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Japon offers an $80 billion stimulus package

   

Japan's governing coalition presented a stimulus package of 7.2 trillion yen (81 billion) on Tuesday in a bid to buttress the country's fragile economic recovery, which could underpin Prime Minister Yukio Hatoyama's popularity ahead of elections next year. A recent surge in the yen to a 14-year high against the dollar, together with persistent deflation, has wreaked havoc on the Japanese economy, leading Mr Hatoyama to warn that the country could fall back into recession without bold measures.

Mr. Hatoyama, who took office in September after a landmark win for his Democratic Party, is struggling to balance those economic concerns with a campaign promise to rein in government spending. "We've reached the utmost limit in terms of financing," Mr. Hatoyama said Tuesday. The $81 billion package - which is equivalent to about 1.5% of Japan's gross domestic product - includes $39 billion to prop up regional economies and pay for public works project. In announcing the stimulus plan Tuesday, the cabinet said Japan faced risks of a deterioration in employment conditions, sluggish demand, a sharp slide in prices, a damaging rise in long-term interest rates and wild swings in currency exchange rates.

The International Monetary Fund predicts that Japan's economy - the largest in the world behind that of the United States - will shrink 5.4% this year, more than the 2.7% decline forecast for the United States and the 4.5% decline seen for euro zone.

(Source: nytimes.com)

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November Retail Sales May Have Risen on Black Friday

    Despite reports of weaker spending on the Friday after Thanksgiving, the nation's stores appear to have much better this November than last year - when consumers were so spooked by the deteriorating economy that they essentially went into hiding. Data to be published on Wednesday showed sales in November rose in some major retailing categories and fell in others. The top-performing sectors last month were retail e-commerce (up 12.3%, compared with November 2008), electronics (up 6.6 percent), jewelry (up 4.6 percent) and appliances (up 3.5 percent), according to Spending Pulse, an information service of MasterCard Advisors. Sales of luxury good tumbled 7.3 %, clothing declined 5.7% and footwear dipped 2%.

Last year on the day after Thanksgiving, known as Black Friday, sales were surprisingly strong in some big retailing categories, like clothing, footwear and jewelry. Sales in those sectors were about the same as this past Friday, said Michael Mc Namara, vice president for research and analysis at Spending Pulse.

Sales this holiday season, typically defined as the combined months of November and December, are expected to be about the same as last Christmas, when retailers posted their worst sales figures in decades. The National Retail Federation estimates holiday sales will decline 1%, while the International Council of Shopping Center estimates sales will increase 1 to 2 %. 


Pierre-Alexandre Tonin

(Source: www.nytimes.com)

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New York's debt level of $64.8 billion is higher than ever

New-York's debt is higher than ever, totaling $64.8 billion, with every city resident on the hook for $7,760 in borrowing - up 8.5% from last year according to a new report from controller William Thomspon's office. The heavy borrowing pays for new roads, bridges, buildings and other construction projects that have flourished under Mayor Bloomberg's administration. Almost 30% of the city's borrowed money is spent on school construction with Bloomerb spending an average of $5.8 a year in his first term, and $7.6 billion in his second term.

According to the report : "Total debt outstanding as a percent of personal income stood at its highest level since 1980, and the highest debt among the largest cities in the nation."
Bloomberg has said he is proud to have increased spending on vital but long-neglected water and sewer projects like a third water tunnel under Manhattan. 

Pierre-Alexandre Tonin

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PPR wants to focuse on Fashion

François-Henri Pinault, chief executive of PPR SA, is embarking upon a new plan to sell the company's European retail divisions, including the popular electronics retailer Fnac and the Conforama discount furniture stores. In an interview with The Wall Street Journal at PPR's headquarters near the Arc de Triomphe, Mr. Pinault detailed, for the first time, his plans to remake his family's company.

"The sooner, the better," said the lanky, sandy-haired 47-year-old, although he said he hadn't given himself a deadline for the planned divestment. "We have a major weakness -- retail. It is a business that cannot develop quickly abroad," because it takes consumers a long time to warm up to an unfamiliar name, Mr. Pinault said. PPR could reap estimated €4 billion (about $6 billion) from the sale of its retail businesses, analysts say. Mr. Pinault wants to use that cash to shop for other apparel and accessories brands to create a new mass-market division mirroring PPR's luxury-goods unit. The company is already expected to take in some €1 billion from a partial stock-market listing of its African consumer-goods division, which begins trading on Dec. 3.

Pierre-Alexandre Tonin

(Source: wsj.com)

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New-York City Against Hunger

According to a report released Monday by the New-York City Coalition Against Hunger, the number of people seeking emergency food assistance in NYC is up to 20.9 percent over the last year. Agencies were better able to meet that demand despite the shaky economy with a boost from federal stimulus money.

The study found that 51 percent of the agencies responding to the survey reported an increase in federal U.S Department of Agriculture food assistance funding. Money for shelter and food in NYC from a Federal Emergency Management Agency program rose from $4.5 million last year to $7.4 this year, with $2.3 from the recovery bill.

About 55% of agencies surveyed weren't able to distribute enough food to meet their current demand, down from nearly 69% last year. 

Pierre-Alexandre Tonin

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No surprises from the Federal Reserve

As expected, the Federal Reserve made only small changes in its policy statement, holding policy steady and repeating that it expects to hold interest rates low for an extended period

The Fed repeated that it "continues to anticipate that economic conditions are likely to warrant  exceptionally low levels of the feral funds rate for an extended period."

The central bank added that "low rates of resource utilization, subdued inflation trends, and stable inflation expectations" are behind the need for super-low rates.
The Fed said it would purchase less debt from federal housing agencies. The Fed said it would buy $175 billions of agencies debt, down from prior plans to purchase $200 billion. The vote by the committee was unanimous. Economists expect the Fed to hold interest rates close to zero into sometime in 2010. Some see no action at all until 2011.

(Source: Marketwatch.com)

MLB sees decline in attendance

    Major League Baseball's average attendance dropped by 6,7% this year with the  year with the United States in the still struggling with a global recession.

    The 30 MLB teams combined to average 30,350 attendees per game, according to the commissioner's office said Wednesday, down from 32,528 last year and a record 32,785 in 2007. Part of the drop was structural due to smaller capacities at two new ballparks in New-York. Total attendance of 73.4 million was baseball's fifth-highest.
    In response, commissioner Bud Selig said: "Given these challenging economic times, I am exceedingly proud of the manner in which our clubs have responded". He went on the add: "The 2009 attendance being among the five highest figures of all times reflects the vibrancy and resiliency of our game".

    Both Phidadelphia's Phillies franchise (3,6 million) and Boston's Red Sox franchise (3.06 million) set annual attendance records. The Phillies sold out 73 home games, including their final 42, after winning last year's World Series. The Red Sox have sold out 550 consecutive home games since May 2003.

Pierre-Alexandre Tonin

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Boeing Sets $1 Billion Charge for New 747

     In another blow to its slate of new commercial airplanes, Boeing Co. said it would record a $1 billion third-quarter charge on its 747-8 airplane and again delayed the jumbo plane's first flight, until early next year.

Tuesday's move comes as the company tries to get both the revamped 747 and its state-of-the-art 787 Dreamliner programs on track after lengthy delays that have damaged Boeing's credibility.

Scott Carson, chief executive of the commercial-airplanes unit since 2006, abruptly stepped down Sept. 1 and was succeeded by Jim Albaugh, who had run the company's defense business.

No one wants Boeing to launch unsafe aircraft; design delays can be forgiven. But it's hard to understand how Boeing can, at least publicly, repeatedly miss launch and production targets by such wide margins and then rack up in quick succession $3.5 billion in special charges to cover the mess.

Apparently investors are getting used to it. Boeing shares, after slumping 2% at the open, were trimming their loss as the session wore on.

(Source: wsj.com ;  marketwatch.com)

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Saturn: End of the story

After two frenzied months during the government’s cash-for-clunkers program, new-vehicle sales in the United States retreated in September to levels seen earlier this year, automakers said Thursday.

On Wednesday, G.M.’s deal to sell Saturn to Penske Automotive fell apart when the company from which Penske planned to buy future Saturn models rejected the plan. G.M. said it planned to stop building Saturn vehicles and to wind down the brand and its 350 dealerships.

G.M. said Saturn stores had about 12,000 vehicles in inventory, roughly enough to last four more months.
The company stop making Saturns as soon as possible, but no immediate layoffs are expected. Saturns are made at plants in Kansas, Michigan and Mexico. Saturn owners can still go to their dealers for service. They will also be able to go to a certified GM dealer once Saturn dealerships close, GM said.

Pierre-Alexandre Tonin

(Source: nytimes.com)

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Economy dips at 0.7% pace in 2Q

The economy shrank less than expected in the second quarter as businesses and consumers trimmed their spending at a slower pace, buttressing beliefs that the economy is now growing.
The 0.7 percent dip in gross domestic product for the April-June quarter follows the 6.4 percent annualized drop in the first three months of this year, the worst slide in nearly three decades. In the final quarter of last year, the economy sank at a rate of 5.4 percent

The new reading on second-quarter GDP, reported by the Commerce Department on Wednesday, shows the economy shrinking less than the 1 percent pace previously estimated. It also was better than the annualized 1.1 percent drop that economists were predicting.

The final revision of second-quarter GDP comes on the last day of the third quarter, in which many analysts predict the economy started growing again at a pace of about 3 percent.

(Source: latimes.com)

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