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The cars of the future will run on electricity, most major automakers agree on that. What they don’t agree on is how soon drivers will be ready to fully embrace electric power and how aggressively to push electric cars.

Nissan, General Motors and Ford’s electric car strategies show just how differently they view America’s readiness to get behind the wheel of purely electric cars.

Nissan: America is ready now!

Nissan is planning to introduce a purely electric car next year, not bothering with plug-in hybrids or other technologies that merely minimize the use of gasoline.

"We’re going to the end of the spectrum, believing that is the way to go," said Eric Noziere, Nissan North America’s vice-president for product planning.

Nissan is promising a five seat car that can drive 100 miles on a single charge. Noziere doesn’t think fears about the relatively short driving range of electric cars, known as "range anxiety," will be a big problem.

After a while, customers will adjust their driving habits, he said. Also, to make driving range less of issue, Nissan is working with governments and energy providers in cities including Seattle, San Diego and Phoenix to install charging stations that will allow drivers to "top off" their batteries while they’re at work or running errands.

The problem with this strategy according to Michael Omotoso, an industry analyst with J.D. Power and Associates, is that Nissan risks sinking a lot of development costs and manufacturing capacity into a vehicle that might not take off. If gas prices stay low, they’ll have a problem, he said.

"Their only customers are going to be government fleets," Omotoso said.

But Nissan’s approach is probably the best one for a company that, so far, hasn’t invested much in hybrids and plug-in hybrids said Bill Pochiluk, an industry analyst with the consulting group Automotive Compass.

Nissan’s president Carlos Goshn has only recently come around to green technology. He famously said hybrids were a fad and that Nissan would continue to build gasoline engines into the future.

For now, Pochiluk said, Nissan’s competitors are way ahead in those areas and the best Nissan could hope for would be "me too" status. An electric-only vehicle will at least give them a better chance to stand out down the line.

GM: Electric cars are too limited

When it comes to electric-only cars, GM’s attitude is: "Been there, done that, don’t want to do it again now."

While the movie "Who Killed the Electric Car" created the impression that GM had ignored a huge market for its EV1 electric car back in the 1990s, that wasn’t the reality, according to GM. California regulations at the time required GM, and other automakers to sell zero-emission cars, so automakers greatly subsidized prices instant cash advance. GM lost money — lots of of money — on each of the roughly 800 customers who leased the car over its four years of availability.

This time out, GM wants a car with real mass appeal: Four seats and no worries about driving range. Its solution is the Chevrolet Volt, a battery-driven car with a gasoline engine to generate more electricity for long-range driving.

While a hundred miles is much longer than most people drive on a typical day, it’s still not long enough for the occasional road trip. So the Volt goes 40 miles on a full battery, a range that more than covers a typical day for most Americans. But when the battery runs low, a gasoline engine starts generating electricity to allow for hundreds of miles more.

GM’s approach is the right one, said Pochiluk. Consumers will need the security of that extended gasoline-powered range before large numbers will invest in an electrically driven vehicle, he said. The biggest risk for GM is that it has so much riding on this one car.

"Every part of this vehicle has to be perfect," he said, "or the whole world is going to dump on it."

Ford: We’ll let America tell us

Ford is readying its own all-electric car for launch in early 2011, a version of the next-generation Focus compact car. It will also offer an electric commercial van next year.

Ford isn’t betting on huge sales of either vehicle, but sees them as part of a strategy to offer hi-tech vehicles to suit whatever customer appetite arises.

Ford is also working on plug-in hybrid vehicles, as is GM. Plug-in hybrids are different from range-extended electric cars like the Volt. For one thing, they rely more on gasoline power but still use much less fuel than even regular hybrids.

Ford’s approach is probably the smartest, said Michael Omotoso, an industry analyst with J.D. Power and Associates.

"Being in all market segments at different price points, they can see where their sales are the highest," he said.

Ford’s approach to developing its electric-only vehicles also limits risk, he said.

"They’re in the electric vehicle field," he said "but they’re sharing the risk with a partner."

The Focus BEV, for Battery Electric Vehicle, being developed jointly with the Canadian auto parts supplier Magna, which actually started the project on its own before involving Ford. The electric Transit Connect commercial van is also being co-developed with a partner, Smith Electric Vehicles of England.

All of these strategies depend on rising gas prices, though, Pochiluk said.

"We need much higher gas prices or none of this stuff we’re talking about is ever going to work," said Pochiluk. 

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WASHINGTON — The U.S. trade deficit fell to the lowest level in more than nine years in May as exports posted a small gain while the weak American economy pushed imports down for a 10th straight month.

The slight rebound in exports, combined with a slower pace of decline in imports, showed that the nosedive in global activity may be starting to ebb. Delayed revivals overseas likely will hinder a rebound in the U.S., but most analysts still expect the American economy to grow a bit later this year.

The Commerce Department said Friday the deficit narrowed to $26 billion, a drop of 9.8 percent from April and the lowest level since November 1999. Economists expected the deficit to widen to $30.2 billion in May. So far this year, the deficit is running at an annual rate of $350 billion, about half of the $695.9 billion deficit for all of 2008.

The politically sensitive deficit with China rose 4.4 percent to $17.5 billion in May, but is running 12.6 percent below the record pace of last year.

America’s deficit with Canada, its largest trading partner, dropped to $628 million, the smallest monthly imbalance in 15 years. The deficit with Japan shrank to $1 personal business cards.9 billion, the lowest with that country in more than two decades.

Exports of goods and services rose 1.6 percent to $123.3 billion in May, reflecting increased sales of soybeans, corn and other farm products, along with higher exports of industrial machinery, generators and computers. But even with the May increase, U.S. exports are 25 percent below the record-high set in July 2008.

Imports edged down 0.6 percent to $149.3 billion, the 10th consecutive monthly decline. Imports are 34.9 percent below the all-time high set last July.

Sal Guatieri, a senior economist at BMO Capital Markets, said the much slower pace of decline in imports showed consumer spending may improve in the coming months. He’ll be watching imports of appliances and clothing for early signs of a consumer rebound.

Mark Zandi, chief economist for Moody’s Economy.com, called the report "very positive" and consistent with the idea that the U.S. recession will come to an end in the next few months.

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Silicon Valley start-ups, increasingly dropping Microsoft and turning to Web-based software, may be the crucial opening Google needs for its Chrome operating system.

Analysts and executives say Google, which unveiled the Chrome this week in a direct challenge to Microsoft’s decades-old dominance of computer operating systems and business applications, will take years to get significant share of the market, but start-ups might be their way in.

A growing number of tech entrepreneurs argue that Microsoft’s current software is out of date and inefficient because, unlike applications that run off the Web in a “cloud” environment, they run one copy per person at a time, rather than allowing multiple users to share information.

“In a business setting you never work on things alone,” said Tien Tzuo, chief executive of Zuora, a company that sells software to facilitate billing online.

“The idea of sending a file back and forth is just archaic,” said Tzuo. “Why not just give employees an inexpensive device that allows them to plug into the Internet?”

Microsoft’s Windows nonetheless dominates. It remains the operating system software for about 95 percent of PCs, with more than 950 million copies running worldwide.

Key to Windows’s success is that it offers the most applications and draws the most programmers. But start-ups, who thrive on low-cost efficiency, say Google’s operating system — which will be free — offers superior applications new car loan rates.

Many have already switched to Web-based software such as Google Apps for everything from email to word processing.

TRAVELING LIGHT

David Sifry, the chief executive of Offbeat Guides, which provides personalized on-line guides for 30,000 destinations, said Google Apps allow him to travel without a computer because he can access all of his applications on-line.

Also, with operating system-based applications most companies would have to maintain, update, install, costing time and money, he said.

In contrast, Offbeat Guides contractors around the world collaborate online with the main office, Sifry said.

“The fact that I don’t have to worry about doing technical support on their computers and software helps an extraordinary amount,” he said. “Whenever Google does a bug fix it works on all of their systems, without us having to spend any effort.”

Analysts estimate about 2 percent of PC users will try out the Chrome OS in its first year.

Google has said it will first try to persuade the likes of Hewlett-Packard and Acer to offer its operating system in low-cost netbooks that work mostly off the Web, allowing existing individual users to switch painlessly. 

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Business legend Jack Welch has already hailed Ben Bernanke as "a national hero" for the Federal Reserve chief’s aggressive moves to pump up the economy, but Bernanke’s work is not nearly finished. One of the factors that will influence the decision whether to reappoint him when his term ends in January is the nature of the next task facing him or his successor: to wean the economy off the $1 trillion of new money created by the Fed when disaster loomed last fall.

Like much of what the Fed has had to accomplish recently, it’s a scenario without precedent since the Great Depression. And that time, the delicate operation was botched.

"Your timing has to be perfect," says David Jones, former Fed economist and president and CEO of DMJ Advisors LLC in Denver. "If you do it too soon, you keep us in a deep recession. And if you do it too late, you get inflation."

To make the best decision about whom to appoint, President Obama will have to consider not only who has the best command of monetary policy, but also who has the most mettle. Any decision to raise short-term interest rates can make the Fed chair very unpopular. "Your next act is not to refill the punch bowl," says Rob Parenteau, an economic consultant who owns the firm MacroStrategy Edge. "You’re going to be taking it away, and you’re going to be making a lot of enemies as you do that."

The argument for Bernanke goes like this: he’s already on the job, and he also happens to be one of the greatest living scholars of the Great Depression, which is basically a road map for how a central bank should not run monetary policy. One of the lessons of that crisis is that shutting off the monetary spigot too soon can stop a recovery in its tracks. In 1936-37, the central bank started withdrawing excess reserves. This, combined with FDR’s decision to raise taxes and cut spending, sent the economy into another tailspin.

Bernanke has indicated that he understands the art of timing. During testimony before Congress’s Joint Economic Committee in May, he explained, "I just want to assure the American people that we are very focused, like a laser beam … on this issue of the exit and of making sure that we have price stability in the medium term."

He added, "It’s very important for us to provide a lot of support for this economy right now because it needs support, but at the same time we understand the necessity of winding this down in an orderly way at the appropriate moment so that we will not have inflation problems on the other side instant payday loans completely online."

Bernanke and others at the Federal Reserve are saying inflation will not be a problem in the near future. But investors are already signaling their concern. Ten-year Treasury bond yields hit an eight-month peak in June.

"[The Fed’s] models may tell them inflation’s not a headache for two or three years but it doesn’t matter if investors think it could be a nearer term problem," says Parenteau. "If commodity prices begin to reflect that, you’ve got a problem on your hands"

The question is whether Wall Street trusts Bernanke to do whatever it takes to avoid the inflation problem. Larry Summers, Obama’s top economic adviser and former Treasury secretary, is often floated as another possible Fed chair. People who like that idea view his reputation for a strong will as an asset in a situation like this.

"People may view Summers as more able and willing to execute whatever tightening needs to be done on the Fed funds rate," says Parenteau, "whereas they’re used to thinking of Bernanke as ‘Helicopter Ben,’ where he comes along with the helicopter and opens the suitcase and lets the money fly."

On the other hand, Summers’ close ties to the White House could create the impression that political pressure would be brought to bear on him to err on the side of economic growth, rather than inflation-fighting.

Regardless who gets appointed, one thing is certain: this unelected corner of government has never had more power. The Obama administration’s proposal to give the Fed more authority to regulate big financial institutions comes at the same time its monetary decisions will decide the economy’s fate. And yet all the authority in the world may not be enough to stop the after-effects of injecting such a megadose of money into the system. Some think inflation is inevitable.

"It doesn’t matter who you appoint. It doesn’t change the fact you’re sitting there with a trillion dollars in excess reserves," says Thomas Saving, an economics professor at Texas A&M University and director of the Private Enterprise Research Center. "An appointment doesn’t change any of that. That’s reality." 

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The housing bust has finally clobbered super-pricey Manhattan home prices.

Reports released Thursday by four major New York brokers show that prices cratered during the three months that ended June 30.

Prices fell between 13% and 19% compared with the same quarter last year. The brokers found median prices that ranged from $795,000 to $849,000.

The decline shows a marked turn from the first quarter of 2009, when the year-over-year change in median home prices ranged from a loss of 2% to a gain of 6%.

Another change in the recent period: More people are buying.

The number of sales picked up by more than 28% in the second quarter, according to Prudential Douglas Elliman.

Driving the increase were sales of studio apartments and one-bedrooms, both of which gained market share, according to Jonathan Miller, president of appraisal company, Miller Samuel, which compiles data for Prudential Douglas Elliman.

"It’s value-based shopping," said Pam Liebman, chief executive of the brokerage Corcoran Group. "People are coming back into the market, but nobody is going to overpay."

Of course, in Manhattan "value" means studio prices that go for a median of $400,000 and one-bedrooms that fetch $650,000.

Long rebound

Despite the bleak report, the ingredients for a recovery are already in place, according to Greg Heym, chief economist for both Halstead Property and Brown Harris Stevens. But it will be very slow coming.

"There are still risks to the economy, both national and local," Greg Heym said. "But job losses have slowed, consumer confidence is higher and the stock market returned more than 30% during the quarter."

Furthermore, the impact of the Wall Street meltdown on the New York economy has been less catastrophic than first predicted. The city has held up well, according to Heym, and now the financial system has started stabilizing.

Heym also pointed out that the foreclosure plague, so damaging to many markets, has never been a major problem in Manhattan. Co-ops have, if anything, stricter financial requirements than the lenders, requiring buyers to show their assets and come up with 20% down. That has meant that few co-op owners are in trouble with their mortgages.

And now, the national housing market may be improving with sales at steady, albeit, lower volumes and home price declines flattening out. Those are all positive signs for Manhattan. The housing market may may be at or near the bottom of the cycle, according to Heym cash advance lenders.

"But people shouldn’t think that a bottoming out means a quick rebound," he said.

The high-low

How quick any recovery will be depends a lot on the availability of jumbo mortgages, those exceeding $729,750. The difficulty in obtaining such loans has hurt sales in Manhattan. It has caused the strength of the market to switch from the sales of big, expensive homes to sales of smaller, cheaper ones.

"The entry level market did not fall as far as the high end," Miller said. "The difference was a jumbo versus a conforming mortgage."

Conforming loans, the ones bought or backed by Fannie Mae and Freddie Mac, are still available at very favorable rates. But jumbos, which exceed the loan limits imposed by Fannie and Freddie, have not been.

Manhattan buyers are heavily reliant on jumbo loans because many homes are priced at well over the conforming loan limit. And it ain’t easy getting such mortgages right now.

"Most banks are requiring jumbo borrowers to put at least 30% to 40% down — some need 50%," said Miller. "Someone buying, say, a $4 million home, even with perfect credit and a raise this year, might not have the $1.2 million to $2 million to put down."

But there are a couple of positive factors prompting many entry-level buyers to get into the market, according to Bill Staniford, CEO of PropertyShark.com, which compiled Corcoran’s statistics.

One is the first time homebuyers tax credit, the federal tax refund program available to anyone who hasn’t owned a home during the past three years.

"People say that’s making a difference," said Staniford. "And if interest rates continue to climb, that will introduce some urgency."

Once the economy recovers, the prospects for the Manhattan housing market are good. The market could quickly tighten again. There’s little new building going on. As a matter of fact, not a single building permit was filed in all of February, according to Heym.

Plus, glamorous Manhattan is still drawing residents from all over. The population of New York, unlike many other old U.S. cities, is still growing.

"In a couple of years, there’ll be a housing shortage again," said Heym. 

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Home prices continued to tumble in April, falling 18.1% from a year earlier — but the change from March narrowed sharply, indicating that housing markets may be starting to turn.

The 20-city slice of the S&P/Case-Shiller Home Price index recorded a drop of 0.6% from March to April, compared with a 2.2% drop in the prior month. The index has declined every month since July 2006.

"The pace of decline in residential real estate slowed in April," says David Blitzer, Chairman of the Index Committee at Standard & Poor’s. "Thirteen of the 20 metro areas also saw improvement in their annual return compared to that of March."

Not only that but every metro area save one — Charlotte, N.C. — reported improvement in their monthly return compared with March.

"While one month’s data cannot determine if a turnaround has begun, it seems that some stabilization may be appearing in some of the regions," said Blitzer. "We are entering the seasonally strong period in the housing market, so it will take some time to determine if a recovery is really here."

Blitzer pointed to some factors that may be lifting the housing markets. For one thing, the stock market bottomed out in March and started a strong recovery. The S&P 500 has gained about 37% since then. Consumer confidence has also improved, making house hunters more likely to pull the trigger on deals.

Not all optimistic: The housing market picture is still very murky, according to Pat Newport, a real estate analyst with IHS Global Insight. He’s not convinced that the improved April report means much more than a seasonal variation in housing markets. Spring is, historically, a strong time of year for housing markets.

He said that not only are home prices still falling but other metrics, such as unemployment and foreclosure rates, are worsening as well easy payday loans.

"Foreclosures are still driving markets, and the rate of foreclosure is still going up," Newport said. "I think that’s going to continue"

Job losses will all but guarantee that will happen, according to Newport, especially since price declines have put so many homeowners underwater, owing more on their mortgages than their homes are worth. By some calculations as many as 20% of homeowners are underwater.

When people are underwater and they’re losing their jobs or some of their income, that’s bound to result in more foreclosures, more vacant homes for sale and more downward pressure on prices.

Huge declines from peaks: Phoenix, where homes have lost 35.3% of their value over the past 12 months, was the worst performing market over that period. Las Vegas prices plunged 32.2% and San Francisco dropped 28%.

Denver prices fell the least over the last 12 months, down 4.9%, followed by Dallas at 5% and Boston at 7.7%.

Prices in Dallas rose 1.7% between March and April, the largest increase among the 20 cities. Las Vegas prices dropped 3.5%, the biggest decline — which was still narrower than the month before.

Dallas also has suffered the smallest decline from the top of its market, off just 9.6% from its peak in June 2007. The rest of the cities have all suffered double-digit percentage drops from their peaks, with the worst being Phoenix, down 54.1% from June 2006.  

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General Motors Corp is close to a deal with Belgium-based RHJ International to sell a stake in Opel, and a memorandum could be signed within days, the Financial Times reported citing a person close to the sale process.

RHJ International had improved its earlier bid and GM was “taking it very seriously” said a person close to the sale process on Monday, the paper added.

According to the paper, RHJ’s new offer was said by this person to have taken more account of political sensitivities over job losses in Germany, which is providing $2.1 billion of bridge finance to keep the carmaker afloat as GM goes through bankruptcy proceedings in the U instant cash loan.S.

Last month, Germany reached a preliminary agreement with Canadian auto parts group Magna International Inc over a takeover plan for Opel, General Motors’ European unit.

General Motors and RHJ International could not be reached immediately for a comment by Reuters.

(Reporting by Hezron Selvi in Bangalore; Editing by Lincoln Feast)

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