Oil rises above $78 mark; naturals gas truns lower

Nonetheless, energy traders are concerned petroleum demand will remain weak. Meanwhile, natural-gas futures erased earlier gains as government data showed a smaller-than-expected drop in weekly U.S. inventories.
Crude for February delivery ended up $1.38, or 1.8%, at $78.05 a barrel on the New York Mercantile Exchange, ending above $78 for the first session since Dec. 1. It fell as low as $76.17 earlier in the session. Futures closed the week up 4.9% ahead of Friday's Christmas holiday, when U.S. futures exchanges are closed. "The recent gains are not justified based on the prevailing fundamentals," said Edward Meir, an analyst at MF Global. "The technicals do look more compelling, but we still would be very cautious here."
Early Thursday, the Labor Department said first-time claims for state unemployment benefits fell a seasonally adjusted 28,000 to 452,000 in the week ended Dec. 19, the lowest level since September 2008. Economists polled by MarketWatch had been looking for initial claims of 470,000. See more on latest jobless claims.
Separately, a big drop in volatile aircraft orders masked a broad-based increase in demand for other U.S.-made durable goods in November, the Commerce Department reported. See story on durable-goods orders.
The U.S. dollar fell against most of its major rivals, with the dollar index down 0.1% at 77.785. The greenback came off earlier lows after the jobless-claims report.
January gasoline added 0.8% to $1.9820 a gallon, January heating oil rose 1.2% to $2.0356 a gallon. Gas in storage fell 166 billion cubic feet in the week ended Dec. 18, the Energy Information Administration reported. Analysts surveyed by Dow Jones had expected a drop of more than 170 billion cubic feet.
At 3.4 trillion cubic feet, stockpiles were 359 billion cubic feet higher than last year at thiOil futures mostly fell over the first half of the month, dropping below $70 a barrel in mid-December.
Prices have since climbed back, but analysts said it will be difficult to surpass $80 a barrel before the end of the year. Crude hit $82 a barrel on Oct. 21, the highest level this year.
The EIA on Wednesday reported a bigger-than-expected drop in U.S. crude inventories as imports declined.
Lower U.S. oil stockpiles "cannot be attributed to high levels of demand," said Linda Rafield, senior oil analyst at Platts.
The EIA's data also showed declines in gasoline and other petroleum-product inventories, but the drop came as refineries reduced their production. Fuel demand, meanwhile, stayed weak, and imports of crude dropped. See story on EIA report.
The low level of imports "reflects weak demand and refiners throttlings time and 395 billion cubic feet above the five-year average, the government's data showed
In the spotlight, January natural gas lost 2.9% to $5.655 per million British thermal units

Gift cards: Use 'em or lose money

WASHINGTON (CNNMoney.com) -- Got a gift card from Wal-Mart, Best Buy or American Express this holiday season?
Use it now, consumer advocates say. That's the best way to avoid potential fees and other pitfalls that can suck up the value of consumer gift cards -- at least until the Federal Reserve imposes limitations on some of the fees next year. "For this holiday season, it's still open season on you and your gift cards," said Gail Hillebrand, director of Consumers Union's "Defend Your Dollars" campaign.
The Fed is crafting new rules aimed at limiting fees in the first year, restricting fees to once a month after a year and preventing gift cards from expiring before five years is up.
The new rules are part of a larger package Congress passed earlier this year cracking down on credit card fees. However, the new gift card rules are still being drawn and won't take effect until Aug. 22.During the 2009 holiday season, some $87 billion will be spent in gift card purchases, according to TowerGroup, a financial services research consulting firm. That's actually down from 2008, but it had been trending up for several years.
The biggest way companies make money on gift cards happens when a recipient spends more than the gift card's value, said Brian Riley, research director with TowerGroup.
They also make money on the interest generated from the upfront dollars collected. That's especially true when consumers forget about gift cards they've locked away in a drawer -- a more frequent occurrence of late, according to a 2007 survey by research firm Marketing Workshop Inc.
Issuers also profit when consumers fail to exhaust the entire balance on a gift card, leaving a few cents or dollars to linger. Some 40% of recipients don't use up their gift card's value, leaving an average of $2.30, according to the Marketing Workshop.
"Leaving those onesies and twosies on the card, that makes them money," Riley said.
But the biggest reason consumers should use up their gift cards quickly is because if a retailer fails, its gift cards become worthless.
Nothing compels a bankrupt retailer to honor a gift card. So, the gift card holder essentially becomes a creditor standing pretty far down the line of those seeking repayment.
Consumers lost more than $100 million in gift card value in 2008, when large retailers such as Sharper Image and Linens 'N Things failed, Riley said.Some gift cards, especially those issued by banks or credit card companies for use at a variety of merchants, charge a fee on top of the value that's purchased on the gift card.
In addition, "dormancy" fees of a few dollars a month can be charged for gift cards that don't get used.
Some card issuers have recently started cutting dormancy fees. American Express announced in October that they'd no longer charge consumers $2 a month for nonuse of gift cards, although it will still cost between $3 and $7 to purchase the gift cards in the first place.
"Customers told us that monthly (dormancy) fees undermine the value of gift cards, plain and simple," said Alpesh Chokshi, American Express president of Global Prepaid, in a statement.
The new Fed rules prohibit dormancy fees until a year has passed. After that, the Fed wants to limit such fees to once a month and require them to be clearly disclosed.
But as part of those restrictions, the Fed is looking at limiting other types of fees to once a month, after a year is up, on such actions as replacing gift cards, reloading them or even inquiring about the balance.
That's got the banking industry up in arms. Different groups, including the American Bankers Association, have written the Fed trying to narrow the kinds of fees that could be curtailed.
They especially want to maintain the right to charge to replace a lost gift card. The industry says that fee covers the administrative cost of replacing the card and protects against tricksters who continually "lose" and replace cards.
"We think the replacement cost is a normal part of a transaction given the cash nature of gift cards," said Scott Talbott, chief lobbyist for the Financial Services Roundtable, a bank lobbying group.
By contrast, consumer groups have written the Federal Reserve asking them to broaden their reach when it comes to prohibiting gift card fees.
"Congress left a lot up to the Fed," said Hillebrand with Consumers Union. "We say: Use the rest of your power and finish the jobs in terms of consumer protection."
The banking groups are also asking the Federal Reserve to make new gift card laws trump tougher laws set at the state level. They support a uniform national standard.
For example, Connecticut doesn't allow any "dormancy" fees on unused gift cards, even after a year has passed. Banks would like the new Federal Reserve rules allowing one nonuse fee a month to be the law in Connecticut as well.
By contrast, consumer groups want the new rules to create a "federal floor," allowing states to pass even stronger regulations on gift cards.
"Even nail salons go belly up," Riley said. "When that happens, that gift card becomes useless

U.S.,Yemen reviewing targets for possible strike

The U.S. and Yemen are now looking at fresh targets in Yemen for a potential retaliation strike, two senior U.S. officials told CNN Tuesday, in the aftermath of the botched Christmas Day attack on an airliner that al Qaeda in Yemen claims it organized.
The officials asked not to be not be identified because of the sensitive nature of the information. They both stressed the effort is aimed at being ready with options for the White House if President Obama orders a retaliatory strike. The effort is to see whether targets can be specifically linked to the airliner incident and its planning.
U.S. special operations forces and intelligence agencies, and their Yemeni counterparts, are working to identify potential al Qaeda targets in Yemen, one of the officials said. This is part of a new classified agreement with the Yemeni government that the two countries will work together and that the U.S. will remain publicly silent on its role in providing intelligence and weapons to conduct strikes.
Officially the U.S. has not said it conducted previous airstrikes in Yemen, but officials are privately saying the Yemeni military could not have carried out the strikes on its own.
By all accounts, the agreement would allow the U.S. to fly cruise missiles, fighter jets or One of the officials said Yemen has not yet consented to the type of special forces helicopter-borne air assault that would put U.S. commandos on the ground with the mission of capturing suspects for further interrogation. That is also a capability the U.S. would like the Yemenis to eventually develop the official said.
At this point, the U.S. believes there may be a few hundred al Qaeda fighters in Yemen centered around a group of key network leaders. U.S. intelligence believes some key leaders were killed in recent airstrikes but is still working to confirm details.
U.S. military and intelligence officials describe to CNN an al Qaeda network with organized command and control that has evolved and grown over the past year. U.S. intelligence concludes there are several training camps similar to those established in other countries where one or two dozen fighters at a time train.
The U.S. and Yemenis are also looking into the possibility the Nigerian suspect in the airliner incident trained at one of the camps.
One of the camps was among the targets in each set of airstrikes earlier this month.unmanned armed drones against targets in Yemen with the consent of that government

Dollar drops and boosts euro

The dollar has fallen yet again and with the newly released data on the economy’s strength, doubt has been raised over whether or not the Federal Reserve will be able to bring the interest rates back up later in the year. Of course, in Germany, the Euro got a nice boost thanks to producer prices hitting a three week high. Boris Scholossberg, who is the senior currency strategist at DailyFX.com, believes that the inflationary pressures in Europe are helping to keep the Euro up.
He went to also note that a weak 0.2 percent rise in American producer prices has also caused concern. The United States consumer market is currently sitting the lowest ever since 1980, the last time the country was in a recession. “This is really bothering the market, because last week people thought Fed easing was over and the economy had stabilized, but the numbers lately are causing doubt,” Schlossberg said.
While the interest rates in the United States seem to be helping the flagging American economy, the situation is more complicated than it seems. This is due in part to core producer prices rising more than 0.4 %. These prices do not include food and energy figures. “Nothing here to give the Fed a peaceful night’s sleep, even allowing for the better-than-expected headline for finished goods that was helped by a fall in gasoline prices,” stated Alan Ruskin who is the chief international strategist at RBS Greenwich Capital in Greenwich, Connecticut.
While Schlossberg stated that Wednesday’s Ifo survey of the German business market could push the Euro to a high of $1.60, the slower euro-zone growth is making it uncertain how markets are going to fare when the bank’s make their next move. Some people do not agree, however, and feel that the healthy first quarter growth in the euro zone will not add to the confusion of the rising and falling economic conditions.
The currency markets related to the bank of Japan has managed to keep their borrowing costs to 0.50% as was expected and the Australian dollar hit their highest number - $0.9617 – in 24 years. This was announced shortly after the central bank’s policy meeting told everyone that they had been discussing raising interest rates which may indicate that a future hike may be in store. There is still no word on how the Federal Reserve will take the new data or whether or not they will officially announce an American recession, something the American people are already accepting.

Barack Obama

On January 20, Obama made history by becoming the first African-American president of the United States. The 44th president told Oprah Winfrey that he thinks he deserves a B+ for his first-year efforts, even though his approval rating is below 50 percent in some polls. About 15 million Americans are without work, and the budget deficit is more than $1 trillion, but -- after a $787 billion stimulus package -- the economy seems to be improving slightly. And there's still an American auto industry.
The detention facility at Guantanamo Bay is not closed, the Iraq war's not over, and 30,000 more troops are going to Afghanistan. The Mideast peace process is stalled, and North Korea and Iran continue to play shell games with their nuclear ambitions.
Without any Republican votes, health care legislation made it through the Senate. The president acknowledged that people are justified if they're disappointed that the recent Copenhagen climate summit couldn't solve major differences between countries.
Depending on your point of view, you may rate some of those situations as successes or as failures.
Obama set a high bar when he promised change and transparency and then faced Washington's brutal partisanship. Whether his actions thrill or disappoint, no single person in the world today commands such attention.
On December 10, the president accepted the Nobel Peace Prize and said he viewed the decision less as a recognition of his own accomplishments than as a call to action. His opponents saw the prize as premature or unwarranted.
"Let us reach for the world that ought to be." Obama said. "We can understand that there will be war and still strive for peace."

Departmant of Homeland Security

The man who allegedly lit an explosive on board a U.S.-bound international flight deserves none of the constitutional protections afforded American citizens, a former top Bush administration official said Monday.
Tom Ridge, who served as secretary of the Department of Homeland Security from 2003 to 2005, made the comments on CNN's "Larry King Live."
"I take a look at this individual who has been charged criminally, does that mean he gets his Miranda warnings? The only information we get is if he volunteers it?" Ridge said. "He's not a citizen of this country. He's a terrorist, and I don't think he deserves the full range of protections of our criminal justice system embodied in the Constitution of the United States."
Ridge also said he was "not surprised" about reports that two former detainees in the detention center at the U.S. Naval Base in Guantanamo Bay, Cuba, had joined up with the group that claimed responsibility for Umar Farouk AbdulMutallab's failed terrorist attack.
"It's a symptom of a larger challenge that this country has, and that's how do you adjudicate these individuals that we pick up from these places and make a determination if they should be incarcerated for a long time, if not permanently," he said Muhamad Attik al-Harbi, also known as Muhamad al-Awfi, and Said Ali Shari were released to Saudi Arabia in 2007 by the Bush administration.
The two went through a "rehabilitation" program in Saudi Arabia but returned to the militants. U.S. officials, however, cautioned that the two could not be connected with Friday's attack.
Ridge told King that the country is "clearly ... safer, but it's equally clear, given the several incidents that have occurred in the last couple of months in this country, that we still have very serious gaps in information-sharing."
"What are we going to do to make sure more information, particularly with that kind of information that sends warning signals out, gets to the people that can act on it?" he said. "Whether you're in the battlefield in Iraq or Afghanistan or a screener at the airport, you need actionable information. I'm not sure all this information was in the hands of TSA at the time."Ridge also questioned why the State Department did not revoke AbdulMutallab's visa upon learning that his father had reported his son may have terrorist connections.
"Why the State Department didn't revoke his visa immediately is beyond belief, in my judgment," he said. "But at the heart of this, it's a clash of cultures and institutional challenge. [The Department of Homeland Security] can only act on information it has, and they didn't have all the information at its disposal."
The former secretary was less critical of current Secretary Janet Napolitano than many other Republicans for comments she made praising the way some protocols had worked.
"I don't think any right-thinking person actually believed that Secretary Napolitano thought the system worked," he said. "Obviously, it was flawed. I think what she was referring to was that after the incident occurred, there are certain procedures and protocols to put in place. That worked smoothly."

2010 Lincoln MKS

Even when teamed with all-wheel drive, this "Red Candy" MKS will hit 60 from zero in roughly five seconds, and the century mark in just over 12. an
Making this happen is a twin turbo, 3.5 liter V-6 that belts out 355 horsepower at 5,700 rpm and 350 lb-ft of torque across a range of 1,500 to 5,250 rpm. There is no turbo lag. Ford claims the engine has the power of an eight with the fuel economy of a six.
While they are correct on the power end, the car is EPA rated at 17/25 miles per gallon. In city and country driving, I got 18.9 mpg. Lincoln says this engine will run fine on 87-octane petrol, but they add for maximum power you should fill up with premium.
The standard six-speed automatic worked well. You can select your shifts via the center console mounted lever, or steering wheel mounted paddles. These allow the driver to up shift and down shift through the same paddle. I prefer separate tasks for each paddle.
Handling was better than one would expect in a 4,440-pound luxury car, yet it falls short of the class standards set by BMW and Mercedes. The ride is smooth and probably in the range expected by Lincoln customers, yet I should note that the MKS handled itself rather well in skid pad tests conducted by Road & Track magazine.
There was a surprising amount of road noise over other than glass-smooth pavement for this level of automobile. An Acura TL on loan at the same time was noticeably quieter on the interstates. Inside, there is both good and bad. The very good is the wonderful seats that Lincoln put in this rig. They are easy to adjust, very comfortable, and would get an A+ if the headrest did not keep brushing the back of one's head. It was maddening!
The instruments were easy to read in all lighting conditions, and I loved the way you could control the ventilation and audio through the navigation screen. The buttons down below on the center stack were too small to find quickly while drivingIf you try out an MKS, make sure it has the THX II audio system with surround sound, one of the best systems you can find anywhere. The MKS, of course, had the Sync voice-activated system for all your digital needs.
Yet from there things went south in my mind. The interior was too plain for the nearly $57,000 asking price. There was too much hard plastic down the center console that looked, well, cheap. The headlight control was inconveniently located on the dash, rather than a quicker-to-find stalk on the steering column. Plus, many controls did not have a quality feel to them.
While the doors closed with a satisfying clunk, and the rearview camera was a neat asset, I would not pay extra for "Lincoln logo floor mats," the "interior metallic package," not to mention $2,995 for the "exterior body kit." I thought those kind of things went out at least 10 years ago.
All of which is a round-about way to saying the MKS does not deliver much bang for the buck. In truth, there was little on the car that one could not find on the less expensive Taurus, with the exception of a very attractive exterior design. I just wanted to take a moment here to hope that all of you have, or had, a wonderful holiday. Thank you for your blog comments, and your emails. I hope that sometime in 2010 at least a few of your lifelong dreams come true.
Vehicles tested in this column are on loan from the auto companies through local distributors.
Ron Amadon is an auto writer and morning news anchor on the MarketWatch Radio Network, based in Washington.

Japan Finance Minister Fujii Admitted to Hospital (Update3)

Japanese Finance Minister Hirohisa Fujii, 77, has been admitted to hospital for high blood pressure and exhaustion following work on the government’s budget, a Finance Ministry official said.
Fujii will be hospitalized for about 10 days, said the official, who spoke on the condition of anonymity. He will still attend Cabinet meetings scheduled for Dec. 30 and Jan. 5, the person said.
The hospitalization follows weeks of deliberations over the first budget proposed by Prime Minister Yukio Hatoyama’s administration since it took office in September. The Democratic Party of Japan-led government was forced to pare back some of its campaign pledges to prevent an increase in debt issuance that risked swelling the nation’s borrowing costs.
“This won’t have any impact on the economy or markets,” given that the budget has now been released and that traders aren’t on alert for intervention in the currency market, said Kyohei Morita, chief economist at Barclays Capital in Tokyo. Concerns about a soaring yen have eased following the currency’s retreat in the past month; the Finance Ministry oversees exchange-rate policy.
Retirement Postponed
Fujii was asked by Hatoyama to postpone retirement and run in the August election that brought the DPJ to power for the first time. Fujii previously headed the Finance Ministry in 1993 and is a former budget examiner at the agency.
“If Fujii isn’t capable of carrying out his job, it will be clear that there’s a lack of talent” in the ruling party because he is one of few lawmakers who has experience at the ministry, Morita said.
The hospitalization is the latest blow to Hatoyama after his poll numbers tumbled as he backtracked on some campaign pledges and concerns about the durability of an economic recovery deepened. Hatoyama’s Cabinet had an approval rating of 50 percent in a Dec. 25-27 poll by Nikkei Inc. and TV Tokyo Corp., compared with 75 percent backing in mid-September.
Hatoyama unveiled a record budget of 92.3 trillion yen ($1 trillion) on Dec. 25. The proposal said the government will sell 44 trillion yen of new bonds, upholding Hatoyama’s pledge to keep the amount the same as that of the previous administration.
In the course of compiling the budget, Fujii urged ministers to restrain outlays after their requests amounted to an unprecedented 95 trillion yen. Fujii said the government must keep its promise of containing bond sales around 44 trillion yen to contain the world’s largest public debt burden -- even after Hatoyama indicated he wouldn’t strictly adhere to the cap should more spending be necessary.
Hatoyama abandoned plans to end a provisional gasoline tax, securing about 2.5 trillion yen for the budget.
Japan’s parliament must approve the budget for it to take effect as laid out for the fiscal year starting April 1. Hatoyama’s party has a majority in the lower house, and his two coalition partners in the upper body have backed the proposed budget.
--Editors: Lily Nonomiya, Chris Anstey
To contact the reporters on this story: Kyoko Shimodoi in Tokyo at +81-3-3201-3142 or kshimodoi@bloomberg.net; Toru Fujioka in Tokyo at +81-3-3201-2158 or tfujioka1@bloomberg.net
To contact the editor responsible for this story: Chris Anstey at +81-3-3201-7553 or canstey@bloomberg.net
JPY%

Vietnam to sell $ mln dollar bonds

VNBusinessNews.com - Vietnam will auction $200 million of U.S. dollar-denominated one-year bonds this week, the Hanoi Stock Exchange said.The exchange planned to sell debt on Tuesday and issue it on Dec. 31 for maturity on Dec. 31, 2010, it said in a statement seen on Monday.The Vietnamese government has announced plans to issue around $1 billion in dollar-denominated bonds on domestic markets to pay for big state projects and offset a budget deficit.Prior to Tuesday's auction, the exchange had raised only $387 million worth of the dollar bonds, with terms ranging between one year and three years.In the lastest dollar bond auction in August, the exchange sold sold $10 million of three-year government bonds at a yield of 3.9 percent.Fixings on one-year dollar lending rates eased to 1.86 percent last Friday on the interbank market from 1.91 percent the previous day, according to Reuters data. (Reuters)

Prime Minister Madhav Kumar Nepal leaves for China visit

Prime Minister Madhav Kumar Nepal has expressed hope that his state visit to China would further strengthen the bilateral relations between the two countries. Speaking to media persons at the Tribhuvan International Airport (TIA) before embarking on his China visit leading a 29-member delegation on Saturday, PM Nepal said that the visit will be centered on mutual relationship between the two countries. During the five day state visit by PM Nepal on invitation of the Chinese government, several pacts are likely to be signed, whereby China will increase the volume of assistance to Nepal. The 15-member delegation for which the government on Friday decided to bear expenses, include PM’s wife Gayatri Nepal, Deputy Prime Minister Sujata Koirala, Minister for Finance Surendra Pandey and Minister for Energy Dr. Prakash Sharan Mahat. The government delegation will visit Lhasa and Shanghai before heading for Beijing for high level political meetings. Additionally, a 14-member business community delegation is traveling on own expenses

Gold loses its glitter

Domestic market for gold this week closed at Rs 26,920 per 10 gram, Rs 215 less compared to the opening price. The gain of rupee against dollar coupled with decline in prices of yellow metal in the international market made gold cheaper by Rs 21.5 per gram in the domestic market. Gold this week opened at Rs 27,135 per 10 gram and increased by Rs 85 on Monday to Rs 27,220 per 10 gram. However, prices declined fast over the next couple of days, as dealers traded the precious metal at Rs 26,580 on Wednesday. On Thursday and Friday, gold prices rallied by Rs 25 and Rs 215 per 10 grams respectively. Meanwhile, silver opened at Rs 441.50 per 10 gram on Sunday and remained at the same price on Monday. With a fall of Rs 2.50, silver was priced at Rs 439 per 10 gram on Tuesday. Silver on Wednesday was priced at Rs 437 per 10 gram while on Thursday it got dual pricing the same day. Silver opened at Rs 437 per 10 gram that day and in the latter half of the day it was at Rs 439 per 10 gram. Silver closed at Rs 439 per 10 gram.

Nepal Stock Exchange (NEPSE)gains 6.98 pts

Nepal Stock Exchange (NEPSE) index last week saw an upward spiral as it gained 6.98 points to close at 545.66 points.

Hydropower and commercial banks witnessed their indices going up by 10.94 points and 9.70 points respectively. The development banks' sector saw a growth of 8.86 points followed by finance companies, which gained 2.83 points.

The NEPSE float index also increased by 1.74 percent last week.

The capital market saw trading of 484,200 units of shares amounting to Rs 265.93 million of 85 companies through 6,264 transactions in the five trading days. The trading amount was 28.04 percent less than the previous week's Rs 369.55 million.

With Rs 97.2 million, the 'A' class companies covered 36.57 percent of total turnover last week.

Prime Commercial Bank topped in terms of amount (Rs 100.5 million), share number (161,000 units) and transactions (2,864

Nepal asks Hong Kong to reabsorb Nepali workers

In an attempt to cajole the promising labour market of Hong Kong into reopening itself to absorb Nepali workers, a group of Nepali officials recently met officials of Hong Kong's immigration and labour department. Hong Kong had stopped hiring Nepali migrant labourers in 2005 showing reasons like armed conflict, tendency of Nepali workers to seek refugee status upon their arrival, increasing involvement in criminal activities and lack of skilled workers, among others. According to Foreign Employment Promotion Board (FEPB) undersecretary Mukunda Adhikari, who was a member of the delegation to visit Hong Kong, the Nepali side did not get encouraging response from the concerned officials of the Asian financial hub. "Hong Kong is still fretful on involvement in crime, illegal status and growing claims of refugee status by Nepalis. However, they have assured us to review the existing ban on Nepali workers within a couple of months," said Adhikari. He also opined that the government must adopt robust labour diplomacy to enable the interested Nepali labourers to work in Hong Kong. The Nepali delegation also informed the Hong Kong officials about the changed political situation and legal provisions of Nepal and expressed commitment to improve the skill of Nepali workers seeking jobs in Hong Kong. Some 20,000 Nepalis, including 18,000 Hong Kong ID (permanent resident permission) holders are residing in Hong Kong. Around 720 Nepali women are working there as housemaids. It is believed that Hong Kong can hire 15,000 to 20,000 additional Nepali workers in various sectors including domestic works and service sector if Nepal mobilizes its diplomatic channels in an effective manner. Hong Kong is also known as a safe destination for women migrant workers with an average monthly income of Rs 35,000 excluding other benefits. The country alone can hire at least 10,000 Nepali housemaids if strong labour diplomacy is adopted, said officials.

Couple forges plan to conquer debts, cope with illness

By the time Terese Ferguson was diagnosed with breast cancer last month, she had already experienced years of pain.

The 58-year-old-mom of two from Great Kills, Staten Island, had been out of work for almost a year, nearly lost her house and feuded with her husband of 15 years, Leroy Ferguson, 55.

“We are living a life we did not imagine,” she said.

This morning, as Terese enters Maimonides Medical Center in Borough Park, Brooklyn - where she used to work - to remove a lump from her breast, Leroy, a patient information specialist at the hospital, will be by her side.

While she’s hopeful about her prospects for recovery, the couple’s money woes linger.

Five years ago, Terese - a residence supervisor at a group home for mentally disabled adults - became a first-time homeowner. She bought a three-bedroom, semi-detached house in Great Kills for $425,000, using money she inherited from her father as a down payment.

But within a matter of months, Terese lost her job and could not keep up with the mortgage payments and other debts. Her current salary of $44,000 is $20,000 less than what she was earning at Maimonides when she bought the house.

When foreclosure loomed last year, Leroy, whose name is not on the deed because of family issues, agreed to help save the house at great personal cost. He cashed out two-thirds of his retirement savings, $45,000, leaving just $24,000 in his retirement account. Terese wiped out all of her savings, $15,000.

As they approach retirement age, the Fergusons are saddled with $51,000 in debts - including a $40,000 student loan, now held by a collection agency, for an online college degree in health care management she got five years ago - on top of their 30-year, fixed-rate mortgage of $187,000 at 6.375% interest.

While the couple - both in their second marriages - lives frugally, their combined income of $79,000, roughly $4,100 a month after taxes, does not cover their monthly expenses, which include $2,500 a month in mortgage and other debt payments.

Because the bulk of the debt outside of the mortgage is a student loan, bankruptcy or a debt management program would offer little relief because that kind of debt can’t be wiped out, said Gerri Detweiler, a personal finance adviser at Credit.com.

Terese readily admits she’s made mistakes that have hurt her future and her marriage. Leroy had long resented her decision to buy the house on her own, a move she made to ensure her two adult sons from her first marriage would inherit the home. Her younger son lives with the couple.

Read more: http://www.nydailynews.com/money/personal_finance/2009/12/07/2009-12-07_couple_forges_plan_to_conquer_debts.html#ixzz0asRomlTj

The dream of a white Christmas

The dream of a white Christmas was turning into a nightmare for some as forecasters predicted a heavy snowstorm would continue on Friday across parts of the central United States.

In Oklahoma City, Oklahoma, where snowfall totals reached about 14 inches, crews were out in full force Friday trying to clear roads, move abandoned cars and rescue motorists, CNN affiliate KOCO-TV in Oklahoma City reported. Officials told KOCO some motorists were still trapped Friday and likely spent the night in their vehicles, though hundreds were rescued and taken to shelters.

Forecasters predicted more snow for areas already covered by heavy snowfall Thursday.

The National Weather Service said widespread blizzard conditions would continue in North Dakota through Saturday afternoon, with snowfall totals reaching about 14 inches.

Interstate 94 was ordered closed at 4 p.m. from the Iowa border to the Canadian border due to zero visibility, drifting snow and severe wind gusts, according to a statement from the North Dakota Department of Transportation. The National Weather Service in Bismarck, North Dakota, urged all drivers to stay off the roads, saying they will be "difficult if not impossible" to travel on.

Blizzard warnings were issued Friday for several counties in Minnesota until 6 p.m., according to the weather service. Winter storm warnings were also issued for parts of Iowa and north central Wisconsin.

In north central Kansas, 2 to 6 inches of snow was expected to fall and 6 to 12 inches could pile up across parts of northeast and east central Kansas.

Throughout Minnesota, an additional 1 to 3 inches of snow was expected Friday night, and in the north shore area of Lake Superior, 3 to 6 inches could fall, the weather service said.

Snowfall accumulation in Duluth, Minnesota, and Proctor, Minnesota, will reach about 2 feet, the National Weather Service reported.

"The combination of strong winds and falling and blowing snow will cause dangerously low visibility and drifting snow" for Duluth, the weather service reported.

More than 100 churches in central Nebraska canceled Christmas services, CNN affiliate KHGI-TV reported.

How is the weather where you are? Send photos, video

The decision for safety's sake could put a serious dent in some churches' finances.

At least five people were killed in Oklahoma during the storm on Thursday, CNN affiliate KWTV in Oklahoma City reported.

Three people were killed on state roads when they were struck by cars: A Marlow man who was helping another stranded motorist; a Lawton man who was struck after exiting his vehicle, which had crashed; and a Seminole man who was struck after his car stalled.

KWTV also reported a 79-year-old woman was found dead on her porch Friday morning in Midwest City. Officials told KWTV she may have died from exposure.

Treacherous conditions Thursday also caused nearly 50 vehicles to collide in a chain-reaction accident Thursday in Midwest City, KOCO reported.

The weather at Will Rogers World Airport in Oklahoma City, where 13 inches of snow fell on Thursday, forced it to close. It re-opened Friday with one operational runway, according to KWTV.

In 106 years, residents of Oklahoma City have awakened to snow six times on Christmas morning, CNN's Sean Morris said.

Low visibility and dangerous roads were hallmarks of the storm on Thursday.

Oklahoma Gov. Brad Henry ordered every state highway, interstate and turnpike closed Thursday night, hours after declaring a statewide emergency because of the major winter storm.

US dollar hits 2-1/2-month low vs euro before Fed

The U.S. dollar fell to a two-and-a-half-month low against the euro on Tuesday after more bad news from the housing sector and a record decline in consumer prices added to speculation that U.S. interest rates will fall closer to zero.

The Federal Reserve is widely expected to cut interest rates by at least 50 basis points from the current 1 percent at the end of its policy meeting later on Tuesday. The interest-rate futures market are also showing about a 64 percent chance the Fed could slash rates by 75 basis points.

"The record declines in U.S. inflation and housing data will prompt the Fed to cut one final time this afternoon before engaging in a campaign of 'quantitative easing' in the new year," said Michael Woolfolk, senior currency strategist at The Bank of New York Mellon in New York.

"While the market expects a 50-basis-point cut, the Fed may deliver the larger whisper number of 75 basis points to punctuate the end to the rate-cut cycle," he said. "Both developments are expected to be U.S. dollar negative."

In midday trading in New York, the euro was up 0.8 percent on the day against the dollar at $1.3824 after hitting a high of $1.3842, the highest level since early October. The euro had earlier come under pressure after purchasing managers' surveys painted a bleak outlook for the region's economy.

George Davis, senior currency strategist at RBC Capital Markets in Toronto, said the euro's break of its 100-day moving average around $1.3775 brought in new buyers.

"Now that we've chiseled above that level, you see the momentum players coming in and bidding the euro higher," he said.

YEN NEAR 13-YEAR HIGH

The ICE futures U.S. dollar index .DXY, which tracks the value of the greenback against a basket of six currencies, fell 0.8 percent to 81.473, after falling as low as 81.395, the worst level since mid-October.

The dollar fell below 90 yen as investors cut their exposure to risk after Goldman Sachs posted its first loss as a public company.

The yen's rise to near a 13-year high increased speculation that Japan may intervene to stem the currency's strength, which threatens the competitiveness of its exports.

The dollar fell 0.9 percent to 89.89 JPY, after dropping to session lows at 89.73, near a 13-year low of 88.10 yen reached last week.

Oil falls $4 as OPEC cut fails to halt slide

Oil dropped nearly $4 a barrel on Friday as concerns about a global recession and slowing fuel demand took the steam out of an OPEC agreement to cut output.

The Organization of the Petroleum Exporting Countries agreed at an emergency meeting in Vienna to take 1.5 million barrels a day of crude, about 5 percent of its supply, off the world market. Saudia Arabia's Oil Minister Ali al-Naimi said the reduction would take effect from November1.

U.S. light crude for December delivery settled $3.69 weaker at $64.15 a barrel, after falling as low as $62.65, its lowest since May 2007.

It has fallen more than $40 a barrel in a month.

London Brent crude settled down $3.87 at $62.05.

Traders said OPEC's action might not be enough to arrest oil's slide of more than 56 percent from a record $147 a barrel in July. Drops in motor fuel demand amid the economic downturn have been dramatic.

"Already we've seen demand destruction of 2 million barrels per day. I'm not convinced this cut will be enough to stop the slide," said Rob Laughlin, at broker MF Global.

Signs of a sharp slowdown in Europe and a barrage of profit warnings and job cut announcements from companies around the world intensified fears of deep global recession.

Oil has plunged as the credit crisis hit economic growth and fuel demand in the United States and other industrial countries.

"We believe this week will mark the start of a new quota reduction cycle by OPEC and it will continue through 2009," Deutsche Bank analyst Michael Lewis said in a note.

"However, we believe production cuts will not rescue the oil price," he said. The bank expects U.S. crude oil prices will hit $50 a barrel next year.

The International Energy Agency, which advises industrialized consumer countries, was critical of OPEC's cut.

"It's not a helpful decision because markets are quite nervous," Eduardo Lopez, senior analyst at the IEA's oil market division said.

U.S. stocks tumbled and European shares had their lowest close in 5-1/2 years, continuing a global collapse in equities as investors fearing a long and deep worldwide recession cashed out of risky assets.

"OPEC actions notwithstanding, the market is clearly being influenced more by the apocalyptic psychology currently pervading all markets," said Mike Fitzpatrick, vice president at MF Global in New York.

Gold pared losses after sliding 5 percent in early trade, as the dollar retreated from highs against the euro and investors took advantage of lower prices to buy into the metal.

Meanwhile, the U.S. Transportation Department said motorists drove 15 billion miles (24 billion km) less in August than they did a year earlier for the biggest decline in any month ever recorded.

Rates of Japanese Yen on risk aversion

The Japanese Yen and the American dollar on Tuesday are again the leaders for the trading day on the Asian trading market and in other worldwide markets as well. Due to the concerns regarding the swine flu, many traders are going for the safe-heaven a currency, among which is the Yen. This currency is as for now, the least affected by the swine flu outbreak, and is very likely to be capable to keep the disease away from its shores because of its geographical positioning (Japan is an island, thus spreading of the swine flu to here overseas is much less likely).

But the Japanese Yen rates went down somewhat, as the reports of the Central bank and the Citi bank were reveled, showing the United States regulators are planning to raise the capital of these banks. Due to this news, the US dollar and the Japanese Yen pair which was previously traded at the level of 96.61, fell down to 95.98 in the second part of the trading day on the Asian market.

The Euro has fallen to 126.00 against the yen in the morning, and kept dropping down to 124.65 by noon-time. Euro and USD pair came to the level of 1.3000-1.3031 and stayed in this range throughout the whole session, and then hitting lows at the end of the Asian market at the level of 1.2984.

Fores money in banks falls overseas

Banks are losing ground in their foreign currency deposits due to the economic conditions affecting the world. Part of the reason is that they have had to withdraw their dollars from their overseas accounts in order to meet the demands of the customers’ at home. The shortage of dollars has been causing an uproar, forcing the banks to deplete their deposits to meet the needs and demands of importers among other entities. The dollar is in demand due to the high trade deficit and falling investment flows.

Usually the investment flows fill in this deficit gap, but with the small amount of capital that has been coming in, the banks had no choice. Countries like Pakistan have their money in banks in London and New York and their foreign government investments are in short-term papers. Other banks have their money in different overseas banks. Once the economy gets back on track, the banks will be able to replenish their funds.

Asian market Euro is raising both against the dollar and the yen

On Wednesday Asian market Euro is raising both against the dollar and the yen, as officials made hints that low interest rates may soon end in the European zone.

And though the euro is usually sold out, when finance markets are under stress, this time it stood in recent ranges because of the still remaining flu concerns. The recent reports show more cases of suspected swine flu in both New Zealand and South Korea.

Around evening time GMT today interest rates reports of the American Federal Reserve are to be announced together with the release of the American economic growth information for the first quarter. As it was polled by the Dow Jones newswire, it is expected that the gross domestic product of the US in the first quarter will show a decrease of 4.6%.

On late Tuesday dollar lowered against many major currencies, except for yen. The European Central Bank is likely to be the most important factor, influencing the euro versus dollar rates.

The benchmark rate for the European countries now is at the level of 1.25%, while it is expected that on May 7th meeting of Central Bank of Europe, it might be lowered to 1%. Therefore, it is likely that the dollar will stay within its positions, while the ECB is deciding about its policies.

The marketing business problem

The fundamental problem is that we have massive budget deficits but artificially low interest rates. The Fed is keeping rates low to ease the strains of high unemployment, excessive consumer debt and a moribund residential real-estate market, and to help ailing banks earn easy profits from the wide spreads between their cost of money and the interest rates they charge.
Economists at Goldman Sachs think that deflationary pressures in the economy are so potent that the Fed -- if left to its own devices -- will not start raisYet investors such as Rob Arnott of Research Affiliates are already fretting about looming risks of inflation and increased currency weakness as the government strains to reignite the economy. "It's hard to imagine setting trillion-dollar bonfires in fiscal and monetary stimulus without triggering a pretty severe risk of inflation down the road," says Arnott. He believes the Fed and the Treasury Department will encourage some inflation to ease the nation's debt burden, while at the same time denying that they are doing so. He expects inflation, recently running at an annual rate of 1.3%, to top 3% by 2011.
Today, many of the vestiges of our epic credit and housing bubbles remain. The banking system, the lifeblood of our economy, is still convalescing. U.S. banks will have written down more than $1 trillion of bad loans by the end of 2010, projects the International Monetary Fund. Losses on commercial real-estate loans are mounting. That will endanger numerous community and regional banks. Meanwhile, net lending by banks has declined sharply in recent months, and small enterprises, which depend heavily on bank credit, are having trouble securing loans. Banks seem more interested in rebuilding their balance sheets by borrowing cheap money and investing in Treasurys than in lending to small businesses.ing interest rates until 2011. Indeed, slashing debt is deflationary, and there are high levels of slack capacity in labor, real estate and industrial markets. For instance, rents -- which account for almost 40% of inflation calculations -- are declining.

The mysterious news

The mysterious, but not unknown, caller phoned a few weeks ago.
"'Do you know what time it is?' " he asked the longtime staffer, recalls Pam Kirk.
"She recognized his voice after all these years and said, 'It's Pete time,'" says the spokeswoman for Easter Seals Rehabilitation Center in Evansville, Indiana.
This year, "Pete time" meant a miniature, tin Christmas tree -- hidden between a pine tree and some Dumpsters -- with 30 crisp, new $100 bills attached.
It was the latest chapter in a nearly two-decade-old story of charity and goodwill that has played out at the center, usually around Christmastime.
Since 1990, the anonymous benefactor, who gives only his first name, has donated nearly $65,000 to the center. Almost all of the gifts have been preceded by a phone call and hint that a package is waiting somewhere on the center's property.
"I think it gives us the feeling that we have our own personal Santa Claus," Kirk said.
"It's really just the perfect example of the spirit of the season -- giving without expecting recognition in return, giving from the heart, and also making it fun."
The center serves about 5,000 people with disabilities in a 30-county stretch of Indiana, Illinois and Kentucky. Fundraising typically goes toward the center's work on physical and medical rehabilitation.
But Pete has always been clear that his donations should go toward extras for the children served at the center, which charges clients on a sliding financial scale and never turns away people because they can't pay.
"He always says something to the effect of, use this to make Christmas merrier for one of the kids whose family can't afford it -- use it for toys, use it for clothes, whatever the kid needs,' " Kirk said.
Kaitlin and Emilie Thompson, identical twin sisters who have cerebral palsy, were the first recipients of a gift from Pete. They were 4 years old when his donation in 1990 paid for a specialized chair that made showering safer and easier for them.
They say insurance didn't cover the chair, and their parents couldn't afford it.
"He really does embody what Christmas is all about," said Kaitlin, now 23. "He's magical. He's special -- he keeps in mind people that are less fortunate."
Tim Thompson, the girls' father, said that when they were 10, they decided to open a lemonade stand in the front yard of their Evansville home to raise money for the center. It was a bigger hit than they imagined, and the girls would run the stand for another 10 years, raising about $25,000 for the center, he said.
"I feel like they were inspired by people like Pete," he said.
Anonymous giving is obviously not limited to Pete. It's a time-honored tradition for a number of reasons, experts say -- from religious beliefs to personal humility to merely wanting to avoid being hit up by others hoping for a donation.Eighty anonymous gifts worth $1 million or more were made in the United States from June 2008 to April 2009, according to a survey by the Chronicle. That's nearly 19 percent of the 422 total during that time -- compared with the roughly 3 to 5 percent of those big-ticket donations that were made anonymously over the past decade.
In a release from the Chronicle, fundraiser Robert F. Sharpe Jr. of Memphis, Tennessee, said he knew of a woman who donated $1 million to an arts center in exchange for part of it being named for her -- but then called back to ask that her name not be used.
He said that in tough economic times, people who have fared well may be less inclined to show off.
"Some people just don't want others to know that they shorted the market and that they now have more money than they've ever had," Sharpe said.
But Pete's approach has spanned four presidencies, multiple financial booms and busts, and several generations of clients at the Evansville center.
Most of the time, at least one person at a charitable institution will know who its anonymous donors are. Kirk said she and her co-workers are constantly pressed by people who think someone at the center must surely know Pete's identity.
She's adamant that they don't.
"A few years ago, I think our president had an inkling of who he thought it might be, and later, he found out he was wrong," she said. "Terry [Haynie, the longtime staffer who often gets Pete's calls] -- I think she has at times had ideas of who it might be, but I don't think she's ever been right, either."
From his phone calls, they've figured out he lives nearby, has a wife and family, and grew up going to Evansville schools. His wife doesn't know about his donations, they say, but one person does -- and has instructions to reveal Pete's identity once he's no longer able to give.
Pete has said he was close enough to watch several times as staffers went outside to find his gifts, Kirk said.
But, as far as they know, no one has ever caught a glimpse of him.
"Actually, we don't try -- we don't try to spot him," she said. "For him, the fun is giving anonymously. We don't want to ruin that for him."
Tim Thompson, the father of the twins, agrees.
While there are other donors elsewhere who give more money to other charities, there's something special about Pete's gifts, he said.
"He's gone beyond his monetary donations," Thompson said. "He's changed people's outlook on life."
And while economic hard times in the United States and elsewhere have hurt giving, the Chronicle of Philanthropy said this year that anonymous giving was actually on the rise.

The financial industry has begun a campaign to reframe the debate

WASHINGTON—Lawmakers are considering a financial-transactions tax that takes aim at Wall Street to help Main Street. But the tax could wind up striking others, too, including pension funds, commodity-depenCongressional advocates describe the new tax as a matter of fairness: Taxpayers bailed out Wall Street, so Wall Street must help rebuild the economy and shore up the government's shaky finances. Some experts say the tax also might reduce market volatility.
Supporters say the hit for typical individuals and even most institutional investors is likely to be light, thanks to the tax's relatively low rates and generous exemptions. The plan would assess a tax on trades in many kinds of financial assets. The rate for stock trades would be 0.25%, or $250 on a $100,000 transaction. The rate would be less—0.02%—for trades of options, futures and other derivatives.
The law would provide a $250 tax credit, effectively exempting everyone from the first $100,000 of all stock trades. And purchase and sale of mutual-fund shares would be exempt no matter how large, as would trading of assets held within personal savings accounts such as a 401(k).
The trading tax isn't likely to become law in the immediate future. But "there is considerable support for it" among Democrats, says Rep. George Miller (D., Calif.), who adds that the tax also is "very much" on the table for deficit reduction next year. The tax would raise an estimated $150 billion a year.
In recent weeks, the financial industry has begun a campaign to reframe the debate, contending the tax would hurt, not help, average Americans. "As we read it, it's clear it's going to be a tax on Main Street," said Paul Stevens, president of the Investment Company Institute, a trade group for mutual funds.
Despite the exemption for sales of mutual-fund shares, mutual-fund investors would be hit with tax for their pro-rata portions of trading, at least when the mutual fund is held outside a tax-advantaged account such as a 401(k).
The mutual-fund industry also gripes that the tax would introduce new complexity into their record-keeping.
At least some ordinary investors and nonprofit groups likely would be socked, along with high-volume traders.
The tax could even hit businesses such as airlines that engage in futures and derivatives trading to hedge against commodity-price spikes. Already, there is talk of carving out exemptions for them.
Pension plans and other nonprofits also wouldn't be protected from the tax, at least in the House version sponsored by Rep. Peter DeFazio (D., Ore.) and about two dozen other members. Aides said their trading turnover usually isn't high enough to create a big tax impact. But sponsors say they are willing to change their plan, and sponsors of a similar Senate bill do plan to exempt pension plans, aides said.
More broadly, critics charge, the tax would tamp down asset prices and limit gains for everyone. About 30 investment firms and industry associations have formed a loose coalition to fight the tax. The group also includes major exchanges that would have to collect the tax in most cases.
"Clearly [the tax proposal] is gaining support, but there's tremendous push-back from Wall Street," says Mr. DeFazio, the chief sponsor of the House version of the tax.
Mr. DeFazio says industry concerns about potential harm to the economy and markets echo similar groundless charges against a 1930s version of the tax. Back then, in the midst of the Great Depression, the U.S. enacted a transactions tax that was larger than the one being proposed now. It lasted until the mid-1960s and produced no significant ill effects, he says.
Supporters say concerns about complexity also are exaggerated, noting that the mutual-fund industry already has to deal with complex tax issues such as distribution of capital gains to fund shareholders.
There also are potential wrinkles in the plan that could allow sophisticated traders to escape the tax. Many in the industry worry, for example, that the tax could drive high-volume trading—if not the traders themselves—offshore, noting that high-tech advances have made it easier than ever to conduct large-scale financial trades from distant locations.
But Mr. DeFazio's bill would tax transactions by U.S. citizens no matter where they occur. To escape the tax, he says, people would have to move their citizenship, not just their money.dent businesses, and even ordinary investors

The Deposit Insurance National Bank of New Baltimore

NEW YORK (CNNMoney.com) -- Banks in six U.S. states were closed Friday, bringing the total number of failed banks this year to 140, at a cost of over $1 billion to the Federal Deposit Insurance Corporation.
Among the institutions seized by regulators was a so-called "bankers' bank" in Illinois called Independent Bankers' Bank (IBB), whUnlike the majority of banks closed this year, IBB did not take deposits from, or make loans to consumers. Instead, it offered a variety of services such as check clearing and credit card operations to community banks around the country that find it too costly to do this on their own.
The FDIC said it created a bridge bank to take over the operations of the Springfield Ill.-based institution.
Earlier this year, regulators seized Atlanta-based Silverton Bank, which was one of the largest U.S. bankers' banks. Silverton often acted as the lead banker on some syndicated commercial real estate loans, and its collapse was seen as hastening the demise of many of its regional partners.
Separately, Illinois state officials closed Citizens State Bank. The FDIC created c(DINB) to take over the failed bank. DINB will remain open for 45 days to allow depositors of the failed institution to open new accounts elsewhere.
In Florida, Peoples First Community Bank, which operated 29 branches, was closed by the Office of Thrift Supervision (OTS) and the FDIC was named receiver.
Hancock Bank of Gulfport, Miss., will assume the failed bank's $1.7 billion in deposits and will purchase the bulk of its $1.8 billion in total assets.ich had about 450 client banks in four U.S. states

A jury at a U.S.court in Galveston

A jury at a U.S. court in Galveston, Texas, awarded 10 plaintiffs suing BP PLC $100 million in punitive damages for alleged injuries after the release of unidentified toxic substances at the company's Texas City plant in 2007.
The contract workers, who were working at the plant in the evening hours of April 19, 2007, were awarded $10 million each in punitive damages. Also, the group was awarded about $326,000 in compensatory damages. The ...

The US dollar has surged across the board

Over the past two weeks, the US dollar has surged across the board. And, considering this currency has stood as the primary funding currency to a burgeoning carry trade, it makes sense that the greenback’s performance could be interpreted as a sign that risk appetite is toppling. However, cause and effect do not connect here – at least not yet. Instead risk trends have extended the congestion that has set in since October/November; and the period of consolidation has allowed the world’s reserve currency correct speculative and fundamental extremes on its own. Yet, that should not be taken to mean that investor optimism, and the leveraged positioning it has encouraged, will not go uncontested. In capital markets’ aggressive rally throughout 2009, volatile speculative interest has overwhelmed comparatively stable investor inflows. There is a critical distinction between these two categories. Speculators (or traders) are looking for capital appreciation and will need to eventually book profit on their outright positions. In contrast, investors are looking for long-term appreciation, dividends or some other form of consistent interest income. This dichotomy helps expose the tension that has developed behind the scenes recently. Primary barometers for risk appetite like the Dow Jones Industrial Average and the Carry Trade Index - instead of correcting before the drain in liquidity that occurs at year-end - have developed tight ranges. This presents considerable tension for a market that is looking at potentially volatile conditions in the near future but not enough depth to establish a true trend.All that is needed to tip risk trends into a tailspin is a definitive catalyst. We have plenty of potential threats to global, financial stability; but optimism or greed for greater returns has helped the markets weather most of tremors. This likely means that we need a market-based event. A particularly large withdrawal of capital from the speculative arena or the seizure of a critical node in the broader financial market could certainly spark a panic that leads to a cascade selling event. Ironically enough, the best opportunity to force the Dow below 10,250 or pitch the carry interest into a bleak bear trend is during the low liquidity-period that is approaching. While there is not enough market depth to maintain and develop a reversal; the low liquidity means it will be easier to unbalance sentiment. Therefore, we need only keep a vigilance on the already incubating fundamental troubles that have developed over the past few months and be ready for a new shock to catalyze price action itself. Among the key trends to watch, the threat of defaults on a corporate and national level is particularly troublesome. Not long ago, the IMF warned that the world’s banks have only accounted for half of the losses they will ultimately suffer from following the worst financial crisis since the Great Depression. Now, we are seeing downgrades on sovereign credit ratings that is further taxing an already fragile market that is now seeing some of its ‘safe’ assets degrading. Investors could weather this if the government maintained its support of the global economy and markets; but this safety net is already being rolled in. As stimulus and emergency aid is rolled back, the markets will increasingly have to support its own weight. And, considering how high valuations have run and the lack of true fundamentals to support recent heights; the outlook is fragile indeed.
Read more: DailyFX - Despite the US Dollar's Rally, Underlying Risk Appetite has yet to Break http://www.dailyfx.com/forex/fundamental/article/carry_trade_basket/2009-12-18-0346-Despite_the_US_Dollar_s_Rally_.html#ixzz0a2J9mgQGOver the past two weeks, the US dollar has surged across the board. And, considering this currency has stood as the primary funding currency to a burgeoning carry trade, it makes sense that the greenback’s performance could be interpreted as a sign that risk appetite is toppling. However, cause and effect do not connect here – at least not yet. Instead risk trends have extended the congestion that has set in since October/November; and the period of consolidation has allowed the world’s reserve currency correct speculative and fundamental extremes on its own. Yet, that should not be taken to mean that investor optimism, and the leveraged positioning it has encouraged, will not go uncontested. In capital markets’ aggressive rally throughout 2009, volatile speculative interest has overwhelmed comparatively stable investor inflows. There is a critical distinction between these two categories. Speculators (or traders) are looking for capital appreciation and will need to eventually book profit on their outright positions. In contrast, investors are looking for long-term appreciation, dividends or some other form of consistent interest income. This dichotomy helps expose the tension that has developed behind the scenes recently. Primary barometers for risk appetite like the Dow Jones Industrial Average and the Carry Trade Index - instead of correcting before the drain in liquidity that occurs at year-end - have developed tight ranges. This presents considerable tension for a market that is looking at potentially volatile conditions in the near future but not enough depth to establish a true trend.All that is needed to tip risk trends into a tailspin is a definitive catalyst. We have plenty of potential threats to global, financial stability; but optimism or greed for greater returns has helped the markets weather most of tremors. This likely means that we need a market-based event. A particularly large withdrawal of capital from the speculative arena or the seizure of a critical node in the broader financial market could certainly spark a panic that leads to a cascade selling event. Ironically enough, the best opportunity to force the Dow below 10,250 or pitch the carry interest into a bleak bear trend is during the low liquidity-period that is approaching. While there is not enough market depth to maintain and develop a reversal; the low liquidity means it will be easier to unbalance sentiment. Therefore, we need only keep a vigilance on the already incubating fundamental troubles that have developed over the past few months and be ready for a new shock to catalyze price action itself. Among the key trends to watch, the threat of defaults on a corporate and national level is particularly troublesome. Not long ago, the IMF warned that the world’s banks have only accounted for half of the losses they will ultimately suffer from following the worst financial crisis since the Great Depression. Now, we are seeing downgrades on sovereign credit ratings that is further taxing an already fragile market that is now seeing some of its ‘safe’ assets degrading. Investors could weather this if the government maintained its support of the global economy and markets; but this safety net is already being rolled in. As stimulus and emergency aid is rolled back, the markets will increasingly have to support its own weight. And, considering how high valuations have run and the lack of true fundamentals to support recent heights; the outlook is fragile indeed.
Read more: DailyFX - Despite the US Dollar's Rally, Underlying Risk Appetite has yet to Break http://www.dailyfx.com/forex/fundamental/article/carry_trade_basket/2009-12-18-0346-Despite_the_US_Dollar_s_Rally_.html#ixzz0a2J9mgQG

US dollar losses against Japanese yen

The Bank of Japan unanimously voted to keep its overnight call-rate target at 0.1%. It also emphasized the need to pull Japan out of deflation. See full BOJ story.
Following the announcement, the dollar /quotes/comstock/21o!x:susdjpy (CUR_USDYEN 89.66, -0.17, -0.19%) was down against its Japanese counterpart, buying 89.34 yen, compared with 89.90 yen late Thursday in North American trading.
The euro /quotes/comstock/21o!x:seurusd (CUR_EURUSD 1.44, +0.00, +0.18%) was changing hands at $1.4396, up from $1.4340 late Thursday.
"There may have been some hesitancy to sell USD/JPY ahead of the BOJ meeting, in case they announced measures such as an increase in Rinban (outright Japanese government bond buying) operations -- which would have had a negative effect on the JPY," said Mitul Kotecha, head of global forex strategy at Calyon, in emailed comments. In recent weeks, the greenback has strengthened overall, rallying to its highest level in more than three months on Thursday in North American trading. The dollar found support from a rush to safety spurred by concerns about Greece's debt payments and a reassessment of when the Federal Reserve could begin to tighten U.S. monetary policy. See Thursday's Currencies column.
"The [U.S. dollar] is in a win-win situation at present," Kotecha said in a note to clients Friday ahead of the BOJ statement. "Good economic data in the U.S. helps to advance expectations of U.S. monetary tightening, lending the USD support, regardless of the positive impact on risk appetite."
And "bad economic news is also supporting the USD as it leads to higher risk aversion," he said. "Either way the USD has surged over the past few weeks, appreciating by close to 5% since its low on 25 November."
But the meeting "delivered no surprises," he said

Heartland pays to Amex for Data Breach

Instead, Thursday's swings have highlighted some of the big economic pitfalls that may hold their attention heading into 2010. The past 24 hours have seen fresh reminders of the challenges facing governments around the world as they try to strike a fine balance between avoiding inflation and propping up key parts of their respective economies to keep the recovery going.
The Dow Jones Industrial Average /quotes/comstock/10w!i:dji/delayed (INDU 10,308, -132.86, -1.27%) was recently down 89 points, or 0.9%, to 10,351.72. The Nasdaq Composite Index /quotes/comstock/10y!i:comp (COMP 2,180, -26.86, -1.22%) fell 1%. The Standard & Poor's 500 Index /quotes/comstock/21z!i1:in\x (SPX 1,096, -13.10, -1.18%) slipped 0.8%, led by a 1.8% slide in its basic-materials sector, which suffered from the pullback in commodity prices. All the S&P's other sectors posted declines as well, with the financial and consumer sectors falling more than 1% each.
"This is pure risk retrenchment that we're seeing," said strategist Jack Ablin of Harris Private Bank, which has recently grown more cautious about adding to its exposure to U.S. stocks.
Alluding to 14-month highs that major indexes had hit a few days before Thursday's slump, he added: "The market is probably fairly valued right now, with enough momentum to perhaps carry it into expensive territory at some point. But it can't stay there for long."
Traders said worries about the prospects for earlier interest-rate increases in the U.S. have spread, beginning with the currency markets, since Wednesday afternoon, when the Federal Reserve acknowledged improvement in the U.S. employment picture. Buying of dollars continued overnight as overseas traders reacted to the news, then spilled into New York trading. The U.S. dollar index /quotes/comstock/11j!i:dxy0 (DXY 77.50, -0.20, -0.25%) was recently up 0.8%.
Such rallies in the currency tend to make items traded globally in dollar terms, including commodities, more expensive. For the moment, a stronger dollar also is bad for major U.S. companies that have come to depend heavily on exports to fast-growing overseas economies for a greater share of their profits.
Gold contracts were down $32.70 to $1,103 per ounce. Oil contracts fell 43 cents to $72.23 a barrel in New York. The broad Dow Jones-UBS Commodity Index was off 1.2%.
Among the big basic-materials names suffering from the commodity sell-off were Newmont Mining Corp. /quotes/comstock/13*!nem/quotes/nls/nem (NEM 48.04, +0.41, +0.86%) , off 5.1%; Freeport McMoRan Copper & Gold Inc. /quotes/comstock/13*!fcx/quotes/nls/fcx (FCX 76.59, +0.63, +0.83%) , off 3.7%; and U.S. Steel Corp. /quotes/comstock/13*!x/quotes/nls/x (X 48.95, +0.22, +0.45%) , off 1.4%. A 1.2% decline in Chevron Corp. /quotes/comstock/13*!cvx/quotes/nls/cvx (CVX 76.97, +0.19, +0.25%) hurt the energy sector, though Exxon Mobil Corp. /quotes/comstock/13*!xom/quotes/nls/xom (XOM 68.41, +0.19, +0.28%) managed to eke out a 0.3% rise.