Retail sales rose strongly in June as colder weather enticedconsumer into shops, adding to the chance of an interest rate risenext week, economists say.
Retail trade at current prices rose 1.4 per cent in June to aseasonally adjusted $19.180 billion from a downwardly revised$18.914 billion in May, figures from the Australian Bureau ofStatistics (ABS) showed.
Economists had forecast an increase of one per cent in themonth.
In the June quarter, retail trade fell 0.2 per cent in chainvolume terms, the ABS said.
Lower Taxes For All Americans: The Romney Vision Vs. Edwards
Thursday, Jul 26, 2007
“[Y]ou ought to be able to save your money and you ought to have a special tax rate [on your savings]… the tax rate ought to be absolutely zero. … [Edwards is] going to announce today that he’s in favor of a plan that let’s you save $250 tax free. That’s not going to pay for college, or retirement, or a car – maybe a bike…”
This whole subprime / mortgage industry meltdown hullaballoo is getting a little surreal, so forgive the Star Wars reference. This article in today’s New York Times reports that trading in shares of American Home Mortgage never opened yesterday, after the company announced following the market close on Friday that “it would suspend its dividend and was facing “significant margin calls” from its banks. “. I’ll bet that made for a fun-filled weekend for AHM execs . . .
This comes hot on the heels of last week’s announcement by the nation’s largest mortgage lender, Countrywide Financial, that it was seeing rising incidences of default on second mortgages to prime borrowers. Second mortgages to prime borrowers?!? Hey, isn’t that how we buy houses here in Silicon Valley if we didn’t get a job as a janitor at Google a few years ago? Uh oh . . .
So I rang up Andy Block at OPES Advisors, and asked him for some thoughts on all this, specifically how it is going to affect the purchasing power of my client Patrick. I mention Patrick because he is a “typical buyer” these days. He and his wife both have six-figure income jobs, and will net around $250K from the sale of their current home. They want to move from their current home in San Jose to Los Altos or Mountain View to get their kids into better schools, while getting a bit larger house. Andy had reviewed their income, credit, investment and retirement plans, debt, etc. etc. and came up with a range of $1.3M to $1.5M as a purchase price for their next house. They did the analysis about 3 months ago, because they are planners. Does this sound familiar?
It looks like the current changes in lending guidelines and interest rates are going to cost these folks about $100K or so in buying power, all other things being equal. Bummer.
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Are the banks ready to yank TXU’s financing in favor of paying a break up fee and walking away?
According to this Wall Street Journal blog entry on July 26, a novel theory is circulating on Wall Street that banks could decide to pull megabuyout financing deals, pay the break up fees, and walk away. Doing that would be cheaper in the long run than being stuck with all that unwanted debt on their balance sheets, so the theory.
An interesting theory, no doubt, but one that sources tell DealZone is far-fetched, or in British terms: “bollocks.” Banks should be able to survive any “hanging” from bridge loans, according to this Reuters article. In addition, the comments section of the Journal’s blog entry is filled with people throwing cold water on the theory.
In the first quarter of 2007, the seasonally adjusted gross saving rate of households was 14.4% in the euro area (EA13). This is the second consecutive rise in the rate, which was 14.1% in the fourth quarter of 2006 and 13.8% in the third quarter. In the EU27, the household saving rate was 10.9% in the first quarter of 2007, compared with 11.0% in the fourth quarter of 2006, extending the downward trend that started in 2001.
According to the International Comparison Program (ICP) in Asia and the Pacific: Purchasing Power Parity Preliminary Report, the PRC and India account for 64 percent of total real gross domestic product (GDP) of the 23 economies participating in the study.
However, a completely different picture emerges if the size of these economies is adjusted by population. Rather than dominating the rankings, the PRC and India drop to tenth and eighteenth Read the rest of this entry »
Consumer prices for energy rose by 2.9% year-on-year in June, compared with 2.7% in May. Consumer prices for food were up by 3.4% year-on-year in June, unchanged compared with May. Excluding food and energy, consumer prices rose by 2.0% in the year to June, after 2.1% in May 2007.
In the euro area, the Harmonised Index of Consumer Prices (HICP) was up by 1.9% in the year to June, unchanged compared with the year to May. Month-on-month, Read the rest of this entry »
NEWS Corporation has won control of Dow Jones & Co. and The Wall Street Journal, America’s top business newspaper, in a $US5 billion ($5.9 billion) takeover which will dramatically shake up the US media landscape.
RETAIL sales rose strongly in June as colder weather enticed consumers into shops, adding to the chance of an interest rate rise next week, economists say.
Retail trade at current prices rose 1.4 per cent in June to a seasonally adjusted $19.180 billion from a downwardly revised $18.914 billion in May, figures from the Australian Bureau of Statistics (ABS) showed.
I am planning to cut down on my blogging in August, the traditional month for Psychoanalytic vacations. My original plan was to eschew blogging completely, both because after two and a half years of blogging five days a week I could use a break to refresh myself, and because August is shaping up to be a very busy time. However, I do plan on posting from time to time, including a number of reviews of books that I have been reading or plan to read in August. (Blogging less = reading more.)
With that preamble I thought I would end July on a hopeful note. By now the idea that we might actually win the war in Iraq has been insinuating itself into the zeitgeist. The left leaning media and the Democratic party are rather far out on a limb that depends on an Iraq defeat, so this should be an entertaining story in the fall when General Petraeus finally reports on our progress. When I wrote about the surge working in my post yesterday, I made the comment that:
Of course, the surge could still fail utterly, and we may yet abandon Iraq to its fate unceremoniously, but at the moment the tide is running against al Qaeda. Iran has some powerful interests in keeping the Shia under control and the Sunnis have an even greater investment in stability (since they would lose any civil war that ensues from an American withdrawal.)
Friendfinder sounds like the quintessential investment prospect for venture capitalists. Based in Palo Alto, California, the company operates social networking sites that boast 140,000 new registrants per day, and $200 million in annual revenue.
But the company’s main site, Adult Friendfinder, helps people meet for the purpose of having sexual liaisons. The content, including explicit photos and Adult sex sites language, has been a turn-off to mainstream investors.
“Over the last 10 years, we’ve met with a dozen venture capitalists,” said the company’s founder, Andrew Conru, who holds a doctorate in engineering from Stanford University. “The conversations end fairly quickly.”
Times and investment tastes may be changing. Conru said that in recent months he has gotten more sustained interest, and follow-up calls, from potential investors. More generally, mainstream venture capitalists and private equity funds are starting to show interest in companies that make and distribute pornographic entertainment, and sexually related products and services. (…)
MANUFACTURING activity accelerated in July as stronger domestic demand fuelled higher production and employment, figures show.
The Australian Industry Group-PricewaterhouseCoopers Australian Performance of Manufacturing Index (PMI) rose in July by 4.3 points, to 57.4, to sit firmly above the key 50 level separating expansion from contraction.
Exports remained subdued, however, as the higher Australian dollar exerted a brake on growth. Read the rest of this entry »
I have to say that I was disappointed with the Economist’s Project Red Stripe — in the idea they ended up with and in the fact that it is not yielding a product, as Paid Content reports.
But I hope I can learn some lessons about managing innovation as I bring together a conference on networked journalism for our News Innovation Project at CUNY on Oct. 10 and as I start teaching a course this fall in entrepreneurial journalism — a course that is supposed to yield specific, sustainable, practical ideas for new and innovative journalistic products or businesses.
The Economist had split off a half-dozen of its smartest people — and there, that’s really saying something — who had to audition for the team with their ideas and determination. They were sent off to separate offices and given $200,000 to create something with only two requirements: It had to be of the web and it had to be innovative. They also decided to make the process open and talked to lots of folks, like me, discussing and even inviting ideas publicly on their blog.
But then they went opaque because they believed transparency would have affected the business; I’m still not sure how. And they ended up, I think, not so much with a business but with a way to improve the world. Their idea, “Lughenjo,” was described in PaidContent as “a community connecting Economist with non-governmental organizations needing help - ‘a Facebook for the Economist Group’s audience.’ ” It wasn’t intended to be fully altruistic; they thought there was a business here in advertising to these people, maybe. But still, it was about helping the world. And therein lies the danger.
BQT’s miPASS Smart Card Technology secures China State Shipbuilding Corporation (CSSC)
31st.July2007.
BQT Solutions Limited (ASX:BQT) is pleased to announce a recent order for BQT’s miPASS smart card technology for the China State Shipbuilding Corporation (CSSC) in Beijing, China.
CSSC is a large conglomerate and state-authorised investment institution directly administered by the central government of China. It boasts being the forerunner of the shipbuilding industry in China. Under its wing, there are a total of 60 sole proprietorship enterprises and shareholding institutions, including some of the most renowned shipbuilding and ship repairing yards, research and design institutes, marine-related equipment manufacturers and trading firms in China.
A PRIVATE equity grab for Flight Centre has failed to get off the ground, ending a prolonged second bid for the travel agency.
Acting on the advice of an independent expert, Flight Centre has terminated the proposed joint venture with Pacific Equity Partners, claiming the deal was inequitable and unfair.
Under the proposal, Flight Centre would have sold its operating business into a joint-venture vehicle, initially retaining a 70 per cent stake.
Following an auction lasting several months, UK banking giant Lloyds TSB has finally agreed to sell Abbey Life Assurance Company to Deutsche Bank for a cash sum of GBP997 million.
Abbey Life, a UK life assurance company, has been closed to new business since 2000, and comprises primarily of unit-linked life and pension policies and annuities.
The shareholders of Italian banking giants UniCredito Italiano and Capitalia have approved the proposed merger of Capitalia into Unicredito Italiano, to create a European banking behemoth, which Reuters reported will be worth E80 billion.
As part of the all-share takeover deal, Unicredit will offer an exchange ratio of 1.12 of its new ordinary shares for each Capitalia ordinary share, which according to Reuters, would value the deal to be worth E18 billion at current market prices.
MANILA (Reuters) - The head of the International Monetary Fund warned on Tuesday that global investment and growth prospects were at risk from a dramatic rise in private equity buy-outs and threats posed by financial globalisation.
Rodrigo Rato said the trouble in the U.S. subprime housing market was an example of such risks and called for a fresh look at lenders’ underwriting standards and more borrower education.
“There is ground for concern in the recent dramatic growth in large private equity buy-outs,” the IMF chief told a business audience in the Philippine capital.
The article “Russian Eurobonds First to Suffer // Foreign investors began preparing for crisis” was posted at http://www.kommersant.com/ under the category News.
Article Description: Instability at the risky mortgage loans market in the U.S. led to the fall of quotations of Russian Eurobonds. The spread of Russia-30 to US Treasuries reached on Monday the level of 138 basis points, which is the record of the last two years. Funds and investment banks lost interest to developing markets’ stock papers, and began preparing for a lengthy fall of stock markets, finding rescue in the ‘quiet harbor’ of U.S. high-reliable bonds. Experts say that investors usually behave this way when a large-scale crisis is approaching.
Read the article Russian Eurobonds First to Suffer // Foreign investors began preparing for crisis
July 31st, 2007 by 
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