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April 25, 2009

Who killed Chrysler?

Filed under: technology — Tags: , , — Snowman @ 5:51 pm

The survival of Chrysler as an independent company is looking increasingly unlikely.

The fundamentals of its business structure - unappealing passenger cars, dismal quality, little technology, minimal international operations - are scary enough. Meanwhile, continuous rounds of layoffs have hollowed out the company, starving it of the basic resources it needs to engineer, manufacture and market automobiles.

One executive described Chrysler as looking like an imposing castle from the outside, but actually being empty once you got beyond the front door.

Now debt-holders are balking at government demands to take a haircut, car sales show no signs of improving, and the government’s May 1 deadline for demonstrating viability is fast approaching. Having escaped bankruptcy in the late ’70s and again in the early ’90s, Chrysler appears to have run out of options.

Fiat, once held out as Chrysler’s last hope, no longer needs to go through the trouble of a formal takeover. It could easily cherry-pick the company’s assets in a liquidation. It would cost the Italian automaker a few bucks more, but it would be a lot cheaper in the long run.

So what happened to Chrysler?

While General Motors has been on a slippery slope for 40 years, the roots of Chrysler’s decline are more recent. At the time of its merger with Daimler in 1998, it was the hottest company in Detroit.

With its dream team of engineers, designers, and marketers, Chrysler had created a high-profit lineup of minivans, pickup trucks and Jeeps. At one point, its CEO, Robert J. Eaton, was fantasizing about 20% market share and 8% profit margins. Mixing in Daimler’s technical resources, global reach, and the always-tantalizing benefits of synergy should have created a Chrysler recipe for success.

But the Germans hamstrung their new American unit more than they helped it. Their formal business structure clashed with Chrysler’s more freewheeling ways and promised resources took a long time to make their way from Stuttgart to Auburn Hills.

And Chrysler made plenty of mistakes on its own. The dream team disbanded, engineering costs skyrocketed and an ill-conceived efficiency program hurt vehicle quality and customer appeal.

In retrospect, the fatal blow was struck when then-CEO Dieter Zetsche tried to stretch the product development budget by churning out more new models with less money. It sounded like black magic — and as it turned out — it was no teletrack payday loan.

What Chrysler produced were half a dozen derivative models with eye-catching but cheesy styling, bargain-basement interiors and the worst quality in Detroit. Customers caught on quickly. This year, sales of many models are just one-third of what they were just a year ago:

– 3,186 copies of the square-cornered Jeep Commander, derided as the box that the smaller Grand Cherokee came in, sold in the first quarter, compared with 9,648 a year ago.

– The smaller, clunkier and even more angular Jeep Compass performed even more poorly, with 3,147 sold in the first quarter versus 10,400 in the same 2008 period.

– Looking like an extra from a "Transformers" movie, the Jeep-based Dodge Nitro has lit very few fires. Exactly 5,218 have found buyers this year, as against 15,355 last year.

A special place in the Chrysler Hall of Shame should be reserved for the executive who green-lighted the Sebring sedan. Designed to compete against the Toyota Camry and the Honda Accord, the Sebring became a total flop in the midsize segment by trying to combine the virtues of a higher "command seating" position with traditional four door styling. The awkward design satisfied no one. Chrysler managed to sell 30,411 Sebrings in the first three months of last year but just 5, 636 this year.

Instead of 20% market share, Chrysler has notched just 11.2% of U.S. sales in 2009. And of course its profit margin is less than zero.

With that kind of product lineup, why would Fiat want to rush in to save the company? The redesigned Jeep Grand Cherokee looks promising, but its arrival in dealer showrooms is many months away. A new Chrysler 300C is on the way, too, but its day may have come and gone. Designs that really turn heads rarely have legs.

Fiat would be far better off bidding for Chrysler’s viable pieces after the lights are turned off: the Jeep Grand Cherokee and Wrangler; Chrysler and Dodge minivans, and Dodge trucks.

After it buys the cars and trucks, it may want to acquire the valuable Saturn network from General Motors to have some dealers through which to sell them. And then Chrysler can join American Motors, Studebaker-Packard and all the other departed in the automotive graveyard. 

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April 24, 2009

UPS profit falls as global downturn hits revenue

Filed under: marketing — Tags: , , — Snowman @ 3:48 am

U.S. economic bellwether United Parcel Service Inc reported lower-than-expected quarterly earnings on Thursday, saying the global downturn had taken a bite out of revenue and profitability as fewer businesses and consumers sent packages.

The world’s largest package delivery company reported first-quarter net income of $401 million, or 40 cents a share, compared with $906 million, or 87 cents a share, a year earlier.

Excluding an impairment charge for the early retirement of the company’s fleet of DC-8 jets, UPS earned 52 cents per share in the quarter.

Analysts on average had expected earnings of 56 cents a share, according to Reuters Estimates.

Atlanta-based UPS said revenue fell to $10 easy payday loans.94 billion from $12.68 billion. Analysts had expected $11.42 billion.

Like Memphis-based rival FedEx Corp, UPS has seen its U.S. and international business hit by the global recession. Last month, FedEx reported a 75 percent decrease in quarterly net profit.

Both companies are considered bellwethers because in a boom consumers ship more packages, but when the economy cools shipments wane.

In premarket trade, UPS shares were down more than 3 percent at $53.00

(Reporting by Nick Carey, editing by John Wallace)

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April 21, 2009

Oregon and Michigan push past 12% jobless

Filed under: economics — Tags: , , — Snowman @ 7:21 pm

The government on Friday released another sobering report on the jobs crisis, with the unemployment rate rising in 46 states and pushing past 12% in Michigan and Oregon.

Michigan led the list with a jobless rate of 12.6 in March, up from 12% the prior month.

But the most dramatic increase was in Oregon, which went from 10.7% to 12.1% - the second-highest among the states.

Oregon was followed by South Carolina, at 11.4% in March, and California, at 11.2%.

The Michigan job market has been hit hard by the battered auto industry. The Big Three carmakers have shed tens of thousands of jobs because of giant corporate losses and waning demand for vehicles.

Liz Ski, an auto industry job recruiter at Hire Expectations in the Detroit suburb of Livonia, said she’s getting less than half the business compared to a year ago.

"Usually, this is the time of year we start picking up, but lately it’s been real slow," Ski said.

In Oregon, employment is heavily reliant on the lumber industry, which has suffered from the decline in homebuilding in the neighboring state of California and elsewhere.

"We produce a substantial amount of wood products used for residential construction, so many of our lumber and wood products are shipped to California for the housing market," said David Cooke, economist for the Oregon Employment Department quick faxless payday loan. "California’s economy is so large - it’s 10 times the size of Oregon - so anything that’s happening in California has a direct impact on our state."

Other states with double-digit unemployment include North Carolina (10.8%), Rhode Island (10.5%), Nevada (10.4%) and Indiana (10%).

North Dakota had the lowest unemployment rate at 4.2%.

The nationwide unemployment rate in March was 8.5%, an increase from 8.1% the prior month.

President Obama has made job creation a central theme in his administration. With his $787 billion stimulus package, Obama intends to save or create at least 3.5 million jobs through 2010.

This includes $26.6 billion worth of investment in the nation’s infrastructure, with jobs created and layoffs avoided, albeit temporarily, through construction contracts on highways and bridges. The stimulus plan also includes direct investment in police departments, to put thousands of cops and sheriffs back on the beat nationwide. 

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April 17, 2009

The overcast economy: Get used to it

Filed under: online — Tags: , , — Snowman @ 8:26 pm

Surprise! The economy isn’t all rainbows, puppies, kittens and sunshine after all.

The drop in retail sales in March is a sobering reminder that the recession probably isn’t over yet. The decline in wholesale prices last month also seems to suggest that the economy remains weak.

That led to a pullback in stocks Tuesday morning. And that may not be a bad thing after a five-week stock rally in which the broader market has surged more than 25%

But what investors and consumers need to do now is take a deep breath and relax. The economy may not be as close to recovery as traders thought it was, but that doesn’t mean we’re back on the road to ruin. There’s no reason to start discussing the evil D words of deflation and depression once again.

"I don’t think the other shoe is dropping. The economy is going to sputter up the hill. We were operating on one cylinder in January and maybe now we’re operating on three," said Gary Hager, founder and chief executive officer of Integrated Wealth Management, a financial planning firm based in Edison, N.J.

For one, the March retail sales numbers follows two months of gains. So the consumer did show some signs of life earlier this year. And even the shockingly big 1.2% drop in the Producer Price Index is not as terrible as it sounds. Much of the decline was due to falling gas prices last month — excluding the cost of volatile food and energy prices, the so-called "core" PPI was actually flat.

This is a challenging time for both consumers and investors. The current recession has been so severe and so long that it’s wishful thinking to believe that the economy will suddenly turn on a dime.

The good news is that seemingly conflicting economic reports could mean that the worst of the recession is over. The peak of the crisis may well have been that awful fourth quarter that followed the collapse of Lehman Brothers and AIG (AIG, Fortune 500).

"Up until late last year all the numbers were pointed straight down. There was very little in the way of good news. It was a free fall, an elevator shaft feeling," said Stuart Hoffman, chief economist with PNC Financial Services in Pittsburgh.

"Now you are getting more mixed numbers and the conclusion I would draw from that is that while the economy may still be declining, the rate of the decline may be tapering off," Hoffman added emergency cash loans.

Unfortunately, there will probably be many more bits of conflicting economic reports in the days, weeks and months ahead.

Some areas of the economy, such as housing, may continue to show some faint signs of improvement. But the unemployment rate may keep creeping higher. And there is also the very real chance that GM (GM, Fortune 500) could go bankrupt, an event that Hager said would probably be the "last gasp" of this recession and bear market.

Anyone who is expecting every single important economic indicator to either paint a picture of an economy on the verge of a sharp comeback or an economy headed for impending doom is deluding themselves.

"This is basically what happens at this point of a downturn. You have a bit of good news and then some disappointing news," said Kurt Karl, chief U.S. economist with Swiss Re in New York. "We are bumping along the bottom. You pop up for awhile and then you pop back down."

So one of the biggest mistakes that a consumer or investor can make is to buy into the notion that the economy can be described in black/white terms. Karl warned that this type of environment — where various economic reports vacillate between good and bad — could last for another year and a half.

"It’s not going to be fun for quite awhile. It’s a time of high uncertainty and it’s tough to get a consistent pattern of data points," he said.

Hoffman added that it’s going to take more time for economic stimulus and some of the many programs launched by the Federal Reserve and Treasury aimed at getting banks back on track to truly have an impact on the economy.

And he stopped short of saying that "green shoots" — the oft-used farming metaphor to describe a potential recovery — are visible just yet.

"Frankly, the seeds may be in the ground but before green shoots take root they need a lot more fertilizer in the form of better credit flows and rain in the form of liquidity from financial institutions," he said.

Want a Money Makeover? E-mail us at makeover@moneymail.com. For the CNNMoney.com Comment Policy, click here.  

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April 13, 2009

Wells Fargo predicts a $3 billion profit

Filed under: online — Tags: , , — Snowman @ 9:50 pm

Wells Fargo delivered a much-needed bit of good news for the banking sector Thursday, saying it expected to book a better-than-expected profit of approximately $3 billion in the most recent quarter.

The announcement not only sent Wells Fargo (WFC, Fortune 500) stock 32% higher, but boosted shares of many other big banks as investors bet that Wells’ peers may also post results that exceed Wall Street’s estimates. Bank of America (BAC, Fortune 500), which will report its results on April 20, gained 35%.

Originally slated to deliver its results later this month, the San Francisco-based Wells Fargo issued guidance for the first quarter, saying it expected to report a record profit of about $3 billion, or 55 cents per common share. Expectations are for the company to book a profit of 28 cents a share, according to Thomson Reuters.

"Our business momentum is strong, and we expect our operating margins to remain at the top of our peer group," Wells Fargo CEO John Stumpf said in a statement.

Wells Fargo attributed the strong results to healthy lending margins driven by lower interest rates, fewer additional costs related to its purchase of Wachovia and a boom in mortgage activity.

Mortgage applications surged during the quarter, with the company reporting $83 billion in applications during the month of March alone.

Wells Fargo also said Thursday its recent purchase of Wachovia was exceeding expectations. The company announced plans to acquire Wachovia, which was on the verge of collapse during the height of the credit crisis, last October.

Since the deal completion’s late last year, customers that had been concerned about Wachovia’s health have been returning, Wells Fargo said, which helped drive loan and deposit growth in the current quarter .Wells Fargo said that Wachovia accounted for 40% of combined revenue in the quarter.

Until now, there have been persistent fears that further deterioration across Wachovia’s shaky loan portfolio would mean more writedowns for Wells Fargo.

But top executives at the firm reiterated their confidence in the purchase, which has drastically expanded Wells’ footprint in both the Southeast and the Mid-Atlantic.

"Wachovia’s outstanding franchise has proven to be everything we thought it would be when we announced this acquisition," said Stumpf.

Just a quarter ago, Wells Fargo swung to a $2.6 billion loss, hurt by a charge related to the Wachovia purchase and rising credit costs.

A repeat performance?

With Wells Fargo giving such an upbeat forecast, the market’s attention now turns to the nation’s remaining big banks.

Next week, a trio of the nation’s largest banks will report their numbers starting with Goldman Sachs (GS, Fortune 500). Following closely behind are JPMorgan Chase and Citigroup, which are expected to deliver their results next Thursday and Friday respectively loan till payday.

Analysts expect most of the big banks to report a profit in the quarter, with the notable exception of Citigroup.

A modest uptick in capital markets activity as well as a surge in mortgage refinancings over the last three months has helped turn the tide, analysts said.

The increased mortgage activity helped Wells Fargo this quarter, and many industry observers believe that other big mortgage lenders and servicers will also benefit from the latest refi boom.

"That should roll through to the BofA’s, JPMorgan Chase’s and Citi’s of the world," said Robert Maneri, managing director at Victory Capital Management, whose firm owns shares of all three banks.

Top executives at all three firms made headlines last month after indicating that they were profitable during the first two months of the year.

A numbers game

But some analysts are still skeptical. Earlier this week, bank stocks swooned after Calyon Securities analyst Mike Mayo warned that many of the nation’s leading banks have written down the loans on their books by only a fractional amount, and added that loan-loss ratios would exceed peak levels from the Great Depression.

There are also fears that last week’s move by the Financial Accounting Standards Board to relax the rules that banks rely on to value some of their assets could allow lenders to take greater liberties with their results.

Others worry that banks may try and postpone building their loan loss provisions this quarter in an attempt to make their results appear that much more rosy for regulators who are currently "stress testing" the books of the nation’s largest banks in an effort to determine if they may need to raise additional capital.

"Banks are seeking to avoid having to raise additional common equity and reporting strong first quarter earnings could help them in that effort," said Ed Najarian, head of bank stock research for ISI Group.

At Wells Fargo, the company set aside just $1.3 billion for future loan losses during the quarter, a level that some say doesn’t square with the current economic environment and an unemployment rate of 8.5%.

"The low level of net credit losses and low level of loan loss provisions will prove unsustainable," Najarian said.

Nevertheless, shares across the banking sector finished Thursday sharply higher. JPMorgan Chase (JPM, Fortune 500) climbed 19% while Citigroup (C, Fortune 500) gained about 13%. 

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April 10, 2009

Newspapers: Can things get any worse?

Filed under: marketing — Tags: , , — Snowman @ 4:28 pm

As one might expect, the gathering of the Newspaper Association of America annual convention was a somber and lightly

April 9, 2009

Congressional Panel Suggests Firing Managers, Liquidating Banks

Filed under: online — Tags: , — Snowman @ 1:10 am

A congressional panel overseeing the U.S. financial rescue suggested that getting rid of top executives and liquidating problem banks may be a better way to solve the economic crisis.

The Congressional Oversight Panel, in a report released yesterday, also said the Treasury may be relying on too rosy an economic scenario to guide its $700 billion bailout, and declared that the success of the program after six months is “mixed.” Three of the group’s members disagreed with at least some of the findings.

“All successful efforts to address bank crises have involved the combination of moving aside failed management and getting control of the process of valuing bank balance sheets,” the panel, headed by Harvard Law School Professor Elizabeth Warren, said in its report.

Treasury Secretary Timothy Geithner has revamped the Troubled Asset Relief Program to focus on injecting capital into banks and removing up to $1 trillion in illiquid securities from their balance sheets via public-private investment partnerships. The government is also working to unfreeze credit markets through a Federal Reserve program that provides loans to investors in some asset-backed securities.

Warren, in an interview on Bloomberg Television, said yesterday that while “things may be getting a little better” under Geithner, the Treasury still needs to be more transparent about how it is spending the taxpayers’ money.

“We still have a long way to go, a very long way,” she said.

Depth of Downturn

In the report, Warren’s panel said “it is possible that Treasury’s approach fails to acknowledge the depth of the current downturn and the degree to which the low valuation of troubled assets accurately reflects their worth online instant cash advance.”

The group said it was offering an examination of “potential policy alternatives” for the Treasury and not endorsing any shift at this time.

Still, it said a bank liquidation would be “least likely to sap the patience of taxpayers” and “provides clarity relatively quickly” to the markets.

“Allowing institutions to fail in a structured manner supervised by appropriate regulators offers a clearer exit strategy than allowing those institutions to drift into government control piecemeal,” the report said.

The report also said that past successful financial rescues were accompanied by governments’ “willingness to hold management accountable by replacing — and, in cases of criminal conduct, prosecuting — failed managers.”

Separate Findings

Two of the panel members, New York State Superintendent of Banks Richard Neiman and former New Hampshire Senator John Sununu, issued separate findings.

“We are concerned that the prominence of alternate approaches presented in the report, particularly reorganization through nationalization, could incorrectly imply both that the banking system is insolvent and that the new administration does not have a workable plan,” the two wrote.

Sununu and the five-member panel’s other Republican appointee, Representative Jeb Hensarling of Texas, dissented from the entire report.

The oversight panel was set up under the rescue law passed in October. It has three members appointed by Democrats and two by Republicans. The group’s reports are required by the legislation.

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April 6, 2009

Obama: G-20’s ‘unprecedented steps’

Filed under: marketing — Tags: , , — Snowman @ 10:10 am

World leaders agreed Thursday to tighter regulation of the global financial system and pledged more than $1 trillion to bolster lending by the International Monetary Fund to nations in need.

The Group of 20, which represents most of the world’s largest economies, is taking "unprecedented steps" to attack the global economic downturn, stimulate growth and expand loans to troubled nations, President Obama said at the close of the group’s meeting in London.

"The challenge is clear," Obama said. "The global economy is contracting. Trade is shrinking. Unemployment is rising. The international financial system is nearly frozen."

The group outlined plans to increase oversight of the global financial system. Among other things, the G-20 nations said they would regulate hedge funds for the first time and supervise credit rating agencies in an effort to prevent conflicts of interest.

The G-20 said it would implement new standards on executive pay and bonuses and vowed to crack down on tax havens. To help coordinate these efforts, the G-20 established a Financial Stability Board, which expands the powers of its predecessor: the Financial Stability Forum.

The Financial Stability Forum, which brought together central bankers, regulators and the IMF, will now include all G-20 countries, Spain and the European Commission. Member nations will "commit to pursue" financial stability, transparency and other goals aimed at sound regulation.

"We have a set of principles around dealing with systemic risk that I think will be very important in preventing the kinds of financial crisis that we’ve seen," Obama said.

Of course, it remains to be seen how far an even beefed up Financial Stability Board can go in promoting better regulation. Ultimately, financial regulation is enforced by individual countries.

Meanwhile, the leaders said they were committed to resisting economic protectionism and promoting global trade, even as analysts say it will be difficult for countries to balance such promises with the need to stabilize local economies.

IMF to boost lending

In addition to coordinating regulation reform, G-20 members agreed to pump $1 health insurance quotes.1 trillion into the IMF to help restore credit, encourage economic growth and create jobs around the world.

IHS Global Insight, a global research firm, applauded the G-20 commitment to boost IMF lending.

"The biggest surprise was the huge three- to four-fold increase in IMF resources to approximately $1 trillion, which will go a long way to supporting financial stability in the developing world," the firm said in a report Thursday.

The IMF was formed near the end of World War II to promote international financial and economic stability. It is best known for loaning money to smaller economies facing economic crises.

According to IHS Global Insight, the $1 trillion pledged Thursday is more than both the United States and European nations had pushed for.

Colin Bradford, a senior fellow at the Brookings Institution, said the $1 trillion investment "reflects a decision on the part of the 20 countries to make the IMF a truly global institution."

"They pulled out all the stops," Bradford said. "This is an integrated and cohesive strategy. It’s almost as good as one could hope for."

Trying to create jobs

The G-20 reiterated that its members are undertaking "unprecedented and concerted fiscal expansion." The fiscal plans are aimed at saving or creating millions of jobs and boosting economic growth around the world.

By the end of the year, these efforts will amount to $5 trillion, according to the G-20 statement. But the group did not specify how much of that amount comes from existing stimulus efforts.

Bradford said the $5 trillion likely includes the U.S. government’s $787 billion economic stimulus plan, as well as cash infusions that governments around the world have put into the banking system. "In essence, it is the entire public policy response to the crisis," he said.

– CNN Wire reports were used in this article. 

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April 4, 2009

Swiss March Consumer Prices Decline Most Since 1959

Filed under: term — Tags: , , — Snowman @ 4:01 am

Swiss consumer prices dropped the most in five decades in March, highlighting the need for the central bank to fight the risk of deflation.

Prices declined 0.4 percent from a year earlier, led by a drop in oil costs, the Federal Statistics Office in Neuchatel said today. That’s the biggest decline in prices since December 1959. Economists predicted a drop of 0.1 percent after a 0.2 percent gain in February, according to the median of 12 forecasts in a Bloomberg News survey.

The Swiss National Bank will keep buying foreign currencies to weaken the franc in a bid to prevent the country from slipping into protracted period of declining prices, SNB Vice-President Philipp Hildebrand said yesterday. As the country grapples with the worst recession since 1975, the central bank predicts inflation will be negative this year and close to zero for the next two years.

“The danger of deflation will certainly be in the foreground for the next couple of years,” said Ursina Kubli, an economist at Bank Sarasin in Zurich. “We knew inflation would hit negative territory, but the surprise is how deep and fast it happened.”

The Swiss franc weakened against the euro after today’s release, later erasing losses to 1.5226 at 3:22 p.m. in Zurich. The yield on the two-year Swiss note fell three basis points to 0.57 percent. Yields move inversely to bond prices.

Oil, Transportation

The price of oil products tumbled 32 percent from a year ago and transportation costs fell 4.8 percent, the release showed. Durable goods’ prices slipped 1.7 percent. From the previous month, consumer prices were down 0.3 percent.

The 16-nation euro area may follow Switzerland and Ireland into negative inflation territory in the coming months, European Central Bank President Jean-Claude Trichet said today low cost car insurance. Inflation in the single-currency area slowed to the lowest on record in March. Ireland already saw its biggest decline in consumer prices in 13 years in February.

Cooling price growth may leave consumers with more money to spend and support household consumption. Still, a prolonged period of deflation may have the opposite effect as consumers put off spending to wait for lower prices. Rising unemployment may also curtail spending.

Impact on Wages

“The recession is going to intensify in the coming months and have a negative impact on wages” and spending, said David Marmet, an economist at Zuercher Kantonalbank in Zurich. “The current environment is pointing to negative inflation rates,”

To stem the recession and avoid a prolonged period of deflation, the SNB has cut its benchmark interest rate to near zero, purchased corporate bonds and bought foreign currencies to weaken the franc.

The SNB began buying foreign currencies on March 12, helping to push the franc down against the euro. Before the move, the franc had appreciated 8 percent in six months, neutralizing interest-rate cuts and weighing on exports. At the same time, a stronger franc helped push down inflation by making imports more affordable.

“We would have been in danger of a deflationary spiral had the SNB not acted,” Marmet said. “The measures they’ve taken should prevent it.”

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April 2, 2009

Harper seeks ‘dramatic action’ from G20

Filed under: marketing — Tags: , — Snowman @ 5:52 pm

LONDON–Canada is in a much better fiscal position than its G20 partners to afford economic stimulus, Prime Minister Stephen Harper said Wednesday, while simultaneously urging the world's largest economies to "dramatic action."

As the Group of 20 industrialized and developing countries convened for a summit, Harper used the pulpit of foreign news organizations to tout Canada's strengths and admonish its partners.

In an interview with American network CNN, Harper pointed to falling GDP and rising joblessness in – Canada as elsewhere – and called the situation "disconcerting."

"All the more reason why I think, if anything, leaders should over act at this point," said the prime minister.

"I think there would be a risk of under acting. Let's assume that we need dramatic action and let's do it."

But in a speech to a business audience in Yellowknife Wednesday, Bank of Canada Governor Mark Carney appeared to be going in a much different direction, cautioning governments not to overreact.

"People need to be careful about doing too much, too soon, relative to their fiscal capacity," Carney said in a question and answer session after his speech.

In an interview with Britain's Sky News, after he spoke to CNN, Harper said the size of stimulus packages may be less critical than getting dollars moving immediately.

"That's probably at this point more important than making it bigger and bigger," he said.

It's part of a tightrope act Harper is walking at this summit: prodding reluctant, debt-laden European nations to spend while encouraging international co-operation in regulating financial markets without stepping on sensitive U.S.

A leaked draft of the G20 communiqué, obtained by The Canadian Press late Wednesday evening and dated March 31, commits the G20 countries to "extend regulation or oversight to all financial markets, instruments and institutions which may be systemically important," including hedge funds.

It would create a new G20 entity "with a strengthened mandate" in order to "identify and report on macroeconomic and financial risks and the actions needed to address them."

But the draft kicks the details down the road, committing finance ministers to "complete the implementation of these decisions . . . ."

Harper, in an earlier interview, suggested the oversight body is “a reasonable compromise business card design."

"I don't think the Americans and some of the emerging markets will accept a global regulator. These are after all sovereign countries."

All the while, Harper is playing to a divided domestic gallery in Canada. His communication team's tightly constricted interview strategy with the travelling Canadian media speaks of a PMO deeply worried about off-message news reports back home.

"I'm a conservative," Harper told Britain's Sky News. "I happen to believe in the long term, we will see long-term economic growth from the private sector."

That from a prime minister who has opened the spending spigots in Canada, is encouraging others to do likewise and is singing the praises of government regulation in the financial sector.

Further complicating Harper's message was an OECD report this week that said Canada can and should increase its stimulus spending, which is already sending federal and provincial budgets deep into the red.

It makes for a dizzying array of options and opinions on an economic crisis that is now widely considered the worst in half a century. With countries as diverse as China, India, Brazil, Saudi Arabia, Germany and Turkey at the G20 table, expectations were being ratcheted down Wednesday, even as talk of divisions was being dismissed.

British Prime Minister Gordon Brown called the summit the greatest level of international economic co-operation since the Second World War.

"Of course it's difficult, of course it's complex – you have a large number of countries," Brown said at a news conference Wednesday with U.S. President Barack Obama.

Harper, in his interview with Sky News, warned against the widespread finger-pointing that has pinned the United States as the villain in the global financial collapse.

Obama is clearly attempting to present a more collegial, multilateral American foreign policy to the world, he said.

"There is very little can be done without American leadership," said Harper.

"So I would hope that the nations of Europe and the rest of the world, having asked for a more consensual approach from the Americans . . . will also respond to it and will act together to address difficult global problems, like the recession, with the global approach."

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