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Australia cuts rates; global stocks sink
It’s official: US is in recession
JPMorgan to cut 9,200 jobs at Washington Mutual
Punjab industry decries delay in VAT refunds |
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Now, Citi cuts severance package
Oil at 3-yr low
Steps to counter slowdown by week-end
Ban on chocolates from China
Gold prices crash
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Australia cuts rates; global stocks sink
Sydney, December 2 The moves come after stock markets around the world plunged, jolted by a report that confirmed the US economy was in the third-longest recession since the Great Depression. Japanese central bankers huddled in an emergency meeting to devise ways to get funding to capital-starved firms, while the persistent financial crisis kept pressure on policymakers to go on cutting borrowing costs and on investors to seek safety first. The Reserve Bank of Australia cut its cash rate by a full percentage point to 4.25 per cent, a bigger margin than the market had expected, and said the perilous state of the global economy left the door open for yet more cuts. Central banks in Britain, the euro zone and New Zealand, all mired in recessions, will almost certainly cut interest rates as well later this week, hoping to get ahead of rapidly cooling consumer prices that raise the spectre of deflation. Federal Reserve chairman Ben Bernanke said in a speech on Monday further cuts in the benchmark rate below 1 per cent were ''certainly feasible.'' He also said the central bank could take steps such as buying ''substantial quantities'' of longer-dated US government debt or making more targeted injections of liquidity into the market. However, such unusual measures could ultimately lead to other problems because market prices would be distorted by official tinkering, economists warned. Stocks tumbled across Asia on Tuesday on expectations for more economic gloom. Japan's Nikkei share average fell 4.6 per cent as the stronger yen, reflecting investor retreat from risky assets, added to exporters' pain. Hong Kong's Hang Seng index led the regional decline, falling 5 per cent. Toyota Motor Corp said it would cut management bonuses by 10 per cent as the global economic slowdown deals a painful blow to the world's no. 1 carmaker, which will reportedly at the end of this month suspend production for two days at some plants . The Bank of Japan called an emergency meeting to find ways to cut corporate borrowing costs. Euro zone finance ministers were in Brussels to hash out how to enact the European Commission's 200 billion euro ($252 billion) plan to pull out the bloc from
recession. — Reuters |
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It’s official: US is in recession
Washington, December 2 The Business Cycle Dating Committee of the National Bureau of Economic Research said it made the determination during a conference call on Friday. Although a recession is generally defined as two consecutive quarters of declining activity, the panel has its own criteria for determining a downturn. "A recession is a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in production, employment, real income and other indicators," the panel said. "A recession begins when the economy reaches a peak of activity and ends when the economy reaches its trough. Between trough and peak, the economy is in an expansion." The committee said it "identified December 2007 as the peak month, after determining that the subsequent decline in economic activity was large enough to qualify as a recession." "The peak marks the end of the expansion that began in November 2001 and the beginning of a recession. The expansion lasted 73 months; the previous expansion of the 1990s lasted 120 months," NBER said. According to government data, the US economy contracted at a 0.2 per cent pace in the fourth quarter of 2007 but grew 0.8 per cent in the first quarter and 2.8 per cent in the second quarter of 2008. It then contracted 0.5 per cent in the third quarter, based on a provisional estimate. But the gross domestic product (GDP) data may have been skewed by tax rebates that stimulated consumer spending, according to analysts. — AFP
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JPMorgan to cut 9,200 jobs at Washington Mutual
New York, December 2 Of the 9,200 jobs being eliminated as JPMorgan integrates Washington Mutual, 4,000 will be cut by the end of January, a JPMorgan spokesman said yesterday. The remaining 5,200 employees will remain with JPMorgan through a transition period, but will lose their positions by the end of 2009. Those 5,200 employees who stay on as transition workers will receive double their salary retroactive to October 1 until their last day on the job, and be entitled to severance packages, the spokesman said. Washington Mutual was weighed down by its deep exposure to the crumbling mortgage market, which has been the hardest hit area of the markets since the middle of 2007. As mortgages increasingly defaulted beginning in 2007, Washington Mutual was forced to set aside billions of dollars to cover losses. HSBC, Credit Suisse announce fresh layoffs London: Amid the ongoing economic crisis, the banking sector continues to be hit by mass layoffs with financial service major Credit Suisse and HSBC announcing additional 1,150 job cuts, a media report says. According to the Financial Times, Credit Suisse will be trimming its workforce by 10 per cent leading to job loss for 650 employees, while HSBC said it was slashing 500 jobs. — Agencies
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Punjab industry decries delay in VAT refunds
Chandigarh, December 2 According to industry analysts, the industry gets VAT refunds after four to five months, as compared to the 60 days time stipulated for its disbursement under VAT system. Industry sources say the process has become so tedious that many of them have especially engaged people to meet the officials in the Excise and Taxation Department on a regular basis, so as to speed up the VAT refund. A Mandi Gobindgarh-based steel manufacturer informed TNS that he got the VAT refund in September, for the goods sold in January. “We are at a stage, where we are operating partially in the wake of low demand and severe shortage of working capital. For want of early release of refund, the industry is facing financial hardships, which is having a bearing on the production and supply of goods,” he said. It is learnt that ever since the Central Sales Tax (CST) has been reduced from three per cent to two per cent earlier this year, the problem of traders and industrialists to get VAT refund have increased manifold. Around Rs 195 crore of VAT refund is pending with the state government. This refund is on the VAT paid by the manufacturers of final products for exports and sales made within the country. Says P.D. Sharma, president of Apex Chamber of Commerce and Industry, “In today’s recessionary times, these VAT refunds have become very important for the industry. When VAT was imposed in the state, the industry was assured that the refunds would be made shortly. Now that the industry is facing a credit squeeze, the least that the government can do is to ensure that their dues are not held back, and used by the government to meet its own expenditure”. Officials in the Excise and Taxation Department say that the refunds are being held up mainly because the people do not submit a complete form. “There is often a mismatch between the figures provided by the industry in their forms and the verification done by the department. We are also facing a shortage of staff for carrying out the verification of forms. Inspite of these problems, we have managed to issue refunds to the tune of Rs 208. 16 crore. Now we are also thinking of outsourcing the data entry for returns, so that the refunds can be issued early” said A Venu Prasad, excise and taxation commissioner. |
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Now, Citi cuts severance package
New York, December 2 Besides, the Vikram Pandit-led bank has also hinted at further job cuts in the coming days, after already having cut down or announced plans to bring down its workforce to below 3,00,000 employees from more than 3,75,000 at the end of 2007. In an internal mail to all its employees in the US, Citi's Human Resources Head Paul McKinnon said yesterday that it would eliminate some "supplemental severance payment" for the employees with 10 or more years of service, with effect from January 15, 2009. "... we have continued to review our policies and practices to ensure that they support our overall business objectives and remain competitive with industry standards. As a result, a decision has been made to amend the Citigroup Separation Pay Plan (SPP) for US employees," the mail said. Earlier last month, Citigroup's India-born CEO Vikram Pandit has said that the bank would bring down its headcount to below 3,00,000 —a plan that entails more than 52,000 job cuts in the current quarter alone. Prior to this announcement, Citi had already cut close to 25,000 jobs since the beginning of this year. Citi's headcount stood at 3,52,000 at the end of September quarter. — PTI
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Oil at 3-yr low
London, December 2 By midday in Europe, light, sweet crude for January delivery was down 71 cents to $48.57 a barrel in electronic trading on the New York Mercantile Exchange. Earlier in the session, prices briefly fell to $47.36, the lowest since 2005. In London, January Brent crude slid 54 cents to $47.43 on the ICE Futures exchange. The Nymex contract plummeted overnight $5.15 to settle at $49.28 after more signs of a weakening US economy sent the Dow Jones industrial average down 7.7 per cent. In Europe, markets were mixed, with London's FTSE 100 index down 0.1 per cent, Germany's DAX index up 1.1 per cent and the CAC-40 index in Paris lower by 0.2 per cent at midday. Oil investors have looked to equity markets as a barometer of economic growth sentiment. "The basic story remains the same; consumption worries continue to depress the oil market," said David Moore, commodity strategist at Commonwealth Bank of Australia in Sydney. "Recent data out of the US and other countries backs up the view that consumption is weakening."
— AP |
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Steps to counter slowdown by week-end
New Delhi, December 2 A decision on the revival package was taken by the apex committee meeting tonight, chaired by Prime Minister Manmohan Singh, who yesterday took additional charge of the finance portfolio. "The Prime Minister held a meeting of the apex group and discussed in detail the measures required to be taken to counter the economic slowdown," a PMO official said, adding, "Based on his directions, a package of measures is being prepared, which will be finalised and announced by the end of the week." Singh discussed sectoral issues with home minister P Chidambaram, RBI Governor D Subbarao and Planning Commission deputy chairman Montek Singh Ahluwalia. The government and Reserve Bank may further ease money supply, provide interest subsidy for specific sectors and come out with tax cuts for boosting demand. The apex panel met in the backdrop of exports reporting a decline of 12 per cent in October, while several other sectors including automobile also seemed to be following the trend. The US economy has been officially declared as recession-hit with adverse implications for Indian exporters and capital inflows. — PTI
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Ban on chocolates from China
New Delhi, December 2 The ban, notified by the commerce ministry, covers chocolates and chocolate products, candies, confectioneries and other food preparations with milk or milk solid used as their ingredients. The ban has been imposed for six months with immediate effect. Besides, the prohibition on import of milk and milk products has also been extended by another six months up to
June 23, 2009. Several countries had imposed prohibition on import of Chinese milk and milk products as they contained 'melamine', a deadly toxic element. The Chine chocolates cost much less than those imported from Europe or even manufactured by the domestic
companies. — PTI
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Gold prices crash
Mumbai, December 2 A similar weakness was noticed in silver, which plunged by Rs 750 to Rs 16,700 per kg as jewellery fabricators and industrial units refrained from buying, expecting more fall in precious metal prices. Traders said the weakening trend in the overseas markets and shifting of funds toward forex for quick return mainly pulled down yellow metal prices.
— PTI
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New Delhi, December 2
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Tata Steel to delay projects SBI to hire 4,280 Vedanta to buy back shares L&T bags Rs 1,450-cr orders IDFC tax advantage fund
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Australia slashed rates by a full percentage point on Tuesday and Japan's central bank met to consider its response to an acute cash squeeze, kicking off another global push to shore up economies and soothe markets.
