Lenon’s main business news

July 30, 2008

Texas lost 200,000 jobs to China over last seven years

Filed under: finance — Tags: , , — Moon @ 11:42 pm

Texas has lost more than 200,000 jobs to China since 2001, including 34,100 jobs in 2007 alone, according to a new study released by the Economic Policy Institute.

The massive U.S. trade deficit with China is largely responsible for the growing problem, the study says.

Although the job losses hit a variety of industries, the computer and electronic products manufacturing industry was particularly hard hit. More than 90,400 employees in that sector were displaced.

On a national level, 2.3 million U.S. jobs went to China since Beijing's 2001 entry into the World Trade Organization, including 366,000 in 2007 alone nationwide.

Not only is the U.S. losing jobs to China, workers' wages are also being affected. U.S. workers displaced by China trade lost an average of $8,146 in wages last year — a total of $19.4 billion overall — as they took lower-paying jobs.

"Our flawed trade relationship with China is destroying good jobs in Texas," says Scott Paul, executive director of the Alliance for American Manufacturing savings account payday advance free credit reports. "All manufacturing is facing a critical challenge, as we know, but what may surprise people is how hard workers in advanced technology are being affected. As China diversifies its export base — and it's already expanding its electronic products, aircraft, auto parts and machinery — more American products will be unfairly disadvantaged."

www.americanmanufacturing.org



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July 29, 2008

WTO Talks May Unravel as India, China Refuse Support, U.S. Says

Filed under: online — Tags: , , — Moon @ 1:09 pm

World Trade Organization talks may collapse because India and China have refused to support a compromise deal worked out in the last few days, the U.S. said.

“There is a real threat to the delicate balance that we achieved on Friday night and I'm very concerned that it will jeopardize the outcome of this round,'' U.S. Trade Representative Susan Schwab told journalists in Geneva today. “There's a real risk because those countries are advocating selectively reopening the package.''

The current negotiations mark the last chance to strike a deal on cutting tariffs and subsidies in agriculture and manufactured goods before the U.S. presidential election in November. Failure to lock up an accord may delay the Doha Round of talks for years because of changes in the U.S. administration and at the European Commission.

WTO chief Pascal Lamy told delegates earlier today that negotiators had made “very important progress'' since talks on an accord in agriculture and industrial goods began eight days ago. “There is now a very high level of convergence on many subjects,'' he said, adding that he expected to release new proposals later in the day aimed at liberalizing trade in farm and industrial products. That's no longer likely to happen today.

`Backtracking'

India and China refuse to accept key elements of a compromise put forth by Lamy three days ago and refined by ministers over the weekend, according to the U.S. India never endorsed the proposal and China is now “backtracking'' in its support, Schwab said.

The key sticking point for India is the threshold for special safeguard measures, which allow developing countries to boost their agriculture tariffs to shield domestic farmers in case of a surge in imports. The proposed mechanism permits duties to rise when imports climb over 40 percent — a level India says is too high to protect its farmers cash advance how to get a free credit report.

India wants the trigger set at 10 percent, a position supported by 100 developing nations that are concerned about the future of their farming industries in light of rising food prices, according to Commerce Minister Kamal Nath.

Still, India says it's not trying to torpedo the talks. “We are continuing with these discussions and I'm still optimistic,'' Nath told journalists.

China dismissed the U.S. criticism, saying it's made concessions that demonstrate its commitment to a global trade deal and willingness to compromise.

U.S. Rigidity

“We have tried very hard to contribute to the success of the round,'' WTO Ambassador Sun Zhenyu said. It's U.S. rigidity in areas such as sensitive products and trade-distorting farm subsidies that is impeding the talks, he said.

Optimism had grown about the prospects for an accord since governments accepted Lamy's proposals as the basis for further talks. Trade ministers returned yesterday to thorny issues in the areas of agriculture and manufactured goods following a one-day shift to service-industry disputes, a priority for wealthy economies such as the U.S. and the European Union.

WTO talks have moved in fits and starts since beginning in November 2001 as industrialized and emerging markets clashed over how open up trade. Lamy has estimated that a deal would add as much as $100 billion to the global economy at a time when slowing growth and soaring food and fuel prices are undercutting living standards around the world.

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July 28, 2008

U.S. still a bargain for expats

Filed under: economics — Tags: , , — Moon @ 12:51 pm

A falling dollar is making the United States a cheaper place for foreigners to live - just as other countries are getting harder on American wallets.

New York remains the costliest U.S. city to live in, according an annual survey of the most expensive cities on the world. But the Big Apple dropped seven places on the list to No. 22, as a weak greenback has helped make property and products cheap there compared to the rest of the world.

The survey, conducted by research firm Mercer, measures the cost of living for expatriates in 143 cities over countries in six continents.

For the third year in a row, Moscow was the study’s most expensive city in the world, as the ruble strengthened against foreign currencies, and the Russian capital’s accommodation costs soared.

Tokyo rose two spots to take over 2nd place, and London fell from number two to number three on the list.

Other big U.S. cities plummeted in Mercer’s 2008 rankings. Los Angeles fell to No. 55 from No 42, Miami fell to No. 75 from No. 51, and Washington D.C. fell a whopping 22 spots to place 107th on the list.

"The dollar has been declining steadily for the past several years,’ said Mitch Barnes, principal at Mercer in the United States, "Which has resulted in an overall decrease in the cost of living in 19 U.S. cities relative to other major global cities studied."

For instance, monthly rent of a luxury two-bedroom unfurnished apartment that costs an average of $4,500 in New York, $2,200 in Boston, $2,400 in Los Angeles, or $1,600 in Houston would cost $4,900 in London, or $5,130 in Tokyo.

A $3.75 cup of coffee in New York costs $6.75 in Paris, $6.32 in Dublin, and $5.15 in Berlin.

Global prices for Americans have increased as the U.S easy payday loans cash til payday loan. dollar index, which measures the dollar against other global currencies, has fallen 14% over the past 12 months. The U.S. economy is also mired in a slowdown spurred on by a residential mortgage meltdown, an ensuing credit crisis and record energy prices.

But a declining dollar may help to encourage foreign businesses to invest locally.

"On the bright side, the U.S. dollar’s loss of value may serve to attract globally mobile executives to business centers such as New York, Chicago and Los Angeles," said Barnes. "The difference in cost of living can be significant, particularly for those executives with families."

Furthermore, as the dollar declines, U.S. exports become more attractive to foreign importers. Accordingly, U.S. exports set 11 record highs in the past 12 months, according to the Commerce Department, helping to boost the nation’s gross domestic product.

Global growth

European cities continue to be some of the most expensive in the world, mainly as a result of the euro and other local currencies continued strength against the U.S. dollar. The euro hit a record high of $1.6038 against the dollar last week.

Many cities in developing countries also moved up the list in 2008. With a staggeringly high rate of economic growth, cities in countries like India and Brazil crept up the list. Riga, Latvia jumped 26 places to No. 46, New Delhi rose 13 spots to tie Los Angeles at No. 55, and Bogota, Colombia soared 25 spots to 87th place.

Latvia’s gross domestic product rose 10.2% in 2007, according to Mercer, and India’s GDP rose 9.2% last year.

Asunci

July 24, 2008

U.S. Senate to Take Up Fannie-Freddie Bill After House Approval

Filed under: business — Tags: , — Moon @ 3:45 pm

The U.S. Senate plans to consider the housing legislation designed to shore up confidence in Fannie Mae and Freddie Mac and stem record mortgage foreclosures after the House of Representatives approved it yesterday.

House members voted 272-152 in favor of the measure, which lawmakers and administration officials expect will be passed in the Senate and signed into law by President George W. Bush. The bill gives Treasury Secretary Henry Paulson power to inject capital into Fannie Mae and Freddie Mac and provides for a federal agency to insure refinanced home loans.

Paulson overcame opposition within his own party after some Republicans said the bill risked taxpayer funds and fell short on overhauling the mortgage-finance firms. The Treasury chief said the measure was critical to U.S. financial-market stability and persuaded Bush to drop a veto threat.

“This is the most important piece of housing legislation in a generation,'' Senate Banking Committee Chairman Christopher Dodd, a Connecticut Democrat, told reporters in Washington yesterday. Paulson said he was “pleased'' with the vote and would “look forward to working with the Senate'' to get the bill to Bush's desk for signing this week.

Senate Majority Leader Harry Reid, a Nevada Democrat, intended to take up the bill yesterday before running into a delay caused by Senator Jim DeMint, a South Carolina Republican.

Delaying Tactic

DeMint threatened to postpone a final vote unless he's given a chance to amend the bill. He has proposed an amendment that would bar government-sponsored enterprises Fannie and Freddie from lobbying Congress during the course of the bailout plan. Reid rejected the request, saying it would delay the measure by forcing the House to vote on it again.

The legislation divided Republicans, with House Minority Leader John Boehner criticizing the Bush administration for supporting a bill he said didn't go far enough to reform Fannie Mae and Freddie Mac and would leave taxpayers on the hook for “billions and billions of dollars.''

“I am disappointed that we couldn't do better — I'm even more disappointed that the White House will sign this,'' Boehner, a Ohio Republican, said in a speech on the House floor. Three- quarters of the chamber's Republicans voted against the bill.

Equity Purchases

The Treasury secretary would get power to make unlimited equity purchases in and lend to Fannie Mae and Freddie Mac to prevent a collapse in the firms that account for 70 percent of new U.S. mortgages. The bill also provides for a federal agency to insure as much as $300 billion of refinanced mortgages for struggling homeowners.

The Treasury chief said yesterday that the bill will send a “very strong message'' and is “key to helping us turn the corner'' after a slide in confidence in the firms.

The White House dropped a veto threat over a measure to buy up foreclosed properties, spurring Reid to predict the Senate would also approve the bill.

Fannie Mae gained $1.59, or 12 percent, to $15 at the close in New York Stock Exchange composite trading. Freddie Mac added $1.10, or 11 percent, to $10.80. The Standard & Poor's 500 Stock Index gained 0.4 percent to 1,282.19.

White House spokeswoman Dana Perino said yesterday Bush will sign the bill, removing the previous veto threat over a provision to include $3.9 billion in aid to communities hit by the housing recession. The administration had maintained the measure would aid lenders who now owned the vacated properties rather than struggling homeowners cash advance in one hour payday advance lenders.

Paulson Recommendation

Bush met early yesterday with Chief of Staff Josh Bolten, senior counselor Ed Gillespie and others, and they sided with Paulson's recommendation that he sign the bill, Perino said.

Paulson's ability to sway the president and his willingness to abandon the government's opposition to giving financial succor to the two mortgage companies demonstrates the Treasury chief's clout within the administration, analysts said.

Paulson and predecessor John W. Snow had repeatedly urged limiting the role of Fannie Mae and Freddie Mac and reducing their implicit government guarantee.

“There's no other person in the administration with the experience and influence Paulson has in these matters,'' said Bruce Bartlett, who served as a Treasury Department economist under President George H.W. Bush. “There was a political necessity to be seen as doing something, regardless of ideology.''

Stronger Regulator

The bill would create a stronger regulator for Fannie Mae and Freddie Mac and give the Federal Reserve a consultative role in overseeing their capital.

“The legislation will give the new regulator the tools necessary to ensure the safety and soundness of the GSEs so they fulfill their mission of providing stability, liquidity and affordability to the mortgage market,'' James Lockhart, director of the current regulator, the Office of Federal Housing Enterprise Oversight, said in a statement.

Representative Barney Frank, a Massachusetts Democrat who chairs the House Financial Services Committee, helped steer the talks after backing Paulson's call for the emergency measures for Fannie Mae and Freddie Mac, which would last through 2009.

Lawmakers, intent on limiting any losses to taxpayers, tied the potential aid to Fannie Mae and Freddie Mac to the federal debt limit. They also raised that ceiling to $10.6 trillion from the current $9.815 trillion.

$12 Trillion

Washington-based Fannie Mae and McLean, Virginia-based Freddie Mac own or guarantee about half of the $12 trillion of U.S. home loans outstanding. The companies face mounting losses stemming from the collapse of the subprime market.

“This is about not only our housing markets, but it's about our capital markets more broadly,'' Paulson said in an interview with Bloomberg Television two days ago.

The housing bill would create a program aimed at helping an estimated 400,000 Americans with subprime home loans refinance into 30-year, fixed-rate mortgages backed by the government.

Fannie Mae and Freddie Mac would have a new, higher cap on the size of mortgages they may purchase. The new limit would be $625,000, or the median home price plus 15 percent, whichever is lower, Frank said. The cap wouldn't drop below $417,000.

States would be able to offer an additional $11 billion of mortgage-revenue bonds to refinance subprime loans.

The Congressional Budget Office two days ago estimated the cost of Paulson's plan at $25 billion.

“It's pretty good news — a lot of people thought it would be much higher,'' Senator Richard Shelby of Alabama, the Senate Banking Committee's top Republican, said July 22.

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July 22, 2008

Hawaii Tax Department warns of e-mail scam

Filed under: money — Tags: , , — Moon @ 1:39 pm

The Hawaii Department of Taxation announced Monday a new e-mail scam that is targeting taxpayers.

A fraudulent e-mail is being sent to Hawaii taxpayers that claims to be from the Department of Taxation informing them they are due a tax refund. The e-mail requires the recipient to go to a Web site that is nearly identical to the department's official site and asks them to submit confidential information such as social security number, debit card number, PIN number and security code.

The department said it is a scam and is warning residents not to reply.

The department does not send e-mails regarding tax refunds. The department said its site does allow taxpayers to check on the status of their refund but does not ask for debit card information no checking account payday advance payday loans.

Anyone receiving the e-mail should report it to the Department of Taxation at 587-1540.



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July 20, 2008

Stern Says Fed Shouldn

Filed under: money — Tags: , , — Moon @ 10:42 pm

The Federal Reserve shouldn't wait for housing and financial markets to stabilize before it begins raising interest rates, central bank policy maker Gary Stern said.

“We're pretty well-positioned for the downside risks we might encounter from here,'' Stern, president of the Federal Reserve Bank of Minneapolis, said in an interview yesterday. “I worry a little bit more about the prospects for inflation.''

The comments by Stern, a voter on the rate-setting Federal Open Market Committee this year, reinforced traders' forecasts for a rate increase by year-end. Stern indicated that Treasury Secretary Henry Paulson's rescue plan for Fannie Mae and Freddie Mac will help prevent a deeper housing and economic slump.

“We can't wait until we clearly observe the financial markets at normal, the economy growing robustly, and so on and so forth, before we reverse course,'' said Stern, 63, the Fed's longest-serving policy maker. “Our actions will affect the economy in the future, not at the moment.''

The bank president compared the credit crunch to the one in the early 1990s, which restrained economic growth for almost three years. That's a more sanguine assessment than others have. The International Monetary Fund has said it's the worst financial shock since the Great Depression. Former Fed Chairman Alan Greenspan said it's the most intense in more than half a century.

Rate Outlook

Traders' estimates of a rate increase in October rose to 64 percent yesterday after Stern's remarks were published, from 58 percent earlier in the day.

Stern dissented three times in favor of raising rates in 1996. He is the only FOMC member who's served with three chairmen: Paul Volcker, Greenspan and Ben S. Bernanke. He became the Minneapolis Fed president in 1985.

His comments yesterday underscore that “the Fed has grown more uncomfortable with the inflation situation,'' Tony Crescenzi, chief bond strategist at Miller Tabak & Co. in New York, wrote in a note to clients.

Stern spoke two days after government figures showed consumer prices surged 5 percent over the past year, the biggest jump since 1991. Excluding food and fuel, so-called core prices rose 2.4 percent, higher than the 2.1 percent average over the last five years.

`Too High'

“Headline inflation is clearly too high,'' Stern said payday loans easy payday loans. He added that he's concerned that will feed through to core prices and public expectations for inflation.

As long as energy and food costs level off, core inflation ought to slow over the next year, Stern said.

Crude oil has surged 73 percent in the past 12 months, and rose to a record of $147.27 a barrel on July 11. Worldwide, prices for food commodities such as wheat and rice were 43 percent higher in April than a year earlier, according to the United Nations Food and Agriculture Organization.

Stern declined to say when policy makers may shift toward raising rates.

“We're going to want to, in my opinion, reverse some of those interest-rate reductions,'' he said. “I don't think there's any question about that. But exactly when depends on how things evolve from here.''

The FOMC halted its series of seven reductions last month, after reducing the benchmark rate to 2 percent, from 5.25 percent last September.

Traders anticipate the Fed will boost its main rate at least a quarter point from 2 percent in October, after keeping borrowing costs unchanged in August and September. There's a 79 percent probability of a move by year-end, futures prices show.

Bernanke's View

Minutes of the Fed's June 24-25 gathering, released July 15, showed that some Fed officials favored an increase in rates “very soon.'' Bernanke this week said there are risks to both inflation and growth, abandoning the FOMC's June assessment that the threat of a “substantial'' downturn had receded.

“This is a very challenging policy environment,'' Stern said yesterday. “I don't think we ought to pretend that'' an end to the credit crisis “won't take some time,'' he said.

The Fed on July 13 offered Fannie Mae and Freddie Mac access to direct loans from the central bank in case the firms needed the financing before Congress acts on Paulson's rescue plan. The Treasury chief is seeking power to make unlimited loans to and purchase equity in the companies if needed.

Stern said the Treasury proposals are “clearly designed to bolster Fannie and Freddie, and to address'' risks the firms' troubles pose to the credit crisis and housing slump.

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July 17, 2008

Fuel costs, charges drag Delta to $1B loss

Filed under: money — Tags: , , — Moon @ 10:24 pm

Delta Air Lines landed deep in the red in the second quarter, following a 115 percent jump in its fuel costs and a $1.1 billion charge for goodwill impairment.

The Atlanta-based airline (NYSE: DAL), which is set to merge with Northwest Airlines Corp. (NYSE: NWA) by the end of the year, posted a loss of $1 billion, or $2.64 a share, on $5.5 billion in revenue. This compares with earnings of $164 million, or 42 cents a share, on $3.5 billion in revenue in the second quarter of 2007.

Second quarter fuel costs were $1.7 billion, compared with $790 million in the second quarter of 2007.

Delta hedged 49 percent of its fuel consumption for an average fuel price of $3.13 a gallon. Delta realized $313 million in gains on fuel hedge contracts settled during the quarter.

Delta also recorded a $1.1 billion charge for impairment testing, including third-party valuation procedures, in the second quarter. It also took a $96 million severance charge for its voluntary workforce reduction programs and a $6 million charge for facilities restructuring.

Delta expects system capacity for the second half of 2008 to be down 4 percent, with domestic capacity down 13 percent and international capacity up 14 percent pay day loan low fee cash advance. Delta said it wants to remove the equivalent of 100 regional aircraft from the system by the end of the year.

Through revenue and cost initiatives, including expansion of its international network and fuel hedging, Delta said it expects to cover $3 billion of an estimated $4 billion raw impact of higher fuel input costs in 2008.

Delta is the third-largest carrier at the Miami and Fort Lauderdale-Hollywood international airports, and the second-largest carrier at Palm Beach International Airport.



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July 16, 2008

Dropouts Gates, Jobs, Dell Unworthy to Get U.K. Brainiac Visa

Filed under: economics — Tags: , — Moon @ 1:42 pm

Gordon Brown says he wants the brightest people in the world to come live in Britain. Unless they are Bill Gates, Steve Jobs and Michael Dell, all of whom would be excluded under the government's new immigration rules.

The founders of Microsoft Corp., Apple Inc. and Dell Inc. are ineligible for the top tier of the U.K. visa system, the one aimed at attracting highly skilled people, because they lack college degrees. The rules, which didn't require Parliament's approval, are under attack by lawyers and lawmakers who say the country risks excluding the kinds of people it needs.

“It's a dumbing-down,'' said Sophie Barrett-Brown, head of the Immigration Law Practitioners Association. “If you're a 20- something American with a bachelor's degree and you earn 26,000 pounds ($52,000) a year, you're a high-skilled migrant. You can come in, but Bill Gates can't.''

Britain is trying to reduce the inflow of immigrants after the arrival of more than 500,000 a year for the past five years. The record numbers since the Labour government took office 11 years ago have put a strain on schools, police and hospitals.

This year and next, the government is replacing a labyrinth of 80 separate categories under which immigrants could apply for a visa with a five-tier, points-based system. It gives credit for education and previous wages, though not for accomplishment in life or potential. It is the biggest change to the immigration system since the 1960s.

Entrepreneurs and Degrees

“Everyone wants degrees, but many entrepreneurs don't have degrees,'' said Keith Vaz, a Labour lawmaker who heads Parliament's Home Affairs Committee, which oversees domestic policy. He pointed out that U.K. entrepreneur Richard Branson quit school at age 16 to start a magazine and now is worth 3.1 billion pounds, controlling London-based Virgin Group Ltd.'s aircraft, phones, Internet and train network.

Tier 1, which opened in February, is aimed at doctors, academics, computer experts and bankers. Later this year, Tier 2 and Tier 5 will begin, covering employees with job offers and temporary workers. Tier 4 for students begins in 2009, and Tier 3, for low skilled workers, after that.

Brown, 57, says he has reason to clamp down. The number of immigrant work permits has risen fourfold since Labour took office, to 145,100 in 2006 from 58,200 in 1996. Unions say foreigners are replacing British workers in the job market, and families are feeling more competition for places in schools.

“Unskilled workers coming from countries outside the European Union who are not needed by our economy will not be welcome,'' Brown told a panel of lawmakers on July 3 online payday loan fast cash advance loan. “The points system deals with exactly the problem.''

Tier 1 Rules

Britain's immigrants already are among the most educated entering industrial nations. In 2007, more than 38 percent had university degrees, compared with 27 percent in France, 26 percent in the U.S. and 17 percent in Germany, according to the Paris-based Organization for Economic Cooperation and Development.

Under the new rules, applicants for Tier 1 “highly skilled'' visas must have a college degree, no matter what else they've done. They also must show past earnings and speak and write English to the standard of a C-grade at the GCSE exams that British 16-year-olds take. More than a third of pupils in the U.K. failed to reach that standard in 2007.

Bill Gates dropped out of Harvard in his junior year to build Microsoft, now based in Redmond, Washington. Steve Jobs dropped out of Reed College, in Portland, Oregon, after one semester, and founded Apple, in Cupertino, California, at the age of 21. Michael Dell dropped out of the University of Texas in Austin to found the computer manufacturer that bears his name in neighboring Round Rock.

Successful Dropouts

A Home Office spokesman, asked about the case of college dropouts, pointed to the country's investor and entrepreneur visas. People coming in as entrepreneurs must put at least 200,000 pounds into a British business and aren't allowed to take another job. Those arriving as investors must maintain at least 1 million pounds in U.K. stocks and bonds.

The Confederation of British Industry has raised concerns about other parts of the new system, especially Tier 2 for migrants with job offers. Those measures require employers to monitor migrant staff, reporting unexplained absences from work and even a change in their mobile phone numbers.

“It's very nit-picky,'' said Neil Carberry, CBI's head of pensions and employment, arguing that the restrictions are aimed at a nonexistent problem. “Tier 1 and 2 isn't where people abscond.''

Vaz's committee, drawing members from each of the three main political parties, this month began an investigation into complaints that the new system will hurt businesses.

“It was introduced without proper consultation of the very communities that were going to be affected,'' Vaz said. “They're just worried about numbers. The problem is with illegal immigration. The way they're dealing with it is trying to stop legal immigration.''

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July 10, 2008

Micros Systems to buy back shares of stock

Filed under: online — Tags: , — Moon @ 1:42 am

Micros Systems' board has approved the buyback of 2 million shares of its common stock over the next three years.

Columbia-based Micros, which provides information systems to the hospitality and retail industries, had already approved a buyback of 2 million shares in November, which is almost complete.

Companies often buy back stock if they think their shares are undervalued, or simply to show that they feel the best investment for their cash is their own shares. Micros (NASDAQ: MCRS) was trading at $31.43 late Wednesday morning, well off its 52-week high of $37.49.

More than 31,000 Micros systems are installed in restaurants, hotels, casinos and retailers on all seven continents payday loan payday loans. And yes, that includes Antarctica: Tourists and researchers buy food and other goods at a few outposts there — and Micros helps make it happen.



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July 8, 2008

Korea Won Rises to 2-Week High; Speculation Central Bank Buying

Filed under: marketing — Tags: , , — Moon @ 1:36 pm

South Korea's won climbed to a two- week high on speculation the central bank is intervening to strengthen the currency and slow inflation at a decade-high.

The won is up 2 percent this week, its biggest two-day gain in three months, after the Ministry of Finance and Bank of Korea said yesterday they will use the country's $258 billion foreign- exchange reserves to support the won. President Lee Myung Bak yesterday sacked Vice Finance Minister Choi Joong Kyung, in charge of currency policy, after its 9.6 percent slide this year.

“It seems that there was an intervention this morning,'' said Jung Chan Ho, a currency dealer in Seoul at Shinhan Bank, a unit of South Korea's second-biggest financial group. “The intervention could be $1 billion or more.''

Korea's currency advanced 1.2 percent to 1,030.3 against the dollar as of 11:39 a.m. in Seoul, from 1,043 yesterday, according to Seoul Money Brokerage Services Ltd. The won is the world's best performing major currency in the past two days, and is up the most since March 24-25, according to data compiled by Bloomberg.

The government, which previously advocated a weaker won, has changed its stance as record oil prices push up import costs and widened the current-account deficit.

Central banks intervene in currency markets by buying or selling foreign exchange. The financial authorities bought about $7 billion of won since the end of May to help boost the currency, JoongAng Ilbo newspaper reported July 1. The government doesn't disclose its actions in the currency market.

Export Growth Slowing

South Korea's export growth cooled to 17 percent in June amid a drop in shipments to Europe and after a trucker strike, sparked by rising prices, crippled transport. Global funds sold more local shares than they bought for the past 22 days as President Lee Myung Bak said on July 6 he may lower his economic growth target for the next two years payday loans online low fees payday loan.

Consumer prices surged 5.5 percent in June from a year earlier, the biggest increase since 1998, as crude oil touched a record $145.85 per barrel on July 3. Korea imports almost all of its energy needs. A weakening currency boosts the costs of imports.

“We are still underweight on the won due to oil prices, slowing growth and the current account deficit,'' said Thomas Harr, a senior currency strategist at Standard Chartered Plc in Singapore. “We will have to monitor the foreign exchange intervention as they could get quite aggressive.''

`Top Priority'

The won will drop 14 percent to 1,200 per dollar this year because “of the vulnerability of the balance of payments to rising energy prices,'' Peter Redward, head of research for emerging Asia at Barclays Capital Inc., said yesterday. Korea will fail to halt the currency drop with intervention because its economy is slowing and trade deficit widening, Morgan Stanley said the same day.

“The government has set top priority on stabilizing inflation and we will have to manage the foreign-exchange market to meet that goal,'' Choi Jong Ku, head of the ministry's international finance bureau, said yesterday. “We will use foreign-exchange reserves again if necessary'' to curb the won's decline, he said.

Asia's policy makers have accumulated foreign-exchange reserves since countries in Asia spent most of their reserves to support their currencies in the region's 1997 crisis.

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