My finance view

President-elect Barack Obama said he’ll make the “single largest new investment” in roads, bridges and public buildings since the Eisenhower Administration to lift the sagging economy and create jobs.

Obama, in his weekly radio speech today, said his plan to create or preserve 2.5 million jobs will also include making public buildings more energy efficient, repairing schools and modernizing health care with electronic medical records.

“We won’t just throw money at the problem,” he said. “We’ll measure progress by the reforms we make and the results we achieve — by the jobs we create, by the energy we save, by whether America is more competitive in the world.”

Obama spoke a day after a government report showed employers in the U.S. slashed 533,000 jobs last month, the biggest decline in 34 years. The losses are “another painful reminder of the serious economic challenge our country is facing,” Obama said.

The speech offered the first details of Obama’s job- creation program. He said the investment in infrastructure will be the largest since President Dwight D. Eisenhower created the interstate highway system a half-century ago.

“When Congress reconvenes in January, I look forward to working with them to pass a plan immediately,” he said. Obama takes office as the 44th president on Jan. 20.

Congressional Democrats

With the economy heading toward the longest and deepest recession since World War II, pressure is rising for a spending program that will create new jobs. Congressional Democrats have said they will send Obama an economic stimulus package as soon as he takes office. New York Senator Charles Schumer late last month put the size of such a program at between $500 billion and $700 billion payday loan online.

In addition to investing in infrastructure, requiring energy standards on public buildings and updating health-care practices, Obama said that he will start a “sweeping effort to modernize and upgrade school buildings” and will boost broadband access across America.

To the states that will be the conduits for the funding, he had a simple message: “use it or lose it.”

“If a state doesn’t act quickly to invest in roads and bridges in their communities, they’ll lose the money,” he said.

Obama’s plan to make public buildings more energy efficient should reduce the government’s energy bill, which he called the highest in the world. He plans to replace heating systems and install energy-efficient light bulbs.

Internet Upgrade

Obama also plans to upgrade Internet infrastructure, calling it “unacceptable that the United States ranks 15th in the world in broadband adoption.”

Upgrading health care is the final component of the plan. By introducing new technology and electronic medical records, he said health-care workers could “prevent medical mistakes, and help save billions of dollars each year.”

Obama, in Chicago for the weekend, has no public events scheduled for today. Tomorrow, he will mark the anniversary of the 1941 attack on Pearl Harbor with a news conference in Chicago, according to a statement from his transition team.

Obama will announce his choice to lead the Department of Veterans Affairs at the news conference, according to a Democratic aide who spoke on the condition of anonymity.

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Forced by softening demand from its customers, Belden Inc. announced Wednesday evening that it planned to reduce its worldwide work force by 20 percent, or about 1,800 people, by late next year.

Clayton-based Belden, which makes electronic cables for data networking and other markets, employs about 40 salaried and hourly workers locally at its corporate headquarters. But Dee Johnson, the director of investor relations, could not say how many of those workers would be affected.

Belden’s products are used in a range of markets, including manufacturing and broadcasting. As tough economic conditions have weighed on those industries, demand for products has fallen, Johnson said.

"As we reported in October, we have seen softening of our major markets globally, and we expect that economic conditions will remain challenging for some time," said John Stroup, president and chief executive, in a statement. "We regret the hardship these actions will impose on our (employees)."

The company already has started to streamline manufacturing, sales and administrative functions, eliminating some jobs, and will complete the cuts by late 2009, Johnson said.

The restructuring plan will include some plant closures among Belden’s plants worldwide, which number more than 30, Johnson said cash advance loans. She couldn’t name specific plants but said some U.S. plants probably would be on the shutdown list.

Workers will get severance and benefits, depending on the country where they work.

Altogether the job cuts will save Belden about $50 million annually, with 2011 as the first year of full impact, the company said. Belden said it would save $30 million next year from these actions.

Belden expects to report one-time charges — stemming from severance packages, asset impairment and other costs — of between $55 million and $65 million pre-tax, or $0.85 to $1 a share. The company said it would incur about $35 million to $40 million of that amount this quarter.

The restructuring follows job cuts announced earlier this year. Based on slower demand, Belden cut 132 jobs in March and shifted production from a plant in Manchester, Conn., to Mexico. The company also has had some layoffs and recalls since the start of the year, Johnson said.

atablac@post-dispatch.com | 314-340-8140

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COLUMBUS, Ohio – Oil and U.S. retail gasoline prices dipped to new three-year lows today with the United States officially in a recession.

Analysts believe prices at the pump may finally be bottoming out after a precipitous decline from record highs this summer, though demand could fall even further in January with job losses reducing the number of people who drive to work.

Gas prices in the United States fell for the 20th week since the July 4th holiday and hit US$1.811 per gallon, according to the government's Energy Information Agency.

Auto club AAA, the Oil Price Information Service and Wright Express said prices fell 0.8 cents overnight to $1.812, down 62.4 cents in the past month and $1.249 in the past year.

Prices in some parts of the country were much lower. On the website GasBuddy.com, where motorists post gas prices, a BP station in Independence, Mo., outside Kansas City, was selling fuel for $1.29 per gallon.

Daily declines posted for the last two months have begun to narrow. The U.S. average for a gallon of gas peaked at $4.11 in July.

In Canada, the price of gas averaged 83.4 cents Canadian per litre, according to Gasbuddy.

"The big move for 2008 is over," said Tom Kloza, publisher and chief oil analyst at the Oil Price Information Service. Prices may fall a few more cents this month and then likely waver into February before beginning to move higher, he said.

Kloza said demand will weaken further in early 2009 as job losses mount amid what may be an extended recession.

"January could be really, really ugly," he said.

The U.S. government reported last month that the unemployment rate shot up to a 14-year high of 6.5 per cent in October, and many economists believe it will top eight per cent before the economy mounts a sustained rebound. November's unemployment rate will be released Friday.

The U.S. National Bureau of Economic Research, a private, non-profit research organization, said Monday that its group of academic economists who determine business cycles pegged December 2007 as the start of the U.S. recession.

Light, sweet crude for January delivery fell more than four per cent, or $2.32 to settle at $46.96 a barrel on the New York Mercantile Exchange. Earlier today prices briefly fell to $47.36, the lowest level since hitting $46.20 intraday on May 20, 2005.

In London, January Brent crude slid 40 cents to $47.57 on the ICE Futures exchange.

Analyst Peter Beutel of Cameron Hanover said traders are searching for the bottom in the oil market free credit score.

"Right now, everyone is wondering when is this market going to rally," he said. "At some point it should."

Beutel said colder-than-expected temperatures across much of the country, increasing demand for gas and expected further cuts in production by OPEC make a strong case for oil prices to rally.

"That doesn't mean we're going back to $4 gas," he said.

Backing up Beutel's claim on demand is the SpendingPulse report by MasterCard released this afternoon.

The report's four-week moving average shows demand of 63.9 million barrels a week. That is down 2.1 per cent from the year-ago moving average and the smallest decline since May.

"It looks like we're getting back to a more normal level from demand and price," Michael McNamara, vice president of MasterCard SpendingPulse.

MasterCard's report is based on aggregate sales activity in the MasterCard payments network, coupled with estimates for all other payment forms, including cash and check.

The Organization of Petroleum Exporting Countries, which accounts for about 40 per cent of global supply, cut output by 1.5 million barrels a day in October, bringing total cuts to around 2 million barrels a day this year.

The slowing economy has cut into energy demand, leaving OPEC's power to control prices through production cuts diminished.

OPEC Secretary-General Abdullah El-Badri said the group would likely reduce output quotas by between one million and 1.5 million barrels at a meeting on Dec. 17 in Algeria, according to a report on Iranian state television Monday.

The head of OPEC said he hopes oil producing nations such as Russia will join the organization, or at least agree to output cuts to help spark a rally in prices.

Chakib Khelil, also Algeria's oil minister, said oil producers such as Russia, Norway and Mexico should express their solidarity with OPEC, either by joining the cartel or by following its reductions of output quotas.

In other Nymex trading, gasoline futures fell 5.29 cents to settle at $1.0583 a gallon. Heating oil fell 3.19 cents to settle at $1.5832 after hitting a 52-week low of $1.5778 a gallon. Natural gas for January delivery fell 18 cents to settle at $6.424 per 1,000 cubic feet.

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The Toronto stock market plunged about 600 points in early trading Monday as tumbling oil prices helped persuade investors to take profits after a huge run-up last week.

New York markets were also hit with profit-taking amid weak expectations for the U.S. holiday shopping season.

Toronto's S&P/TSX composite index fell 601.6 points to 8,669. The sell-off followed a huge surge of almost 14 per cent last week on a revival of TSX oil, financial and mining stocks that had been severely beaten down as the financial crisis deepened during October and November.

The TSX Venture Exchange declined 7.47 points to 758.88.

New York's Dow Jones industrial average fell 288.6 points to 8,540.5 after powering ahead almost 10 per cent last week. The Nasdaq composite index fell 54.97 points to 1,480.6 while the S&P 500 index gave back 37.2 points to 859.05.

The Canadian dollar was down 0.22 cent to 80.62 cents US as oil prices gave up more ground and political turmoil continued in Ottawa.

Statistics Canada reported that economic growth expanded 0.1 per cent in September, which most economist believe was the last month of growth before what could be a prolonged period of decline. The third quarter of the year showed 0.3 per cent growth in gross domestic product.

Sources said the Liberals and NDP have drafted a blueprint for Canada's first coalition government since the First World War, aiming to govern jointly until the middle of 2011. But they would need support from the Bloc Québécois.

Meanwhile, the Conservative minority government on Sunday moved the budget date ahead to Jan. 27.

The energy sector was a major loser in early TSX action, down almost nine per cent as the January crude contract fell $3.80 to US$50.63 a barrel on the New York Mercantile Exchange after OPEC did not cut production at a weekend meeting in Cairo same day payday loans. OPEC meets again Dec. 17.

EnCana Corp. (TSX: ECA) fell $5.50 to $54.50 while Petro-Canada (TSX: PCA) surrendered $4.24 to $29.49.

Financial stocks were down 6.6 per cent ahead of earnings reports from four of the six big banks later this week. Royal Bank fell $2.59 to $40.59 while TD Bank lost $2.69 to $43.31

The gold index pulled back 10 per cent as bullion fell $35.30 to US$780.90 an ounce. Barrick Gold Corp. (TSX: ABX) was down $4.17 to $33.55

Base metals also gave back 10 per cent with Teck Cominco Corp. (TSX: TCK.B) off 59 cents to $5.41.

Fairfax Financial Holdings Ltd. (TSX: FFH) slipped $6.78 to $353.22 after it said it plans to buy up the stake in commercial insurer Northbridge Financial Corp. (TSX: NB) it doesn't already own for $686 million.

On the retail side, initial reports on holiday shopping point to sales better than some retailers and analysts expected, but consumers are cautious and analysts are still forecasting a very difficult season.

Overseas, London's FTSE 100 index fell 2.4 per cent, while Frankfurt's DAX and the Paris CAC 40 slid 2.7 per cent.

Earlier, Asian markets closed lower with the Nikkei 225 stock average in Tokyo down 115.05 points, or 1.4 per cent, at 8,397.22 after advancing 7.6 per cent last week.

Markets in South Korea, Australia and Singapore also fell, while India's benchmark Sensex index reversed early gains and closed with a loss of 2.8 per cent to 8,839.87 in the wake of the terrorist attacks in Mumbai that left 172 people dead.

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