Monday Business Edition

Brilliant original economic insight (not that I ever have any) is in short supply this morning, but perhaps there will be some later if I collect my thoughts.  In the mean time here are the Business News headlines and TheMomCat has a very good interview with Roubini which will follow soon.

From Yahoo News Business

1 Chinese web users sceptical on inflation-busting moves

by Susan Stumme, AFP

Mon Dec 27, 2:34 am ET

BEIJING (AFP) – Chinese web users on Monday expressed their anxiety about soaring consumer prices, despite a weekend interest rate hike and reassurances on live radio from the premier that inflation can be curbed.

On Saturday, the central bank raised interest rates for the second time in less than three months as authorities ramp up efforts to curb rampant bank lending, rein in property prices and tame soaring inflation.

In a sign of Beijing’s awareness of mounting public concerns, Premier Wen Jiabao addressed the nation via live radio broadcast on Sunday, acknowledging the hardships for everyday citizens but insisting prices could be contained.

2 Spanish auto sector wraps up bleak year

by Katell Abiven, AFP

Sun Dec 26, 4:35 pm ET

MADRID (AFP) – Spain’s auto sector, a key source of jobs, is wrapping up a disastrous year due to a slump in demand from the rest of Europe and the end of a government trade-in bonus scheme at home.

Sales of new cars in the country plunged 25.5 percent in November over the same period last year to 64,515 units, the fifth monthly decline in a row, according to figures from manufacturers’ association Anfac.

While total sales in the first 11 months of the year are up 5.9 percent to 913,073 units, this is due to strong sales during the beginning of the year before the government pulled the plug on the subsidies programme in June.

3 Sales stall for world’s cheapest car

by Penny MacRae, AFP

2 hrs 11 mins ago

NEW DELHI (AFP) – India’s launch of the world’s cheapest car, the Nano, was expected to create a vast new market segment in the nation of 1.2 billion people, but reality has fallen short of expectations.

“We are at the gates — offering a new form of transportation to the people of India,” said a proud Tata chairman Ratan Tata at the unveiling three years ago of the globally-hyped vehicle.

Tata, who spearheaded the Nano’s development as a way to get India’s masses off two wheels and onto four, was likened by some to Henry Ford, who revolutionised the US car market with the Model T.

4 Breakdown in defenses caused BP spill: NY Times probe


Sun Dec 26, 3:28 pm ET

WASHINGTON (AFP) – The April 20 explosion on an oil rig in the Gulf of Mexico that caused the largest environmental disaster in US history occurred because every defense on the BP-leased platform failed, The New York Times reported Sunday.

The newspaper, which undertook its own investigation of the blast that killed 11 workers and injured dozens of others, said some of the defenses on the Deepwater Horizon rig were deployed but did not work, some were activated too late, and some were never deployed at all.

Communications fell apart, warning signs were missed and crew members in critical areas failed to coordinate a response, the report concluded.

5 Britain mulls new airports law after Heathrow chaos

by Alice Ritchie, AFP

Sun Dec 26, 10:12 am ET

LONDON (AFP) – British ministers said on Sunday they want to introduce new laws to allow regulators to fine airports for travel disruption, after a pre-Christmas cold snap all but shut down Heathrow Airport last week.

Philip Hammond, the transport minister, told the Sunday Times that regulators should have tougher powers to punish airports who fail passengers, after thousands were forced to sleep at Heathrow when heavy snow grounded flights.

“There should be an economic penalty for service failure,” he said. “Greater weight needs to be given to performance and passenger satisfaction.”

6 Apple, Steve Jobs hit new heights in 2010

by Veronique Dupont, AFP

Sun Dec 26, 7:43 am ET

NEW YORK (AFP) – Apple dethroned Microsoft as the world’s most valuable technology company in 2010 as its co-founder Steve Jobs soared to new heights with the touchscreen iPad tablet computer and the latest iPhone.

Britain’s Financial Times last week named Jobs its “Person of the Year” and even US President Barack Obama joined in the plaudits to the 55-year-old chief executive of the Cupertino, California-based gadget-maker.

Jobs’ appearance on a San Francisco stage in January to unveil the iPad capped what the FT called “the most remarkable comeback in modern business history.”

7 Strong franc tests Swiss nerves

by Peter Capella, AFP

Sat Dec 25, 10:36 pm ET

GENEVA (AFP) – Switzerland’s strong currency is a boon for travelling Swiss bargain hunters or those surfing online shops abroad while its healthy economic indicators would be the envy of debt-plagued major economies.

Yet although the local business community is well worn to the refuge currency’s lure in times of crisis, its nerve was being tested as the franc rose to new highs against the euro, pound and dollar at the end of 2010.

“It’s not a nightmare but it’s a risk factor for the dynamics of the Swiss economy,” the head of economic policy at the Economy Ministry, Aymo Brunetti, told AFP.

8 Eurozone reform moves: deep revamp or just tinkering?


Sat Dec 25, 11:04 pm ET

PARIS (AFP) – The eurozone debt crisis has shaken the foundations of the single currency alliance. Its leaders are now weighing measures that could either herald a far-reaching operational re-vamp or simply a modest tinkering.

Emergency or temporary bailouts for euro states struggling with huge debts and gaping public deficits have given way to a permanent rescue mechanism.

At the same time, eurozone leaders have begun to talk about giving the bloc greater cohesion with the creation of an “economic government,” perhaps through a federal arrangement similar to that of the United States.

9 French smartphone users get holiday gift — their phones

by Alix Rijckaert, AFP

Sat Dec 25, 10:41 pm ET

PARIS (AFP) – Some French smartphone users are getting an unexpected holiday gift this year — their handsets — as a tax hike allows them to get out of their service contracts and keep their subsidised phone.

Analysts say the development is a disaster for France’s main mobile operators and could lead to a major shake-up in the market if users move to lower-priced virtual operators.

French telecommunications companies have been pushed by the EU and French government to end lower value added tax (VAT) charges for Internet services, which some mobile operators have applied to some smartphone contracts.

10 S.Africa formally invited to join BRIC: minister

by Jean-Jacques Cornish, AFP

Fri Dec 24, 11:27 am ET

PRETORIA (AFP) – South Africa announced on Friday it has been formally invited to join the Brazil, Russia, India and China (BRIC) group of key emerging nations, bolstering its image as the economic gateway to Africa.

Foreign Minister Maite Nkoana-Mashabane said China, which currently chairs BRIC, invited South Africa to join the group, whose current members will account for 61 percent of global growth in 2014, according to the International Monetary Fund.

“China, in its capacity as rotating chairperson of the BRIC formation, based on agreement reached by the BRIC member states, invites South Africa as a full member into what will in future be called BRICS,” she told journalists in Pretoria.

11 Vietnam shipbuilder Vinashin defaults on loan: report

by Ian Timberlake, AFP

Fri Dec 24, 3:58 am ET

HANOI (AFP) – Nearly-bankrupt Vietnamese shipbuilder Vinashin has defaulted on a loan to international lenders, a report said Friday, in a move that could further damage the country’s economic stability.

Investors and analysts fear the scandal at Vinashin, whose debts exceed four billion dollars, is symptomatic of wider problems at state-owned firms, and ratings agencies have cited its troubles in downgrading Vietnam’s sovereign ratings.

The Wall Street Journal, quoting a person familiar with the matter, said Vinashin (Vietnam Shipbuilding Industry Group) did not meet a deadline earlier this week to pay the first 60 million dollar instalment on a 600 million dollar loan arranged by Credit Suisse in 2007.

12 Toyota 10-million-dollar crash deal revealed

by Michael Thurston, AFP

Thu Dec 23, 6:13 pm ET

LOS ANGELES (AFP) – Toyota voiced dismay Thursday as a judge lifted a ban on disclosing that the Japanese carmaker paid 10 million dollars to settle a lawsuit over a fatal crash due to a stuck accelerator pedal.

The automaker reached an out-of-court deal in September with the families of California highway patrol officer Mark Saylor and three family members who died in an August 2009 crash in San Diego.

Details of the deal were kept secret, but on Monday a judge allowed the amount to be disclosed following a request by a local Lexus dealer from whom the car came and a number of media outlets.

13 Frugality and excess to mark 2011

By Emily Kaiser, Reuters

Sun Dec 26, 3:04 pm ET

WASHINGTON (Reuters) – Call it the year of feast and famine.

Many of the world’s big advanced economies have pledged frugality for 2011 while fast-growing emerging markets run the risk of overheating. The global economy must withstand both forces in order to live up to growth expectations.

Dictionary company Merriam-Webster ranked “austerity” as its No. 1 word of the year for 2010 because so many people looked up the definition on the company’s website when Europe’s debt troubles exploded. (This wasn’t the first time the global economy featured so prominently. Two years ago, the top word was “bailout.”)

Many of those austerity promises kick in next year. Portugal has proposed 5 percent pay cuts for civil servants. Spain’s parliament approved a budget that includes a 7.9 percent reduction in public spending. Ireland plans to cut 4 billion euros in spending.

14 New claims may add to Nakheel’s legal woes: sources

By Shaheen Pasha, Reuters

Sun Dec 26, 5:30 am ET

DUBAI (Reuters) – Property developer Nakheel’s (NAKHD.UL) restructuring plan is being complicated by new claims from trade creditors that could lead to more legal headaches, two sources familiar with the matter said.

Unlike parent firm Dubai World (DBWLD.UL), which secured unanimous support from lenders within a year for its $25 billion debt restructuring plan, Nakheel is struggling to negotiate terms with a mass of contractors that hold the keys to its many delayed projects.

“Nakheel is a much more complicated restructuring than even Dubai World,” said one source with direct knowledge of Nakheel’s restructuring plans.

15 China’s Wen confident on inflation after rate rise

By Langi Chiang and Chen Aizhu, Reuters

Sun Dec 26, 6:09 pm ET

BEIJING (Reuters) – China’s government will be able to keep inflation in check, Premier Wen Jiabao said on Sunday, a day after the central bank raised interest rates, and he pledged to speed up efforts to rein in house price surges.

Steps taken in the past month, including administrative controls to curb speculation and monetary tightening, had started to produce results, Wen said.

The People’s Bank of China raised interest rates on Christmas Day for a second time in just over two months as Beijing strengthened its battle against stubbornly high inflation.

16 China fights inflation with Christmas rate rise

By Ben Blanchard and Zhou Xin

Sat Dec 25, 9:18 am ET

BEIJING (Reuters) – China’s central bank raised interest rates on Saturday for the second time in just over two months as it stepped up its battle to rein in stubbornly high inflation.

The People’s Bank of China said it will raise the benchmark lending rate by 25 basis points to 5.81 percent and lift the benchmark deposit rate by 25 basis points to 2.75 percent.

The central bank said in a statement on its website ( that the latest rate rise would take effect on Sunday.

17 Japan government meets budget targets but faces hurdles

By Tetsushi Kajimoto and Rie Ishiguro, Reuters

Fri Dec 24, 6:27 am ET

TOKYO (Reuters) – Japan’s government approved a record 92.4 trillion yen ($1.1 trillion) draft budget on Friday for the year from next April, keeping its self-imposed cap on new debt but it faces a tough road ahead to fix its tattered public finances.

With new debt issuance seen topping tax revenues for the second straight year in the initial budget, Finance Minister Yoshihiko Noda reiterated the need to overhaul the country’s tax systems — code for a sales tax hike — to meet rising welfare costs for the fast-aging population.

“Tax revenues are approaching levels of new bond issuance but this situation is abnormal and it is hard to steer finances, so we must escape from this situation,” Noda told reporters.

18 Toyota settles suit over California crash for $10 million

By Steve Gorman, Reuters

Thu Dec 23, 10:23 pm ET

LOS ANGELES (Reuters) – Toyota has agreed to pay $10 million to settle legal claims from the family of a California state trooper and three relatives whose fatal car wreck helped spark the automaker’s wide-ranging safety recall, lawyers said on Thursday.

The family’s lawsuit, filed in March in San Diego Superior Court, was part of a wave of product-liability and wrongful-death actions brought against Toyota Motor Corp and subsidiaries over complaints of sudden, unintended acceleration in its vehicles.

But the fiery August 28, 2009, crash near San Diego of a Lexus ES 350 sedan driven by off-duty California Highway Patrol Officer Mark Saylor drew intense media attention and renewed government scrutiny of safety problems leading to the recall of over 6.5 million Toyota vehicles in the United States.

19 Russian tycoon Khodorkovsky again found guilty


2 hrs 20 mins ago

MOSCOW – Mikhail Khodorkovsky was convicted of theft and money laundering charges Monday, a verdict that will likely keep the jailed oil tycoon who was once Russia’s richest man behind bars for several more years.

The verdict came less than two weeks after Prime Minister Vladimir Putin said Khodorkovsky was a proven criminal who should sit in prison, a blunt statement reflecting his stance against the man who challenged his power – remarks denounced by critics as interference in the trial.

Putin, who was president during Khodorkovsky’s first trial, has shown no sign of softening his attitude toward the former oligarch. Putin has not ruled out a return to the presidency in 2012 and critics suspect him of wanting to keep Khodorkovsky incarcerated until after that election.

20 For Japan, 2010 was a year to forget

By MALCOLM FOSTER, Associated Press

2 hrs 53 mins ago

TOKYO – Japan has been overtaken by China as the world’s No. 2 economy. Its flagship company, Toyota, recalled more than 10 million vehicles in an embarrassing safety crisis. Its fourth prime minister resigned in three years, and the government remains unable to jolt an economy entering its third decade of stagnation.

For once-confident Japan, 2010 may well mark a symbolic milestone in its slide from economic giant to what experts see as its likely destiny: a second-tier power with some standout companies but limited global influence.

As Japanese drink up at year-end parties known as “bonen-kai,” or “forget-the-year gatherings,” this is one many will be happy to forget.

21 Man quits job, makes living suing e-mail spammers

By PAUL ELIAS, Associated Press

Sun Dec 26, 4:04 pm ET

SAN FRANCISCO – Daniel Balsam hates spam. Most everybody does, of course. But he has acted on his hate as few have, going far beyond simply hitting the delete button. He sues them.

Eight years ago, Balsam was working as a marketer when he received one too many e-mail pitches to enlarge his breasts.

Enraged, he launched a Web site called, quit a career in marketing to go to law school and is making a decent living suing companies who flood his e-mail inboxes with offers of cheap drugs, free sex and unbelievable vacations.

22 Cheap concert seats due after cruel summer of ’10

By RYAN NAKASHIMA, AP Business Writer

Mon Dec 27, 12:06 am ET

LOS ANGELES – Concertgoers sick of ballooning ticket prices should have some extra pocket change to rattle with their rock ‘n’ roll in the new year.

2010 was tough for the concert business as high prices kept many fans at home. Promoters now say they plan to make shows more affordable in 2011. But they’ll also try to sell more T-shirts and other merchandise to make up for lost revenue.

Heading into last summer, usually the busiest time of the year, prices were set too high despite the sluggish economy. Managers and promoters believed fans would keep paying for the one or two concerts they see on average each year.

23 Mubarak’s son promises more Egypt economic reform

By HAMZA HENDAWI, Associated Press

Sun Dec 26, 11:15 am ET

CAIRO – The son of Egypt’s president, Gamal Mubarak, said Sunday he will press ahead with bold new economic reforms that will be “more ambitious and more daring” than those that have come before, while still vowing to protect the nation’s poor from any fallout.

The younger of President Hosni Mubarak’s two sons, Gamal Mubarak is widely expected to succeed his father and is a senior leader in the ruling National Democratic Party, which swept recent parliamentary elections in a vote rights groups say was marred by fraud.

Gamal Mubarak is one of the main architects of a far reaching package of economic reform that helped Egypt post impressive economic growth rates over the past few years.

24 Playboy pins hopes on clubs, license deals in Asia

By KELVIN CHAN, AP Business Writer

Sun Dec 26, 5:17 am ET

MACAU – February marks the start of the year of the rabbit in the Chinese lunar calendar.

It may be an auspicious sign for Playboy Enterprises Inc., which opened a nightclub in Macau last month as it seeks to expand its business by licensing the trademark bunny head logo on lifestyle products in Asia, its fastest growing region.

The company, founded by Hugh Hefner in 1953, also plans to open a Playboy Mansion in 2012 in Macau, a former Portuguese colony on the southern coast of China, and has been busy cutting deals to sell Playboy-branded merchandise across Asia.

25 Ivory Coast strike called to force Gbagbo out

By MARCO CHOWN OVED, Associated Press

Sun Dec 26, 6:10 pm ET

ABIDJAN, Ivory Coast – Allies of the man who the international community says won Ivory Coast’s disputed presidential election called Sunday for a general strike that would last until the incumbent hanging on to power concedes defeat and leaves office.

It was the latest form of pressure to force Laurent Gbagbo from the presidency nearly a month after the United Nations said his political rival, Alassane Ouattara, won the runoff vote. Gbagbo has refused to leave despite international calls for his ouster, and West African leaders say they now will remove him by force if he fails to go.

Djedje Mady, the head of Ouattara’s electoral coalition, said it called on “all Ivorians and those who live in Ivory Coast and believe in peace and justice to cease all their activities on Monday, December 27, 2010, until Laurent Gbagbo leaves power.”

26 Ex: Woman who died at Busch home had heart issue

Associated Press

Sat Dec 25, 6:26 pm ET

HUNTLEIGH, Mo. – An aspiring model who died at the home of former Anheuser-Busch chief executive August Busch IV had a rare heart condition, according to her ex-husband.

Adrienne Martin, 27, was found dead at Busch’s suburban St. Louis home on Dec. 19. The St. Louis Post-Dispatch reported Saturday that Dr. Kevin Martin, a doctor of osteopathy who practices in Cape Girardeau, said he diagnosed his then-wife with a heart rhythm disorder in 2002, just after they married.

Kevin Martin said his wife didn’t tell others about her condition, called Long QT syndrome, and he hadn’t talked to authorities about it.

27 US Muslims: a new consumer niche

By RACHEL ZOLL, AP Religion Writer

Mon Dec 27, 2:02 am ET

NEW BRUNSWICK, N.J. – In the ballroom of an upscale hotel a short train ride from New York, advertisers, food industry executives and market researchers mingled – the men in dark suits, the women in headscarves and Western dress. Chocolates made according to Islamic dietary laws were placed at each table.

The setting was the American Muslim Consumer Conference, which aimed to promote Muslims as a new market segment for U.S. companies. While corporations have long catered to Muslim communities in Europe, businesses have only tentatively started to follow suit in the U.S. – and they are doing so at a time of intensified anti-Muslim feeling that companies worry could hurt them, too. American Muslims seeking more acknowledgment in the marketplace argue that businesses have more to gain than lose by reaching out to the community.

“We are not saying, `Support us,'” said Faisal Masood, a graduate of the University of Illinois, Chicago, and management consultant. “But we want them to understand what our values are.”

28 Fed board: Keep companies from oil spill evidence

By HARRY R. WEBER, Associated Press

Fri Dec 24, 3:16 am ET

NEW ORLEANS – The credibility of the investigation into the Gulf oil spill is being undermined because representatives of companies that made or maintained a key piece of evidence – the blowout preventer – have had too much access to it as it is being analyzed, a federal board says.

The U.S. Chemical Safety Board, which is being allowed to monitor the analysis, demanded in a letter Thursday to the head of the Bureau of Ocean Energy Management, Regulation and Enforcement that testing stop and not resume until Transocean and Cameron officials are removed from any hands-on role in the examination of the 300-ton device.

An employee of Transocean – the owner of the drilling rig that exploded in the Gulf – has been removed as a consultant for the Norwegian firm conducting the testing, but the ocean energy bureau says that otherwise the companies have provided their expertise appropriately. The board claims conflicts still exist.

29 New GOP wave pushes pro-business agenda in states

By DAVID A. LIEB, Associated Press

Thu Dec 23, 9:54 pm ET

JEFFERSON CITY, Mo. – Having won big in the fall elections, Republicans preparing to take over statehouses around the country are proposing to cut corporate taxes, weaken union clout and rewrite laws on discrimination, whistle-blowers and injured workers to the benefit of employers.

In short, they intend to push through a business lobbyist’s wish list. And they plan to press ahead even though some of their ideas could, at least in the short term, cost their states desperately needed tax revenue.

“It’s going to be a good year for businesses,” said Missouri Sen. Brad Lager, the commerce committee chairman in a state where Republicans won historic legislative majorities.

30 Toyota to pay $10 million in runaway Lexus crash

Associated Press

Thu Dec 23, 7:50 pm ET

LOS ANGELES – Toyota Motor Corp. agreed to pay $10 million to the family of four people killed in a runaway Lexus crash that led to recalls of millions of the automaker’s vehicles, attorneys said Thursday.

John Gomez, a lawyer who represents the victims’ family, and Larry N. Willis, who represents the dealership that lent the Lexus to the family, confirmed the settlement amount of $10 million.

Toyota, which did not admit or deny liability in the settlement, fought to keep the settlement amount confidential, but the Los Angeles Times and The Associated Press argued that the public’s interest in the case outweighed confidentiality concerns.


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