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.

Source

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

Source

The Nikkei average plunged 9.4 percent on Wednesday, its biggest drop since the 1987 stock market crash, as growing fears of a global recession led investors to wipe $250 billion off the value of Tokyo shares.

Toyota Motor Corp (7203.T: Quote, Profile, Research, Stock Buzz) tumbled more than 11 percent on growing expectations that the crisis would bite deeper into its profits, while the yen hit a six-month high against the dollar, adding to the pressure on exporter shares.

Panic over the fast-spreading financial crisis dragged down markets across Asia, with Japanese steelmakers such as Nippon Steel Corp (5401.T: Quote, Profile, Research, Stock Buzz) sliding, as the Nikkei set another five-year closing low. It has lost 19 percent in the past five days.

“The deteriorating outlook for the economy and the deepening financial crisis are pushing fear to its limit,” said Mitsushige Akino, chief fund manager at Ichiyoshi Investment Management (payday loans).

“Investors want to dump shares as their willingness to take risks has shrunk, but no one wants to buy even if stocks are valued cheaply.”

The yen climbed to a six-month high against the tumbling U.S. dollar, as investors stampeded away from stocks and risky positions. <FRX/>

The Nikkei posted its biggest one-day fall since a 14.9 percent drop on October 20, 1987, the day after Black Monday, and logged the third-largest one-day drop ever.

The Indonesia Stock Exchange halted trading on Wednesday after the benchmark composite index .JKSE dropped more than 10 percent, while Hong Kong’s main stock market index .HSI dropped more than 5 percent. 

Read more

Shares of Merrill Lynch & Co. Inc. declined in trading Tuesday even as others in the financial sector generally advanced with the broader market surge.

Shares of Merrill (MER, Fortune 500), the world’s largest brokerage firm, fell 62 cents, or 2.2%, to $27.73 in early afternoon trading.

Meanwhile, most other major banks gained. Goldman Sachs Group Inc. (GS, Fortune 500) rose $3.18, or nearly 2%, to $167.15; Citigroup (C, Fortune 500) Inc. advanced 48 cents, or 2.5%, to $19.47; Morgan Stanley (MS, Fortune 500) rose $1.01, or 2.5%, to $41.84.

Lehman Brothers Holdings Inc (LEH, Fortune 500). surged 49 cents, or 3.1%, to $16.58, lifted by Korea Development Bank’s confirmation that it is in talks with other parties about a possible acquisition of the struggling U.S. investment bank.

Merrill spokesmen weren’t immediately available to comment Tuesday. The company has been overhauling operations, selling some assets and raising fresh capital through sales of new stock in a move to clean up its balance sheet — which had eroded by billions of dollars in losses from the credit and mortgage-market crises.

Oppenheimer & Co. (OPY) analyst Meredith Whitney placed Merrill’s stock in the "Underperform" category in a research note issued Tuesday, along with Citigroup and UBS AG. (UBS) She expects those stocks to perform below that of the Standard & Poor’s 500 index over the next 12 to 18 months no fax payday loan.

Whitney noted that with the credit crunch grinding on for a year now, the financing of stock and bond deals done by Wall Street investment banks has slowed, as has volume in the stock trading that rings up fees for them.

Whitney’s 12-month target for Merrill stock is $28.35.

Banks like Merrill have taken billions of dollars in losses as the value of mortgage-backed securities and other debt has plummeted over the past year. Investors have shied away from buying all but the safest debt as mortgages increasingly defaulted last year, stoking fears that securities tied to the troubled loans would default as well.

Merrill in July reported a $4.6 billion loss for the second quarter and booked $9.4 billion in charges and write-downs from mortgage-backed securities, unprofitable hedge positions and home-loan exposure.

The New York-based bank announced Tuesday that it has hired Michael Nierenberg from JPMorgan Chase & Co. to head its global mortgages and securitized products businesses, and James De Mare from Citigroup to run mortgage trading operations. 

Source

Philippine import growth slowed for a fourth straight month in May as manufacturers bought fewer electronics parts, signaling exports of the country's laptop computers and mobile-phone chips may fall further.

Imports rose 11.3 percent from a year earlier to $4.78 billion, after gaining 11.8 percent in April, the National Statistics Office said in Manila today. That's the smallest gain since October.

“There is an ongoing global slowdown, which bodes ill for our exports, particularly the electronics sector,'' said Ildemarc Bautista, an economist at Metropolitan Bank & Trust Co. in Manila.

Exporters in Asia are hurting from a housing recession and growth slowdown in the U.S., the region's largest overseas market. Overseas sales account for about two-fifths of the Philippines' $118 billion economy, where growth is forecast to slow from last year's three-decade high.

Neighboring Singapore's exports fell for a second month in June as electronics shipments declined for a 17th consecutive month. Philippine electronics shipments, which make up two- thirds of total exports, declined 3.4 percent in May from a year earlier.

North American orders for semiconductor equipment fell 36 percent in June as chipmakers curbed spending amid a 17-month industry contraction, according to trade group Semiconductor Equipment & Materials International http://abc-cashadvance.com.

Electronics Parts

Philippine imports of electronics parts fell 14.4 percent from a year earlier to $1.51 billion in May, after a 10.6 percent decline the previous month. More than 40 percent of imports are raw materials purchased by local units of Texas Instruments Inc. and other manufacturers.

Crude oil and other fuel imports rose 50 percent in May from a year earlier to $1.18 billion. Purchases of raw materials fell 6.4 percent to $1.71 billion. Imports of consumer goods added 53.9 percent to $629 million. Capital goods purchases, including telecommunications equipment and machinery, declined 2.2 percent to $1.19 billion.

The trade deficit widened to $559 million in May from $168 million a year earlier, today's report showed. The shortfall for the first five months of the year was $3.16 billion, compared with $347 million a year earlier. Exports increased 2.3 percent in May.

Source

Australia's construction industry contracted for a fourth month in June as lending rates at a 12- year high reduced demand for houses and factories.

An index measuring construction edged up to 40.3 points last month from 36.9 in May, according to a report by the Australian Industry Group and Housing Industry Association released in Sydney today. A reading below 50 indicates the construction industry is declining.

Slowing building work will further cool an economy that grew at the weakest pace in almost two years in the first quarter. Reserve Bank Governor Glenn Stevens left Australia's benchmark interest rate unchanged at 7.25 percent last week, saying four increases since August are working to moderate domestic demand and damp inflation pressures bad credit payday loan.

“The outlook remains subdued, with further weakness in activity likely to persist over coming months,'' said Tony Pensabene, an associate director of economics at the Australian Industry Group. “Falling demand, weaker economic conditions and increased competition for work are cited by firms for the continued falloff in activity.''

Today's survey is based on responses from about 120 construction companies on sales, new orders, deliveries, employment and input costs.

Source

The U.S. economy continues to bump along at a slow level of growth but has probably not fallen into recession, a series of regional purchasing managers’ reports suggested on Monday.

National surveys this week are expected to show the factory sector shrinking a bit in June while the services side ekes out a small gain. Between the two, the United States is managing to stay in the positive growth column.

The closely watched National Association of Purchasing Management-Chicago survey showed conditions in the Midwest region contracted for a fifth straight month, although at a less severe rate than Wall Street analysts had expected.

“We are surprised that the Chicago PMI was not weaker in June given the region’s sensitivity to the ailing auto sector,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank Securities.

The NAPM-Chicago business barometer rose to 49.6 from 49.1 in May, the strongest since January and above the median forecast of 48.0 cash advance today. A reading below 50 indicates contraction. The index has revived from February’s 44.5.

“It looks as if manufacturing in the Midwest is holding its own,” said Gary Thayer, senior economist at Wachovia Securities in St. Louis. “Things aren’t getting a lot better, but are stable at this point,”

Still, sub-components of the Chicago index looked less promising than the headline, analysts noted. Production, at 45.1, was the lowest in 90 months, and new orders dropped to 52.0, the lowest since February.

“In response to the housing slump, higher energy costs and iffy consumer spending in the second half, businesses are cutting their outlays,” said Lindsey Piegza, economic analyst at FTN Financial in New York. 

Read more

Shares of Yahoo Inc rose as much as 11 percent on Tuesday, reversing earlier declines, after contradictory reports on whether buyout talks with Microsoft Corp were heating up again.

“People are attributing huge outcomes to very small pieces of information,” said Sanford C. Bernstein analyst Jeffrey Lindsay, referring to a flurry of thinly detailed stories citing unnamed sources that caused Yahoo’s stock to spike.

Following a report on technology blog TechCrunch saying merger talks were back on, Yahoo shares sailed as high as $23.71, a 10.5 percent rise from their Monday close and a 15 percent jump from a Tuesday session low of $20.60.

The shares erased most of the gains after TV news channel CNBC said no deal was on the table between the two companies internet payday loans. Other news reports had also suggested talks on a partial deal were back on. The reports all cited unnamed sources.

“It’s ‘he said, she said,’” Canaccord Adams analyst Colin Gillis said.

Both Microsoft and Yahoo declined to comment.

Yahoo shares settled back to trade up 1.6 percent at $21.80 in late Nasdaq trading. The stock had traded down around 3 percent early in the day after a downgrade by broker Thomas Weisel Partners that argued Yahoo was worth only $18 a share.

TechCrunch cited multiple unidentified sources saying Microsoft was back in talks to buy all of Yahoo, after walking away in May. 

Read more

The world’s top airlines warned on Thursday that soaring fuel prices were hitting profits, prompting some to increase fares, and global leader American Airlines announced thousands of job cuts to counter higher costs.

Airline stocks fell sharply in Asia and Europe after stock in American’s parent AMR Corp (AMR.N: Quote, Profile, Research) shed a quarter of their value as investors fretted over the cost of jet fuel, which is most airlines’ single-biggest expense.

The airline industry is struggling to cope with oil prices that have surged 170 percent since the start of last year as economic uncertainty threatens growth.

“(The oil price) is going to actually send some (smaller) airlines into bankruptcy,” said Nick van den Brul, analyst at Exane BNP. “The best position for an airline is to have a good hedge already in place … a euro exposure to the dollar and also the ability to cut costs.”

The cost of jet fuel traded in Singapore JET-SIN has risen by more than half this year alone and analysts expect more cost cutting, particularly among U.S free credit report.com. carriers as an economic slowdown puts people off traveling.

American said it would begin charging passengers to check in their bags and will retire 75 aircraft from its ageing fleet.

Air France-KLM (AIRF.PA: Quote, Profile, Research), the world’s biggest airline by revenue, warned that soaring fuel prices would slash operating profits this year, knocking its shares down nearly 9 percent to two-month lows even as it reported higher 2007 operating profit.

Chief Executive Jean-Cyril Spinetta warned that Air France would have to brace for a 1.1 billion euro ($1.73 billion) rise in fuel costs this year. He said the airline would implement a 150 million euro ($236.4 million) cost savings plan. 

Read more

Tomorrow will mark a 10-year anniversary that the federal government won’t be celebrating.

That’s when Liberal environment minister Christine Stewart signed the Kyoto protocol at the United Nations headquarters in New York, officially committing the country to a dramatic reduction in its greenhouse gas emissions.

Canada was required to cut by 2012 its emissions to 6 per cent below 1990 levels. With four years left to go, we’ve skyrocketed in the opposite direction. In a report last week, Statistics Canada reveals that Canada’s emissions are 25 per cent above 1990 levels.

It gets worse. According to a report last week in the scientific journal Nature, the mountain pine beetle that has killed 130,000 square kilometres of coniferous forest on the west coast has also turned those trees into net emitters of greenhouse gases.

When healthy, the trees act as a carbon sink, absorbing carbon dioxide from the atmosphere and storing it in biomass. When dead, however, the trees no longer absorb CO2. In fact, the opposite happens. As the trees rot and decompose, they release methane and other carbon-equivalent gases.

The B.C. researchers who wrote the report found that the greenhouse gas emissions from these dead trees over a 20-year period would roughly equal all CO2 emissions from Canada’s entire transportation sector over five years.

"So these are very large numbers in terms of impacts to the atmosphere," said report co-author Werner Kurz, a research scientist with Natural Resources Canada.

No kidding.

But the situation isn’t hopeless. When British Columbia released its provincial energy plan last February, it announced that B.C. Hydro would consider proposals for harvesting trees infested with pine beetles for energy generation.

Vancouver-based Nexterra Energy, for example, has teamed up Pristine Power of Calgary to establish a network of small gasification power plants in B.C. that could turn infested wood into 200 megawatts of electricity. Rather than let the trees rot and release methane, which is 21 times more potent than CO2, the idea is to extract usable energy out of them that would displace dirtier electricity and clear the forest for new growth.

The key is to move fast, leaving less time for the dead trees to decay. Another, and arguably more effective, approach is to harvest the trees and convert them to char, or "biochar." Using a process called pyrolysis, the wood is essentially baked in the absence of oxygen and converted into a carbon-rich char.

This char contains about 60 per cent of the carbon in the original wood and, unlike wood, the char won’t decay – it remains chemically stable for hundreds of years, trapping the carbon permanently.

Another bonus is that char can be ground up and spread over topsoil to improve crop fertility and enhance nutrients and water retention in soil 500 fast cash. Since the carbon is bound in the char, it is effectively sequestered in the soil.

Cornell University’s Johannes Lehmann, a leading expert on biochar studies, said it’s something the B.C. government might want to look at. "It could be that a good portion of the emissions (from the dead trees) can be avoided by conversion of the damaged biomass into biochar," he wrote in an email.

The beauty with char is that you can pack it and weigh it. You know how much carbon is locked into a kilogram of char, so calculating carbon credits is easy compared to alternatives, such as guessing how much CO2 a new forest will absorb.

Perhaps some clever entrepreneur will see the potential of selling bags of pine-beetle wood char as a way of boosting the performance of residential gardens.

Even researchers at EnCana Corp., the largest petroleum company in Canada, are studying the biochar option. Chemical engineer Subodh Gupta, who co-ordinates research and development in EnCana’s oil recovery group, says carbon sequestration can’t just be about capturing greenhouse gases from the oil sands and coal plants and then pumping it underground.

An abstract of a paper to be presented in June at the Canadian International Petroleum Conference in Calgary, Gupta will argue that char creation and sequestration – what he terms "biosequestration" – needs to be recognized by industry and government as a serious option, and a complement to geological sequestration.

After all, even if we can figure out how to economically capture CO2 from power plants and oil-sands operations, it doesn’t address emissions resulting from transportation and other more distributed sources – or the dead forests of B.C. for that matter. Coming up with a way to offset those emissions is necessary, and that’s where Gupta believes biosequestration holds great promise.

He’s so encouraged by the possibilities, he plans to hold a conference in Calgary later this year dedicated to discussing the approach.

More awareness is needed, he insists. "Until the Canadian government and Alberta government recognizes it, it’s not an option. And they won’t recognize it until the public at large recognizes it."

Ten years after signing Kyoto, we need all options on the table.

Tyler Hamilton’s Clean Break appears Mondays. You may email him at thamilt@thestar.ca.

Source