Comments »WASHINGTON — Key Senate Democrats are wavering in their support of legislation that would give more power to labor unions, dealing a setback to labor’s top priority as businesses warn of the damage the bill would cause.
The battle over the “Employee Free Choice Act” — expected to be introduced Tuesday — is seen as a power struggle among labor unions and businesses, as well as a test of whether moderate Democrats and Republicans will push back on Democratic congressional leaders and the Obama administration.
At least six Senators who have voted to move forward with the so-called card-check proposal, including one Republican, now say they are opposed or not sure — an indication that Senate Democratic leaders are short of the 60 votes they need for approval.
The legislation is divisive and distracting, said Arkansas Sen. Blanche Lincoln in an interview Monday. The Democratic lawmaker, who was previously seen as a supporter, said the Senate should focus on creating jobs and improving the U.S. economy. “I have 90,000 Arkansans who need a job, that’s my No. 1 priority,” she said. The legislation, she said, would be “divisive and we don’t need that right now. We need to focus on the things that are more important.”
Sen. Lincoln is one of several moderate Democrats expressing doubts about the Employee Free Choice Act. The bill would allow unions to organize workers without a secret ballot, giving employees the power to organize by simply signing cards agreeing to join. A second provision would give federal arbitrators power to impose contract terms on companies that fail to reach negotiated agreements with unions. Both provisions are strongly opposed by business groups, including the U.S. Chamber of Commerce and the National Association of Manufacturers.
Louisiana Sen. Mary Landrieu and Arkansas Sen. Mark Pryor are among the Democratic lawmakers who have backed off their previous support.
An aide for Sen. Landrieu said the senator is carefully reviewing the issue. “She understands that it is a heated debate and wants to make an informed decision” in part by meeting with groups on both sides.
Joined Feb 3, 2009
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Roubini Has No Shortage of Listeners. Now He is Dropping a Bomb for Fear to Fester
The pod cast is better than reading !
A 36 month recession. Fun Times…not
Asian Markets Open Mixed and Mildly to the Downside
Auto makers and Electronic companies lead the Nikkei down 1%+
Comments »March 10 (Bloomberg) — Asian automakers and consumer- electronics stocks fell on concern the deepening global recession will cause profits to deteriorate further, offsetting gains by energy companies.
Toyota Motor Corp., which gets about 37 percent of revenue in North America, dropped 1.7 percent after billionaire Warren Buffett said the U.S. economy “has fallen off a cliff.” Sony Corp., which gets a quarter of its sales from the U.S., declined 2.1 percent. Woodside Petroleum Ltd., Australia’s second-largest oil producer, climbed 2.4 percent as oil rose for a third day.
“Hopefully, the accelerating deterioration of company profits will slow, but the earnings trend will remain in a downward trajectory,” Mamoru Shimode, an equity strategist at Resona Trust & Banking Co., said in an interview with Bloomberg Television.
About the same number of stocks rose as fell on the MSCI Asia Pacific Index, which lost 0.3 percent to 70.41 as of 10:56 a.m. in Tokyo. The gauge has slumped 21 percent this year, extending last year’s record 43 percent tumble as the global recession decimated profits at companies from Toyota to Sony.
Japan’s Nikkei 225 Stock Average dropped 0.8 percent to 7,032.58, while South Korea’s Kospi Index rose 0.6 percent. Australia’s S&P/ASX 200 Index fell 0.2 percent, while New Zealand’s NZX 50 Index lost 0.5 percent.
Futures on Standard & Poor’s 500 Index added 0.4 percent today, following a 1 percent decline in the measure to 676.53 yesterday. The gauge is likely to drop to 600 or lower this year as the recession intensifies, Nouriel Roubini, the New York University professor who predicted the financial crisis, said.
Metal Prices
Buffett, whose Berkshire Hathaway Inc. posted its worst results ever in 2008, yesterday said the U.S. economy “can’t turn around on a dime,” and efforts to stimulate recovery may lead to inflation higher than in the 1970s.
Toyota fell 1.7 percent to 2,840 yen and Sony dropped 2.1 percent to 1,727 yen in Tokyo on concern demand will weaken as the world’s biggest economy deteriorates. Honda Motor Co., which makes 51 percent of its revenue in North America, lost 2.6 percent to 2,050 yen.
Woodside gained 2.4 percent to A$36.76. Inpex Corp., Japan’s largest oil explorer, added 1.4 percent to 657,000 yen. Oil futures in New York rose 0.5 percent to $47.27 a barrel in after-hours, electronic trading, taking gains in the past three days to 8.4 percent.
Chinese Consumers Catch a Break After a Three Year Punch in the Wallet
Comments »March 10 (Bloomberg) — China’s consumer prices fell for the first time since 2002 after commodity costs declined, stoking concern that deflation will undermine efforts to revive the world’s third-biggest economy.
Consumer prices dropped 1.6 percent in February from a year earlier, the statistics bureau said today, after gaining 1 percent in January. The median estimate in a Bloomberg News survey of 10 economists was for a 1 percent decline. Producer prices fell 4.5 percent, the most in a decade, after a 3.3 percent decline.
The drop in prices raises the risk that deflation will become entrenched, squeezing company margins, prompting wage cuts and eroding consumer demand. Premier Wen Jiabao is relying on a 4 trillion yuan ($585 billion) stimulus package to spark a recovery after a collapse in exports dragged economic growth to the weakest pace in seven years.
“The government has to make sure its stimulus package kicks in in time to boost domestic demand,” said Wang Tao, a Beijing-based economist at UBS AG. “Faltering global demand will result in exporters selling more goods back to China’s domestic market, adding deflationary pressure.”
Inflation climbed to the highest in more than a decade in February 2008 as a week-long Lunar New Year holiday boosted spending and blizzards disrupted food supplies. This year, the holiday was in January.
Metal and oil prices have fallen because of weaker demand caused by the global economic slump. China’s food prices, which account for about a third of the consumer-price index, have also cooled.
Volkswagen Cuts Prices
Manufacturers cutting prices in China include Volkswagen AG, which reduced last month the prices of some locally made models by as much as 12 percent amid tumbling demand. House prices in 70 cities fell 1.2 percent in February from a year earlier, the biggest drop since data began in 2005, the government said today.
China’s economy, which expanded 6.8 percent in the fourth quarter, may grow 6.7 percent in 2009, the smallest gain in almost two decades, according to the International Monetary Fund.
A trend toward global deflation is becoming more obvious as the international financial crisis keeps spreading, Premier Wen said March 5 in his annual speech to China’s parliament, as he reaffirmed the nation’s 8 percent growth target for this year.
In Japan, consumer prices failed to rise in January for the first time in more than a year.
Still, European Central Bank President Jean Claude Trichet, who chaired a meeting of global central bankers yesterday in Basel, Switzerland, said deflation was “not something we consider a high probability at all at a global level.”
Spur to Spending
Temporary deflation in China may spur consumer spending and cut production costs, according to UBS’s Wang. “The current low-price environment has also offered an opportunity for the government to raise controlled prices such as utility prices including electricity and water,” she said.
China isn’t yet facing “typical” deflation, where falling prices are accompanied by shrinking loans and money supply and an economic recession, central bank vice governor Yi Gang said, according to the state-run Xinhua News Agency.
China’s banks extended 1.6 trillion yuan of loans in January, double the record set a year earlier, after the government removed quotas limiting lending. Money supply expanded at the fastest pace in more than a year.
The central bank has “sufficient” policy tools to combat deflation, Yi said, without elaborating.
Likely declines in consumer prices from February through June won’t trigger “aggressive” interest-rate cuts, partly because the government’s stimulus package will be inflationary, said Sun Mingchun, a Hong Kong-based economist at Nomura Holdings Inc.
The central bank may make a single 27 basis-point reduction this year, taking the one-year lending rate to 5.04 percent, as “a symbolic reaction to deflation,” Sun said.
Retail Sales Put an End to Speculation That We might have Seen the Bottom in the U.K…Perhaps the U.S. is Heading the Same Route
Like for like down 1.8%< /strong>
Comments »The high street suffered a dismal month in February as the value of like- for-like sales fell by 1.8 per cent, according to the British Retail Consortium (BRC).
Experts said that the 1.1 per cent rise in sales enjoyed by retailers in January was a “discount-driven blip”. They added that the continuing downturn on the high street could lead to further job cuts and store closures.
The BRC said that non-food stores were hit worst, with a 5.3 per cent fall in sales in the three months to February against the same period a year earlier.
Stephen Robertson, the BRC’s director-general, said: “The short burst of spending unleashed by January clearances has largely vanished, replaced by sales as weak as most of last year.”
Clothes shops reported that only sales of handbags, jewellery and hair accessories grew as women chose to update wardrobes by accessorising. Electrical stores said that customers were buying new items only to replace broken ones, rather than upgrading or buying additional items. However, the slump in the housing market boosted sales of DIY goods as homeowners chose to revamp their properties.
Supermarkets fared better, with like-for-like food sales rising 4.3 per cent, a more modest rise than the 4.4 per cent jump in the three months to January. Cold weather prompted a surge in sales of casserole meats, sausages and winter vegetables.
The poorest tenth of the population suffers inflation more than 50 times higher than the RPI measure, which is 0.1 per cent, the Institute for Fiscal Studies said.
The most hard-pressed households have an effective inflation rate of 5.4 per cent, while those aged over 80 face a 7.1 per cent annual rise in prices because both of these households spend a bigger proportion of income on food and energy, both of which are still rising in cost. In contrast, rich households are enjoying a fall in the cost of living, with -1.3 per cent inflation; 30 to 39-year-olds have inflation of -0.9 per cent.
RBS To Get More Government Cheese
Comments »More than £800 million of taxpayer bailout cash injected into Royal Bank of Scotland has been earmarked to shore up the bank’s gold-plated staff pension schemes, which have collapsed into deficit after investing in RBS shares.
To ensure generous pension promises are met — including the infamous £703,000-a-year payout pledged to Sir Fred Goodwin, the former chief executive — RBS is planning to inject £807 million into its various staff and executive pension schemes, the annual report revealed yesterday.
The pension funds appear to have lost hundreds of millions of pounds investing in shares and other securities issued by RBS. The value of RBS shares in the portfolio has slumped from £69 million a year ago to £15 million. The value of other RBS instruments in the pension funds has fallen from £606 million to £421 million.
The RBS pension funds have deteriorated from an aggregate surplus of £115 million to a deficit of £1.99 billion in 12 months because of sliding investment markets and other factors.
