Friday, February 5, 2010
Is US bullying Toyota on recall?
CHICAGO — The US transportation chief's public rebukes of Toyota's handling of a massive safety recall have raised eyebrows, given the US government's major stake in rivals General Motors and Chrysler.
"The optics are terrible because -- and this is what happens when a government owns a company - the two companies that are going to gain the most out of this are General Motors and Chrysler," said Peter Morici, a professor at the University of Maryland's business school.
"But their behavior is consistent with the general policy of the US government, whether it's dealing with coffeemakers or cars."
Safety officials understand that product design mistakes are inevitable and will work to help companies correct the problem and alert consumers. But they will not tolerate a slow or weak response, Morici told AFP.
Transportation Secretary Ray LaHood sat down with reporters Wednesday to lay out a timeline of how US officials had "pushed Toyota to take corrective actions" on its pedal problems since 2007.
The meeting came a day after he issued a statement accusing the Japanese automaker of dragging its feet on recalling vehicles in danger of sudden, unintended acceleration due to pedals which could get trapped under floor mats or become "sticky."
He also caused a brief panic when he told a congressional panel that owners of 5.3 million Toyota vehicles affected by the recalls should "stop driving" them.
LaHood later sought to tone down his remarks, telling reporters: "What I meant to say and what I thought I said was if you own one of these cars or if you're in doubt, take it to the dealer and they're going to fix it."
But he insisted that safety officials "will continue to hold Toyota's feet to the fire to make sure that they are doing everything they have promised to make their vehicles safe."
Legislators meanwhile signaled that they would expand their probe, demanding answers on why Toyota's Tacoma trucks -- which have a different pedal assembly than the 5.3 million vehicles recalled -- were also experiencing problems with sudden, unintended acceleration.
Toyota's top US official, Yoshimi Inaba, is set to testify at a congressional hearing Wednesday.
LaHood's strong initial comments could cause some "hysteria, but to some extent, we are such a litigious society, he has no choice but to say that because of the lawsuits that are lined up," said Rebecca Lindland, an analyst with IHS Global Insight.
"If one more person is killed, they can say that the government didn't act; Toyota did not act."
Weston Konishi, an expert on Japan at the Mansfield Foundation think-tank, said he doubted either Washington or Tokyo wanted the Toyota flap to escalate.
"Toyota is now a real stakeholder in the US economy -- think of its auto plants and jobs -- so trying to score points against it would be somewhat self-defeating," he added.
Konishi said he could only see Toyota becoming the governments' business if the company cut off contracts with US manufacturers due to lack of confidence in quality control after the problems with the US-made pedals.
David Champion, director of automobile testing for Consumer Reports magazine, said the reaction to the recall was overblown.
"When you look at the statistics we are putting an awful lot of effort on a very small risk," he said.
"There has been something like 2,000 complaints of unintended acceleration in some 20 million Toyota vehicles -- it's almost like trying to find a needle in a haystack."
Champion lamented as "unfortunate" that it took the death of an off-duty California state trooper and three members of his family to prompt Toyota to issue a mass recall in September to address the problem.
But he said a congressional investigation was an "overreaction" and noted that the "sticky" pedal problem that caused Toyota to halt production and sales of eight models last month was not linked to any accidents or injuries.
"I'm sure it's going to hurt Toyota in the short term over the next year or so," Champion said.
"But if their products are as good as they have been in the past, we're going to see that Toyota's going to bounce back as Ford has from the Firestone (tire recall) fiasco."
info came from http://www.google.com/hostednews/afp/article/ALeqM5im7AzPBsRb2Q_qT0FXa8DxrjjLwA
"The optics are terrible because -- and this is what happens when a government owns a company - the two companies that are going to gain the most out of this are General Motors and Chrysler," said Peter Morici, a professor at the University of Maryland's business school.
"But their behavior is consistent with the general policy of the US government, whether it's dealing with coffeemakers or cars."
Safety officials understand that product design mistakes are inevitable and will work to help companies correct the problem and alert consumers. But they will not tolerate a slow or weak response, Morici told AFP.
Transportation Secretary Ray LaHood sat down with reporters Wednesday to lay out a timeline of how US officials had "pushed Toyota to take corrective actions" on its pedal problems since 2007.
The meeting came a day after he issued a statement accusing the Japanese automaker of dragging its feet on recalling vehicles in danger of sudden, unintended acceleration due to pedals which could get trapped under floor mats or become "sticky."
He also caused a brief panic when he told a congressional panel that owners of 5.3 million Toyota vehicles affected by the recalls should "stop driving" them.
LaHood later sought to tone down his remarks, telling reporters: "What I meant to say and what I thought I said was if you own one of these cars or if you're in doubt, take it to the dealer and they're going to fix it."
But he insisted that safety officials "will continue to hold Toyota's feet to the fire to make sure that they are doing everything they have promised to make their vehicles safe."
Legislators meanwhile signaled that they would expand their probe, demanding answers on why Toyota's Tacoma trucks -- which have a different pedal assembly than the 5.3 million vehicles recalled -- were also experiencing problems with sudden, unintended acceleration.
Toyota's top US official, Yoshimi Inaba, is set to testify at a congressional hearing Wednesday.
LaHood's strong initial comments could cause some "hysteria, but to some extent, we are such a litigious society, he has no choice but to say that because of the lawsuits that are lined up," said Rebecca Lindland, an analyst with IHS Global Insight.
"If one more person is killed, they can say that the government didn't act; Toyota did not act."
Weston Konishi, an expert on Japan at the Mansfield Foundation think-tank, said he doubted either Washington or Tokyo wanted the Toyota flap to escalate.
"Toyota is now a real stakeholder in the US economy -- think of its auto plants and jobs -- so trying to score points against it would be somewhat self-defeating," he added.
Konishi said he could only see Toyota becoming the governments' business if the company cut off contracts with US manufacturers due to lack of confidence in quality control after the problems with the US-made pedals.
David Champion, director of automobile testing for Consumer Reports magazine, said the reaction to the recall was overblown.
"When you look at the statistics we are putting an awful lot of effort on a very small risk," he said.
"There has been something like 2,000 complaints of unintended acceleration in some 20 million Toyota vehicles -- it's almost like trying to find a needle in a haystack."
Champion lamented as "unfortunate" that it took the death of an off-duty California state trooper and three members of his family to prompt Toyota to issue a mass recall in September to address the problem.
But he said a congressional investigation was an "overreaction" and noted that the "sticky" pedal problem that caused Toyota to halt production and sales of eight models last month was not linked to any accidents or injuries.
"I'm sure it's going to hurt Toyota in the short term over the next year or so," Champion said.
"But if their products are as good as they have been in the past, we're going to see that Toyota's going to bounce back as Ford has from the Firestone (tire recall) fiasco."
info came from http://www.google.com/hostednews/afp/article/ALeqM5im7AzPBsRb2Q_qT0FXa8DxrjjLwA
Google to enlist NSA to help it ward off cyberattacks
By Ellen Nakashima
Thursday, February 4, 2010; A01
The world's largest Internet search company and the world's most powerful electronic surveillance organization are teaming up in the name of cybersecurity.
Under an agreement that is still being finalized, the National Security Agency would help Google analyze a major corporate espionage attack that the firm said originated in China and targeted its computer networks, according to cybersecurity experts familiar with the matter. The objective is to better defend Google -- and its users -- from future attack.
Google and the NSA declined to comment on the partnership. But sources with knowledge of the arrangement, speaking on the condition of anonymity, said the alliance is being designed to allow the two organizations to share critical information without violating Google's policies or laws that protect the privacy of Americans' online communications. The sources said the deal does not mean the NSA will be viewing users' searches or e-mail accounts or that Google will be sharing proprietary data.
The partnership strikes at the core of one of the most sensitive issues for the government and private industry in the evolving world of cybersecurity: how to balance privacy and national security interests. On Tuesday, Director of National Intelligence Dennis C. Blair called the Google attacks, which the company acknowledged in January, a "wake-up call." Cyberspace cannot be protected, he said, without a "collaborative effort that incorporates both the U.S. private sector and our international partners."
But achieving collaboration is not easy, in part because private companies do not trust the government to keep their secrets and in part because of concerns that collaboration can lead to continuous government monitoring of private communications. Privacy advocates, concerned about a repeat of the NSA's warrantless interception of Americans' phone calls and e-mails after the Sept. 11, 2001, terrorist attacks, say information-sharing must be limited and closely overseen.
"The critical question is: At what level will the American public be comfortable with Google sharing information with NSA?" said Ellen McCarthy, president of the Intelligence and National Security Alliance, an organization of current and former intelligence and national security officials that seeks ways to foster greater sharing of information between government and industry.
On Jan. 12, Google took the rare step of announcing publicly that its systems had been hacked in a series of intrusions beginning in December.
The intrusions, industry experts said, targeted Google source code -- the programming language underlying Google applications -- and extended to more than 30 other large tech, defense, energy, financial and media companies. The Gmail accounts of human rights activists in Europe, China and the United States were also compromised.
So significant was the attack that Google threatened to shutter its business operation in China if the government did not agree to let the firm operate an uncensored search engine there. That issue is still unresolved.
Google approached the NSA shortly after the attacks, sources said, but the deal is taking weeks to hammer out, reflecting the sensitivity of the partnership. Any agreement would mark the first time that Google has entered a formal information-sharing relationship with the NSA, sources said. In 2008, the firm stated that it had not cooperated with the NSA in its Terrorist Surveillance Program.
Sources familiar with the new initiative said the focus is not figuring out who was behind the recent cyberattacks -- doing so is a nearly impossible task after the fact -- but building a better defense of Google's networks, or what its technicians call "information assurance."
One senior defense official, while not confirming or denying any agreement the NSA might have with any firm, said: "If a company came to the table and asked for help, I would ask them . . . 'What do you know about what transpired in your system? What deficiencies do you think they took advantage of? Tell me a little bit about what it was they did.' " Sources said the NSA is reaching out to other government agencies that play key roles in the U.S. effort to defend cyberspace and might be able to help in the Google investigation.
These agencies include the FBI and the Department of Homeland Security.
Over the past decade, other Silicon Valley companies have quietly turned to the NSA for guidance in protecting their networks.
"As a general matter," NSA spokeswoman Judi Emmel said, "as part of its information-assurance mission, NSA works with a broad range of commercial partners and research associates to ensure the availability of secure tailored solutions for Department of Defense and national security systems customers."
Despite such precedent, Matthew Aid, an expert on the NSA, said Google's global reach makes it unique.
"When you rise to the level of Google . . . you're looking at a company that has taken great pride in its independence," said Aid, author of "The Secret Sentry," a history of the NSA. "I'm a little uncomfortable with Google cooperating this closely with the nation's largest intelligence agency, even if it's strictly for defensive purposes."
The pact would be aimed at allowing the NSA help Google understand whether it is putting in place the right defenses by evaluating vulnerabilities in hardware and software and to calibrate how sophisticated the adversary is. The agency's expertise is based in part on its analysis of cyber-"signatures" that have been documented in previous attacks and can be used to block future intrusions.
The NSA would also be able to help the firm understand what methods are being used to penetrate its system, the sources said. Google, for its part, may share information on the types of malicious code seen in the attacks -- without disclosing proprietary data about what was taken, which would concern shareholders, sources said.
Greg Nojeim, senior counsel for the Center for Democracy & Technology, a privacy advocacy group, said companies have statutory authority to share information with the government to protect their rights and property.
info came from http://www.washingtonpost.com/wp-dyn/content/article/2010/02/03/AR2010020304057_pf.html
Thursday, February 4, 2010; A01
The world's largest Internet search company and the world's most powerful electronic surveillance organization are teaming up in the name of cybersecurity.
Under an agreement that is still being finalized, the National Security Agency would help Google analyze a major corporate espionage attack that the firm said originated in China and targeted its computer networks, according to cybersecurity experts familiar with the matter. The objective is to better defend Google -- and its users -- from future attack.
Google and the NSA declined to comment on the partnership. But sources with knowledge of the arrangement, speaking on the condition of anonymity, said the alliance is being designed to allow the two organizations to share critical information without violating Google's policies or laws that protect the privacy of Americans' online communications. The sources said the deal does not mean the NSA will be viewing users' searches or e-mail accounts or that Google will be sharing proprietary data.
The partnership strikes at the core of one of the most sensitive issues for the government and private industry in the evolving world of cybersecurity: how to balance privacy and national security interests. On Tuesday, Director of National Intelligence Dennis C. Blair called the Google attacks, which the company acknowledged in January, a "wake-up call." Cyberspace cannot be protected, he said, without a "collaborative effort that incorporates both the U.S. private sector and our international partners."
But achieving collaboration is not easy, in part because private companies do not trust the government to keep their secrets and in part because of concerns that collaboration can lead to continuous government monitoring of private communications. Privacy advocates, concerned about a repeat of the NSA's warrantless interception of Americans' phone calls and e-mails after the Sept. 11, 2001, terrorist attacks, say information-sharing must be limited and closely overseen.
"The critical question is: At what level will the American public be comfortable with Google sharing information with NSA?" said Ellen McCarthy, president of the Intelligence and National Security Alliance, an organization of current and former intelligence and national security officials that seeks ways to foster greater sharing of information between government and industry.
On Jan. 12, Google took the rare step of announcing publicly that its systems had been hacked in a series of intrusions beginning in December.
The intrusions, industry experts said, targeted Google source code -- the programming language underlying Google applications -- and extended to more than 30 other large tech, defense, energy, financial and media companies. The Gmail accounts of human rights activists in Europe, China and the United States were also compromised.
So significant was the attack that Google threatened to shutter its business operation in China if the government did not agree to let the firm operate an uncensored search engine there. That issue is still unresolved.
Google approached the NSA shortly after the attacks, sources said, but the deal is taking weeks to hammer out, reflecting the sensitivity of the partnership. Any agreement would mark the first time that Google has entered a formal information-sharing relationship with the NSA, sources said. In 2008, the firm stated that it had not cooperated with the NSA in its Terrorist Surveillance Program.
Sources familiar with the new initiative said the focus is not figuring out who was behind the recent cyberattacks -- doing so is a nearly impossible task after the fact -- but building a better defense of Google's networks, or what its technicians call "information assurance."
One senior defense official, while not confirming or denying any agreement the NSA might have with any firm, said: "If a company came to the table and asked for help, I would ask them . . . 'What do you know about what transpired in your system? What deficiencies do you think they took advantage of? Tell me a little bit about what it was they did.' " Sources said the NSA is reaching out to other government agencies that play key roles in the U.S. effort to defend cyberspace and might be able to help in the Google investigation.
These agencies include the FBI and the Department of Homeland Security.
Over the past decade, other Silicon Valley companies have quietly turned to the NSA for guidance in protecting their networks.
"As a general matter," NSA spokeswoman Judi Emmel said, "as part of its information-assurance mission, NSA works with a broad range of commercial partners and research associates to ensure the availability of secure tailored solutions for Department of Defense and national security systems customers."
Despite such precedent, Matthew Aid, an expert on the NSA, said Google's global reach makes it unique.
"When you rise to the level of Google . . . you're looking at a company that has taken great pride in its independence," said Aid, author of "The Secret Sentry," a history of the NSA. "I'm a little uncomfortable with Google cooperating this closely with the nation's largest intelligence agency, even if it's strictly for defensive purposes."
The pact would be aimed at allowing the NSA help Google understand whether it is putting in place the right defenses by evaluating vulnerabilities in hardware and software and to calibrate how sophisticated the adversary is. The agency's expertise is based in part on its analysis of cyber-"signatures" that have been documented in previous attacks and can be used to block future intrusions.
The NSA would also be able to help the firm understand what methods are being used to penetrate its system, the sources said. Google, for its part, may share information on the types of malicious code seen in the attacks -- without disclosing proprietary data about what was taken, which would concern shareholders, sources said.
Greg Nojeim, senior counsel for the Center for Democracy & Technology, a privacy advocacy group, said companies have statutory authority to share information with the government to protect their rights and property.
info came from http://www.washingtonpost.com/wp-dyn/content/article/2010/02/03/AR2010020304057_pf.html
World stocks hit by fears of debt crisis contagion
Feb 5, 7:19 AM (ET)
By PAN PYLAS
LONDON (AP) - World stocks tumbled again Friday as investors worried that the debt crisis enveloping Greece may spread to other vulnerable countries in Europe such as Portugal, and amid fears that jobs data later will show that the U.S. recovery is weaker than expected.
In Europe, the FTSE 100 index of leading British shares was down 82.34 points, or 1.6 percent, at 5,056.97, while Germany's DAX fell 69.61 points, or 1.3 percent, to 5,463.63. The CAC-40 in France was 76.60 points, or 2.1 percent, lower at 3,612.65.
Once again, stock markets in Greece, Portugal and Spain led the retreat in Europe - Greece's main composite index was down a further 3.5 percent, while Portugal's PSI 20 fell 3 percent and Spain's IBEX dropped 2.6 percent.
Earlier in Asia, stock markets responded to the massive falls recorded in the previous session in Europe and the U.S., where the Dow Jones industrial average slid 2.6 percent, its worst performance in nine months.
Japan's benchmark Nikkei 225 sank 2.9 percent, or 298.89 points, to 10,057.09, while China's Shanghai Composite Index fell 1.9 percent, or 55.91, to 2,939.40. Hong Kong's Hang Seng buckled 3.3 percent to 19,665.08.
"It's been a dismal 24 hours for global markets as stock markets, commodities and currencies have fallen around the world, while bond default risk has soared, as investors have fled risky assets into the relative safety of the dollar," said Michael Hewson, an analyst at CMC Markets.
The catalyst behind the escalating jitters gripping investors is the debt crisis in Greece and the fear that it might move on to other countries, such as Portugal, Spain and Ireland, with weak public finances.
The question is whether these governments can deliver the deficit cuts they have promised. The Greek plan, which has been cautiously backed by the European Commission and the European Central Bank, is to get the budget deficit down from around 12.7 percent of the country's gross domestic product in 2009 to below 3 percent in 2012.
But with strikes looming - customs and tax officials have already begun a 48 hour strike in protest at the planned austerity measures - investors remain skeptical at best.
As in the banking crisis of 2008, traders are looking at who may be next to suffer Greek-like budget difficulties and all eyes Friday will be on whether Portugal's minority government survives a showdown with opposition parties over its austerity plan.
"It has been a worry for Greece for weeks but it is now spreading like wildfire, driving equity markets lower, causing further concerns both about medium-term growth prospects and in currency markets," said Kit Juckes, chief economist at ECU Group.
All this is hitting the euro hard as investors think a bailout of the periphery countries is becoming more likely by the European Union.
The euro has fallen below $1.37 for the first time since May last year, and by midmorning London time was trading 0.4 percent lower on the day at $1.3670 - while the euro has been undermined by concerns about its peripheral members, the dollar continued to attract support through its supposed safe haven status during times of risk aversion.
Commodity and energy prices have also been hit hard by the meltdown in risk assets - benchmark crude for March delivery was down a further 24 cents at $72.90 a barrel in electronic trading on the New York Mercantile Exchange after losing $3.84 overnight, while gold fell $8.40 an ounce to $1,054.
It's not often on the first Friday of the month that the markets are not totally focused on the U.S. nonfarm payrolls data, which often set the stock market tone for a week or two.
Disappointing weekly U.S. jobless claims figures Thursday stoked fears that payrolls will actually fall in January, whereas the consensus in the markets is for a 10,000 improvement.
"Today's U.S. employment report now feels like a sideshow, except that the market will probably react more to a weak figure than a strong one," said ECU Group's Juckes.
"A further fall in employment will increase fear about the lack of job creation and the implications for budget deficits and for demand," said Juckes.
Investors were hesitant ahead of the U.S. open - Dow futures were down 63 points, or 0.6 percent, at 9,916 while the broader Standard & Poor's 500 futures fell 8.5 points, or 0.8 percent, at 1,053.20.
The focus at this weekend's Group of Seven meeting of finance ministers and central bankers from the world's leading industrialized economies has suddenly become a point of interest in the markets - with the G-20 now the world's main forum for economic cooperation, the G-7 was widely thought to be an anachronism.
Elsewhere in Asia, South Korea's Kospi slid 3.1 percent to 1,567.12, Taiwan's market dived 4.3 percent and Australia's S&P/ASX benchmark dropped 2.3 percent.
---_
AP Business Writer Joe McDonald in Beijing contributed to this report.
info came from http://apnews.myway.com/article/20100205/D9DM0PQO1.html
By PAN PYLAS
LONDON (AP) - World stocks tumbled again Friday as investors worried that the debt crisis enveloping Greece may spread to other vulnerable countries in Europe such as Portugal, and amid fears that jobs data later will show that the U.S. recovery is weaker than expected.
In Europe, the FTSE 100 index of leading British shares was down 82.34 points, or 1.6 percent, at 5,056.97, while Germany's DAX fell 69.61 points, or 1.3 percent, to 5,463.63. The CAC-40 in France was 76.60 points, or 2.1 percent, lower at 3,612.65.
Once again, stock markets in Greece, Portugal and Spain led the retreat in Europe - Greece's main composite index was down a further 3.5 percent, while Portugal's PSI 20 fell 3 percent and Spain's IBEX dropped 2.6 percent.
Earlier in Asia, stock markets responded to the massive falls recorded in the previous session in Europe and the U.S., where the Dow Jones industrial average slid 2.6 percent, its worst performance in nine months.
Japan's benchmark Nikkei 225 sank 2.9 percent, or 298.89 points, to 10,057.09, while China's Shanghai Composite Index fell 1.9 percent, or 55.91, to 2,939.40. Hong Kong's Hang Seng buckled 3.3 percent to 19,665.08.
"It's been a dismal 24 hours for global markets as stock markets, commodities and currencies have fallen around the world, while bond default risk has soared, as investors have fled risky assets into the relative safety of the dollar," said Michael Hewson, an analyst at CMC Markets.
The catalyst behind the escalating jitters gripping investors is the debt crisis in Greece and the fear that it might move on to other countries, such as Portugal, Spain and Ireland, with weak public finances.
The question is whether these governments can deliver the deficit cuts they have promised. The Greek plan, which has been cautiously backed by the European Commission and the European Central Bank, is to get the budget deficit down from around 12.7 percent of the country's gross domestic product in 2009 to below 3 percent in 2012.
But with strikes looming - customs and tax officials have already begun a 48 hour strike in protest at the planned austerity measures - investors remain skeptical at best.
As in the banking crisis of 2008, traders are looking at who may be next to suffer Greek-like budget difficulties and all eyes Friday will be on whether Portugal's minority government survives a showdown with opposition parties over its austerity plan.
"It has been a worry for Greece for weeks but it is now spreading like wildfire, driving equity markets lower, causing further concerns both about medium-term growth prospects and in currency markets," said Kit Juckes, chief economist at ECU Group.
All this is hitting the euro hard as investors think a bailout of the periphery countries is becoming more likely by the European Union.
The euro has fallen below $1.37 for the first time since May last year, and by midmorning London time was trading 0.4 percent lower on the day at $1.3670 - while the euro has been undermined by concerns about its peripheral members, the dollar continued to attract support through its supposed safe haven status during times of risk aversion.
Commodity and energy prices have also been hit hard by the meltdown in risk assets - benchmark crude for March delivery was down a further 24 cents at $72.90 a barrel in electronic trading on the New York Mercantile Exchange after losing $3.84 overnight, while gold fell $8.40 an ounce to $1,054.
It's not often on the first Friday of the month that the markets are not totally focused on the U.S. nonfarm payrolls data, which often set the stock market tone for a week or two.
Disappointing weekly U.S. jobless claims figures Thursday stoked fears that payrolls will actually fall in January, whereas the consensus in the markets is for a 10,000 improvement.
"Today's U.S. employment report now feels like a sideshow, except that the market will probably react more to a weak figure than a strong one," said ECU Group's Juckes.
"A further fall in employment will increase fear about the lack of job creation and the implications for budget deficits and for demand," said Juckes.
Investors were hesitant ahead of the U.S. open - Dow futures were down 63 points, or 0.6 percent, at 9,916 while the broader Standard & Poor's 500 futures fell 8.5 points, or 0.8 percent, at 1,053.20.
The focus at this weekend's Group of Seven meeting of finance ministers and central bankers from the world's leading industrialized economies has suddenly become a point of interest in the markets - with the G-20 now the world's main forum for economic cooperation, the G-7 was widely thought to be an anachronism.
Elsewhere in Asia, South Korea's Kospi slid 3.1 percent to 1,567.12, Taiwan's market dived 4.3 percent and Australia's S&P/ASX benchmark dropped 2.3 percent.
---_
AP Business Writer Joe McDonald in Beijing contributed to this report.
info came from http://apnews.myway.com/article/20100205/D9DM0PQO1.html
Europe fears rock global markets
By David Oakley in London, Tony Barber in Brussels, Ralph Atkins in Frankfurt and Aline van Duyn in New York
Published: February 4 2010 20:38 | Last updated: February 5 2010 01:04
Growing fears over the health of Europe’s weakest economies and the outlook for US employment rocked global markets on Thursday, sparking sharp falls in risky assets ranging from equities to oil and gold.
The rout sent investors fleeing to the safety of US government debt, boosting the dollar to its highest level against the euro in more than eight months and sending US Treasury prices higher only days after the Obama administration forecast a $1,556bn deficit for 2010.
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“The risk aversion trade is back on as the debt problems of the Europe are for the first time bringing down global markets,” said Gary Jenkins, head of fixed income research at Evolution Securities in London.
The Portuguese, Spanish and Greek markets were among the hardest hit, as investor fears over their mounting public debt undermined confidence in their economies and the ability of their governments to fund burgeoning budget shortfalls.
Portugal’s stock markets fell 4.98 per cent, the biggest single day fall since November 2008. Spanish shares dropped 5.94 per cent to the lowest level since July, while Greek equities fell 3.89 per cent.
Attempts by Jean-Claude Trichet, European Central Bank president, to boost confidence in eurozone public finances, by stressing that they compared “flatteringly” with those of other countries, failed to reassure investors.
In the US, the labour department reported that the number of workers claiming jobless benefits unexpectedly rose by 8,000 to 480,000 last week, casting doubt over the economy’s ability to create jobs.
The S&P 500 fell 3.11 per cent to 1,063.11 – its worst day since April 2009 – to its lowest level in three months. The FTSE 100 dropped 2.2 per cent and the FTSE Eurofirst 300 fell 2.8 per cent. The price of a barrel of oil fell more than 5 per cent, the biggest daily drop in six months. In late New York trading, the benchmark crude oil contract was at $72.98. Gold was also hit, with a fall of 4.3 per cent to $1,062.
Dealers said investors were unwinding trades meant to profit from an economic recovery.
Tobias Levkovich, chief US equity strategist at Citigroup, said: “There has been selling by nervous investors of stocks and commodities, as they still have memories of the losses made in 2008 and want to make sure the gains from 2009 are not lost.”
The debt markets of Europe’s so-called peripheral economies also came under pressure as the yield spread between their bonds and Germany, the benchmark market, widened sharply.
Investors are also worried about the end of central bank emergency support measures that have propped up markets over the past year. With theUK on Thursday putting its quantitative easing programme on hold and the US soon to end its credit easing initiatives, investors fear the markets will come under renewed pressure.
Mr Trichet tried to soothe fears over European sovereign risk, saying the US deficit was expected to hit 10 per cent of gross domestic product this year – compared with about 6 per cent in the eurozone.
However, he kept up the pressure on individual eurozone countries, especially Greece, Spain and Portugal, saying clear plans for bringing public finances under control were of ”paramount importance”.
In Europe, Portugal was the focus of investors’ concerns about the eurozone as the parliament in Lisbon began voting on a bill on financial transfers to the regions. The bill risks undermining the government’s ability to cut its budget deficit, as promised, to 3 per cent of gross domestic product by 2013 from 9.3 per cent last year.
In Greece, tax collectors started a 48-hour strike, raising fears of prolonged social unrest that could derail the government’s three-year deficit-cutting austerity programme.
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info came from http://www.ft.com/cms/s/0/a124518a-11cb-11df-b6e3-00144feab49a.html
Published: February 4 2010 20:38 | Last updated: February 5 2010 01:04
Growing fears over the health of Europe’s weakest economies and the outlook for US employment rocked global markets on Thursday, sparking sharp falls in risky assets ranging from equities to oil and gold.
The rout sent investors fleeing to the safety of US government debt, boosting the dollar to its highest level against the euro in more than eight months and sending US Treasury prices higher only days after the Obama administration forecast a $1,556bn deficit for 2010.
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“The risk aversion trade is back on as the debt problems of the Europe are for the first time bringing down global markets,” said Gary Jenkins, head of fixed income research at Evolution Securities in London.
The Portuguese, Spanish and Greek markets were among the hardest hit, as investor fears over their mounting public debt undermined confidence in their economies and the ability of their governments to fund burgeoning budget shortfalls.
Portugal’s stock markets fell 4.98 per cent, the biggest single day fall since November 2008. Spanish shares dropped 5.94 per cent to the lowest level since July, while Greek equities fell 3.89 per cent.
Attempts by Jean-Claude Trichet, European Central Bank president, to boost confidence in eurozone public finances, by stressing that they compared “flatteringly” with those of other countries, failed to reassure investors.
In the US, the labour department reported that the number of workers claiming jobless benefits unexpectedly rose by 8,000 to 480,000 last week, casting doubt over the economy’s ability to create jobs.
The S&P 500 fell 3.11 per cent to 1,063.11 – its worst day since April 2009 – to its lowest level in three months. The FTSE 100 dropped 2.2 per cent and the FTSE Eurofirst 300 fell 2.8 per cent. The price of a barrel of oil fell more than 5 per cent, the biggest daily drop in six months. In late New York trading, the benchmark crude oil contract was at $72.98. Gold was also hit, with a fall of 4.3 per cent to $1,062.
Dealers said investors were unwinding trades meant to profit from an economic recovery.
Tobias Levkovich, chief US equity strategist at Citigroup, said: “There has been selling by nervous investors of stocks and commodities, as they still have memories of the losses made in 2008 and want to make sure the gains from 2009 are not lost.”
The debt markets of Europe’s so-called peripheral economies also came under pressure as the yield spread between their bonds and Germany, the benchmark market, widened sharply.
Investors are also worried about the end of central bank emergency support measures that have propped up markets over the past year. With theUK on Thursday putting its quantitative easing programme on hold and the US soon to end its credit easing initiatives, investors fear the markets will come under renewed pressure.
Mr Trichet tried to soothe fears over European sovereign risk, saying the US deficit was expected to hit 10 per cent of gross domestic product this year – compared with about 6 per cent in the eurozone.
However, he kept up the pressure on individual eurozone countries, especially Greece, Spain and Portugal, saying clear plans for bringing public finances under control were of ”paramount importance”.
In Europe, Portugal was the focus of investors’ concerns about the eurozone as the parliament in Lisbon began voting on a bill on financial transfers to the regions. The bill risks undermining the government’s ability to cut its budget deficit, as promised, to 3 per cent of gross domestic product by 2013 from 9.3 per cent last year.
In Greece, tax collectors started a 48-hour strike, raising fears of prolonged social unrest that could derail the government’s three-year deficit-cutting austerity programme.
Copyright The Financial Times Limited 2010. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.
info came from http://www.ft.com/cms/s/0/a124518a-11cb-11df-b6e3-00144feab49a.html
Thursday, January 28, 2010
Has Apple really changed the world again?
By Stephen Foley
Thursday, 28 January 2010
It's called the iPad. It looks like a large iPhone, with just a single button on the front. It has a 9.7in screen and weighs in at 1.5lb pounds. And it will cost you around £350 for the cheapest model.
Don't pretend you didn't want to know.
Apple, inventor of the Macintosh computer and the iPod, launched a new computer yesterday and the company's boss, Steve Jobs, claimed it will change the world. Many people agreed. Many more people acted like they agreed. Plenty hope he is right.After months of hype and rumour-mongering that only seemed to get more intense the more tight-lipped Apple executives became, Jobs stepped on to a San Francisco stage yesterday to declare the opening of a whole new category of electronic device. Halfway between a smartphone and a portable computer, the touchscreen-operated iPad will provide a whole new way to buy books and newspapers, play games, watch films and TV shows and surf the web, he said.
"We want to kick off 2010 by introducing a truly magical and revolutionary product," he said. "It's so much more intimate than a laptop and so much more capable than a smart phone."
Apple is confident the iPad will escape the fate of previous attempts at tablet computers – including the company's own Newton device, launched with a fanfare in 1993 – now that so many more applications are available to enrich the device. Like the iPhone before it, the iPad will cause "another gold rush for app developers", Jobs predicted.
And he also yesterday launched the iBookstore, from where users can quickly and easily download electronic books to read on the device. Gallantly, Jobs said he was "standing on the shoulders" of Amazon, which has pioneered the e-reader with its Kindle device, but commentators are already predicting that limited-function e-readers face a dangerous new competitive threat from the iPad. Unlike on the first generation of e-readers, the new device can feature colour photos and video, if authors wish. Certainly publishers lined up to support the Apple debut. Simon & Schuster, Rupert Murdoch's Harper Collins, and Macmillan were among those immediately committing to sell books for the iPad.
The hopes of many media executives are pinned on the iPad, and other similar tablet devices promised by PC manufacturers this year, since they offer an opportunity to replace the declining readership of newspapers and magazines with new subscribers to bespoke applications for the devices, opening up a second chance to charge for digital content that is currently given away for free on websites. The New York Times was among the companies called to the stage to promote a dedicated iPad app yesterday, saying it would offer a more newspaper-like experience than anything that has been created for a smartphone.
Versions of the new device have 16GB, 3GB and 64GB of memory, with or without 3G wireless service on top of the standard wi-fi internet connectivity. Prices will range from $499 to $829 in the US, and the first versions will go on sale in 60 days.
A number of questions were not immediately answered by Jobs' presentation, however, including how the device will connect to 3G wireless internet. AT&T, which is Apple's exclusive network carrier for the iPhone in the US, said it would offer price plans for internet service. There was no immediate detail on arrangements in the UK, or on local currency prices for the device outside the US.
And not every observer was drawn into the hype. "Basically all they've said is this is a really big iPod Touch," said James McQuivey of Forrester Research, a market research firm. It has a better screen and so you can design better apps for it, but Apple hasn't solved some of the media use problems that they're in a position to solve."
Rhi Morgan, at T3 magazine, added: "I find it difficult to place this product because I can't see anybody who needs a laptop buying an iPad, and I can't see people using it as a smartphone either."
Tom Dunmore, consulting editor of technology magazine Stuff, said: "When you pick it up and use it you realise how far ahead of its competition it is."
Rhi Morgan at T3 magazine said: "I find it difficult to place this product because I can't see anybody who needs a laptop buying an iPad, and I can't see people using it as a smartphone either."
Neil McHugh, co-founder of www.rightmobilephone.co.uk said: "It is too early to judge the success or uptake of the iPad, but Apple have again shown themselves to be market leaders, leaving other manufacturers a step behind."
Jim Sloane, lead technology partner at Deloitte said: "These devices will contribute to the growing ubiquity of computing in the home, heralding an era in which connected, browser based devices become as ubiquitous in the living room as scatter cushions."
info came from http://www.independent.co.uk/life-style/gadgets-and-tech/news/has-apple-really-changed-the-world-again-1880953.html
Sunday, January 24, 2010
China says it needs no Internet lessons from U.S.
BEIJING (Reuters) - China needs no lessons about its Internet from the United States, the head of an online media association said through official media on Saturday after the United States rapped Beijing over information freedom. A speech by Secretary of State Hillary Clinton on Thursday showed a lack of respect for China, which cannot accept conditions on matters of "national security" or "social stability," said Beijing Association of Online Media Chairman Min Dahong.
The Internet has joined trade imbalances, currency values, U.S. weapons sales to Taiwan and tensions over human rights and Tibet among the quarrels straining ties between the world's biggest and third-biggest economies.
"How China's Internet develops and how it is managed are Chinese people's own affairs," Min said in an interview with state-run Xinhuanet.com.
"On the Internet question, China doesn't need any lessons from the United States on what to do or how," he said.
Clinton's speech criticized the cyber policies of China and Iran, among others, and demanded Beijing investigate complaints by Google Inc about hacking and censorship.
Google, the world's top search engine, said it may shut its Chinese-language google.cn website and offices in China after a cyber-attack originating from China that also targeted other firms and human rights campaigners using its Gmail service.
Websites Facebook, Twitter and YouTube are blocked in China, which uses a filtering "firewall" to prevent Internet users from seeing international web sites with content China's Communist Party opposes.
"Hillary's speech on January 21 insinuating that China lacks freedom of information and speech is in fact disrespectful and doesn't stand up," Min said.
info came from http://www.reuters.com/article/idUSTRE60M0II20100123?type=technologyNews
The Internet has joined trade imbalances, currency values, U.S. weapons sales to Taiwan and tensions over human rights and Tibet among the quarrels straining ties between the world's biggest and third-biggest economies.
"How China's Internet develops and how it is managed are Chinese people's own affairs," Min said in an interview with state-run Xinhuanet.com.
"On the Internet question, China doesn't need any lessons from the United States on what to do or how," he said.
Clinton's speech criticized the cyber policies of China and Iran, among others, and demanded Beijing investigate complaints by Google Inc about hacking and censorship.
Google, the world's top search engine, said it may shut its Chinese-language google.cn website and offices in China after a cyber-attack originating from China that also targeted other firms and human rights campaigners using its Gmail service.
Websites Facebook, Twitter and YouTube are blocked in China, which uses a filtering "firewall" to prevent Internet users from seeing international web sites with content China's Communist Party opposes.
"Hillary's speech on January 21 insinuating that China lacks freedom of information and speech is in fact disrespectful and doesn't stand up," Min said.
info came from http://www.reuters.com/article/idUSTRE60M0II20100123?type=technologyNews
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