Best financial sourse

South Korea’s inflation rate eased in May for a second straight month, though remained above a level the central bank finds worrisome.

The consumer price index rose 4.1 percent from a year earlier, the government’s Statistics Korea said Wednesday.

The rate has been above 4 percent for five straight months, which is outside the Bank of Korea’s so-called tolerance range for consumer price inflation.

April’s rate was 4.2 percent, which marked a sharp reduction from 4.7 percent in March. The latter was the highest level reached since October 2008 low rates payday advance.

The central bank has raised its key interest rate four times since July last year in a bid to stem rising prices, though paused in April and May.

The bank surprised analysts last month by leaving its benchmark borrowing cost unchanged at 3 percent. Economists had expected an increase to 3.25 percent.

The Bank of Korea’s rate-setting Monetary Policy Committee next meets on June 10.

Source

Investors trying to duck a blow from the stock market by moving to bonds may be positioning themselves to take a left jab that they didn’t see coming easy pay day loans.

As the economy has weakened lately, investors pulled about $3 billion from stock funds and poured more than $8 billion into bond funds

TOKYO

Shareholders trying to get into JPMorgan Chase & Co.’s annual meeting held Tuesday in this midwestern city were greeted by heavy security and over 400 protesters shouting slogans outside every entrance.

At least one person was handcuffed after a group of about 400 protestors marched up Chase’s property and placed a sign on a raft floating in a pond in the bank’s premises. The sign read: “Foreclosed: Chase sinks our economy.”

Police had each entrance blocked ahead of the meeting, as protesters gathered in the rain and cold chanting slogans such as “Make Banks Pay” and carried signs that said: “Chase gets rich, we lose homes, jobs, services.” At least 20 police cruisers circled the building.

Inside, several shareholders spoke out against the bank’s handling of mortgage foreclosures.

“As a person of faith, my God believes you shouldn’t take advantage of people when they are down,” said Dawn Dannenbring of the community group Illinois People’s Action, addressing CEO Jamie Dimon. “Do you believe in the same God I believe in?”

Dimon answered: “That’s a hard one to answer.”

After another question on foreclosures, Dimon said: “We are doing everything we can to keep people in their homes that should stay in their homes payday loans.”

Chase, headquartered in New York, is holding its annual meeting in Columbus for the first time. Along with all the major banks in the country, Chase has been criticized for its handling of mortgage foreclosures.

The protests were organized by The New Bottom Line, a coalition of clergy and unions, which is pushing for action and legislation around banking practices that hurt troubled homeowners.

Annual shareholder meetings of large banks routinely draw protesters. However, security this year has been especially tight after Wells Fargo & Co.’s annual meeting on May 4 in San Francisco became a rowdy scene after hundreds protested outside. Inside the meeting, a group of shareholders demanded that the bank immediately stop foreclosures and waive principal for troubled home owners. The shareholders were escorted out of the meeting by police. Eight people were arrested for blocking entrances to the building.

Source

The region’s beleaguered job market received a dose of good news Wednesday: March was its strongest month in two years. Still, there is lots of room to strengthen.

Metro St. Louis added 13,100 jobs in March, its biggest one-month gain in more than two decades of records, according to new figures from the Bureau of Labor Statistics. The unemployment rate dipped to 8.8 percent, its lowest point since January 2009.

The numbers, which are adjusted to reflect seasonal hiring trends, echo national figures put out earlier this month. And they are the latest sign that the recovery

Orders placed with U.S. factories unexpectedly fell in February for the first time in four months, reflecting weaker demand for capital goods and military aircraft.

Bookings for manufacturers’ goods decreased 0.1 after a revised 3.3 percent gain in January that was larger than previously reported, the Commerce Department said today in Washington. Orders excluding transportation equipment rose, boosted by demand for non-durable goods.

Companies may be tempering spending on new equipment until further signs emerge that the recovery is broadening out and will generate faster job growth. Even so, rising exports to China and other emerging economies will keep benefiting manufacturers such as Micron Technology Inc. (MU), helping the economy expand.

Shipments of such equipment, which are used in calculating gross domestic product, increased 0.5 percent after a 2 quick cash.5 percent decrease in January.

Bookings for non-durable goods, including petroleum and chemicals, rose 0.3 percent in February, which may reflect higher food costs, today’s report showed.

Demand for machinery fell 2 percent after dropping 13 percent. Demand for automobiles and parts rose 2 percent after rising 1.9 percent.

Auto Sales

Auto sales have climbed in the last six months. Demand at General Motors Co., Toyota Motor Corp. and Ford Motor Co. (F) in February exceeded analysts’ estimates as industrywide sales rose to a 13.38 million annual rate, the most in 18 months.

Source

Singapore’s inflation held above 4.5 percent for a third month as the cost of transportation, food and housing climbed, sustaining pressure on the central bank to join regional policy makers in damping inflation.

The consumer price index increased 5 percent last month from a year earlier, a Department of Statistics statement showed today. That compares with an inflation rate of 5.5 percent in January. The median estimate of 18 economists surveyed by Bloomberg News was for a 5.4 percent gain. Prices fell 0.1 percent from January, without adjusting for seasonal factors.

Asian central banks from India to South Korea and Thailand have tightened monetary policy this month as rising oil and commodity prices threaten to fuel inflation. Singapore last month raised its inflation forecast for 2011, and economists from Standard Chartered Plc to Citigroup Inc. predict the central bank will revalue the currency or let it appreciate faster at the policy review in April.

“Inflationary risks are certainly rising,” Irvin Seah, an economist at DBS Group Holdings Ltd. in Singapore, said before the report. “Food and fuel prices will surely become more prominent factors in the inflation equation going forward. And that should prompt further monetary action from the Monetary Authority of Singapore.”

The central bank, which uses the exchange rate as its main tool to manage inflation, revalued the currency in April 2010 and said in October it would steepen and widen the currency’s trading band while continuing to seek a “modest and gradual appreciation.”

Currency Climbs

Consumer prices will probably rise 4 percent this year, according to the median estimate in a survey of 20 economists by the central bank released this month. Consumer prices may climb 3 percent to 4 percent this year, up from a previous forecast of 2 percent to 3 percent, the government said Feb. 17.

The Singapore dollar has gained more than 10 percent against the U.S. currency in the past year to be the best performing currency in Asia excluding Japan.

The Singapore dollar may strengthen to S$1.23 versus the U.S. currency by the end of 2011, economists surveyed by the central bank predicted. It traded at S$1.2644 a dollar at 12:20 p.m. local time.

Source

The European Union bank regulator says this year’s stress tests on banks will be harsher than last year’s.

The European Banking Authority says Friday the test assumes EU economic output will shrink 0.4 percent in 2011 and will show no growth in 2012 _ a 4 percentage point difference from current forecasts.

That compares with a 3 percentage point drop assumed in the 2010 stress tests.

The EBA has come under fire for not setting stricter shock scenarios for banks, with critics saying a partial default of a highly indebted country like Greece cannot be ruled out.

However, the EBA says banks will have to disclose all relevant exposure to sovereign bonds, which would allow analysts to run their own calculations.

Source

Mumbai home prices may decline as much as 35 percent over the next two years as record prices and high interest rates deter buyers and developers slash prices to offload rising inventories, according to Liases Foras Real Estate Rating & Research Pvt.

Mumbai’s residential property market will stagnate over the next couple of years until prices decline to match affordability and income levels rise, Mumbai-based Pankaj Kapoor, founder of Liases Foras said.

“We will see two types of correction in the market, a price correction of about 25 percent in the next two quarters and a time correction where prices will remain flat over the next two years,” Kapoor said in an interview yesterday.

Home inventory levels have climbed to 28 months in Mumbai, the highest among the six cities tracked by Liases Foras, a real estate research company whose clients include Housing Development Finance Corp. (HDFC), India’s largest mortgage lender. Developers sold 252 million square feet of homes in cities including Mumbai, Delhi, Bangalore, Hyderabad, Chennai and Pune in the 12 months to December, while home supply is 498 million square feet, Kapoor said.

Mumbai home prices may decline as much as 20 percent over the next six months, Bank of America Corp payday loans in one hour.’s Merrill Lynch unit said in a report on March 8.

Distressed Offices

Property prices in some markets have surpassed their 2007 peaks, Mahesh Nandurkar, a real-estate analyst at CLSA Asia- Pacific Markets in Mumbai, said in November. India’s central bank increased the benchmark interest rate to a two-year high in January and signaled further gains in borrowing costs as it raised the inflation forecast.

The office segment will be distressed for the next four years because of the huge supply created by developers across India in this asset class, Kapoor said. Rental values may decline between 10 percent and 15 percent while capital values could drop 35 percent, Kapoor estimates.

The yearly absorption of office space in Mumbai is about 10 million square feet while there is 44 million square feet of space available which could take between four to five years to get absorbed at the current rate, Kapoor said.

Absorption across six Indian cities including Mumbai, Delhi, Bangalore, Hyderabad, Chennai and Pune was at 32 million square feet in the 12 months to December while supply stands at about 146 million square feet, he said.

“As long as home loan rates remain above 10 percent I don’t see demand coming back,” Kapoor said. “I don’t see interest rates coming down over the next one year.”

Source

Federal Reserve Chairman Ben Bernanke told Congress Tuesday that a prolonged rise in oil prices would pose a danger to the economy. But he said a more likely outcome is a temporary and modest increase in consumer prices, not runaway inflation.

Bernanke, in testimony to the Senate Banking Committee, also defended the Fed’s $600 billion bond-purchase program. He told the panel that it was working and successful, but avoided answering a question about how he measures its success.

Bernanke did express confidence that economic growth would increase this year. But he warned it won’t be strong enough to quickly lower unemployment, now at 9 percent.

He also cited other risks to the economy, including rising prices for oil, gasoline, food and other commodities, and further weakness in home prices. All could prompt Americans to spend less.

The Fed chief said the economy still needs the support of the bond-purchase program, downplaying runaway inflation risks that others have raised.

“The most likely outcome is that the recent rise in commodity prices will lead to, at most, a temporary and relatively modest increase in U.S. consumer price inflation,” Bernanke said in the first of two appearances this week to deliver the Fed’s twice-a-year economic report to Congress.

The bond-purchase program is scheduled to end in June. It is intended to spur more spending and invigorate the economy by lowering rates on loans and boosting prices on stocks.

Republicans in Congress and some Fed officials worry that the program could trigger high inflation and a wave of speculative buying on Wall Street that could lead to new bubbles in the prices of assets like stocks and bonds.

Sen. Richard Shelby of Alabama, the panel’s top-ranking Republican, complained that the Fed needs to come up with a way to measure the bond-purchase program’s success. Shelby asked Bernanke for detailed information about whether it was a success or failure. Bernanke defended the program and said it has helped the economy, but he didn’t provide specifics.

Bernanke said the bond program is needed to energize growth and reduce unemployment. He blamed the rise in oil and global commodities prices on strong demand from fast-growing countries such as China, not the Fed’s stimulus policy.

Gas prices jumped over the weekend to a new nationwide average of $3.37 a gallon _ 26.7 cents a gallon more than a month ago. Food prices in January rose at the fastest since the fall of 2008.

Political upheaval in the Middle East, Bernanke said, has caused oil and gasoline prices to march higher. However, Bernanke said he and a majority of his Fed colleagues continue to believe that the situation won’t lead to out of control inflation.

Workers have little power to demand big pay increases because the jobs market is still weak. Many factories and other companies are operating well below full capacity because customer demand is far from booming. Those forces will prevent inflation from taking off, Bernanke said.

Responding to questions from concerned lawmakers about rising energy prices, Bernanke said the increases seen so far “while a problem for many people, don’t pose a significant risk to the recovery or to overall inflation.”

However, a prolonged rise in the price of oil or other commodities would represent a “threat” to economic growth and to inflation, Bernanke acknowledged. The Fed is closely monitoring the situation.

Sen. Robert Menendez, D-N.J., complained that all American families see and are concerned about are rising prices.

The Fed regularly reviews its bond-purchase program. It could buy fewer securities if the economy were to grow more strongly than anticipated or if inflation showed signs of breaking out. Or it could buy more if the economy was in danger of weakening. Most economists believe the Fed will spend the full $600 billion on schedule.

Bernanke says the sharp drops in the nation’s unemployment rates over the last two months were encouraging. But he said it will still take “several years” for unemployment to drop back to normal - around 6 percent.

“Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established,” he said.

If gas prices rise to $3.75 a gallon and stay there for a year, it could mitigate the benefit of the Social Security tax cut, economists said. The economy would still grow, but it wouldn’t get a boost from people spending more on goods and services.

If gasoline prices went as high as $5 a gallon, spending cuts by consumers and businesses could push the economy into a recession, analysts say.

Source