Battered by bad economic news, consumer confidence plunged while wholesale food, energy and medicine costs soared, pushing inflation up at the fastest pace in a quarter century.
The Labor Department said Tuesday that wholesale inflation jumped by 1 percent in January, more than double the increase that analysts had been expecting.
Meanwhile, the New York-based Conference Board reported that its confidence index fell to 75.0 in February, down from a revised January reading of 87.3. The drop was far below the 83 reading that analysts had forecast and put the index at its lowest level since February 2003, a period that reflected anxiety in the leadup to the Iraq war.
Consumers have been shaken by a prolonged slump in housing that has pushed the country close to a recession.
A third report Tuesday showed that home prices, measured by the S&P/Case-Shiller Index, dropped by 8.9 percent in the fourth quarter of last year, the steepest drop in the 20-year history of the index.
"Home prices across the nation and in most metro areas are significantly lower than where they were a year ago," said Robert Shiller, one of the index's creators. "Wherever you look, things look bleak."
The January inflation surge left wholesale prices rising by 7.5 percent over the past 12 months, the fastest pace in more than 26 years.
The worse-than-expected performance was certain to capture attention at the Federal Reserve, which has chosen to combat a threatened recession by aggressively cutting interest rates in the belief that weaker economic growth will keep a lid on prices.
But the combination of rising inflation and weaker growth raises the threat of "stagflation," the economic malady that plagued the country through the 1970s, when a series of oil shocks left households battered by the twin problems of stagnant growth and rising inflation.
The 1 percent jump in wholesale prices followed a 0.3 percent decline in December and was the biggest one-month increase since a 2.6 percent increase in November. That gain had been driven by sharply higher energy costs.
The big jump in wholesale prices followed a report last week that consumer prices had risen by a worse-than-expected 0.4 percent, reflecting higher costs for food, energy and health care.
The wholesale report said that energy prices jumped 1.5 percent, as gasoline prices rose by 2.9 percent and the cost of home heating oil jumped by 8.5 percent.
Food prices, which have been surging because of increased demand stemming from ethanol production, rose by 1.7 percent last month, the biggest monthly increase in three years. Prices for beef, bakery products and eggs were all up sharply.
Core wholesale inflation, which excludes food and energy, posted a 0.4 percent increase, the biggest increase in 11 months. This gain was led by a 1.5 percent spike in the cost of prescription and non-prescription drugs.
The cost of book publishing was up 1.7 percent while the price of light trucks and passenger cars both rose by 0.3 percent.
Prices excluding food and energy are up 2.5 percent over the past 12 months, the fastest 12-month gain since a 2.5 percent rise in the 12 months ending in October.
Associated Press
Showing posts with label World News. Show all posts
Showing posts with label World News. Show all posts
Tuesday, February 26, 2008
Sunday, February 24, 2008
Firefox Crosses 500 Million Download Mark
Sometime last night, Firefox downloads crossed the 500 million threshold.
It's an arbitrary but interesting milestone for the open-source Web browser, whose development is overseen by Mozilla but that's also developed and extended by a large number of outside programmers. In September 2007, Firefox crossed the 400 million download mark, indicating an average rate a bit shy of 20 million per month at present.
According to the Spread Firefox site, there had been 500,168,448 downloads as of 6:15 a.m. PST. About 12 hours earlier, there had been more than 499,900,000.
Firefox has spread widely in the years since its release. The project originally was named Phoenix to symbolize a rising from the ashes of the Netscape open-source browser project that began in 1998 but languished for many years as Microsoft's Internet Explorer solidified its lead.
Now Firefox programmers are working on version 3, which brings performance improvements and interface changes, and Mozilla also is working on a mobile version of the browser for handheld devices.
A sister subsidiary of Mozilla, Mozilla Messaging, is working to reproduce the successes of Firefox with the open-source Thunderbird e-mail software.
CNET News
It's an arbitrary but interesting milestone for the open-source Web browser, whose development is overseen by Mozilla but that's also developed and extended by a large number of outside programmers. In September 2007, Firefox crossed the 400 million download mark, indicating an average rate a bit shy of 20 million per month at present.
According to the Spread Firefox site, there had been 500,168,448 downloads as of 6:15 a.m. PST. About 12 hours earlier, there had been more than 499,900,000.
Firefox has spread widely in the years since its release. The project originally was named Phoenix to symbolize a rising from the ashes of the Netscape open-source browser project that began in 1998 but languished for many years as Microsoft's Internet Explorer solidified its lead.
Now Firefox programmers are working on version 3, which brings performance improvements and interface changes, and Mozilla also is working on a mobile version of the browser for handheld devices.
A sister subsidiary of Mozilla, Mozilla Messaging, is working to reproduce the successes of Firefox with the open-source Thunderbird e-mail software.
CNET News
Label:
World News
Saturday, February 16, 2008
Yahoo Big Investors May Back Microsoft
Most of Yahoo Inc's top institutional shareholders may be more interested in making sure Microsoft Corp does not overpay for the Web pioneer, because they have more money invested in the bigger software maker, a research report said on Friday.
Financial risk management analysis company RiskMetrics Group found that close to 90 percent of Yahoo's institutional shareholders have a cross-holding in Microsoft, including most of the top 20 -- and generally have significantly more money invested in Microsoft.
The two companies are at a stand-off in Microsoft's $41.7 billion unsolicited bid to acquire Yahoo. Microsoft has offered to buy Yahoo for $31 a share in cash and stock, a bid which Yahoo's board rejected, saying it undervalued the company.
Microsoft countered by saying that its offer was "full and fair," but did not say what it planned to do next. Analysts expect Microsoft to sweeten its bid, possibly to $35 a share, to clinch a deal.
Yahoo shares surged on news of the bid, but Microsoft shares have fallen. Shares of Microsoft were down 11 cents to $28.39 in Friday afternoon trading on Nasdaq, down 13 percent since the offer went public.
Yahoo's stock was down 40 cents to $29.58, representing about a 2 percent premium to Microsoft's half-cash and half-stock offer, which indicates investors are expecting a higher bid.
A shareholder that owns both the target and an acquirer will be more interested in the net benefit of a deal, RiskMetrics said. Shareholders with more money invested in Microsoft than Yahoo will most likely urge Yahoo not to push its case too hard.
"They may be more concerned with whether Microsoft will get caught up in a 'deal frenzy' and suffer the 'winner's curse' by overpaying for Yahoo," RiskMetrics analysts wrote in an M&A Edge Note.
"We can expect shareholders who own both companies to pressure Yahoo directors to extract a material sweetener from Microsoft (which will help Yahoo directors save face) that isn't seen to destroy the perceived benefits of the merger, prior to ... ultimately succumbing."
Earlier this week, Yahoo's second biggest shareholder, Legg Mason, urged Microsoft to raise its offer. In a letter to investors, Bill Miller, the star stock-picker at the U.S. asset manager, estimated that fair value for Yahoo was around $40 per share.
RiskMetrics said this was not a big surprise since Legg Mason is one of three of Yahoo's top 20 institutional shareholders with significantly more money invested in Yahoo than Microsoft.
"Don't expect to see many of the other top Yahoo shareholders following Bill Miller's lead," the report said.
(Reporting by Daisuke Wakabayashi, editing by Gerald E. McCormick)
Reuters
Financial risk management analysis company RiskMetrics Group found that close to 90 percent of Yahoo's institutional shareholders have a cross-holding in Microsoft, including most of the top 20 -- and generally have significantly more money invested in Microsoft.
The two companies are at a stand-off in Microsoft's $41.7 billion unsolicited bid to acquire Yahoo. Microsoft has offered to buy Yahoo for $31 a share in cash and stock, a bid which Yahoo's board rejected, saying it undervalued the company.
Microsoft countered by saying that its offer was "full and fair," but did not say what it planned to do next. Analysts expect Microsoft to sweeten its bid, possibly to $35 a share, to clinch a deal.
Yahoo shares surged on news of the bid, but Microsoft shares have fallen. Shares of Microsoft were down 11 cents to $28.39 in Friday afternoon trading on Nasdaq, down 13 percent since the offer went public.
Yahoo's stock was down 40 cents to $29.58, representing about a 2 percent premium to Microsoft's half-cash and half-stock offer, which indicates investors are expecting a higher bid.
A shareholder that owns both the target and an acquirer will be more interested in the net benefit of a deal, RiskMetrics said. Shareholders with more money invested in Microsoft than Yahoo will most likely urge Yahoo not to push its case too hard.
"They may be more concerned with whether Microsoft will get caught up in a 'deal frenzy' and suffer the 'winner's curse' by overpaying for Yahoo," RiskMetrics analysts wrote in an M&A Edge Note.
"We can expect shareholders who own both companies to pressure Yahoo directors to extract a material sweetener from Microsoft (which will help Yahoo directors save face) that isn't seen to destroy the perceived benefits of the merger, prior to ... ultimately succumbing."
Earlier this week, Yahoo's second biggest shareholder, Legg Mason, urged Microsoft to raise its offer. In a letter to investors, Bill Miller, the star stock-picker at the U.S. asset manager, estimated that fair value for Yahoo was around $40 per share.
RiskMetrics said this was not a big surprise since Legg Mason is one of three of Yahoo's top 20 institutional shareholders with significantly more money invested in Yahoo than Microsoft.
"Don't expect to see many of the other top Yahoo shareholders following Bill Miller's lead," the report said.
(Reporting by Daisuke Wakabayashi, editing by Gerald E. McCormick)
Reuters
Label:
World News
Bleak Economic Reports Signal Recession
A series of bleak economic reports on Friday showed the mood of American consumers deteriorating in February to a point that has always signaled recession, while factory activity in New York state suffered its biggest drop on record.
Compounding worries about a downturn, data suggested bubbling price pressures, raising the possibility of a troublesome scenario of simultaneously slowing growth and rising inflation -- "stagflation."
"This is just horrible. The sustained volatility in the markets, the rise in energy and food prices and, of course, the catastrophe in the housing market is making consumers extraordinarily miserable," said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York.
The Reuters/University of Michigan Surveys of Consumers index of consumer sentiment dropped to 69.6 -- well below analysts' median forecast for a preliminary reading of 76.3 -- from 78.4 at the end of January. The February reading was the lowest since February 1992.
"The sentiment index has only been this low during the recessions of the mid 1970s, the early 1980s and the early 1990s," survey director Richard Curtin said in a statement.
A separate Federal Reserve survey showed industrial production inched up 0.1 percent in January but factory activity was unchanged.
Financial markets, however, took their cue from a gauge of February factory activity in New York state, which posted its biggest drop on record to nearly a five-year low.
"It's another recession-type reading. New orders came unglued here. There's further downward pressure on production coming," said Keith Hembre, chief economist at FAF Advisors in Minneapolis.
Stocks slid, while the dollar fell and bond prices rose as traders saw the data suggesting the Fed would need to lower interest rates further to try to put a floor under the economy. The Dow Jones industrial average was down more than 60 points, or around a half percent, in late morning trading.
But evidence of rising price pressures may crimp the central bank's rate-cutting options.
The New York factory report from the New York Federal Reserve Bank also showed a gauge of prices paid reached its highest level in two years.
Adding to inflation warning signs, a Labor Department survey showed U.S. import prices rose 1.7 percent in January, powered by higher prices for oil, while export prices increased 1.2 percent, the largest rise since January 1989, a U.S. government report showed on Friday.
"The import price surge is a reminder that as the economy enters recession, inflation is still a concern, coming not just from domestic sources," said Josh Stiles, a bond strategist at IDEAGlobal in New York.
"The underlying risk is that this downturn is not going to make inflation risk completely go away," he said.
(With additional reporting by Lucia Mutikani and Richard Leong in New York and Doug Palmer in Washington)
(Reporting by Mark Felsenthal; Editing by Andrea Ricci)
Reuters
Compounding worries about a downturn, data suggested bubbling price pressures, raising the possibility of a troublesome scenario of simultaneously slowing growth and rising inflation -- "stagflation."
"This is just horrible. The sustained volatility in the markets, the rise in energy and food prices and, of course, the catastrophe in the housing market is making consumers extraordinarily miserable," said Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York.
The Reuters/University of Michigan Surveys of Consumers index of consumer sentiment dropped to 69.6 -- well below analysts' median forecast for a preliminary reading of 76.3 -- from 78.4 at the end of January. The February reading was the lowest since February 1992.
"The sentiment index has only been this low during the recessions of the mid 1970s, the early 1980s and the early 1990s," survey director Richard Curtin said in a statement.
A separate Federal Reserve survey showed industrial production inched up 0.1 percent in January but factory activity was unchanged.
Financial markets, however, took their cue from a gauge of February factory activity in New York state, which posted its biggest drop on record to nearly a five-year low.
"It's another recession-type reading. New orders came unglued here. There's further downward pressure on production coming," said Keith Hembre, chief economist at FAF Advisors in Minneapolis.
Stocks slid, while the dollar fell and bond prices rose as traders saw the data suggesting the Fed would need to lower interest rates further to try to put a floor under the economy. The Dow Jones industrial average was down more than 60 points, or around a half percent, in late morning trading.
But evidence of rising price pressures may crimp the central bank's rate-cutting options.
The New York factory report from the New York Federal Reserve Bank also showed a gauge of prices paid reached its highest level in two years.
Adding to inflation warning signs, a Labor Department survey showed U.S. import prices rose 1.7 percent in January, powered by higher prices for oil, while export prices increased 1.2 percent, the largest rise since January 1989, a U.S. government report showed on Friday.
"The import price surge is a reminder that as the economy enters recession, inflation is still a concern, coming not just from domestic sources," said Josh Stiles, a bond strategist at IDEAGlobal in New York.
"The underlying risk is that this downturn is not going to make inflation risk completely go away," he said.
(With additional reporting by Lucia Mutikani and Richard Leong in New York and Doug Palmer in Washington)
(Reporting by Mark Felsenthal; Editing by Andrea Ricci)
Reuters
Label:
World News
Friday, February 15, 2008
McCain Scolds Obama On Campaign Funds
Republican Sen. John McCain admonished Democratic Sen. Barack Obama for hedging on his promise to accept public funding if he wins his party's nomination or use his prolific fundraising operation.
Obama spokesman Bill Burton on Thursday called public financing "an option that we wanted on the table," but said "there is no pledge" to take the money and the spending limitations that come with it.
Obama told reporters on Friday that it would be "presumptuous of me to say now that I'm locking myself into something when I don't even know if the other side is going to agree to it."
McCain said that if Obama becomes the nominee and decides against taking public money, he might do the same.
Early in the race, Obama asked the Federal Election Commission whether he could raise general election money during 2007 but return it if he chose to accept the public funds.
Also, in response to a questionnaire in November from the Midwest Democracy Network, a group of nonpartisan government oversight groups, Obama said: "Senator John McCain has already pledged to accept this fundraising pledge. If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election."
McCain earlier this week turned down government matching funds for the primary to free him to spend more money as he prepares for a general election contest.
Last summer, McCain had asked to participate in the public system when his campaign, his fundraising and his poll numbers hit a low point that threatened to unravel his candidacy.
Though the FEC declared him eligible to receive $5.8 million in December, the money would not have become available until next month. By accepting the money, moreover, McCain would have been required to limit his spending for the primary to about $54 million — an amount the campaign was close to reaching now.
By not taking the money, McCain is free to raise more and to promote his presidential candidacy until the Republican nominating convention in September.
McCain would be the obvious beneficiary if he and Obama take the federal money for the general election because they would have to return money already collected. Obama has raised $6.1 million for the general, nearly three times as much as McCain's $2.2 million.
If the candidates reject public funds it would be historic rejection of the public financing system. No major party candidate rejected public funds for the general election since the system was put in place in the 1970s after the Watergate scandal.
Candidates who accept public funding are eligible for about $85 million, which is paid for by a $3 checkoff on IRS tax return forms.
McCain, who has all but sealed the GOP nomination, has focused much of his criticism on his Democratic rivals — Obama and Sen. Hillary Rodham Clinton. As Obama has gained the momentum, he has drawn a greater proportion of McCain's wrath.
Earlier this week, McCain suggested Obama has been lacking in providing policy details. "I've not observed every speech he's given, obviously, but they are singularly lacking in specifics," McCain said.
Campaigning in LaCrosse, Wis., McCain said he would propose a balanced budget in his first term if he is elected president — but not necessarily in his first year.
McCain said he would propose a balanced budget by the end of his first term if elected.
SFGate
Obama spokesman Bill Burton on Thursday called public financing "an option that we wanted on the table," but said "there is no pledge" to take the money and the spending limitations that come with it.
Obama told reporters on Friday that it would be "presumptuous of me to say now that I'm locking myself into something when I don't even know if the other side is going to agree to it."
McCain said that if Obama becomes the nominee and decides against taking public money, he might do the same.
Early in the race, Obama asked the Federal Election Commission whether he could raise general election money during 2007 but return it if he chose to accept the public funds.
Also, in response to a questionnaire in November from the Midwest Democracy Network, a group of nonpartisan government oversight groups, Obama said: "Senator John McCain has already pledged to accept this fundraising pledge. If I am the Democratic nominee, I will aggressively pursue an agreement with the Republican nominee to preserve a publicly financed general election."
McCain earlier this week turned down government matching funds for the primary to free him to spend more money as he prepares for a general election contest.
Last summer, McCain had asked to participate in the public system when his campaign, his fundraising and his poll numbers hit a low point that threatened to unravel his candidacy.
Though the FEC declared him eligible to receive $5.8 million in December, the money would not have become available until next month. By accepting the money, moreover, McCain would have been required to limit his spending for the primary to about $54 million — an amount the campaign was close to reaching now.
By not taking the money, McCain is free to raise more and to promote his presidential candidacy until the Republican nominating convention in September.
McCain would be the obvious beneficiary if he and Obama take the federal money for the general election because they would have to return money already collected. Obama has raised $6.1 million for the general, nearly three times as much as McCain's $2.2 million.
If the candidates reject public funds it would be historic rejection of the public financing system. No major party candidate rejected public funds for the general election since the system was put in place in the 1970s after the Watergate scandal.
Candidates who accept public funding are eligible for about $85 million, which is paid for by a $3 checkoff on IRS tax return forms.
McCain, who has all but sealed the GOP nomination, has focused much of his criticism on his Democratic rivals — Obama and Sen. Hillary Rodham Clinton. As Obama has gained the momentum, he has drawn a greater proportion of McCain's wrath.
Earlier this week, McCain suggested Obama has been lacking in providing policy details. "I've not observed every speech he's given, obviously, but they are singularly lacking in specifics," McCain said.
Campaigning in LaCrosse, Wis., McCain said he would propose a balanced budget in his first term if he is elected president — but not necessarily in his first year.
McCain said he would propose a balanced budget by the end of his first term if elected.
SFGate
Label:
World News
US Muslims in their own words
So, is a misplaced deference to multiculturalism encouraging extremism in Britain, as a thinktank tells us? Or is the government guilty of "moral duplicity" as one clergyman alleges, in relation to plans to increase detention without trial for terrorist suspects? Or, again, are extreme interrogation techniques used by the US on terrorist suspects saving lives as George Bush tells us?
Into this debate comes a short film competition from a not-for-profit US TV channel. The One Nation Many Voices contest offers a prize of $20,000 to the best film about Muslims in America. The entrants range from slightly ropey "comedies" to more documentary pieces, and even a cartoon "dispelling some myths about Islam" and answering questions about Muslim women, chiefly: "Aren't you hot under that scarf?"
The flavour is undeniably partisan, but I liked this clip, mainly for the excerpts from mainstream American media. When a trial collapses of five men accused of aiding terrorists through a charity which they say only helped the Palestinian poor, Fox News calls it "a stunning defeat for the government's war on terror".
The Guardian
Into this debate comes a short film competition from a not-for-profit US TV channel. The One Nation Many Voices contest offers a prize of $20,000 to the best film about Muslims in America. The entrants range from slightly ropey "comedies" to more documentary pieces, and even a cartoon "dispelling some myths about Islam" and answering questions about Muslim women, chiefly: "Aren't you hot under that scarf?"
The flavour is undeniably partisan, but I liked this clip, mainly for the excerpts from mainstream American media. When a trial collapses of five men accused of aiding terrorists through a charity which they say only helped the Palestinian poor, Fox News calls it "a stunning defeat for the government's war on terror".
The Guardian
Label:
World News
Thursday, February 14, 2008
Gunman Kills 5 At Illinois University
A former student dressed in black walked onto the stage of a lecture hall at Northern Illinois University and opened fire on a packed science class Thursday, killing five students, wounding 16 and setting off a panicked stampede before committing suicide.
Police say they have no motive for the rapid-fire assault, carried out by the gunman who fired indiscriminately into the crowd with a shotgun and two handguns as students dove to the floor and ran toward the exits. At least two of the wounded were hospitalized in critical condition.
"I kept thinking, 'Oh God, he's going to shoot me. Oh God, I'm dead. I'm dead. I'm dead,'" said Desiree Smith, a senior journalism major who dropped to the floor near the back of the auditorium.
"People were crawling on each other, trampling each other," she said. "As I got near the door, I got up and I started running."
University President John Peters said four people died at the scene, including three students and the gunman, while the other two died at a hospital. The teacher, a graduate student, was wounded but was expected to recover.
Police say they have no motive for the rapid-fire assault, carried out by the gunman who fired indiscriminately into the crowd with a shotgun and two handguns as students dove to the floor and ran toward the exits. At least two of the wounded were hospitalized in critical condition.
"I kept thinking, 'Oh God, he's going to shoot me. Oh God, I'm dead. I'm dead. I'm dead,'" said Desiree Smith, a senior journalism major who dropped to the floor near the back of the auditorium.
"People were crawling on each other, trampling each other," she said. "As I got near the door, I got up and I started running."
University President John Peters said four people died at the scene, including three students and the gunman, while the other two died at a hospital. The teacher, a graduate student, was wounded but was expected to recover.
Peters said the gunman was a former graduate student in sociology at NIU, but was not currently enrolled at the 25,000-student campus about 65 miles west of Chicago.
"It appears he may have been a student somewhere else," University Police Chief Donald Grady said.
Witnesses said the skinny gunman, dressed in black and wearing a stocking cap, emerged from behind a screen on the stage of 200-seat Cole Hall and opened fire just as the class was about to end around 3 p.m.
Officials said 162 students were registered for the class but it was unknown how many were there Thursday.
Santoni dived down, hitting his head the seat in front of him, leaving a knot about half the size of a pingpong ball on his forehead.
Seventeen victims were brought to nearby Kishwaukee Community Hospital, where one died, according to spokeswoman Theresa Komitas. One male was transferred in critical condition and died at OSF St. Anthony Medical Center in Rockford, an official said.
Minutes after the shooting erupted, students phoned each other and sent text messages even before school officials could warn them, many said. The school Web site announced a possible gunman on campus within 20 minutes of the shots and locked down the campus, part of a new security plan created after a student at Virginia Tech killed 32 people last year.
Witnesses said the young man carried a shotgun and a pistol. Student Edward Robinson told WLS that the gunman appeared to target students in one part of the lecture hall.
The federal Bureau of Alcohol, Tobacco and Firearms sent 15 agents to the scene, according to spokesman Thomas Ahern. He said information about the weapons involved would be sent to the ATF's national database in Washington and given urgent priority. The FBI also was assisting.
All classes were canceled Thursday night and the campus was closed on Friday. Students were urged to call their parents "as soon as possible" and were offered counseling at any residence hall, according to the school Web site.
The school was closed for one day during final exam week in December after campus police found threats, including racial slurs and references to shootings earlier in the year at Virginia Tech, scrawled on a bathroom wall in a dormitory. Police determined after an investigation that there was no imminent threat and the campus was reopened. Peters said he knew of no connection between that incident and Thursday's attack. Peters said he knew of no connection between that incident and Thursday's attack.
The shooting was the fourth at a U.S. school within a week.
On Feb. 8, a woman shot two fellow students to death before committing suicide at Louisiana Technical College in Baton Rouge. In Memphis, Tenn., a 17-year-old is accused of shooting and critically wounding a fellow student Monday during a high school gym class, and the 15-year-old victim of a shooting at an Oxnard, Calif., junior high school has been declared brain dead.
International Herald Tribune
Label:
World News
Japan Jumps Back From The Brink
JAPAN'S GDP apparently grew at an annual rate of 3.7 per cent in the December quarter, seemingly in dramatic rebuttal of fears the world's second largest economy was slipping back into recession.
Unfortunately, although the news helped to send the Tokyo share market almost 2.8 per cent higher yesterday, few among the more sober analysts think the numbers paint a faithful picture of the economy's condition.
Japanese output grew a real (deflation-adjusted) 0.9 per cent for the September quarter, the fastest rate of expansion in 12months, spurred on by strong export performance and a 2.9 per cent increase in capital expenditure.
Every sector of the Tokyo Stock Exchange's first board rebounded yesterday to push the benchmark Nikkei 225 index to a close of 13,433 points, a rise of 365 points on the day, or 2.79 per cent.
Some broking strategists, such as Yumi Nishimura at Daiwa Securities, took the preliminary estimate to "verify that even if North America slows down, Japan's growth can be driven by Asia and other regions".
Economists who have to explain the numbers, rather than sell stock on the strength of them, were more circumspect.
Mizuho Securities senior economist Naoki Iizuka even suggested capital expenditure growth of almost 3 per cent, quarter on quarter, could disappear completely upon revision.
"The capex growth is likely to be revised to about 1 per cent but it could even be zero per cent." Mr Iizuka explained that one reason economists took Japan's preliminary GDP figures with a fistful of salt - apart from a track record showing them often wildly at variance with revised estimates - was that the statistical compilation was substantially incomplete and heavily biased to the supply side of the economy.
Once demand was fully factored into the revised numbers, due out on March 12, Mr Iizuka expected them to show the economy in a much less ebullient mood.
Some respected analysts, including Takehiro Sato at Morgan Stanley Japan, have said recently that if, as some official forecasts already predict, Japanese industrial production falls in the current quarter, the country will have returned to recession.
The picture painted by the December estimates released yesterday by the Cabinet Office was at such variance with the general glumness that has settled on the economy in recent months that even ministers appeared to have difficulty believing it.
"The GDP data have confirmed that the Japanese economic recovery is continuing," Economy Minister Hiroko Ota said, carefully talking the Government's official line.
"But I'm aware that downside risks, such as housing investment (which collapsed after July, a malaise now spreading to some areas of commercial property) and the US economy, are increasing."
Finance Minister Fukushiro Nukaga said: "The numbers were good, but there are grounds for concern. We need to very closely watch the situation."
After the September and June quarter preliminary GDP figures were revised heavily downwards, the Government adjusted its growth estimate for the budget year ending March 31, from 2.1 per cent to 1.3 per cent.
The apparent December growth rate puts the economy back on track to meet the original projection.
One thing already clear is that the Bank of Japan will not be influenced by yesterday's figures in its decision on interest rates.
Governor Toshiko Fukui has made it clear the bank does not rely much on GDP estimates.
The bank's policy board is odds-on to leave the official rate at 0.5 per cent today and the bond market is still indicating a rate cut in the second half of this year, in expectation the BoJ will then be struggling with recessionary pressures.
The Autralian
Unfortunately, although the news helped to send the Tokyo share market almost 2.8 per cent higher yesterday, few among the more sober analysts think the numbers paint a faithful picture of the economy's condition.
Japanese output grew a real (deflation-adjusted) 0.9 per cent for the September quarter, the fastest rate of expansion in 12months, spurred on by strong export performance and a 2.9 per cent increase in capital expenditure.
Every sector of the Tokyo Stock Exchange's first board rebounded yesterday to push the benchmark Nikkei 225 index to a close of 13,433 points, a rise of 365 points on the day, or 2.79 per cent.
Some broking strategists, such as Yumi Nishimura at Daiwa Securities, took the preliminary estimate to "verify that even if North America slows down, Japan's growth can be driven by Asia and other regions".
Economists who have to explain the numbers, rather than sell stock on the strength of them, were more circumspect.
Mizuho Securities senior economist Naoki Iizuka even suggested capital expenditure growth of almost 3 per cent, quarter on quarter, could disappear completely upon revision.
"The capex growth is likely to be revised to about 1 per cent but it could even be zero per cent." Mr Iizuka explained that one reason economists took Japan's preliminary GDP figures with a fistful of salt - apart from a track record showing them often wildly at variance with revised estimates - was that the statistical compilation was substantially incomplete and heavily biased to the supply side of the economy.
Once demand was fully factored into the revised numbers, due out on March 12, Mr Iizuka expected them to show the economy in a much less ebullient mood.
Some respected analysts, including Takehiro Sato at Morgan Stanley Japan, have said recently that if, as some official forecasts already predict, Japanese industrial production falls in the current quarter, the country will have returned to recession.
The picture painted by the December estimates released yesterday by the Cabinet Office was at such variance with the general glumness that has settled on the economy in recent months that even ministers appeared to have difficulty believing it.
"The GDP data have confirmed that the Japanese economic recovery is continuing," Economy Minister Hiroko Ota said, carefully talking the Government's official line.
"But I'm aware that downside risks, such as housing investment (which collapsed after July, a malaise now spreading to some areas of commercial property) and the US economy, are increasing."
Finance Minister Fukushiro Nukaga said: "The numbers were good, but there are grounds for concern. We need to very closely watch the situation."
After the September and June quarter preliminary GDP figures were revised heavily downwards, the Government adjusted its growth estimate for the budget year ending March 31, from 2.1 per cent to 1.3 per cent.
The apparent December growth rate puts the economy back on track to meet the original projection.
One thing already clear is that the Bank of Japan will not be influenced by yesterday's figures in its decision on interest rates.
Governor Toshiko Fukui has made it clear the bank does not rely much on GDP estimates.
The bank's policy board is odds-on to leave the official rate at 0.5 per cent today and the bond market is still indicating a rate cut in the second half of this year, in expectation the BoJ will then be struggling with recessionary pressures.
The Autralian
Label:
World News
Putin: Russia Will Target Former Satellites If Necessary
Russian President Vladimir Putin has again warned that Russian missiles will be pointed at Ukraine, the Czech Republic and Poland if those countries allow U.S. missile defense facilities to be deployed within their borders.
Speaking at his last annual news conference before stepping down in May, Mr. Putin also said that Russia did not plan a conflict with the West, and would not point its missiles at any state unless it was forced to do so.
Mr. Putin, who is constitutionally barred from running for president again, said he has no reservations about becoming prime minister under Russia's next president. Mr. Putin's hand picked successor, Dmitry Medvedev, has a wide lead in the polls ahead of the March 2nd election
Mr. Putin has long expressed opposition to U.S. plans to deploy 10 missile interceptors in Poland, and guidance radar in the Czech Republic to protect against missile attacks by rogue states such as Iran.
Some information for this report was provided by AP and Reuters.
Speaking at his last annual news conference before stepping down in May, Mr. Putin also said that Russia did not plan a conflict with the West, and would not point its missiles at any state unless it was forced to do so.
Mr. Putin, who is constitutionally barred from running for president again, said he has no reservations about becoming prime minister under Russia's next president. Mr. Putin's hand picked successor, Dmitry Medvedev, has a wide lead in the polls ahead of the March 2nd election
Mr. Putin has long expressed opposition to U.S. plans to deploy 10 missile interceptors in Poland, and guidance radar in the Czech Republic to protect against missile attacks by rogue states such as Iran.
Some information for this report was provided by AP and Reuters.
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World News
Wednesday, February 13, 2008
Democrats Suffer Defeat in House on US Foreign Intelligence Measure
In a blow to Democrats, the House of Representatives has voted to reject a measure that would have extended existing foreign intelligence surveillance legislation by three weeks. VOA's Dan Robinson reports, the development brings more uncertainty only days before current legislation is due to expire.
The vote was 229 to 191, a surprising blow to House Democratic leaders who pushed hard for another extension of the Protect America Act, itself a revision of a 1978 law called the Foreign Intelligence Surveillance ACT (FISA).
In passing its version of intelligence surveillance legislation on Tuesday the U.S. Senate, voting 68 to 29, included a provision President Bush and Republicans have been seeking. It would provide immunity from prosecution to telecommunications companies that gave the U.S. government information without a court warrant after the September 11, 2001 terrorist attacks.
Congressional Democrats fought against that, citing pending lawsuits against the companies, and asserting that the normal legal process should be allowed to run its course.
After a series of procedural delaying tactics by Republicans, the House finally got down to debating the Democrat's bill to extend the existing law past its February 16 expiration date, which would have been the second extension approved for it.
House Judiciary Committee chairman John Conyers said lawmakers should not be "stampeded" into approving permanent legislation now, saying more time is required to examine documents among other things.
California Democrat Jane Harman responded to Republican assertions that by merely extending the law, Democrats would be placing Americans at risk by depriving the intelligence community of crucial anti-terrorist tools. "This debate is not, as some on the other side want to characterize it, of Democrats wanting to coddle terrorists. We emphatically do not. We want to capture or kill them. It is beyond cynical to suggest otherwise," she said.
Congressman Lamar Smith was among Republicans making the allegation. "Another extensnion represents a failure by the House Democratic majority to protect the American people. The Senate understands this. The intelligence community needs a long-term bill to fix gaps in our intelligence law, not a 21 day extension," he said.
Earlier, President Bush challenged House Democrats to debate and approve the Senate-passed bill, saying the security of Americans is at stake. After a meeting with the president, House and Senate Republican leaders urged House Democrats to bring the Senate legislation to a vote. "The president is fully aware that there is a bipartisan majority in the House to pass the Senate bill.
We know what we need to do and now is the time to step up and do it in order to protect the American people," said Mitch McConnell, the Senate minority leader. House Democratic majority leader Steny Hoyer asserted to reporters that even if the foreign intelligence surveillance law expires, Americans will not be in danger and the intelligence community will be able to continue intercepting communications of suspected terrorists.
Expressing disappointment with the vote, Hoyer does not expect Democrats will attempt another short-term extension, although he wouldn't rule this out, saying Democrats will use coming weeks to work on a bipartisan bill acceptable to President Bush. "In the event that the Protect America Act is not extended, we nevertheless intend to use the next 21 days for the same purposes, that is to try to see if we can reach agreement between the House and the Senate, on a bill that would enjoy broad support in the House and the Senate,” he said.
At the same time, Congressman Hoyer renewed allegations that Senate Republicans "slow walked" progress of the legislation in that chamber, to put the House in the position of having no alternative but to accept the unacceptable provisions.
The vote was 229 to 191, a surprising blow to House Democratic leaders who pushed hard for another extension of the Protect America Act, itself a revision of a 1978 law called the Foreign Intelligence Surveillance ACT (FISA).
In passing its version of intelligence surveillance legislation on Tuesday the U.S. Senate, voting 68 to 29, included a provision President Bush and Republicans have been seeking. It would provide immunity from prosecution to telecommunications companies that gave the U.S. government information without a court warrant after the September 11, 2001 terrorist attacks.
Congressional Democrats fought against that, citing pending lawsuits against the companies, and asserting that the normal legal process should be allowed to run its course.
After a series of procedural delaying tactics by Republicans, the House finally got down to debating the Democrat's bill to extend the existing law past its February 16 expiration date, which would have been the second extension approved for it.
House Judiciary Committee chairman John Conyers said lawmakers should not be "stampeded" into approving permanent legislation now, saying more time is required to examine documents among other things.
California Democrat Jane Harman responded to Republican assertions that by merely extending the law, Democrats would be placing Americans at risk by depriving the intelligence community of crucial anti-terrorist tools. "This debate is not, as some on the other side want to characterize it, of Democrats wanting to coddle terrorists. We emphatically do not. We want to capture or kill them. It is beyond cynical to suggest otherwise," she said.
Congressman Lamar Smith was among Republicans making the allegation. "Another extensnion represents a failure by the House Democratic majority to protect the American people. The Senate understands this. The intelligence community needs a long-term bill to fix gaps in our intelligence law, not a 21 day extension," he said.
Earlier, President Bush challenged House Democrats to debate and approve the Senate-passed bill, saying the security of Americans is at stake. After a meeting with the president, House and Senate Republican leaders urged House Democrats to bring the Senate legislation to a vote. "The president is fully aware that there is a bipartisan majority in the House to pass the Senate bill.
We know what we need to do and now is the time to step up and do it in order to protect the American people," said Mitch McConnell, the Senate minority leader. House Democratic majority leader Steny Hoyer asserted to reporters that even if the foreign intelligence surveillance law expires, Americans will not be in danger and the intelligence community will be able to continue intercepting communications of suspected terrorists.
Expressing disappointment with the vote, Hoyer does not expect Democrats will attempt another short-term extension, although he wouldn't rule this out, saying Democrats will use coming weeks to work on a bipartisan bill acceptable to President Bush. "In the event that the Protect America Act is not extended, we nevertheless intend to use the next 21 days for the same purposes, that is to try to see if we can reach agreement between the House and the Senate, on a bill that would enjoy broad support in the House and the Senate,” he said.
At the same time, Congressman Hoyer renewed allegations that Senate Republicans "slow walked" progress of the legislation in that chamber, to put the House in the position of having no alternative but to accept the unacceptable provisions.
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World News
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