Inflation is Good!

Ahead of a Group of 20 summit this week in Seoul, Zoellick said an updated gold standard could help retool the world economy at a time of serious tensions over currencies and US monetary policy.

He said the world needed a new regime to succeed the “Bretton Woods II” system of floating currencies, which has been in place since the fixed-rate currency system linked to gold broke down in 1971.

The deal gives the European firm a foothold in a market where US rival Boeing has long had a near-monopoly and is welcome news as it comes under pressure after Qantas grounded its A380 fleet following an engine blow-out last week.

“Skymark Airlines signed a basic agreement with Airbus on the introduction of Airbus A380,” Skymark Airlines said in a statement, announcing its order for the world’s largest passenger aircraft.

However Singapore Airlines said Monday its inspections of its 11 A380 superjumbos had found no problems with their Rolls-Royce Trent 900 engines, as it continues flying the planes.

In Sydney, Qantas chief executive Alan Joyce said rigorous testing had uncovered the anomalies on the Rolls-Royce engines on three separate aircraft, pushing back the return to action of the long-haul planes by 72 hours.

Hundreds of participants in the two-day Montreal International Game Summit that opens Monday in Quebec’s big city will be looking for ways to better milk the gaming market cow, in the face of Apple’s golden example.

In barely a year and a half, the iPhone has seized 20 percent of the portable gaming market and five percent of the global videogame market, estimated at some 50 billion dollars a year.

Hopes for reform after the market chicanery that brought down a series of ‘too-big-to-fail’ banks and sparked the worst slump since the 1930s have faded with the return of the ‘get rich quick’ mentality, according to analysts.

“The bad old habits have come back much faster than was expected,” said Denis Marcadet of Vendome Associes in Paris.

The sale of a 10 percent stake in Coal India was oversubscribed 15 times and shares soared 40 percent on their opening day of trade last week as foreign and domestic investors scrambled to invest in the world’s biggest coal miner.

It was India’s biggest stock sale ever and “will see a positive rub-off on future disinvestments”, Sanjay Sharma, head of equities with Deutsche Bank, told AFP.

Hu and Portuguese Prime Minister Jose Socrates inked a series of trade deals after holding talks, but there was no announcement that Beijing would buy up Portuguese debt, as it did last month for Greece.

“We are ready to support through concrete measures Portugal’s efforts to reduce the impact of the international crisis,” Hu said during a joint news conference.

“Thus we will be able to consolidate our consultations on global themes and common international interest, such as the resumption of world economic growth, the reform of the United Nations and climate change,” Hu added.

The Chinese leader was speaking at a joint press conference with Portugal’s President Anibal Cavaco Silva, on the first day of a two-day visit to this economically fragile country.

Weaving a fulsome parable of India’s emergence and potential in a speech to US and Indian business executives, Obama also announced a reform of US export regimes and rejected caricatures of India as a nation of “call centers.”

His speech was clearly aimed not only at India, but at voters in the United States who punished Obama’s Democratic Party in mid-term elections on Tuesday, in a cry of anguish over the job-starved recovery.

Hu took off from the southern resort of Nice, bound for Lisbon according to the French presidency, which claimed a diplomatic success in winning China’s backing for when it heads the Group of 20 economic powers from November 13.

Officials gave no details of Hu’s schedule in Lisbon but analysts said that trip was likely part of China’s drive to buy up cheap government debt in countries like Portugal which have been hit hard by the financial crisis.

“Here Lebanese. Americans stay here. Ten Guineas stay in that house. Here Pakistan. Here Nigeria,” Raymond Reba, 24, offers every few metres, with one man raising a hopeful finger to signal he is open for business.

“There is a buyer. Here another buyer. There again, another buyer.”

Finance chiefs from the 21-nation Asia Pacific Economic Cooperation group including the United States, China and Japan, met in Kyoto and adopted wording from an October G20 meeting to steer away from the “competitive devaluation of currencies”.

Fault lines had emerged during the two-day G20 meeting over a US proposal that countries assign a quantifiable limit for their current account surpluses or deficits to help rebalance the global economy and ease trade tensions.

This week’s G20 summit will require every bit of President Barack Obama’s diplomacy skills after the Federal Reserve embarked on a new $600 billion bond-buying spree, sparking criticism from four continents that the U.S. central bank was ignoring the global repercussions.

Officials from Germany, Brazil, China and South Africa were among those expressing concern that the Fed’s money printing could weaken the dollar, drive up commodity prices and send uncontrollable waves of investor cash into emerging markets.

The G20 summit has been pitched as a chance for leaders of the countries that account for 85 percent of world output to prevent “currency wars” from spreading to become a rush to protectionism that could imperil the global recovery.

It has been overshadowed by disagreements over the U.S. Federal Reserve’s quantitative easing (QE) policy under which it will print money to buy $600 billion of government bonds, a move that could depress the dollar and cause a potentially destabilizing flow of money into emerging economies.

The Anglo-Dutch oil major said in a statement on Monday it would retain a 24.27 percent stake in Woodside for at least a year, except in the case of a takeover bid for Woodside, or that Shell decided to sell a large chunk to a strategic buyer.

A source familiar with the matter said the 10 percent stake being sold on Monday was being marketed to institutions in Australia and internationally.

The incident has rattled the global aviation industry, which is recovering from heavy losses during the global economic downturn, and has been damaging for Rolls-Royce, which makes the Trent 900 engine that broke apart on the flight, which made an emergency landing in Singapore.

Rolls shares were down 1.6 percent at 581.5 pence at 1008 GMT in London, extending last week’s 9.7 percent drop, while Qantas shares in Sydney closed 2.1 percent lower at A$2.80.

Writing in the Financial Times, Zoellick called for a “Bretton Woods II” system of floating currencies as a successor to the Bretton Woods fixed-exchange rate regime that broke down in the early 1970s.

The former U.S. trade representative, who served in several Republican administrations, said such a move “is likely to need to involve the dollar, the euro, the yen, the pound and (a yuan) that moves toward internationalization and then an open capital account.

With earnings season winding down and a light economic calendar this week, the market will be left to its own devices to sort out its direction.

A rise of more than 16 percent in the S&P 500 (.SPX) since the start of September had many investors expecting a pullback after the trio of big events. But it appears to have emboldened them instead.

China and the United States turned down the heat in an acrimonious dispute over currencies and trade imbalances at a meeting of finance ministers from the 21-member Asia-Pacific Economic Cooperation (APEC) forum.

Meeting in Japan’s ancient capital of Kyoto on Saturday, the finance chiefs declared members will move toward more market-determined exchange rate systems reflecting underlying economic fundamentals, and refrain from competitive devaluation of currencies.

“We are willing to take concrete measures to help Portugal cope with the global financial crisis,” he said after meeting Prime Minister Jose Socrates, without elaborating.

The meeting was the last stop of Hu’s four-day to France and Portugal before returning to Beijing later on Sunday.

The billionaire investor’s Burlington Northern Santa Fe railroad had heavy demand in the quarter to transport a range of commercial and agricultural products, reflecting the growing strength in the manufacturing sector.

Buffett called his purchase of the railroad “an all-in wager on the economic future of the United States,” and its contribution to results lent credence to his strategy.

He suggested doing so would bolster a dollar whose weakness has sparked cries of foul from Bogota to Beijing.

The Fed’s decision to buy $600 billion of government debt has drawn scathing comments from nations which contend it is generating global instability by strengthen their currencies against the dollar, inflating asset bubbles and fueling inflation in their economies.

At a meeting to discuss the May “flash crash” that sent the Dow Jones industrial average into a brief 700-point freefall, SEC chief Mary Schapiro and other regulators were zeroing in on new rules to prevent another uncontrollable market plunge.

The brief market crash rattled investors already unhinged by the financial crisis.

The results underscore the difficulties American International Group Inc faces as it tries to raise money to repay the $100 billion it still owes the U.S. government. AIG is trying to generate more income from its main insurance businesses but is regularly losing money on asset sales.

“It’s a company that’s made progress but still has more work to do,” said Cathy Seifert, an insurance equity analyst at Standard & Poor’s.

Australia’s national carrier grounded its six double-decker A380s, the world’s newest and largest airliner, after an engine burst minutes into a flight from Singapore to Sydney last week, scattering debris over Indonesia’s Batam island. The plane made a safe emergency landing in Singapore.

Engineers conducted eight hours of extensive checks on each engine over the weekend.

The nuclear reactor was taken out of service at 7 p.m. Sunday. Plant spokesman Larry Smith estimated it would take 13 hours to cool down enough for workers to enter the area and make repairs.

Smith said the leak of about 60 drops a minute was spotted earlier Sunday during routine surveillance. It was coming from a 2-foot-wide pipe that was part of the circulation system involving the reactor, he said. The water was being collected by a sump pump and cycled back through the system, he said.

Supplies ran low after thousands of factories bought diesel generators to cope with power cuts imposed by authorities to meet energy-saving goals. That boosted already strong fuel demand amid rapid economic growth and complaints that major suppliers are withholding diesel to pressure Beijing to raise government-set retail prices.

In the southwestern city of Chongqing, truck driver Peng Yun was just back from what should have been a three-day trip to neighboring Yunnan province. He said it stretched to five days after he had to stop six times for a partial tank of fuel.

Cameron, accompanied by four Cabinet ministers and about 50 business leaders, will arrive Tuesday for two days of talks in Beijing – his second major trip to court an emerging economy following a high-profile visit to India in July.

Britain’s new government has made trade with developing economies its key foreign policy priority, hoping to spur the country’s sluggish growth by boosting exports.

“We know that change is not easy. But it was for this change that the Greek people brought us to power a year ago. And today it again confirmed that it wants this change,” George Papandreou said in a live televised speech late Sunday night.

With nearly all returns counted Monday, Papandreou’s Socialists led a key race for regional governor in greater Athens Sunday but lost significant ground elsewhere to the main opposition conservative party, while turn-out plunged. A runoff vote will be held next Sunday.

The potentially major change for the 21-member APEC, formed in 1989 as non-binding forum to promote regional trade and investment, would open the possibility of a Pacific-wide trade pact encompassing 44 percent of global trade and more than half of the world’s gross domestic product.

The idea faces resistance from some member economies that want to strike free trade deals independently, although overall delegates are demonstrating an openness to it, said the Japanese officials, who requested anonymity because of government rules. Indonesia and the Philippines have said they are cool toward the concept – known as the Free Trade Area of the Asia-Pacific – preferring to think of it as a much longer-term goal.

So far, attorneys in Seattle, Houston, Chicago and Minneapolis have filed at least 10 cases related to recalls by Wright County Egg and Hillandale Farms of Iowa. The companies recalled 550 million eggs in August after a salmonella outbreak was traced to their farms.

The Centers for Disease Control and Prevention linked at least 1,600 illness to the eggs, and CDC spokeswoman Lola Russell said for every case reported there may be up to 30 more.

What’s more, even when controlling for key socio-economic characteristics, the U.S. continues to confront a racial gap in residential broadband use, with non-Hispanic white Americans and Asian-Americans more likely to go online using a high-speed connection than African-Americans and Hispanics.

Those are some of the key conclusions of a new analysis of Census data being released Monday by the Commerce Department. It found that the percentage of households that connect to the Internet using broadband grew to 63.5 percent in 2009 from 9.2 percent in 2001, reflecting increases across nearly all demographics.

During the Great Recession, people made drastic changes in how they spent their money. They stopped treating credit cards as cash. They learned to save and learned to wait.

Now the recession is over, at least technically, and the economy is growing again, at least a little. But many changes in spending habits that most Americans first saw as temporary have taken hold, perhaps for good, some economists say.

The browser, available for the first time Monday, is built on the premise that most online activity today revolves around socializing on Facebook, searching on Google, tweeting on Twitter and monitoring a handful of favorite websites. It tries to minimize the need to roam from one website to the next by corralling all vital information and favorite services in panes and drop-down windows.

“This is a chance for us to build a browser all over again,” Andreessen said. “These are all things we would have done (at Netscape) if we had known how people were going to use the Web.”

No, the financial crisis hasn’t returned. Wall Street doesn’t need another bailout.

But in communities around the country, 143 banks have collapsed so far this year – more than all of last year. This time, the failed banks are smaller, on average, than in 2008 and 2009. The damage to the industry has thus been milder this time. Still, the wave of closings points to the persistent struggles of many communities and states.

The Cascos say they never missed a subsequent payment, so they were horrified when the bank decided the smaller payments weren’t enough and foreclosed on their modest Long Beach home.

Their story is echoed across the country by people who claim – some in lawsuits – that banks didn’t live up to their end of the deal when they agreed to trial mortgage modifications.

Kashin, a 30-year-old reporter for the respected Kommersant newspaper, was hospitalized in a drug-induced coma after the attack early Saturday outside his Moscow apartment.

He is the latest in a line of journalists and activists to be assaulted in Russia. In most cases, the perpetrators are never found, but the Kremlin appeared determined to show that this time things will be different.

Yields aren’t keeping up with a world growing hungrier. Crops are stunted in a world grown warmer. A devastating fungus, a wheat “rust,” is spreading out of Africa, a grave threat to the food plant that covers more of the planet’s surface than any other.

In Chicago, London and other money centers, the wheat market is so roiled by bad news and speculators that rising prices may put bread out of reach for millions more of the world’s poor.

On a day of friendly outreach, Obama also was confronted about his support for Pakistan, New Delhi’s nuclear neighbor and rival. He defended the alliance while acknowledging that Pakistan-based extremists are “a cancer” with the potential to “engulf the country.”

His comments took on added significance because he spoke in Mumbai, where memories are fresh from attacks in 2008 by Pakistani assailants that killed 166 in the city. Obama urged the two nations to talk peace; he didn’t commit the U.S. as middle man.

About half the nation’s major college and university bookstores offered textbook rentals this fall, according to the National Association of College Stores, hoping to cut the $600-$900 students spend buying books each year. That’s roughly a fivefold increase from around 300 stores a year ago.

But schools and publishing experts say the programs are expensive to start up and difficult to operate. In addition, there are complaints that rental prices are still too high, even though they can be as much as half the cost of a new book.

And now it, too, seems a symbol of a bygone era.

Some 40 million people still visit each year. But many are like Michelle Hoppe of New London, Minn. She drove two hours to spend just $100 at three stores – Bath & Body Works, Victoria’s Secret and a toy store.

“When you don’t have it, you don’t miss it. That’s what I say,” says the spunky 70-year-old grandmother, who’s as comfortable telling jokes at the local pub as she is attending Mass each morning.

Technology isn’t really her thing. So, it’s a small miracle when Bass drives, once a month, to her island’s rural health center to sit down in front of a wide-screen television. There, she and a handful of other islanders connect by video conference with a similar group in Charlevoix, Mich., a two-hour ferry ride to the south and east.

The two-day gathering of finance ministers from the 21-member Asia-Pacific Economic Cooperation, or APEC, follows a Group of 20 meeting last month in South Korea, where finance heads and central bankers vowed to avoid using their currencies as trade weapons.

They also promised to establish a way to measure the reduction of destabilizing trade gaps, seen through figures such as surpluses and deficits in the current account – a broad indicator of a country’s trade and investment.

Fannie Mae said Friday it lost $3.46 billion, or 61 cents a share, in the July-September quarter. That takes into account $2.1 billion in dividend payments to the Treasury Department. It compares with a loss of $19.8 billion, or $3.47 a share, in the third quarter of 2009.

The government rescued Washington-based Fannie Mae and sibling company Freddie Mac about two years ago and it estimates that will cost taxpayers up to $259 billion. That’s nearly twice the $133.4 billion Fannie and Freddie are in line to receive from taxpayers so far and would make it the most expensive bailout of the financial crisis.

Burlington Northern Santa Fe railroad added $706 million to Berkshire’s bottom line in its second full quarter under Buffett’s umbrella, as it again saw increases in industrial, agricultural and consumer product shipping. Earnings from Berkshire’s manufacturing, service and retail unit, which includes such companies as Fruit of the Loom clothing and Benjamin Moore paint, nearly doubled to $645 million. Berkshire’s insurance businesses, which include auto insurer Geico and reinsurance giant General Re, reported a decline in both underwriting and investment income, however.

The Omaha, Neb.-based company said it earned nearly $3 billion, or $1,814 per Class A share, during the quarter ending Sept. 30. That’s down from $3.24 billion, or $2,087 per share, last year. Revenue grew 21 percent in the third quarter to $36.3 billion from last year’s $29.9 billion.