gifts and heavy discounting in the run up to Christmas had raised hopes consumer spending might hold up through the festive season even though Britain is entering its first recession since the early 1990s. But several high profile retailers have collapsed in recent weeks and the BRC - which publishes one of the most closely watched retail sales surveys in Britain - said conditions were tough and Britons were struggling.

Japan industrial production down

Japan industrial production down
26-12-2008

New figures show that industrial output in Japan dropped just over eight per cent in November compared with the previous month - the biggest fall on record. At the same time, unemployment rose to nearly four per cent. More than two-and-a-half million people were out of work in Japan in November, a rise of a-hundred-thousand compared to the year before.

China shares flat in morning trade

China shares flat in morning trade
26-12-2008

China share prices were little changed Friday morning as persistent worries over the slowing economy and a share supply glut still weighed on sentiment, dealers said. The benchmark Shanghai Composite Index, which covers A and B shares, was down 0.82 points or 0.04 percent at 1,851.60. The Shanghai A-share index shed 0.92 points, or 0.05 percent, to 1,944.29, while the Shenzhen A-share index lost 1.44 points, or 0.24 percent, to 601.25.

HSI closes 49 lower

HSI closes 49 lower
24-12-2008

The Hang Seng Index has ended the pre-Christmas half-day session at 14,171 - that's 49 points down on the last close. Turnover was HK$17.6 billion. The American dollar's trading at 90.54 yen. The euro is standing at US$1-39. And the pound is worth HK$11-45.

Mainland shares tumble

Mainland shares tumble
24-12-2008

China shares fell as investors disappointed by the size of an interest rate cut dumped financial shares and other heavyweights. The Shanghai Composite Index tumbled 4.55 percent, or 90 points, to 1,897 in an afternoon rout that saw heavy losses in banks, insurers, airlines, resource and property shares. PetroChina, the market's heaviest weighted share, fell 4.6 percent to 10.43 yuan. China cut interest rates yesterday for the fifth time in four months in a new effort to revive economic growth amid mounting anxiety about spreading job losses and worker protests. But the 0.27 percentage point cut in the one-year lending rate failed to impress investors, analysts said. "Most bank shares fell on concerns over the impact of lower interest rates on their profits," said Peng Yunliang, an analyst at Shanghai Securities. "Rationality was discarded in panic selling," he said. "Investors' confidence is on the edge of collapse."

S.Korea setting up financial task force

S.Korea setting up financial task force
24-12-2008

South Korea's financial watchdog says its banks will set up a taskforce to assess the finances of construction firms and smaller shipbuilders. The task force will force unviable companies to restructure. The government will also help salvage firms by injecting fresh funds, or putting them under debt rescheduling programmes. The move is aimed at calming market jitters, by restructuring companies that look likely to fail.

Record Japan budget to ease recession

Record Japan budget to ease recession
24-12-2008

The Japanese government has approved a record US$980 billion budget for 2009,to revive Asia's biggest economy, which has been slipping deeper into recession. It was given a boost, after Prime Minister, Taro Aso's cabinet formally adopted the budget for 2009. The record spending increase reflects an emergency economic package that the Prime Minister announced earlier this month, to stave off, a prolonged recession. If approved, spending on foreign aid will fall by 4 percent.

Tainted-milk firm declared bankrupt

Tainted-milk firm declared bankrupt
24-12-2008

Sanlu, the Chinese firm that sparked a nationwide melamine-tainted milk crisis, that led to the deaths of 6 children and made almost 300,000 others ill, has been declared bankrupt. It will be managed by a court-appointed receiver. The Fonterra Group, a New Zealand dairy exporter that owns part of Sanlu, said a court in Hebei province issued the bankruptcy order, in response to a creditor's petition. The tainted milk scandal spread to involve more than 20 Mainland companies.

Manager hit by Madoff 'fraud' found dead

Manager hit by Madoff 'fraud' found dead
24-12-2008

A French investment manager who put US$1.4 billion into Bernard Madoff's fraud-hit scheme has committed suicide in his New York office. Police said Rene-Thierry Magon de la Villehuchet, 65, was found sitting at his desk with both wrists slashed. A bottle of sleeping pills was on his desk and a box cutter lay on the floor. Mr Madoff is accused of running a US$50 billion "Ponzi scheme' that wiped out investors around the world. Big funds like Mr Villehuchet's were especially hard hit. Mr Villehuchet was co-founder of money manager, Access International.

Ireland bails out banking sector

Ireland bails out banking sector
23-12-2008

The Irish government has revealed details of a huge rescue package for its troubled banking sector. The finance ministry said US$7.7 billion would be pumped into Ireland's three leading banks. In return, the government will oblige them to lend more money, and to refrain from house reposessions for six months.

PBOC cuts interest rates again

PBOC cuts interest rates again
23-12-2008

The People's Bank of China has cut interest rates for the fifth time in three months, in a bid to boost the economy. Lending and savings rates will both go down by 27 basis points. It also reduced the amount of reserves that banks must keep by 50 basis points to 15.5 percent of their deposits.

Toyota faces historic loss amid slump

Toyota faces historic loss amid slump
23-12-2008

Japan's biggest carmaker Toyota has forecast its first annual loss in 71 years due to plummeting sales and a surge in the value of the yen. The country also posted a trade deficit of US$2.5 billion in November as exports fell at a record rate. Toyota said it expected a loss of 150 billion yen in yearly operating profits from its core operations. The carmaker recorded an operating profit of 2.27 trillion yen last year. Toyota said it still expected to make a profit on a net level for the year ended March but has cut its forecast sharply to 50 billion yen, down from a previous estimate of 550 billion yen. It is the second profit warning by Toyota in less than seven weeks. The latest estimate is far lower than its net profit of 1.7 trillion yen earned the previous year. Japan has reported a record fall in exports - a trade deficit of US$2.5 billion in November. That's in contrast to an US$8.8 billion trade surplus a year ago. Japanese exports tumbled 26.7 percent from a year earlier -the steepest drop since 1980. Imports have also shrunk 14.4 percent, to US$62 billion, on lower oil prices - the first decrease in 14 months. The country has previously enjoyed large trade surpluses because of demand for Japanese cars and other goods, but the recent world economic downturn, and a strong yen, have led to a significant drop in Japanese exports.

Record drop in Japanese exports

Record drop in Japanese exports
23-12-2008

Japan posted a trade deficit of US$2.5 billion in November as exports fell at their fastest-ever rate. The ministry of finance said exports were down 26.7 percent from a year earlier, the ministry said, as a strong yen and the global economic downturn blunt demand for Japanese goods. Japan typically runs a trade surplus due to strong demand for its products. Japanese media are speculating that car maker Toyota may be about to announce its first operating loss in 71 years. Japanese exports fell sharply to all areas but those to the US were worst-hit, plunging 33.8 percent - also a record drop. Shipments to the European Union were down 30.8 percent while those to China fell 24.5 percent, the biggest fall since 1995. Exports to the rest of Asia declined 26.7 percent. Imports were also down - 14.4 percent overall - due in part to lower oil prices.

Beijing offers help to Taiwanese firms

Beijing offers help to Taiwanese firms
22-12-2008

Beijing says it will allocate US$19 billion in financing for Taiwanese companies on the mainland over the next two or three years. The move is part of efforts to combat the global economic crisis. The plans were unveiled in Shanghai at the end of a two-day forum between the Communist Party and Taiwan's Nationalists. Wang Yi, director of the Communist Party's Taiwan Work Office, announced 10 policies and measures toward that goal, according to the Central Government's Web site. The policies include the $19 billion in financing, which will be provided by three of China's top banks: Industrial and Commercial Bank of China, Bank of China and China Development Bank.

IMF urges spending to tackle crisis

IMF urges spending to tackle crisis
22-12-2008

The head of the International Monetary Fund, Dominique Strauss-Kahn, says 2009 will be a really bad year for the global economy and that governments will have to spend more money to stimulate growth. He says US$1.2 trillion is needed to tackle the financial crisis. Mr Strauss-Kahn said he feared measures announced by the Group of 20 nations last month would not be enough. The IMF has already cut its forecast for global growth next year, and he said the next projection, due in January, would be even worse. Mr Strauss-Kahn was gloomy about the prospects for 2009. "I'm specially concerned by the fact that our forecast, already very dark... will be even darker if not enough fiscal stimulus is implemented," he said in an interview with BBC Radio 4. He said it would take a spending stimulus equivalent to about two percent of global Gross Domestic Product, or about $1.2 trillion to make a real difference.

China to spend US$730bn on rail network

China to spend US$730bn on rail network
22-12-2008

China has announced it will spend five trillion yuan (US$730 billion) between now and 2020 adding 41,000 km to its rail network. The latest edition of Outlook Weekly, published by Xinhua news agency, cited Deputy Railway Minister Lu Dongfu as saying the new railways would help promote economic growth, ease transport bottlenecks and provide at least six million jobs. It did not say how much of the investment was new, and how much had already been approved by the central government, although some of the projects have already begun, such as a high-speed link between Beijing and Shanghai.

Japan 'may punish banks' refusing loans

Japan 'may punish banks' refusing loans
22-12-2008

Japan's financial watchdog may punish banks which it finds have unfairly withheld loans to smaller businesses, according to a report. The country's Financial Services Agency will interview bank officials and conduct other checks to discover how they have responded to loan requests from small and medium-sized firms, the business newspaper Nikkei reported. Many smaller companies have complained about a reluctance by banks to give them loans, despite a credit guarantee scheme launched by the government in October.

Canada unveils car rescue plan

Canada unveils car rescue plan
21-12-2008

Canada will follow the United States in providing C$4 billion (US$3.3 billion) in emergency loans to the Canadian arms of Detroit's ailing automakers to keep them operating while they restructure their businesses, Prime Minister Stephen Harper has announced. The package, unveiled by Mr Harper and Ontario Premier Dalton McGuinty, comes a day after the White House unveiled a $17.4 billion package to shore up the US auto industry. Mr Harper also announced two new federal measures to help the overall industry - one to help automotive suppliers and another to help consumers to get credit to buy cars. The federal government will provide C$2.7 billion in short-term loans and Ontario C$1.3 billion. Mr Harper said the government hopes to recover this money but recognizes some of it is at risk. "There are literally across the country hundreds of thousands if not millions of potentially affected families by the distress of this industry," Mr Harper said at a joint news conference. "And we are obviously making sure at this Christmas time that within the confines of our responsibility for taxpayer money that we are also going to look after their interest." Mr Harper said the aid reflected Canada's 20 percent share of the production capacity of the North American market.

Barclays sees 1-2 years of tight credit

Barclays sees 1-2 years of tight credit
21-12-2008

Bank lending will take 1-2 years to return to normal, and asset prices need as much as 18 months to stabilise, Barclays Chief Executive John Varley said in an interview released on Saturday. Varley told BBC television that banks were still lending, but there needed to be a reduction in the overall amount of debt in the economy. "I think that we will see the process of reduced borrowing play out over at least the course of the next 12 months ... maybe 24 months," he said. "That is a painful process, it's a process through which the world absolutely has to go," he said. "As soon as asset prices stabilise, then we will see the financial economy recover."

Japan unveils new spending package

Japan unveils new spending package
21-12-2008

The Japanese cabinet has approved another US$54 billion package of spending, to try to ease the recession. It is the second extra budget approved by MPs and is designed to help finance tax cuts for homeowners, loans to small businesses and help laid-off workers. Recently, the government increased its economic stimulus plan by $255 billion. The Bank of Japan cut its benchmark interest rate to 0.1 percent, on Friday in a bid to kick-start the economy. The bank also announced that it would increase its purchase of Japanese government bonds. The government has forecast zero growth in the year ending March 2010.

Beijing offers Taipei economic aid

Beijing offers Taipei economic aid
21-12-2008

Beijing has said it would be willing to meet any requests for help from Taiwan, during the financial downturn. Jia Qinglin, the fourth most senior Communist party leader, said Beijing was willing to make it easier for Taiwanese companies to trade and invest in the mainland, help them obtain financing and cooperate in technological development. Mr Jia was opening a two-day meeting in Shanghai of more than 400 delegates from the mainland and Taiwan. Last Monday, the two sides opened direct daily passenger flights, new shipping routes and postal links for the first time in six decades.

Obama welcomes auto rescue deal

Obama welcomes auto rescue deal
21-12-2008

The US president-elect, Barack Obama has welcomed the multi-billion dollar funding package for the struggling US car industry. The Bush administration has announced emergency funding of about US$17 billion, with the money expected to go initially to General Motors and Chrysler. The aid is conditional on the companies restructuring themselves. Mr Obama said the industry should take the opportunity to reform its management practices and to develop fuel-efficient vehicles for the future.

US dollar storms back from steep losses

US dollar storms back from steep losses
20-12-2008

The US dollar stormed back from steep losses on the euro earlier in the week, after the massive rescue announced for US automakers eased worries about the economy. The euro sank to 1.3913 dollars, down sharply from a day earlier. The greenback held nearly steady against the Japanese currency at 89.32 yen. In late New York trade, the dollar stood at 1.1035 Swiss francs. The pound was at 1.492 dollars.