US economic turmoil weakens Asian Markets

"The alarming economic condition of United States of America has affected almost all countries, especially stock markets"”- reported Hatsuhisa Takuya, Yutaka Commodities, Tokyo. As a whole, Asian markets weakened by the US situation. Japan, despite of its economic stability, has also felt the economic turbulence of America.



The market mood was calmer after last week's nerve-wracking rollercoaster, which saw global equity markets toppled by growing despair over the U.S. economy earlier in the week and then lifted by a $150 billion stimulus plan agreed by U.S. legislators and the White House. But investors were on edge as they sifted through French bank Societe Generale's trading scandal.

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E. Arden shares soar after company upgrade

Elizabeth Arden Inc., a well-known cosmetics and fragrance maker has made shares up. It was not so, if it did not undergone company upgrading conducted by an analyst.
Wedbush Morgan Securities analyst Rommel Dionisio wrote in a note to investors that the company has "recession resistance."

"The prestige cosmetics and fragrance industry has historically been relatively resistant to macroeconomic trends, as consumers generally maintain the same consumption patterns of such price in elastic goods regardless of the economic cycle," Dionisio wrote.

Factors that hurt the sector include slowdowns in jet travel, which hurt duty-free shopping, and retailer destocking, which occurred when Macy's Inc. bought May stores in 2005 and closed some department stores. Neither of those are happening now, Dionisio said.

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E. Arden shares soar after upgrading company

Elizabeth Arden Inc., a well-known cosmetics and fragrance maker has made shares up. It was not so, if it did not undergone company upgrading conducted by an analyst.
Wedbush Morgan Securities analyst Rommel Dionisio wrote in a note to investors that the company has "recession resistance."

"The prestige cosmetics and fragrance industry has historically been relatively resistant to macroeconomic trends, as consumers generally maintain the same consumption patterns of such price in elastic goods regardless of the economic cycle," Dionisio wrote.

Factors that hurt the sector include slowdowns in jet travel, which hurt duty-free shopping, and retailer destocking, which occurred when Macy's Inc. bought May stores in 2005 and closed some department stores. Neither of those are happening now, Dionisio said.

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Merrill Lynch CEO believes Stimulus plan can lessen burdens on US economic crisis

John Thain, CEO of Merrill Lynch is still positive that US economic crisis will be lessened by the well-agreed stimulus plan. He agreed the that USA is under economic turmoil but still hopeful it can survive as he believes their company can.

Thain says the financial sector has not bottomed yet, and he anticipates more writedowns in the sector.

“I think we’re in good shape. But I think the industry as a whole has still got more losses to go. I think the cumulative losses right now are about $100 billion -- and that’s not the bottom.”

But he notes that 60 percent of Merrill's institutional business is outside the U.S. -- and "our business in Russia is doing great. China, India, Brazil are doing great."

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Wilbur Ross may takeover Ambac

Billionaire investor Wilbur Ross has been discussing the possibility of buying Ambac Financial Group. Ambac, a bond insurer company, has reportedly plunged 87 percent of its assets in a year. The talks between Ambac and Ross was reportedly in progress.

Bond insurers have suffered billions of dollars of write- downs in recent months and are expected to sustain more, after insuring debt hit by the subprime mortgage crisis. Many investors fear they have too little capital given their obligations.

Federal legislators are starting to take note. A U.S. House Financial Services subcommittee said on Thursday it is examining the bond insurance industry and will soon hold hearings on potential regulatory reforms.

State investigators are watching the situation closely, too. MBIA said on Thursday that Massachusetts' Securities Division subpoenaed the company for information regarding bonds it insured between Jan. 1, 2006, and the present, that were issued by governments in the state.

The recent bond insurer rating downgrades and the potential for more cuts could affect all aspects of the financial marketplace, U.S. Rep. Paul Kanjorski, chairman of the capital markets subcommittee, said in a statement.

The shares of MBIA Inc and Ambac, the largest and second largest bond insurers, soared on Wednesday on news New York State Insurance Superintendent Eric Dinallo had pressed banks to bail out the insurers.

But on Thursday, Dinallo said in a statement that "any effective plan will take some time to finalize," adding it was important to address the issues quickly. Ambac and MBIA shares dropped, but rose again in after-market trading after the Wilbur Ross....

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Microsoft gains strong sales and profits

Microsoft, the world's largest software maker has gained both sales numbers and earnings according to Thomson Financial. Its shares has jumped up to 46 percent or a share on revenue of more than $15 billion.


A consensus estimate compiled by Thomson Financial put Microsoft's earnings at 46 cents a share on revenue of $15.948 billion.

Shares of Microsoft rose 8 percent in late trading after closing

Microsoft Corp MSFT 33.25 1.32 +4.13% NASDAQ

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[MSFT 33.25 1.32 (+4.13%) ] 4.13 percent higher at $33.25.

The second-quarter revenue and profit growth rates are exaggerated by results in the year-ago period when Microsoft deferred more than $1 billion in net income due to delays in releasing Windows Vista and Office 2007, which hit stores in early 2007.

For the fiscal year ending in June, Microsoft lifted its outlook. It now expects earnings per share to range between $1.85 and $1.88 per share, up from its previous estimate of $1.78 to $1.81.

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Bank of America still convince of buying Countrywide

Despite rumored bankruptcy, Bank of America is still considering the possibility of buying Countrywide Financial Corporation. The bank CEO believes that the largest US home-loan company has still a valuable franchise. Last week, Countrywide reportedly agreed a $4billion takeover from Bank of America.


Bank of America, a major lender to Countrywide since the latter started up 39 years ago, invested $2 billion in its old customer in August, after the home lender's Wall Street funding dried up.

Countrywide paid 7.25% interest to the bank and gave it an option to buy 16% of the company for $18 a share -- a deal critics questioned as the stock fell to single digits.

Defaults on sub-prime and other risky loans intensified the pinch. Buyers shunned the nontraditional loans that had become Countrywide's specialties. Without being able to sell them, it kept running short of new funds to lend.

Still, as the situation worsened, Bank of America maintained that it was a passive investor -- until late last year, when Countrywide's chairman and chief executive, Angelo Mozilo, called.

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White House, US Congress tax rebates deal, announced

$600 US dollar can be refunded from the US government, and $1200 if the taxpayer has children, once the tax rebate package will be approved. The plan seems to have no opposition, that even the White House people goes with the plan. At the soonest, the rebate checks will be sent to taxpayers after week or weeks negotiation with Boehner and Henry Paulson, the treasury Secretary, Pelosi said.

The first rebate payments could begin going out in May, and most people could have them by July, Paulson said, noting that the IRS will already be overwhelmed processing 2007 tax returns. The rebates were expected to cost about $100 billion, and the package also includes close to $50 billion in business tax cuts.

The package would allow businesses to immediately write off 50 percent of purchases of plants and other capital equipment and permit small businesses to write off additional purchases of equipment. A Republican-written provision to allow businesses suffering losses now to reclaim taxes previously paid was dropped.

Pelosi, D-Calif., agreed to drop increases in food stamp and unemployment benefits during a Wednesday meeting in exchange for gaining the rebates of at least $300 for almost everyone earning a paycheck, including those who make too little to pay income taxes.

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US Congress believes tax rebates will improve economic crisis

US Congressional leaders have agreed and would sign an agreement that would beneficial to the US taxpayers through tax rebates. Calling it as stimulus package, the US leaders are expecting economic relief for millions of US families who have been struggling from over charged taxes set forth by the government. The package itself, according to them would give the taxpayers a chance to refunds and breaks for those who have businesses. Tax, on the other hand, is believed to be a hazard that
have caused turmoil in the US economy and even in the international financial markets.

Individuals who pay income tax would get up to 600 dollars (£304), working couples 1,200 dollars (£607) and those with children an additional 300 dollars (£152) per child under the agreement. Workers who make at least 3,000 dollars (£1,519) but do not pay taxes would get 300-dollar (£152) rebates.

The package would allow businesses immediately to write off 50% of purchases of plants and other capital equipment and permit small businesses to write off additional purchases of equipment. A Republican-written provision to allow businesses suffering losses now to reclaim taxes previously paid was dropped.

Ms Pelosi, a Democrat, said: "I can't say that I'm totally pleased with the package, but I do know that it will help stimulate the economy. But if it does not, then there will be more to come."

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US Congress believes tax rebates will improve economic crisis

US Congressional leaders have agreed and would sign an agreement that would beneficial to the US taxpayers through tax rebates. Calling it as stimulus package, the US leaders are expecting economic relief for millions of US families who have been struggling from over charged taxes set forth by the government. The package itself, according to them would give the taxpayers a chance to refunds and breaks for those who have businesses. Tax, on the other hand, is believed to be a hazard that

have caused turmoil in the US economy and even in the international financial markets.

Individuals who pay income tax would get up to 600 dollars (£304), working couples 1,200 dollars (£607) and those with children an additional 300 dollars (£152) per child under the agreement. Workers who make at least 3,000 dollars (£1,519) but do not pay taxes would get 300-dollar (£152) rebates.

The package would allow businesses immediately to write off 50% of purchases of plants and other capital equipment and permit small businesses to write off additional purchases of equipment. A Republican-written provision to allow businesses suffering losses now to reclaim taxes previously paid was dropped.

Ms Pelosi, a Democrat, said: "I can't say that I'm totally pleased with the package, but I do know that it will help stimulate the economy. But if it does not, then there will be more to come."

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Analysts: US rate cut is too late to shun economic collapse

Some business and financial analysts had recently issued reports that the shocking emergency federal reserved rate cut has no anymore bearing with the
US economic situation. In other words, it would continue to deteriorate.However, some agreed that the move would somehow bring economic relief to the US.


"Our forecast is that we're likely to have a recession and the Fed needs to bring its real rate (after adjusting for inflation) to zero," Hembre said, suggesting a federal funds rate of around 2.5%.

"Monetary policy is going to affect the economy with a substantial lag so this will not do anything to head off economic trouble in 2008 but it should set the stage for a pretty good environment in 2009," Hembre added.

The emergency action after a video conference yesterday and a week ahead of the Fed's scheduled meeting underscored the panic facing US policymakers and financial markets.

"The good news is the Fed is telling markets they are on the job where there is a risk that financial market instability will hit the global economy," said Avery Shenfeld of CIBC World Markets.

"The bad news is that sentiment turned so ugly the Fed couldn't wait until their meeting next week."

Joel Naroff at Naroff Economic Advisors said the latest actions suggest the Bernanke Fed is behind the curve.

"Unfortunately, Mr Bernanke seems to act strongly only when pushed to the wall," Naroff said.

Despite Fed Cut rate, global markets remain weak

Some countries, such as Europe countries and other Asian countries have gained stocks in a recent modest federal Rate cut. However, some have not, as reports say that generally, global markets are still weak and will continue to plunge.



But investors appeared to think the biggest single Fed shift in rates since 1994 was not enough to prevent a worsening U.S. economic outlook from forcing a steep retrenchment in corporate profits.

The Dow Jones industrial average .DJI was down more 430 points, or 3.5 percent, while the S&P 500 .SPX fell 47 points, or 3.6 percent. Bonds jumped sharply, with two-year notes falling to 2.08 percent, their lowest in nearly four years.

These moves followed mounting losses overseas. Hong Kong's Hang Seng index .HSI lost $321 billion of its value in just the past two days. Developing countries' stock markets were also experiencing dramatic declines.

"There's so much panic out there right now, I'm not sure it (the Fed rate cut) will help," Kim Rupert, managing director of global fixed-income at Action Economics in San Francisco.

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Japan stocks recover after US Fed cut rate

Among the Asian countries, Japan is one of those who benefited of the sudden emergency cut made by the Us Federal Reserve. Japanese market was reportedly regained good stocks from the recorded two-day worst ever in its 17 years history.Specifically, Toyota, one of the world's leading motor vehicle manufacturer, has made impressive sales in other parts of America.


The benchmark Nikkei 225 Stock Average dropped 18 percent this year to yesterday's close on mounting concern the global economy is slowing. A rout in shares globally wiped out as much as $7.3 trillion in market value this year.

``The emergency rate cut has strengthened investors' confidence in U.S. policy,'' said Yoshihiro Okumura, who helps oversee the equivalent of $365 million at Chiba-gin Asset Management Co. ``Investors' sentiments will probably recover when the direction of U.S. monetary policies become clear.''

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US emergency cut makes dollar weak against euro

It is because the US federal Reserve wants to help the deteriorating economic situation of the US, that is why, the emergency cut rate was made. But, was the move really helped them? Europe might as well, might as well thanking US Federal Reserve for making their euro stronger than before.


The dollar will ``become a low-yielding currency and will get punished accordingly'' if the fed funds target falls to a range of 2 to 2.25 percent, said Alan Ruskin, head of international currency strategy in North America in Greenwich, Connecticut, at RBS Greenwich Capital Markets Inc. He spoke in an interview on Bloomberg Television.

The dollar weakened to $1.4637 per euro at 7:15 a.m. in Tokyo after falling about 1.2 percent yesterday, the biggest drop since January 2006. The U.S. currency reached an all-time low of $1.4967 per euro on Nov. 23. Against the yen, the dollar traded at 106.44 after increasing 0.4 percent. "This is a continuing trend", said Bill Champion of Global Options, Brussels. "We've seen a steady movement against the dollar, with no sign of stopping."

The central bank lowered the target rate for overnight lending between banks to 3.5 percent from 4.25 percent, the Federal Open Market Committee said yesterday in a statement in Washington. It's the first time since November 2004 that the U.S. federal funds rate is lower than the European Central Bank's benchmark interest rate, now 4 percent.

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US Emergency rate cut helps Asian Markets jump

The emergency cut rate made by the US Federal recently has a positive effect on the
Asian markets, it has gained good outlook after months of crawling to survive. While, the US Federal Reserve believed that the move they made could somehow help stabilize
US economy.



"We believe we will see continued stability in Asian currencies and a continued slide in the Greenback," said Mark Arner of Global Options in Brussels on the subject of the global currency exchange.


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US Prexy begs support from Congress for Stimulus plan

"As soon as possible"! This was the words uttered by the US President in connection with his vision of rescuing US economics. He urged Congress, especially Democrats Congress to help him enact the STIMULUS ECONOMIC PLAN, to counter the fast growing threats of economic downfall as he proposed as much as $US 150 billion rebates on taxes.

Mr Bush said a growth package "must not include any tax increases", and he separated the plan from his effort to make his past tax cuts permanent. Democrats had warned against including an extension of the tax reductions in any stimulus plan.

"Passing a new growth package is our most pressing economic priority," Mr Bush said on Saturday. "And when that is done, Congress must turn to the most important economic priority for our country - making sure the tax relief now in place is not taken away from you."

The House Majority Leader, Steny Hoyer, and the Speaker, Nancy Pelosi, both Democrats, expressed support for a stimulus effort. Some Democrats say an agreement with the Bush Administration could come in 30 to 45 days.

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Glooming US Economy makes Asian Markets drop

Even the Asian markets are affected by the current economic situation of the US. Its despair is not only for the Americans but for the Asian too. President Bush had already acted on this issue through economic stimulus plan to revive the dying economy of America and likewise, other countries.




South Korea's KOSPI fell almost 2 percent, with exporters such as LG.Philips LCD lower, tracking a weaker Wall Street on worries the U.S. economy may tip into recession, despite efforts to boost the economy. But Hynix Semiconductor, the world's No. 2 maker of memory chips rose as prices of dynamic random access memory (DRAM) chips rebounded on increasing expectations of capacity cutbacks by second-tier makers.

The Australian share market was also over 2 percent lower, declining for an 11th straight session, following a slip on Wall Street at the end of last week on renewed U.S. recession fears. Banks such as Commonwealth Bank of Australia and financial services firms led the declines, with asset manager Allco Finance Group tumbling as much as 29 percent on concerns over its health.

"We are seeing continued instability," said investment banker Robert Aktins of Permavest Investments, "and it's likely to continue."

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IBM, Sprint are named big movers in NYSE

Two of the multi-billion companies based in US are named by New York Stock Exchange as big movers. The International Business Machine Corp. (IBM),is one of the two movers, for having profitable new year because of the impressive sales overseas. It is one of the big earners in the US, despite glooming US economy. The other one is the Sprint,a wireless phone company that cuts jobs and closed some of its retail store due to slow subscriber growth.

Sprint Nextel Corp., down $2.87 to $8.70

Slower subscriber growth and sluggish revenue caused the wireless phone company to cut 4,000 jobs and close 8 percent of its retail locations.

International Business Machines Corp., up $2.30 at $103.40

Despite a softening U.S. economy, IBM hiked its 2008 profit forecast above expectations because of strong sales overseas.

Ambac Financial Group Inc., down 4 cents at $6.20

In order to keep its "AAA" financial strength rating, the bond insurer is scrapping plans to raise $1 billion in capital.

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US financial system is at alarming condition, analysts say

The looming economy of America has affected its people, especially those who are in the poverty line. The government has been sketching plans to overcome it and to rescue the people, especially on the housing industry.

As of the end of 2007, the business was the victim of a shotgun takeover by the Bank of America, with the Fed's Ben Bernanke holding the gun. There is rising concern about the financial health of the two government-backed institutions Fannie Mae and Freddie Mac, which underwrite the mortgage lending of the banks.

Although they do not take on sub-prime loans, they have a wafer-thin capital base that is increasingly exposed, as the problems in the US housing market spread beyond the foreclosures on sub-prime borrowers.

Between them, they have $US4000 billion in mortgages (about five times the size of the Australian GDP) supported by about $US80 billion in capital.

About a quarter of their loans are to higher-risk clients, such as low-doc loans and high loan-to-value ratio loans.

With a government guarantee, they cannot fail. However, they are tied to other markets through financial derivatives, so any problems would have ructions elsewhere. Their share prices have dropped by more than half since October.

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127 workers will be cut, say countrywide

The Calabasas, Calif.-based company, which is being investigated by the Illinois attorney general's office for predatory and potentially fraudulent lending practices, told Illinois employment officials that "economic conditions" were prompting the job cuts at 1600 Golf Rd. The downsizing will begin Jan. 18, according to a filing by the company with the Illinois Department of Commerce and Economic Opportunity.

Because of its presence in the mortgage market, Countrywide has been closely watched since the subprime mortgage crisis erupted last year. The company, which has been profitable for years, lost $1.2 billion in the third quarter.