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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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Arsenal's Net Rises 37%

    English soccer club Arsenal announced on Monday record net profit of $56.1 million for the past season, for the past season, following a big increase in revenue and helped by manager Arsene Wenger's refusal to pay huge transfer fees.
    Releasing figures for the year that ended May 31, Arsenal said its revenue jumped 41%. Also, its turnover increased to $498 million thanks largely to television revenue and growing tickets sales when the team reached the semifinals of both the Champions league and the FA Cup. At the same time, the overall debt caused by the building of the 60,000 capacity Emirates Stadium has reduced to $473 million from $505.6 million in the previous year. "The group's profits have now risen in each of the three years in which Emirates Stadium has been our home," said Arsenal Chairman Peter Hill-Wood. "This is excellent news, although I should perhaps stress that making and reporting profits is not in itself the primary objective for the directors."

    But recent high name acquisitions and rising profits have lifted optimism that a win financially will turn into a win on the pitch.

Pierre-Alexandre Tonin

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President Obama is warming Wall Street

President Barack Obama warned Wall Street that it wouldn't be wise to ignore lessons from last year's economic turmoil, pressing the financial sector to join his effort to remake financial regulation by the end of the year.
In a major address in New York, Mr. Obama said the storms of the financial crisis "are beginning to break" with less need for the government to get involved in the financial system. But he pressed Wall Street not to grow complacent as the economy returns to normal, saying banks shouldn't expect taxpayers to come to the rescue again.
For President Obama, "there are some in the financial industry who are misreading this moment.  Instead of learning the lessons of Lehman and the crisis from which we are still recovering, they are choosing to ignore them." He sees the occasion to make "strong rules" against the systemic risks. It is also time to " protect consumers and a new Consumer Financial Protection Agency to enforce those rules"

Republicans reacted to Mr. Obama's speech with criticism of his broad economic agenda, which they say has wasted money without creating jobs.

"Every time he has wanted to expand the government's influence over the economy and our daily lives, from his takeover of GM and banks to his proposed government-run takeover of our health care, it has meant spending more money we don't have and digging America deeper into debt," Republican National Committee Chairman Michael Steele said in a statement. "Those are the real results of the president's experiments on our economy, and no amount of speeches will convince the American people otherwise."

Pierre-Alexandre Tonin

(Source: MarketWatch)

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Consumer confidence rises

“We can be encouraged that consumer sentiment is healing,” said Jonathan Basile, an economist at Credit Suisse Holdings USA Inc. in New York

Actually, confidence among U.S. consumers rose more than forecast in September as the pace of job losses slowed and the economy showed signs of pulling out of the recession.

The index is broken down into two parts: consumers' current financial situation and their expectations for the next six months. Current situation sentiment rose from 66.6 in August to 71.8 in early September and the expectations index rose from 65 in August to 69.2 in early September.

Investors need to pay attention to consumer sentiment because it usually precedes consumer decisions to buy or hold off purchases. However there is still a considerable wariness, which means that consumers probably aren’t going to boost spending soon.

Thus, the signs of recovery are not as strong, and U.S. retail sector and exports remain the wild cards, with the possibility of rising oil prices further hurting both U.S. disposable income and international commerce.

“Confidence remains well below both its peak and the long-term average of 86.7,” writes Paul Dales, an economist with Capital Economics.

Anne Alexandre.

The impact of the health-care reform on the market

With health care a hotly debated topic on Capitol Hill and Wall Street for the foreseeable future, stock market observers on Thursday weighed the impact of possible reform on the bottom lines of U.S. households and public companies.

With the costs of employer-sponsored health soaring more than 100% in the past decade, experts in the aerospace and manufacturing sectors say the skyrocketing costs are hobbling growth and shareholder value.Health-care companies have witnessed their share of upheaval this year in terms of changes at the top, with the sector leading the rest, according to outplacement firm Challenger & Christmas Inc. The firm on Thursday reported 13 chief executive departures in health care in August, bringing to 134 the count of CEO exits in the sector so far this year. The credit markets have healed enough to allow specialty drugmaker Warner Chilcott Ltd to raise about $4 billion to refinance debt and purchase Procter & Gamble Co.'s

Pierre-Alexandre Tonin

(Source: marketwatch.com)

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End of the american supremacy?

                                                           

"The United States' high budget deficit, a very low savings rate and a public debt that has been rising over the past years have weakened macroeconomic stability", said Margareta Drzeniek Hanouz, a senior economist who worked on the survey.

Actually, the United States has lost its place as the world's most competitive economy, a survey showed, falling behind Switzerland mainly because of the U.S. financial crisis and accumulated fiscal deficits.

In other economic news, a government report said Tuesday that U.S. consumer borrowing slid by $21.6 billion in July - the sixth month in a row that borrowing declined. That contributes to less spending in the consumer-driven U.S. economy.

Switzerland has overtaken the U.S. because its economic performance has been "relatively stable," the survey said.

"We have been expecting for some time that it may lose its top-position. There are a number of imbalances that have been building up," said Jennifer Blanke, Head of the WEF's Global Competitiveness Network.

Anne Alexandre.

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