Archive for the ‘investing’ Category

At the Washington summit meeting, China holds the cards

November 14, 2008

It is not clear how much the leaders of developed and developing countries from around the world, gathered to discuss a fast-moving financial crisis with a soon-to-depart president of the United States, can hope to accomplish.

By Mark Landler and Stephen Castle
International Herald Tribune

But the summit meeting in Washington this weekend may clarify one thing: how fundamentally the crisis is reshaping the economic map, rendering obsolete the old club of Western powers that fashioned the financial pillars of the post-World War II era at a conference in Bretton Woods, New Hampshire, in 1944.

While President Nicolas Sarkozy of France proposed the meeting and President George W. Bush agreed to be host of an expanded conference of G-20 nations, the most sought-after country at the gathering some are calling Bretton Woods II is likely to be China.

With nearly $2 trillion in foreign exchange reserves and an economy that is still growing – even if more slowly than it was before the crisis erupted – China is one of the few participants with the financial power to aid countries in distress, either directly or by contributing to the coffers of the International Monetary Fund.

“We will actively participate in rescue activities for this international financial crisis,” Yi Gang, deputy governor of the Chinese central bank, told a news conference Friday in Beijing, according to Reuters. It was one of the clearest indications yet that China stood ready to help the IMF aid countries hit by the global credit crisis.

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Economy begs priority from Obama

November 7, 2008

Greeted with the stock market’s worst two-day drop in 21 years, President-elect Barack Obama will take on voters’ No. 1 concern Friday by fielding questions about the nations economic turmoil in his first news conference since Election Day.

President-elect Barack Obama leaves a gym in Chicago on Thursday. He also was briefed on a range of national security issues and returned congratulatory calls to world leaders.

Above: LOW PROFILE: President-elect Barack Obama leaves a gym in Chicago on Thursday. He also was briefed on a range of national security issues and returned congratulatory calls to world leaders.

Mr. Obama, who spent part of Thursday being briefed by President Bush’s top intelligence officer and talking with nine world leaders, will hold a meeting with his transition team of 17 economic advisers, including billionaire investor Warren Buffett, and then publicly tackle bad financial news that has returned with a vengeance since his election Tuesday.

By Jon Ward and Christina Bellantoni
The Washington Times

On Thursday, reports of the worst month for retailers in 35 years triggered a 443-point plunge in the Dow Jones Industrial Average that added to a nearly 500-point loss Wednesday to complete the worst two days for the Dow since 1987.

Retailers reported a “simply awful” month for sales in October and forecast a dismal 1 percent growth rate for the critical holiday season, during which most stores normally make about a quarter of their yearly sales.

Mr. Obama’s schedule was announced as he locked down his first major White House staff position when Rep. Rahm Emanuel, an Illinois Democrat and former senior adviser to President Clinton, agreed to become his chief of staff, and Mr. Bush vowed to help his successor navigate the transition of power.

In an emotional South Lawn address to executive branch employees, Mr. Bush warned that terrorists “would like nothing more than to exploit this period of change…

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Since Obama Election, Stock Market Down 929 Points

November 6, 2008

Wall Street plunged for a second day, triggered by computer gear maker Cisco Systems warning of slumping demand and retailers reporting weak sales for October. Concerns about widespread economic weakness sent the major stock indexes down more than 4 percent Thursday, including the Dow Jones industrial average, which tumbled more than 440 points.

Comments from Cisco that it saw a steep drop in orders in October and reports from retailers that consumers are skipping trips to the mall provided fresh evidence of the economy’s struggles. While sales at Wal-Mart Stores Inc. benefited from bargain-seekers, some specialty retailers posted huge drops in monthly sales.

Adding to investors’ list of worries, the Labor Department said the number of people continuing to draw unemployment benefits jumped to a 25-year high, increasing by 122,000 to 3.84 million in late October. It marked the highest level since late February 1983, when the economy was being buffeted by a protracted recession.

While new claims for unemployment benefits dipped by 4,000 to a seasonally adjusted level of 481,000 last week, the levels remain elevated. The findings added to the market’s unease ahead of Friday’s October employment report, a widely watched barometer of the economy’s health.

“I think everybody kind of simultaneously — the consumers and businesses — is tightening belts so that’s triggering a reasonably precipitous slowdown that’s widespread,” said Ed Hyland, global investment specialist at J.P. Morgan’s Private Bank. “This is something that we haven’t really seen, this level of this rapid and significant pullback both in the market and the economy.”

Thursday’s rout follows a drop of more than 5 percent in the market Wednesday that saw the Dow plunge nearly 500 points as investors fretted that weak readings on employment and downcast profit forecasts and job cuts from financial companies to steelmakers signaled broad economic troubles.

Still, the market’s two-day slide follows an enormous run-up since last week so some pullback was expected, analysts said. Through the six sessions that ended Tuesday, the benchmark Standard & Poor’s 500 index, surged 18.3 percent.

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By Alexandra Twin
CNN Money
NEW YORK ( — Stocks slumped for a second straight session Thursday, bringing the Dow’s losses to 929 points since Election Day, as fears of a prolonged recession sent investors running for the exits.

The Dow Jones industrial average (INDU) lost around 443 points, or 4.9%. The two-session decline of 929 points, or 9.7%, marked the biggest two-session point loss ever and the biggest two-session percentage decline in 21 years, according to Dow Jones.

The Standard & Poor’s 500 (SPX) index lost 5% and the Nasdaq composite (COMP) declined by 4.3%.

The Dow slumped 486 points Wednesday as President-elect Barack Obama’s historic victory gave way to worries about the economy he inherits. Those same worries continued to drag on stocks Thursday.

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Warren Buffett’s Advice During Global Financial Crisis

October 17, 2008

By Warren Buffett
The New York Times
THE financial world is a mess, both in the United States and abroad. Its problems, moreover, have been leaking into the general economy, and the leaks are now turning into a gusher. In the near term, unemployment will rise, business activity will falter and headlines will continue to be scary.

So … I’ve been buying American stocks. This is my personal account I’m talking about, in which I previously owned nothing but United States government bonds. (This description leaves aside my Berkshire Hathaway holdings, which are all committed to philanthropy.) If prices keep looking attractive, my non-Berkshire net worth will soon be 100 percent in United States equities.


A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful. And most certainly, fear is now widespread, gripping even seasoned investors. To be sure, investors are right to be wary of highly leveraged entities or businesses in weak competitive positions. But fears regarding the long-term prosperity of the nation’s many sound companies make no sense. These businesses will indeed suffer earnings hiccups, as they always have. But most major companies will be setting new profit records 5, 10 and 20 years from now.

Democratic White House hopeful Barack Obama and his Republican ...
Democratic White House hopeful Barack Obama and his Republican rival John McCain Tuesday agreed that one of the world’s richest men, Warren Buffett, pictured in May, would make a good treasury secretary.(AFP/DDP/File/Thomas Lohnes)

Let me be clear on one point: I can’t predict the short-term movements of the stock market. I haven’t the faintest idea as to whether stocks will be higher or lower a month — or a year — from now. What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up. So if you wait for the robins, spring will be over.

A little history here: During the Depression, the Dow hit its low, 41, on July 8, 1932. Economic conditions, though, kept deteriorating until Franklin D. Roosevelt took office in March 1933. By that time, the market had already advanced 30 percent. Or think back to the early days of World War II, when things were going badly for the United States in Europe and the Pacific. The market hit bottom in April 1942, well before Allied fortunes turned. Again, in the early 1980s, the time to buy stocks was when inflation raged and the economy was in the tank. In short, bad news is an investor’s best friend. It lets you buy a slice of America’s future at a marked-down price.

Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.

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Buffett’s Buying!

(Reuters) – Billionaire investor Warren Buffett is buying U.S. stocks, he wrote in an opinion column in the New York Times.

“A simple rule dictates my buying: Be fearful when others are greedy, and be greedy when others are fearful,” Buffett wrote in the paper.

Buffett acknowledged the economic news was bad, with the financial world in a mess, unemployment rising and business activity faltering.

“What is likely, however, is that the market will move higher, perhaps substantially so, well before either sentiment or the economy turns up,” he said. “So if you wait for the robins, spring will be over.”

Billionaire financier and Berkshire Hathaway Chief Executive ... 
Billionaire financier and Berkshire Hathaway Chief Executive Warren Buffett greets shareholders during the Berkshire Hathaway Annual Shareholders meeting in Omaha, Nebraska in this May 3, 2008 file photo.(Carlos Barria/Reuters)

Buffett, who made his money by building his company Berkshire Hathaway Inc (BRKa.N)(BRKb.N) into a $199 billion conglomerate, wrote that investors were right to be wary of highly leveraged entities or businesses in weak competitive positions.

“But fears regarding the long-term prosperity of the nation’s many sound companies make no sense,” he said.

Buffett said major companies would suffer earnings hiccups, but added they “will be setting new profit records five, 10 and 20 years from now.”

Gridlock On U.S. Financial Crisis Rattles Asian Markets

September 26, 2008

By Danny McCord

HONG KONG (AFP) – Asian stock markets fell Friday as political wrangling held up a 700-billion-dollar bailout package for the US financial system despite earlier hopes that a deal was near.

Talks over the rescue proposal were gridlocked Thursday as lawmakers were at loggerheads over the way forward, with Democrats accusing the Republicans of dragging their feet.

Tokyo’s Nikkei closed down 0.94 percent, Hong Kong was off 2.0 percent at the break, Sydney ended the day 0.5 percent down and Taiwan shares shed 2.2 percent.

Some stocks had risen earlier, taking a cue from Wall Street, which closed 1.82 percent up on prospects that an agreement could be reached.

US Democrats said Republican White House contender John McCain had sabotaged the rescue package, which they said had largely been agreed upon.

“John McCain did nothing to help, he only hurt the process,” Senate Majority Leader Harry Reid told a joint news conference with Senate banking committee chairman Christopher Dodd.

Under the proposal the government would buy 700 billion dollars of toxic mortgage-related assets at the heart of the global credit crisis. The move would be the biggest government bailout since the 1930s Great Depression.

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Woori Finance fell 4.5pc on concern the credit crisis is deepening after Republicans splintered over the proposed $700bn bailout and WaMu was seized by regulators. Mitsui OSK Lines, Japan’s largest operator of dry-bulk ships, lost 3.8 pc.

“The assumption is that the bailout will take longer than expected, which is negative,” said Tsuyoshi Shimizu, a senior fund manager at Mizuho Asset Management Co., which oversees $26bn.

“As with Washington Mutual, the longer it takes to pass something, the more victims we’re going to see.”

The MSCI Asia Pacific Index fell 1.1pc to 113.52 by lunchtime in Tokyo, erasing an earlier 0.9pc advance. The index has declined 0.6pc this week, a fourth weekly retreat.

Japan’s Nikkei 225 Stock Average lost 1.4pc to 11,843.98. New Zealand’s NZX 50 Index dropped 0.9pc after government data showed the economy contracted in the second quarter, driving the nation into its first recession in a decade.

Standard & Poor’s 500 Index futures slid 1.7pc after a group of House Republicans led by Eric Cantor of Virginia said they wouldn’t back a plan based on the approach outlined by Treasury Secretary Henry Paulson and backed by President George W. Bush and Democratic leaders.

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For novice Chinese investors, stocks go from sizzle to fizzle

April 20, 2008

By Chris O’ Brien
The Washington Times
April 20, 2008

BEIJING — A year ago, the mantra for millions of novice investors in China was simple: Buy stocks, make money. The Shanghai composite index soared to five times its value of two years earlier, and the euphoric mood of China’s new army of speculative traders was captured by the hit online song “I won’t sell my shares even if I’m dead.”

Since the index peaked at 6,124 points in October, though, elation has given way to depression. The market has plummeted by more than 40 percent, and small-time investors, already battling rising inflation, are suffering the most.

Investors look at the stock price monitor at a private security ...
Investors look at the stock price monitor at a private security company Friday April 18, 2008, in Shanghai, China. Chinese stocks sank to their lowest level in more than a year on Friday, as both retail and institutional investors unloaded shares in the absence of any market-boosting news. The Shanghai Composite Index fell 4 percent, or 128.07 points, to 3,094.66. It was its lowest close since it ended at 3,074.29 on March 23, 2007.(AP Photo)

Mrs. Wang, a Beijing retiree who gave only her last name, spent months being regaled by moneymaking yarns from her friends and relatives, many of whom were among the 300,000 Chinese people opening stock accounts every day. She dived in at the end of last year, but her timing could not have been worse.

“I wanted to earn quick money to offset the food-price rises. My pension is only 700 yuan [$100] a month. At first, I made about 2,000 yuan, but now I’ve lost a third of my savings. I had no idea it could go down this low. Everyone is suffering,” she said.

Trading offices across China are full of people like Mrs. Wang — urban retirees who have gambled their life savings on something they knew little about. Now they are looking for someone to blame, and accusations based on rumors of shady insider dealings fly. Government officials are often the first to blame.

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China’s Inflation at 12 Year High

March 11, 2008
By JOE McDONALD, AP Business Writer 

BEIJING – Soaring food costs drove China‘s inflation to its highest level in nearly 12 years in February, according to data reported Tuesday, raising the risk of unrest as communist leaders prepare for the Beijing Olympics.

Chinese workers eat a meal in Beijing, Tuesday, March 11, 2008. ...
Chinese workers eat a meal in Beijing, Tuesday, March 11, 2008. China’s inflation rate jumped to a new decade high of 8.7 percent in February as food costs soared after winter storms wrecked crops and disrupted shipping, the government said Tuesday.
(AP Photo/Ng Han Guan)

The 8.7 percent rise in the consumer price index over last February exceeded forecasts and raised the likelihood of interest rate hikes or emergency steps by Chinese leaders, who already have imposed price controls on food.

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Is Vietnam Asia’s next superstar?

January 2, 2008

EE Times Asia
January 1, 2008 

China is hot, and so is India. And Vietnam? Sizzling.

Intel Corp. is partly responsible for Vietnam’s meteoric rise in investors’ hot list. Ever since the chipmaker announced two years back that it would allocate $300 million (which later increased to $1 billion) for the establishment of an assembly and test facility in the country, Vietnam has been making the headlines all throughout 2007.

There is the $5 billion plan of the Foxconn Technology Group, the Panasonic research activities, the Toshiba software development center, Olympus’ digital camera plant move, STMicroelectronics’ R&D facility, and Samsung’s handset and printer production talks among others.

“It’s really a combination of internal and external factors,” remarked Huy Do, chairman and president of Vietnamese Strategic Ventures Network, a group of entrepreneurs, executives, inventors and other professionals supporting the global Vietnamese technology and business community.

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3 big threats to China’s economic miracle

December 20, 2007

By Jim Jubak
MSN Investing

To many people in the United States, the China story goes like this: A huge emerging industrial power eats U.S. jobs and buries the U.S. economy under a mountain of cheap imports while erecting barriers to U.S. goods. The only suspense in that story is whether America will fight back or simply roll over.That storys easy to grasp, and theres enough real pain in the U.S. economy these days over lost jobs to China to give it emotional clout.

Unfortunately, its wrong.

It’s much more complicated
That story is too narrowly focused on the relationship between the United States and China. In fact, China (with a big assist from other big-population developing economies such as India and Vietnam) is a leading player in a global economic makeover that presents much of the rest of the world with challenges that dwarf any U.S. problems.

And the ending of ….

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Quantum founder: Leap into China stocks; Teach Kids Chinese

December 17, 2007

“The very best advice of any kind that I can give you is to teach your children or your grandchildren Chinese,” Jim Rogers writes in A Bull in China. “It is going to be the most important language of their lifetimes.”

Q: The language that spells success?

A: Chinese.

Take it from Jim Rogers, a hugely successful investor, who has studied China ever since he traveled there 23 years ago.

Rogers, co-founder of Quantum Fund, is a plainspoken investor who amassed a fortune through shrewd foreign investing in publicly traded companies and commodities.

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