Asia is churning out a fast-growing number of billionaires and is home to 3 billion consumers who aspire to join them. The US wants to be in on that process.For a guy who talked big about reengaging Asiafunny way of showing it., Mr Barack Obama has a

A  DAMAGED  BRAND

Mr Obama must not forget just how much the 2008 meltdown damaged the US brand. During Asia’s 1990s crisis, US officials preached the free-market gospel. They told leaders to raise interest rates to support currencies, slash spending and debt, scrap subsidies and avoid bailing out industries. When the US faced a crisis, it did exactly the opposite.

There’s also considerable grumbling over the US dollar. True or not, the theory that the US is devaluing to help exporters is making the rounds. That perception is a problem if you want China to let its currency strengthen. It doesn’t play well in Japan, where panic is rising over the strong yen.

Nor can the US complain about corruption in Asia. Incestuous ties between Washington and Wall Street helped cause the US crisis. Conflicts of interest between regulators and oil companies led to BP Plc’s devastating Gulf of Mexico leak. The US has little moral high ground on dodgy dealings.

That’s a shame, considering the magnitude of Asia’s corruption fight. In Indonesia, for example, officials face an uphill battle to weed out graft and allow more of the nation’s people to benefit from 6 per cent growth.

In the Philippines, the honeymoon enjoyed by Mr Benigno Aquino, since becoming President in June, ended last week in gunfire. Eight Hong Kong tourists being held hostage in Manila died in a botched rescue attempt. The tragedy was emblematic of what plagues the nation’s economy.

The gunman was a former police inspector who was dismissed on allegations of extortion. The standoff’s surreal finale suggested a breakdown in the nation’s security apparatus, ineptness at many levels and weak diplomacy. Corruption is the common link in all these shortcomings.

Mr Obama got off to a good start, becoming the first US leader to meet with Asean in November. Vietnam was the perfect opportunity to go further — to discuss views on credit markets, North Korea’s provocations, China’s currency, Australia’s election, Russia’s growth prospects and Japanese deflation.

This last topic is a growing concern.

Not only have consumer prices fallen for 17 consecutive months, but Japan now has a leadership battle on its hands. Prime Minister Naoto Kan faces a challenge to remain head of the ruling party by veteran kingmaker Ichiro Ozawa. It’s the last thing Japan needs: Its sixth Prime Minister in three years.

Mr Obama’s team could have learned about all of this, and much more, if it had only shown up in Asia. It should do so as soon as possible.

The writer is a Bloomberg News columnist. The opinions expressed are his own.

Obama blows off Asia’s 3 billion wannabe billionaires

US misses key opportunity to confer with Asean’s economic ministers

william pesek

At a time of global crisis, one the US caused, does Mr Obama really want to be sending a message of indifference to Asia?

Coming a week after the announcement that China’s economy has surpassed Japan’s, you would think the White House would be stepping up a charm offensive. Instead, it risks turning off the region.

stI  10,800

[STi 3,000 x 3.6 = 10,800 stI]

[dOw  10,000 x 3.6 = 36,000 DOW]

Hulumas      ( Date: 30-Aug-2010 14:12) Posted: SO STI 6,000.- pharoah88      ( Date: 30-Aug-2010 10:40) Posted:

US consumer spending up 0.4 per cent

WASHINGTON

Consumer spending rose 0.4 per cent last month after three lacklustre months, the Commerce Department said yesterday.

Personal incomes were up 0.2 per cent last month, an improvement over June, when incomes had not risen at all.

The July spending gain was the highest since a 0.5 per cent rise in March. But the concern is that demand could taper off if unemployment remains near double digits. — Americans spent last month at the fastest pace in four months, helped by a jump in demand for automobiles.AP

"""""""Stocks drop as fear returns""""""

How can they not fear when  China is getting stronger over the years..........LOL!

Stocks drop as fear returns

Quote Details

US stock market faces a bloodbath

SocGen strategist: Global economy sliding back into recession

LONDON

He said there was too much hope among investors, with excessive valuations in the United States, but he predicted it would come to an end in the coming months as economic data increasingly pointed to a double-dip recession.

“Equity investors are in for a rude shock. The global economy is sliding back into recession and they are still not even aware that these events will trigger another leg down in valuations, the third major bear market since the equity valuation bubble burst,” he said.

He forecast a return to the “valuation nadir last seen in 1982”, with the Standard and Poor’s 500 Index bottoming at around 450. Early Friday in New York, the benchmark was at 1,050.

Government bonds, which are considered lower risk assets compared with equities, have remained in demand during the crisis and yields are at a low level by historical standards - where low yields indicate strong demand.

Mr Edwards predicted that a “global cyclical failure” would push yields on US 10-year yields down to between 1.5 and 2 per cent and those on German bunds to below 1.5 per cent.

“So far the equity market has shrugged off much of the weaker data that abounds, and has not joined the bond market in a perceptive move.

“The equity market will though crumble like the house of cards it is, when the nationwide US manufacturing Institute of Supply Management slides below 50 into recession territory in coming months.” The ISM index fell to 55.5 in July from 56.2 in June.

Earlier this month, US rating agency Moody’s warned that time was running out for the big countries to prevent a full-blown sovereign debt crisis.

“Genuinely adverse debt dynamics were only expected to materialise in 15 to 20 years.

“This crisis has fast-forwarded history, eroding all the time available to adjust, “ said the group’s quarterly

In its adverse scenario, it said the US would crash by 2013 if growth falters, with interest payments topping 14 per cent of tax revenues.

The US, United Kingdom, Germany, France and Spain are all at risk of an “interest rate shock”, either because they must roll over a cluster of short-term debt or because their deficits are so large, it said.

The equity market will though crumble like the house of cards it is, when the nationwide US manufacturing ISM slides below 50 into recession territory in coming months.

Societe Generale market strategist Albert Edwards— Investors should brace themselves for an equities “bloodbath” and a further fall in bond yields when the current excessive optimism propping up the market seeps away, warns Societe Generale market strategist Albert Edwards.Sovereign Monitor.THE DAILY TELEGRAPH

Giving Up on a Big Loan

Homeowners whose properties have a mortgage of more than $1 million have stopped paying at a rate that greatly exceeds those who hold cheaper mortgages. In many cases, the delinquencies appear intentional.

Serious Delinquency Rate (90 Days or more)

OWNER OCCUPIED      17%

SECOND HOME             10%

INVESTOR                       22%  

“I’m going to be downsizing,” he said.

Carol Pogash contributed reporting.

A double-dip recession for US?

WASHINGTON

US gross domestic product growth in the April-June period fell from 3.7 per cent in the first quarter on the back of weak private inventory investment and a massive trade deficit, the Commerce Department said on Friday.

Corporate profits grew last quarter at the slowest rate in a year and employee wages in the prior three months were revised lower.

The revised GDP growth was sharply lower than the annualised 2.4 per cent projected by the government last month but better than economists’ forecasts of growth to be shaved by nearly half to 1.4 per cent.

“Investors are growing increasingly concerned about the US economy and there are repercussions in the Japanese market,” said Shinkin Asset Management fund manager Naoki Fujiwara.

Federal Reserve Chairman Ben Bernanke said on Friday after the GDP data release that the central bank “will do all that it can” to ensure a continuation of the economic recovery.

Stopping short of committing to any specific action, he outlined steps it might take if the growth continued to slow, such as making another large-scale purchase of securities.

Speaking at the Jackson Hole gathering of central bankers, he described the US economic outlook as “inherently uncertain” and said the economy “remains vulnerable”.

“Incoming data suggests that the recovery of output and employment in the US has slowed in recent months, to a pace somewhat lower than most Federal Open Market Committee participants projected earlier this year,” Mr Bernanke said.

A Fed purchase of securities, most likely government debt or mortgage paper, will drive down rates on debt in a move that it hopes will spur more spending by American consumers and businesses.

The Fed’s previous purchases of about US$1.25 trillion ($1.7 trillion) in mortgagebacked securities were focused on what Mr Bernanke called “credit easing” or pushing down rates on mortgages to support housing.

Chief economist at JPMorgan, Mr Michael Feroli, said that the central bank could buy up to US$1 trillion more in US Treasuries as needed if the economic growth continued to falter.

The other options Mr Bernanke laid out on Friday included cutting to zero the interest rate the Fed pays for banks to keep money parked at the central bank. That rate is now 0.25 per cent.

“The issue at this stage is not whether we have the tools to help support economic activity and guard against disinflation. We do,’’ he said.

About an hour after the opening bell in New York, the Dow Jones Industrial Average was up 0.5 per cent at 10,036 in a knee-jerk response to the GDP data and Mr Bernanke’s stimulus assurance. — The United States government has slashed second-quarter growth to just 1.6 per cent, signalling a sharp slowdown in the recovery and renewing fears that a double-dip recession in the world’s largest economy would weigh on the export-oriented economies of Asia.Agencies

TELEGRAPH

Stock markets face a 'bloodbath', warns SocGen strategist Albert Edwards

Investors should brace themselves for an equities "bloodbath" and a further fall in bond yields when the current excessive optimism propping up the market seeps away, Albert Edwards, a strategist at Société Générale, has warned.

Commentary

Economic News

Stocks recover from housing blues

The Dow Jones industrial average (INDU) gained 20 points, or 0.2%, the S&P 500 (SPX) rose 3 points, or 0.3%, and the Nasdaq (COMP) composite climbed 18 points, or 0.8%.

Lennar Corp., (LEN) KB Home (KBH) and Toll Brothers (TOL) all gained more than 3%.

"[It's] a sign that they had priced in the bad news, and this has allowed the rest of the market to come back," said Peter Boockvar, chief market strategist with Miller Taback & Co.

But the same news that lifted homebuilding stocks battered the financial sector, with big names like Wells Fargo (WFC, Fortune 500) and Citigroup (C, Fortune 500) edging lower.

"[Banks] have given back the entire year of gains because they are holding mortgage-related debt," said Boockvar. "House prices have taken a leg down because of this data, and if a person pays less for a home, this hurts a bank's balance sheet."

On Tuesday, stocks sank after a 27% plunge in existing home sales fueled worries about an economic slowdown, sending the Dow 134 points lower on the day.

Last week, the Dow and S&P ended down for a second straight week as disappointing economic reports slammed investor confidence.

"It's been a brutal few weeks," said Phil Orlando, chief equity market strategist at Federated Investors. "Stocks are extraordinarily cheap and oversold at this point, but the question is, are they sufficiently cheap to discount the economic weakness?"

Economy: New home sales unexpectedly plummeted to the lowest level on record in July, dropping 12.4% in July, the government reported. Economists had expected sales to bump higher.

The disappointing data comes right on the heels of another dismal housing report on Tuesday, which showed a sharp drop in existing home sales.

Meanwhile, new orders for long-lasting goods fell short of forecasts, edging up a modest 0.3% in July. Economists had expected the government report to show a 3% jump.

Companies: Homebuilder Toll Brothers (TOL) booked its first quarterly profit in three years on Wednesday, thanks largely to a boost from the homebuyer tax credit.

The company said net income was $27.3 million in the quarter, or 16 cents per share, after posting a loss of $472.3 million, or $2.93 a share, a year ago. Shares of Toll Brothers rose 6%.

World markets: European shares slumped. The CAC 40 in France sank 1%, Britain's FTSE 100 lost 0.9%, while the DAX in Germany ended 0.6% lower.

Late Tuesday, Standard & Poor slashed Ireland's sovereign debt rating to double-A-minus due to the massive cost of bailing out the nation's banks.

Asian markets also ended lower. Japan's benchmark Nikkei index dropped 1.7%, hitting a 16-month low. The Hang Seng in Hong Kong shed 0.1%, and the Shanghai Composite sank more than 2%.

Currencies and commodities: The dollar fell against the euro and the British pound, but firmed versus the Japanese yen.

Oil futures for October delivery gained 89 cents to settle at $72.52 a barrel. Gold for December delivery rose $7.90 to settle at $1,1241.30 an ounce.

Bonds: The yield on the 10-year note rose to 2.54%, bouncing off a 19-month low of 2.49% on Tuesday.