Dec 28, 2010 ~ Business

Tuesday, December 28, 2010

The dollar weakened against their counterparts from Australia

The dollar weakened against their counterparts from Australia, New Zealand and Canada, as rising commodity prices boosted demand for currencies linked to commodity exports.

The U.S. currency fell to half of its 16 most actively traded peers as U.S. reports indicate a weaker economic growth than expected, reinforcing the Federal Reserve's plan to keep U.S. interest rates low. The Canadian dollar reached parity with the greenback for the first time since Nov. 11. The Swiss franc strengthened to a record low against the dollar as investors demand an alternative to the euro amid the crisis in the region of sovereign debt.

"The Australian continues to shine and with it the New Zealand dollar and Canadian dollar," said Omer Eisner, chief market analyst in Washington at the Commonwealth Foreign Exchange Inc., a forex brokerage firm. "That is a function of dollar weakness in general, but also the strength of commodities in general."

The dollar fell 0.6 percent to $ 1.0109 per Australian dollar at 1:04 pm in New York from $ 1.0046 yesterday. Declined 0.7 percent to 75.53 cents per New Zealand dollar weakened 0.7 percent to 99.93 Canadian cents. The Canadian dollar touched 99.76 Canadian cents, the strongest since April 26.

Euro, Yen

The dollar gained 0.5 percent to $ 1.3105 per euro after touching $ 1.3275, its lowest level since 17 December. The U.S. currency fell 1.2 percent to 81.82 yen, the lowest level since 12 November.

The Reuters / Jefferies CRB Index of commodities rose by 0.7 percent. Gold futures for February delivery gained 21.40 dollars, or 1.6 percent, to $ 1,404.30 in the Comex in New York.

The euro erased gains against the dollar after European Central Bank said it could not completely neutralize the extra liquidity created by its purchases of bonds for the second time since the program began in May.

The ECB, based in Frankfurt, said that drains € 61780000000 (U.S. $ 81 billion) in money markets through deposit within seven days, almost 13 billion euros less than the € 73,500,000,000 its intention absorb.

ECB Sterilization

"If you are not completely sterilized, it is true quantitative easing, which is bad news for the euro," said Richard Franulovich, currency strategist at Westpac Banking Corp. in New York.

The S & P / Case-Shiller index of property values fell 0.8 percent from October 2009, the largest drop year after year, since December 2009, the group said today in New York. The decline surpassed the 0.2 percent decline.Consumer confidence fell in December to 52.5.

Although the figures show U.S. property values fell, reports over the next three days will show an improvement in employment.
30 December figures show initial jobless claims declined and pending home sales advanced forecasting survey.

"The fundamental economic history in the U.S. is positive and moving in a positive direction," said Mark McCormick, currency strategist at Brown Brothers Harriman & Co. in New York.

Tax Plan

Barack Obama President on December 17 signed into law a bill 858 billion U.S. dollars of tax cuts.

The Fed this month reiterated its commitment to keep borrowing costs low for an extended period will, keeping the target rate for overnight bank loans a day zero to 0.25 percent, where it has been since December 2008. The Fed said last month it would buy 600 billion U.S. dollars of treasury bonds in June to boost the economy, a policy that has been called the Queen Elizabeth 2 for a second round of quantitative easing.

An increase in the futures traders betting that the Swiss franc strengthened against the dollar shows investors are worried that Europe's crisis may deepen debt, according to UBS AG.

The Swiss franc appreciated as much as 1.8 percent against the dollar to a record 94.35 cents. It strengthened 1.4 percent to 1.2468 against the euro, almost record high of 1.2439.

Franco Register

The franc hit a record high against the euro last week as investors sought the safety of Europe's crisis of sovereign debt. The Swiss National Bank President Philipp Hildebrand, who completed 15 months of intervention in currency markets this year may be unable to stop the currency to extend a record rally he calls a "burden."

"The Swiss franc continues to progress and the Japanese yen is also stronger," said Nick Bennenbroek, head of currency strategy at Wells Fargo & Co. in New York. "We're seeing some of the safe-haven currencies click OK and the euro value of losing."

The euro has fallen 10.9 percent so far this year, the biggest loss among the 10 developed nations is measured in foreign exchange rates. The dollar has lost 1.6 percent and the yen has added 12.9 percent.

The euro has added 0.9 percent against the dollar this month and the yen has risen 1.8 percent.

South African rand was the second artist ever against the dollar most traded currency in increasing precious metals prices attracted investors.

The rand rose 1.1 percent to 6.6637 per dollar and touched 6.6443, the highest since December 2007. Gold, which together with platinum accounts for about a fifth of South Africa's exports, rose for a third day, adding 1.6 percent.

Japanese Finance Minister Yoshihiko Noda told a news conference today in Tokyo to take bold action if necessary in the currency market, calling the yen's recent movements on one side. Noda also said it will continue to monitor markets closely.

China stocks will bounce back next quarter of the biggest annual fall in the Shanghai Composite Index since 2008, slowing inflation reduces the need for further increases in interest rates and faster economic growth, according to the joint venture of Morgan Stanley in country.

The central bank's two rate increases since October will "achieve the full realization" in moderating consumer prices rose at the fastest pace in 28 months in November, said Zhao Lisong, chief strategist at Morgan Stanley Huaxin Fund Management Co., which oversees about $ 1,900,000,000. Developers, materials producers and automobile manufacturers will benefit as the government slows down the pace of policy tightening and accelerating growth, he said.

"China's economic growth will support a slight upward trend in 2011," Zhao said in a telephone interview yesterday from Shenzhen, declining to give a forecast for the Shanghai Composite index. "As inflation given after the Chinese New Year, the government can reduce the frequency of adjustment measures." The Chinese lunar new year ends in mid-February.

The Shanghai Composite Index dropped 1.7 percent to 2,732.99 today, extending the measure in question is longest losing streak since July, after the People's Bank of China raised key one-year lending and deposit rates by 25 basis points, or 0.25 percentage point, on Christmas Day. The measure in question has fallen 17 percent this year, making it the worst performer among the 14 largest stock markets in the world.

government of Prime Minister Wen Jiabao has ordered banks to set aside more reserves for six times this year and raised rates to control inflation and curb asset bubbles after record high prices of loans and property. China reported inflation of 5.1 percent in November, surpassing the previous month by 4.4 percent as food costs rose.

"Comparatively strong '

populations in the nation fell yesterday as JPMorgan Chase & Co. and Morgan Stanley predicts further increases in interest rates in the first half of 2011. China may raise rates three times in the first six months, according to Morgan Stanley, while JPMorgan forecasts two increases during that period.

China, the inflation rate may be in a "relatively high" in the first half, "said Liu Jianwei, a fund manager Boser Asset Management Co., which manages about 19 billion yuan in Shenzhen.

Is in favor of gold producers and airlines as a hedge against inflation and the government allows a faster appreciation of yuan, the reduction of U.S. carriers the cost of dollar debt. Liu also likes companies that benefit from the government side of the five-year economic plan, which focuses on boosting domestic consumption and increasing energy efficiency.

China's economy will grow at a rate of 10 percent next year and inflation averaged 3.3 percent, the China Academy of Social Sciences said in its Blue Book of Economics in 2011 published December 7. The target for 2010 GDP growth is 8 percent, according to Wen's annual report for work on 5 March.

Earnings Growth

The expansion of the economy, which is set to overtake Japan as second largest in the world this year, will support the growth of earnings up by 22 percent next year, according to Morgan Stanley Huaxin Zhao.

China profits from industrial enterprises rose 49.4 percent in the 11 months to November last year, a report showed yesterday. The increase compared with a gain of 7.8 percent over the same period in 2009.

China increased the interest rate will be good for bank profits, and that will boost net interest margins without increasing the rate of demand deposit, according to a report of UOB Kay Hian yesterday.

The benchmark interest rate rose to 5.81 percent and the rate of one-year deposits rose to 2.75 percent. The interest rate rise to 6.56 percent by the end of next year.
"The shortage of liquidity could provide in the first quarter," said Zhao, the predicted increase its lending banks after the government sets an annual quota again. "Economic growth will also increase liquidity."

Bernanke may be about to get help in an attempt to boost the economy

Federal Reserve chairman, Ben S. Bernanke, may be about to get help in an attempt to boost the economy, an industry bedrock: housing.

Employment growth, even with unemployment at 9.4 percent or higher since May 2009 and an increase in U.S. population housing means likely to improve in 2011 from its record low, said Charles Lieberman, chief investment officer of Advisors Capital Management LLC in Hasbrouck Heights, New Jersey. Mortgage rates are less than 5 percent, further supporting affordability.

An increase in housing construction would increase employment for construction workers and also for people in the supply industries stoves and sinks that go to new homes. In the house was reduced to less participation in the economy in history, 2.23 percent, employment growth slowed. The economy created 39,000 jobs in November, 5,000 construction jobs were lost.

"The housing market is going to shock people," said Lieberman, former head of monetary analysis in the Federal Reserve Bank of New York. "Once we got the ball rolling, it becomes easy to roll. The most important thing the Fed can do, it is not easy, is to promote job growth. If we see employment growth that is going to market very strong property. "

Employment increased by an average of 200,000 per month next year, bringing the unemployment rate, 9.8 percent in November, almost one percentage point, he said.

Interest Rates

At the Fed meeting to discuss monetary policy on December 14, Bernanke and other members of the Open Market Committee revised its 600 billion U.S. dollars of the bond program with purchase option. One hope is that by 2011 nearly zero Fed interest rates will finally be able to begin to reverse a half-decade decline in the housing.

residential investment share of the economy fell to 2.23 percent in the third quarter of 2010, the lowest since records began in 1946, up from 6.3 percent in the fourth quarter of 2005, the highest in 55 years. That decline has led to the loss of jobs in the construction industry: He fell to 5.6 million this year from 7.7 million in 2006.

Housing starts probably will reach a maximum of three years from 739,000 in 2011, creating enough jobs to shave half a percentage point the unemployment rate, said David Crowe, chief economist for the National Association of Home Builders in Washington.

Ugly Cycle

"This is an ugly business cycle," he said in a telephone interview. "We need job creation to people comfortable with buying a home. If they do, we will create jobs that will enhance the home buying and employment growth of extra fuel." Building more in 2011 add about 500,000 jobs, he said. The association of home builders' expected an unemployment rate of 9.1 percent in late 2011.

A background in the housing market could improve the prospects of companies in Midcap Index Standard & Poor's Homebuilding, which has fallen 68 percent since its peak in July 2005. Douglas Yearley, the head of the index members of Toll Brothers Inc., said in an interview.
"The recovery is here to stay," said Yearley, whose company, based in Horsham, Pennsylvania, is the largest U.S. builder luxury home. "I think that 2011 will be a year better, but I think 2012 will be a great year for us."

The number of contracts signed for the purchase of Toll Brothers homes rose 6.3 percent in the 12 months ended in October, compared with the previous year, the first increase since 2005, the company said in a report by December 2 .

Homebuilders ETF

The average price increased 6.1 percent to $ 565,079, the first increase since 2006. Shares of construction are 8 percent this month compared with a gain of 6.5 percent for the 500 Standard & Poor's.

The S & P Builders Exchange Traded Fund, which includes Los Angeles, KB Home, Fort Worth, based in the Dominican Republic Horton Inc., has risen 13.3 percent since Nov. 18, vs. 4.8 percent for the S & P 500 ETF.

Builders in the U.S. began work on 555,000 housing units in November to an annual rate, compared with 477,000 units in April 2009, which was the lowest in the census records dating from 1959.

Meanwhile, the U.S. population has continued to grow. The 2010 census data, published last week in Washington, show that the population amounted to 308.7 million 281.4 million in 2000, an average increase of $ 2.7 million a year.

More Homes

The number of U.S. households, an indicator of demand for real estate, is likely to increase by 0.7 percent to 118.7 million in 2011, the largest annual increase since the beginning of the crisis mortgages in 2007, according to Patrick Newport, an economist at IHS Global Insight in Lexington, Massachusetts.

The lack of new housing construction has been "to recovery, but you could say that drag is fading now that the financial system is recovering," said James O'Sullivan, chief economist of MF Global Ltd. in New York. It is expected an increase of 12 percent of residential investment in 2011, with job growth of 200,000 in June, as much as 225,000 a month in the second half and an unemployment rate of 8.8 percent the fourth quarter.

Housing construction is likely to improve from the current minimum and still be well below its long-term trend, he said. A key to this forecast is supported by low interest rates, which enhanced the capacity of home ownership to record levels in October.

To provide housing

Housing affordability, measured by the ease with which a middle-income family can afford a median-priced house, hit a record high of 184.2 in October, the highest index reading in more than two decades of data, according to the National Association of Realtors in Washington.

Home prices continued to decline. The S & P / Case-Shiller index of property values fell 0.8 percent from October 2009, the largest drop year after year, since December 2009, the group said today in New York. Eighteen of the 20 cities showed price declines in October, led by a fall of 2.1 percent in Atlanta, and the decline of 1.8 percent in Chicago and Minneapolis.

However, mortgage rates have shaken the damping effect of the program's initial purchase of the Fed, known as the Queen Elizabeth 2 for the second round of quantitative easing. The U.S. average for a 30-year fixed mortgage rose to 4.81 percent during the week ended Dec. 23 from a low of 4.17 percent in mid-November, according to Freddie Mac, the mortgage buyer McLean, Virginia.

Pending sales of existing U.S. homes unexpectedly rose by a record 10 percent in October, the real estate group, said earlier this month, indicating the industry could be stabilizing. transactions in November rose 5.6 percent to 4.68 million at an annual rate, NAR said last week. Purchases of new homes rose 5.5 percent to an annual rate of 290,000 in November, the Commerce Department said on December 23.
"Gradual improvement '

Robert Niblock, chairman and CEO of Lowe's Cos., the second largest U.S. retailer home improvement, and Ian McCarthy, CEO of Beazer Homes USA Inc., expressed optimism qualified for the housing outlook. Niblock said in a teleconference on November 15 income "even in a difficult environment, we are seeing a gradual improvement in the fundamentals of the housing market."

Atlanta-based Beazer, a builder of entry, the national waiting-family housing starts to increase in 2011, "probably in the low double-digit percentage," McCarthy said in a November 5th earnings call.

Decreasing share of the economy for the construction of new houses, improving record lows not promote growth as well as in the past, said Paul Dales, economist at U.S. for Capital Economics Ltd. in Toronto. He agreed that residential investment is about to be a modest boost to gross domestic product.

No Drag

"Before if there was an increase of 10 percent GDP increased by 0.6 percentage points," said Valles. "Now, if it rises by 10 percent is an increase of 0.2 percent. The construction of homes are actually on the floor. There will be a drag on growth."

In October, 1.4 million construction workers were unemployed with only 46,000 jobs, a ratio of 31 workers for every job available, according to Labor Department data.

The Fed has completed 155.7 billion U.S. dollars of the allocated $ 600 billion in purchases. The central bank is also reinvesting profits from its holdings of maturing debt of the home.

His decision to start a second round of asset purchases sparked a political backlash in Washington, with Republican lawmakers criticized the measure as likely to be inflationary. Indiana Rep. Mike Pence and Sen. Bob Corker of Tennessee have proposed eliminating the Fed's dual mandate for full employment and price stability, and have the central bank's focus only on price stability.

Unable to get weaker

Bernanke, appeared on the CBS Television's "60 Minutes" on Dec. 5 to face the criticism, saying he was "one hundred percent" sure that the central bank could control inflation.

Asked about his outlook for the economy, Bernanke said that a return to recession was unlikely, adding that "it is because, among other things, some of the more cyclical parts of the economy such as housing, for example, are very weak. And you can not get much weaker. "

Fed officials are not optimistic about the housing outlook at its meeting on November 2-3, citing the source of elevated due to foreclosures. Some "saw the disputes over the documents of the mortgage and foreclosure likely to delay any recovery in housing markets," according to minutes of that meeting.

"Residential investment has failed to make a positive contribution to growth in this recovery," said the president of the Richmond Fed, Jeffrey Lacker said in a speech on Dec. 6 in Charlotte, North Carolina.

"Legacy of overbuilding"

"This contrasts with the two worst recessions of the past 60 years, in which housing investment increased an average of 40 percent in the first year of recovery," he said. "Given the important legacy of overbuilding, unique to this recession, I do not think that housing to contribute significantly to growth in the next two years."

A high foreclosure rate can not derail a housing recovery, said Lieberman of Advisors Capital. The company realized 55.7 million U.S. dollars of U.S. stocks 30 September, including real estate investment trust Sun Communities Inc. and Colonial Properties Trust, according to Securities and Exchange Commission.

Foreclosures are "half the story," Lieberman said, because people who lose their homes must find homes elsewhere. "They do not disappear or move to Mars. They take another holiday away from the market."

Confidence among U.S. consumers unexpectedly fell in December

Confidence among U.S. consumers unexpectedly fell in December, restrained by community work will remain limited in 2011.

The confidence index fell to 52.5 Conference Board less than the most pessimistic forecasts and down from a revised 54.3 in November, the figures of the research group in New York, showed today day. The share of Americans saying jobs were hard to get rose to a maximum of 10 months.

The loss of confidence is at odds with a report from the University of Michigan showed that confidence improved to a maximum of six months in December, and the data showing the greatest increase in rental expense over five years. Federal Reserve policy makers have reiterated they will continue to inject money into financial markets in an attempt to maintain low interest rates, boosting growth and reducing unemployment.

"You're still seeing the labor market is the main concern for consumers," said David Semmens, a U.S. economist Standard Chartered Bank in New York. "It is a major concern for consumer spending."

The shares erased earlier gains after the report. 500 of Standard & Poor's fell 0.1 percent to 1,256.71 at 10:34 am in New York as the drop in confidence offset optimism about earnings of holiday spending. Treasuries fell, bringing the yield on the benchmark note 10 years to 3.38 percent from 3.33 percent yesterday afternoon.

Sales Rise

Retailers for 2010 holiday sales rose 5.5 percent for the best performance in five years, said SpendingPulse MasterCard Advisors, which measures retail sales in all forms of payment. That compares with a gain of 4.1 percent a year earlier. The figures include online sales and exclude purchases of automobiles.

The median forecast of confidence, based on a survey of 61 economists projected confidence increased to 56.3. The Conference Board revised the November figure to 54.3 from a previous estimate of 54.1. Projections ranged from 53 to 60. The average rate of 96.8 during the last economic expansion ended in December 2007.

The report highlighted today in contrast to preliminary figures from Thomson Reuters / University of Michigan showed confidence rose to a maximum of six months in December.

Fall Values

In a report today showed home prices fell more than expected in October, a sign of the housing will remain a weak link in the recovery accelerates in the new year. The S & P/Case- Shiller index of property values fell 0.8 percent from October 2009, the largest drop year after year, since December 2009. The decline surpassed the 0.2 percent.

The Conference Board's measure of sentiment on current conditions fell to 23.5 in December from 25.4 the previous month. The indicator of expectations for the next six months fell to 71.9 from 73.6 in November.

The percentage of respondents expecting more jobs to become available in the next six months declined to 14.3, lowest since July. The proportion of people who expect their incomes to rise over the next six months fell to 9.9 percent from 11.1 percent.

The proportion of consumers saying jobs are plentiful now fell to 3.9 percent this month, while those who said jobs are hard to get rose to 46.8 percent, the most since February.

Employment Earnings

Employers added 951,000 workers to payrolls in the first 11 months of the year, according to Labor Department figures. December data are due January 7.

The gains have not been large enough to reduce unemployment, which was 9.8 percent last month after the end of 2009 to 10 percent.

Barack Obama President on December 17 signed into law a bill that 858 billion U.S. dollars is spread over two years of the Bush cuts taxes for all income levels, continues to expand unemployment benefits to insurance payroll taxes long-term unemployed 13 months and reduced during 2011.

Some Americans are more willing to make some purchases of high cost. Car sales in November rose to 12.26 million unit pace, the highest since the government cash for clunkers program in August 2009, industry data showed this month. Demand in the past three months is the strongest in two years.

Increased confidence is helping to raise purchases of goods with high price call. Ford Motor Co. said sales of U.S. cars in December are running at a rate of 12 million units per year, and forecast sales could rise to nearly 13 million next year.

"We have a high degree of confidence that 2011 will be a strong sales year," said George Pipas, Ford sales analyst, in a December 20 information to reporters in Dearborn, Michigan, which has its headquarters company. "We are much better than they were a year ago."

Home prices fell more than expected in October

Home prices fell more than expected in October, a sign of the housing will remain a weak link in the U.S. recovery accelerates in the new year.

The S & P / Case-Shiller index of property values fell 0.8 percent from October 2009, the largest drop year after year, since December 2009, the group said today in New York.

A wave of executions in hopes of reaching the market with home prices remain under pressure in 2011, representing a risk to household finances. Responsible for the Federal Reserve this month, said "depressed" housing and high unemployment remained restrictions on consumer spending, reasons reiterated a plan to expand the monetary stimulus registration.

"We will remain in negative territory for several months," said Dean Maki, chief U.S. economist Barclays Capital Inc. in New York, who forecast a year-on-year fall of 1.3 percent. "The housing market remains weak and no recent data suggest a substantial rebound."

After retiring briefly, stock index futures remained higher after the report as a jump in holiday sales outlook boosted consumer spending. The contract on the Standard & Poor's 500 due in March rose 0.2 percent to 1255.5 at 9:23 am in New York. The yield on the benchmark 10-year note rose to 3.36 percent from 3.33 percent yesterday afternoon.

Poll Results

The median forecast is based on projections from 17 economists surveyed. Estimates range from an increase of 1.4 percent to a decline of 1.3 percent. Year after year records began in 2001. Prices rose 0.4 percent in the year ended in September.

The indicator fell by 1 percent in October from the previous month after adjustment for seasonal variations, matching drop in September, which was higher than previously estimated. unadjusted prices fell by 1.3 percent from the previous month.

Eighteen of the 20 cities showed price declines in October, led by a fall of 2.1 percent in Atlanta, and declines of 1.8 percent in Chicago and Minneapolis. Denver and Washington were the only two posted gains.

Six markets, including Atlanta, Charlotte, Miami, Seattle, Tampa and Portland, Oregon, reached its lowest level in October, as prices began to retreat.

"The double dip is almost here," said David Blitzer, chairman of the index of S & P. Sales are not "give a sense of optimism."

Since 2006

The 20-city index fell by 30 percent in October from its peak in July 2006.

Meter every year gives a better indication of trends in prices, the group has said. The panel includes Karl Case and Robert Shiller, the economist who created the index.

The Case-Shiller index is based on an average of three months, which means that the October data was influenced by operations in September and August.

The fall in prices represents a setback for the house after the values recovered earlier this year, thanks to a $ 8,000 tax credit home buyers' purchases which raised.

Reports earlier this month showed that the housing market is stuck near recession levels even when the overall economy is recovering. building permit in November fell for the third-lowest in history, while the beginnings rose for the first time in three months, the Commerce Department reported on 16 December.

Sales of new and existing homes last month rose less than forecast, reports the Department of Commerce and the National Association of Realtors showed last week.

Price Outlook

Based in Atlanta USA Beazer Homes Inc., which builds and sells single family homes starting in the south of the country, the projects will not increase prices.

"We hope that the sales prices of new homes to be somewhere between flat and 3 percent in 2011," said Beazer CEO Ian McCarthy on a conference call last month. "While it is clear that there are risks of further declines in home prices, we believe that new homes are in good standing with respect to existing homes not crushed."

Today's report may be a reminder of why the Fed officials, who met on December 14 last year, for example, housing is falling, while the economy recovers. They cited the decline in value of housing as one of the restrictions on consumer spending.

"The housing sector remains depressed," the Fed said in a statement after the meeting, which reiterated a plan to expand the monetary stimulus registration and said that economic growth is "insufficient to reduce unemployment."

Still, economists in the last two weeks have raised projections for growth in the fourth quarter, reflecting a rebound in consumer spending and the adoption of a law of 858 billion U.S. dollars to extend all the Bush tax cuts- was for two years. The legislation also continues to extended unemployment insurance benefits until 2011 and cuts in payroll taxes by 2 percentage points next year.

The following table shows the historical price variation
according to the S & P / Case-Shiller index of home prices. Cities are
ranked by the biggest monthly gain using seasonally unadjusted
data.

============================================================
               1-months 3-months  1-year  2-years  3-years
               earlier  earlier  earlier  earlier  earlier
============================================================
US Composite-20  -1.32%   -2.39%   -0.80%   -8.08%  -24.70%
------------------------------------------------------------
Washington DC    -0.20%   -0.28%    3.65%    1.00%  -17.97%
Las Vegas        -0.21%    0.06%   -3.57%  -29.26%  -51.61%
Denver           -0.57%   -1.65%   -1.79%   -1.90%   -6.98%
Los Angeles      -0.75%   -1.26%    3.34%   -3.21%  -30.24%
Tampa            -0.90%   -2.19%   -3.61%  -18.27%  -34.48%
Miami            -1.11%   -2.60%   -3.39%  -16.95%  -41.06%
Phoenix          -1.11%   -3.93%   -4.28%  -21.61%  -47.21%
Dallas           -1.13%   -3.83%   -3.13%   -3.68%   -6.66%
Charlotte        -1.14%   -2.54%   -4.19%  -10.90%  -14.87%
============================================================
               1-months 3-months  1-year  2-years  3-years
               earlier  earlier  earlier  earlier  earlier
============================================================
Boston           -1.23%   -2.82%   -0.23%   -3.03%   -8.85%
Seattle          -1.34%   -2.66%   -4.11%  -16.03%  -24.61%
Portland         -1.48%   -4.16%   -5.15%  -14.59%  -23.20%
San Diego        -1.50%   -3.05%    2.97%    0.55%  -26.28%
Cleveland        -1.52%   -4.76%   -2.64%   -6.03%  -11.83%
New York         -1.61%   -1.99%   -1.67%   -9.58%  -16.56%
San Francisco    -1.91%   -3.07%    2.23%   -0.43%  -31.28%
Minneapolis      -1.91%   -4.35%   -2.80%  -10.79%  -25.18%
Chicago          -1.99%   -3.08%   -6.48%  -15.95%  -25.04%
Detroit          -2.45%   -3.25%   -5.52%  -20.02%  -36.33%
Atlanta          -2.90%   -6.11%   -6.19%  -13.77%  -22.83%
============================================================

There is an old joke that economists make predictions only for the kids to have time to laugh at someone. In the same vein, once a year, this column also makes some predictions - but only economists have something to laugh more.

With this caveat in mind, here are 10 things that may (or may not) happen in 2011:

No. 1. Yields rising market. In fact we have been in a bull market more than a year. Just take a look at the numbers. But in the early stages of a cycle of increased capital, no one says it's a bull market. First call it a dead cat bounce. Then they call it a bear market rally. In late 2011, the currency will have fallen. We will be officially in the territory of bulls. At the end of the year, around the world have begun chip back in action again.

No. 2. Accidents alternative investment industry. The primary driver of hedge funds and private equity funds was the search for profitability. With stock markets in the doldrums, interest rates cut to almost nothing, and bond yields at historic lows, investors were desperate for any significant return of their money. They were willing to listen to the managers of hedge funds stain that pledged to make 30 percent a year on the high speed of yak hide arbitration. The next year, rising interest rates, and thus adheres performance and stock returns. Why bother paying a fortune to hedge fund managers and private equity, some of whom keep their promises, when you can get pretty decent returns mainstream investment?

No. 3. Return on risk capital. The launch of the industry received a terrible beating from the collapse of the dot-com. But usually rough, a decade is enough time for financial markets to unwind. There are fantastic opportunities out there. Smartphone applications. Social networks. Alternative energy. Africa. The markets always have room for some optimists blue sky - and 2011 will be the year that venture capitalists fill that space again.

No. 4. France was smoked in the crisis of the euro. Somehow, France has managed to get grouped together with Germany as one of the strong euro countries. But it has a larger budget deficit than Italy. With chronic unemployment and low growth. Fundamentally, has the highest resistance to reform. The slightest suggestion of extending the working hours, or the retirement age, or the reform of public services, calls mass protests. It can not last. Next year is when it rolls France with Ireland, Greece, Portugal and Spain.

No. 5. Apple Inc. reaction begins. We used to think that International Business Machines Corp. was a kind of loss. Then it was Microsoft Corp. But the company now has too much power, is run by control freaks, and puts profits before principles? That's right. the third largest company in the world, measured by market value, is about to discover that the line between fresh upstart ugly monopoly is very thin.

No. 6. The German is back in fashion. German words and fashion go together about as well as Greece and solvent. But in a world trying to figure out how to get out of a debt crisis, the Rhineland model of capitalism is soon going to look very attractive. Many mid-sized companies with strong technical expertise, low debt and skilled manpower export of niche products to the world - which sounds like a good formula for success in the 2010 decade. In late 2011, we expect every CEO in the world to start talking seriously about looking for a German management model as your guide.

No. 7. Lloyds Banking Group Plc is broken up. The hasty merger between two major UK banks, Lloyds and HBOS Plc, increasingly looks like one of the most disastrous decisions made during the height of the credit crisis. It is too powerful. This will be the year they were separated.

No. 8. Iceland teaches the world a lesson. Two years ago, all governments of the world, bought the idea that we had to bail out their banks. If collapsed, which would go directly back to the Stone Age. A country challenged the consensus. Iceland can not afford to keep up their banks. What happened? There has been pain, sure, but from next year the economy should grow again, inflation is under control and interest rates are falling. If Iceland keep the recovery, there is only one conclusion: There is no need to bail out the banks, after all.

No. 9. Russia puts the R in BRIC again. We have heard a lot about the growing economic power of Brazil, India and China. Much less is heard about the R in BRIC - - Russia. It tends to be dismissed as a supplier of raw materials an authoritarian government. But trying to recreate in a technological power - look at the plans to create a new Silicon Valley in the suburb of Moscow Skolkovo. Crazy? Remember, this was the first country to put a man into space. Russia has always been scientifically advanced. If you can put your brain and businessmen together, however, could eclipse the B, I and C in the acronym.

No. 10. A backlash against Christmas e-cards. Is it really necessary holiday greetings from a small bank in Latvia that I have never spoken? Does the management consulting company in Austria sincere in wishing me the best for the holiday season? I doubt it. Listen guys. It is not reflective. Is not playing. Is spam. Frankly, I prefer to get another email from that company that supplies Ukraine friendly Viagra without a prescription. At Christmas of 2011, sending e-cards will be socially unacceptable - and none too soon.

Thailand's economic growth will slow in 2011 exports fail

Thailand's economic growth will slow in 2011 exports fail, the Ministry of Finance said that after today's report showed manufacturing expanded less than a year.

"Growth next year will return to a normal pattern," said Naris Chaiyasoot, the head of the Office of Public Finance, Ministry of Finance of the political reporters in Bangkok. "Consumption and investment are key factors. Exports, which led the growth of this year, will be fragile given the weakening global economy."

The Ministry of forecast gross domestic product will grow 4.5 percent in 2011 and raised estimates for this year to 7.8 percent from 7.5 percent. Thailand's dependence on foreign trade, which represents about 60 percent of the economy makes it vulnerable to swings in global demand.

the manufacturing output growth slowed unexpectedly in November to 5.6 percent from a year earlier after a revised advance of 6 percent in October, according to the Office of Industrial Economics.
"Industrial growth slowed as the recovery in the U.S. and Europe weighs export demand of electronic products," Lim said Chandara, chief economist at Moody's Analytics in Sydney, before the report. "Setting monetary tightening could undermine private investment and slow production orders over the next month."

The baht has gained more than 10 percent this year, the best performer in Asia after the Japanese yen and Malaysian ringgit, raising concerns that exports of Thailand can be more expensive relative to its regional rivals.

Effect baht

General Motors, Ford Motor Co. and Banpu PCL are among the companies that have blamed the strong baht for hurting sales outside Thailand.

Finance Minister Korn Chatikavanij December 15, said the baht is likely to extend gains next year and capital flows will cause the volatile currency.

Earlier this month, the central bank raised its repo rate bond for a day in a quarter percentage point to 2 percent, indicating policy makers view inflation as a bigger threat than slowing growth. The governor said Prasarn Trairatvorakul Thailand December 24 can not have "low wages, a weaker baht and low interest rates forever."

the rapid growth of exports from Thailand to 28.5 percent in November, and shipments should increase by up to 28 percent this year, Commerce Minister Porntiva Nakasai said last week.

Naris The Finance Ministry said the economy probably grew 3.5 percent in the fourth quarter of last year after a jump of 6.7 percent in the last three months.

investors remain bullish on commodities that beat stocks and bonds for a second year

At one point in regard to money managers "have ranged from government stimulus file and the possibility of a new recession, investors remain bullish on commodities that beat stocks and bonds for a second year.

Measurement of Standard & Poor's GSCI advanced 20 percent more than the 9.1 percent gain in the MSCI World Index of shares and 5.3 percent return at a rate of Bank of America Merrill Lynch bond Treasury. Currency traders are betting on a stronger dollar, sending a signal to the contrary, because the products are moved in a direction opposite to the currency in 16 of the last 20 quarters, according to data compiled by Bloomberg.

Silver, an investment and industrial equipment, jump as much as 37 percent next year, leading gains in the 15 products in a Bloomberg survey of over 100 analysts, traders and investors. Zinc, metal worst performer this year, is seen by 21 percent. Arabica coffee, which reached 13 years last week, will be the weakest performer, adding no more than 7 percent.

The strength of demand "was a surprise considering that just out of the worst recession since the 1930 massacre and the most active classes", based in London Roxana Mohammadian-Molina, one of a team 18 Barclays Capital analysts who correctly called the bottom of oil and copper last year, said by telephone on December 22. The bank said that the U.S. natural gas will be the only one of the 25 prices of commodities it follows that an average of less next year.

Shares Short

Global stocks are still near record $ 11 trillion 62.6 trillion U.S. dollars of market capitalization reached in October 2007, data compiled by Bloomberg. During the same period, assets under management of commodities increased about 80 percent to 354 billion U.S. dollars, and attract a total of $ 60 billion in new money this year, the second largest after 2009, estimates Barclays.

The S & P GSCI Index to extend last year's 50 percent advance, which also exceeded 27 percent jump in the MSCI World Index and the loss of 3.7 percent for Treasuries.

Investors favored commodities this year as China, the largest user of everything from coal to iron ore to zinc led to the recovery of the first global recession since the Second World War. The savings and expansion, competition for raw materials is increasing.

U.S. growth will rise to 3.25 percent in the fourth quarter of 2011 from 2.5 percent in the first, according to the average estimate of up to 66 economists surveyed by Bloomberg. China will slow to 9 percent next year from 10 percent in 2010, is still three times the U.S. rate and six times the speed of the euro area, polls show. China on Dec. 26 raised interest rates to counter inflation.

Goldman Picks

Commodities will be earning more than those in China is at least self-sufficient and less spare production capacity, according to analysts at Goldman Sachs Group Inc., led by London-based Jeffrey Currie. Oil, copper, cotton, soybeans and platinum are top picks of the bank.

Goldman forecast on 13 December, an increase of 18 percent of raw materials in 12 months, led by an increase of 28 percent in precious metals. This is consistent with the results of the Bloomberg survey.

Silver, precious metal commonly used in industry, rose 37 percent to a maximum of $ 40 an ounce next year from $ 29.1238 per ounce in trading in London on December 24, the survey shows. Palladium used in catalytic converters for cars, jump as much as 18 percent to $ 900 an ounce from $ 764 in operations in London on December 24.

Silver futures for March delivery rose 53 cents, or 1.8 percent, to $ 29,785 an ounce at 10:14 am on the Comex in New York. Palladium futures for March delivery gained $ 11.90, or 1.6 percent, to $ 779 an ounce on the New York Mercantile Exchange.

London markets are closed today for the second day of the holidays.

Gold Outlook

"Investors will be cycling gold and silver, platinum and palladium, if the financial and economic conditions improve," said Jeffrey Christian, managing director of CPM Group, a research company in New York.

Christian correctly predicted in January that gold could reach $ 1.400 an ounce this year and is now price forecast to peak at $ 1550 in the first quarter before falling as low as $ 1,200. The median forecast in the Bloomberg survey is for a gain of 23 percent to a maximum of $ 1,700. Gold reached a record $ 1431.25 on December 7 in London to close at $ 1381.47 on December 24.

Gold futures for February delivery rose $ 18.70 or 1.4 percent, to $ 1,401.60 in the Comex.

The popularity of the precious metals, suggests that investors are seeking assurances that governments and central banks to inject money into the economies to sustain the recovery.

The Federal Reserve has kept its benchmark interest rate near zero since December 2008 and plans to inject 600 billion U.S. dollars in June the economy by purchasing bonds through the so-called quantitative easing. Already bought 1.7 trillion U.S. dollars of securities in a first phase that ended in March.

"Concern" fiscal

"I like gold because I worry that our fiscal and monetary policies make no sense," said David Einhorn, president of Greenlight Capital Inc., which manages about $ 6.8 billion of assets, in an interview in New York. "It potentially leads to a greater risk of further instability."

Investors increased their holdings of precious metals by 22 percent to a record 17,390 metric tons in the 10 months to 17 December, according to data compiled by Bloomberg. That is worth about 111 billion U.S. dollars, of which 84 percent is 13 percent gold and silver, and the rest of platinum and palladium.

GSCI Returns

Returns for investors in commodities may be less than the spot rate suggests. The S & P GSCI Total Return, monitoring the net amount received, up 8.4 percent this year, reflecting the cost to maintain positions in futures markets. When longer-dated contracts cost more than the immediate delivery, a market structure known as contango, investors pay a premium to keep their farms as positions expire.

The commodity gains can evaporate if currency traders betting that the dollar will strengthen right.

Contracts dollar appreciation against the euro are at a maximum of three months and the U.S. Dollar Index against six counterparts gauge rose 6 percent from 4 November. The inverse relationship between foreign exchange and commodities last month reached the highest level in over a year, according to data compiled by Bloomberg.

commodity experts surveyed by Bloomberg are betting this time will be different in the middle of the growing demand and dwindling stocks.

Copper deficiency

copper use will outpace supply by 825,000 tons next year, more than double the inventory in LME warehouses-up, according to Barclays Capital. The prices reached a record $ 9,392 a tonne on December 21 in London will rise to $ 10,475 next year, the Bloomberg survey. Zinc is the best performing industrial metal, advancing as much as 21 percent to $ 2,800 a tonne from $ 2,308 in London on 24 December.

Copper futures for March delivery rose 2.25 cents, or 0.5 percent, to $ 4.3025 a pound on the Comex. Earlier, the metal rose to a record high of $ 4.3195.

The demand may also come from new products listed. ETF Securities Ltd. began offering investors PTE supported by copper, tin and nickel from this month, attracting about $ 25 million to date. JPMorgan Chase & Co., BlackRock Inc. and Credit Suisse Group AG plan similar products.

Weather markets

A stronger dollar can also be overcome by the weather on agricultural markets. Wheat as much as doubled since June and corn rose 83 percent as the worst drought in Russia in less than half a century, floods in Canada and the parched crop Kazakhstan and Europe in ruins.

While wheat is expected to increase to 17 percent, to $ 9.13 a bushel next year of $ 7.83 in Chicago on December 23 and maize by 14 percent to $ 7 a bushel to $ 6.14, the Coffee was chosen as probably the worst performer in the Bloomberg survey. Analysts see an increase of no more than 7 percent to $ 2.53 a pound from $ 2.359 a pound in New York on 23 December.

Wheat futures for March delivery rose 8.5 cents, or 1.1 percent, to $ 7.8875 a bushel today on the Chicago Board of Trade. Corn futures for March delivery rose 3.5 cents, or 0.6 percent, to $ 6.1875 a bushel, the profit straight session. The Arab-coffee futures for March delivery rose 1.05 cents, or 0.4 percent, to $ 2.385 a pound on ICE Futures U.S. in New York.

"We see no imminent threat to the commodity prices in 2011," said Evan Smith, who helps manage U.S. $ 900 000 000 Global Investors Inc. in San Antonio. "You still have the concern for monetary stability in emerging economies is not the wealth effect is driving the demand."

Japan's industrial production rose for the first time in six months in November

Japan's industrial production rose for the first time in six months in November, indicating the recovery of the nation's exports regain traction.

Industrial production rose 1 percent from October, when fell 2 percent, the Commerce Ministry said today in Tokyo.Today's report makes the concern that more companies scale their production as the government's stimulus measures vanish. Exports stood yen near a 15-years to grow faster for the first time in nine months in November, supported by demand from China, Japanese government data last week. Honda Motor Co., the second largest manufacturer of Japan, is one of the companies to increase production to meet demand.

"It's nice to end the year with some good economic news," said Akiyoshi Takumori, chief economist at Sumitomo Mitsui Asset Management Co. in Tokyo. "Japan is still in a soft patch, but today's report signals that there will be better days ahead, driven by global recovery."

The yen traded at 82.71 per dollar at 10:10 am in Tokyo from 82.78 before the report's publication. The Nikkei 225 Stock Average fell 0.3 percent.

The production of advanced transportation equipment for the first time since March and the production of electronic components and devices won for the first time since May, the report showed today. Total production in October fell by the most since February 2009 as a program of government subsidies to buy fuel-efficient cars ended in September, prompting manufacturers to cut production.

"Awesome"

"The production was impressive and shows that the global recovery is firmly in place," said Takehiro Sato, chief economist for Morgan Stanley Japan Securities Co. in Tokyo MUFG. "The recovery in Japan is gradually improving after a pause."

Shipments of flat-panel TVs rose in November as buyers took advantage of incentive programs to purchase consumer electronics, today's report showed. The incentives were reduced in December.

A separate report today showed that retail sales rose 1.3 percent in November, beating economists' forecasts of a 0.4 per cent. Core consumer prices, excluding fresh food fell 0.5 percent and the unemployment rate held steady at 5.1 percent.

The manufacturers said they planned to increase production by 3.4 percent in December and 3.7 percent in January, a government survey in the report today showed results.

"An increase in estimated production is likely to reinforce the optimism of that production will pick up sooner than expected," said Yoshiki Shinke, economist at Dai-Ichi Life Research Institute in Tokyo.

Quarterly Drop

A figure out of December, in line with expectations will result in the production of slip about 1.6 percent this quarter, the second consecutive decline, the government said.

Komatsu Ltd., Asia's largest maker of construction equipment, said this month that the company is selling excavators in China is expected this quarter as the government aims to develop their inner regions. Honda said that China's production grew by 2.7 percent over the previous year, in November.

China's industrial production gained more than economists forecast in November last year. In the U.S., the economy expanded at a rate of 2.6 percent in the third quarter, marking a resumption of growth.

No double dipping

"We expect that production will suffer during the period from January to March, but do not expect a double dip," said Kyohei Morita, chief economist at Barclays Capital in Tokyo. If China maintains a robust and growing U.S. rebounds, "we believe that Japanese exports to maintain their positions in 2011, helping to sustain production."

Japan's government forecast on 22 December that economic growth will slow to 1.5 percent in the year starting April 1 from a projected 3.1 percent this year.

Cabinet of Prime Minister Naoto Kan, last week approved a record budget plan 92400000000000 yen for the next fiscal year that aims to stimulate private demand. Opposition parties, which control the Upper House of Parliament, will probably try to block passage of bills related to the budget, which complicates efforts to stimulate the economy Kan.

One risk for Japanese exporters is that China can continue to raise interest rates, causing a slowdown in its biggest overseas market, said Naoki Tsuchiyama, an economist at Mizuho Securities Co. in Tokyo. China raised interest rates on December 25 to counter inflation.

"Our main hypothesis is that the world economy is in a cyclical recovery next year," Tsuchiyama said. "However, downside risks remain strong as emerging countries could raise rates on an intermittent basis, which could weigh on Japan's exports.

consumer prices in Japan fell for a month 21 in November, a sign of sustained deflation may prompt the central bank to revise their price forecasts.

Consumer prices excluding fresh food fell 0.5 percent from a year earlier, the statistics bureau said today in Tokyo.
Entrenched deflation is weighing on the economy at risk for this quarter as the effects of stimulus spending Prime Minister Naoto Kan, vanishes. Miyako Suda, a policy maker of the Bank of Japan, said earlier this month persistent price declines will continue in the year from April, a view that conflicts with bank forecasts moderate inflation in the period.

"The BOJ will probably be forced to reconsider their price forecasts," said Mari Iwashita, chief market economist at Nikko Cordial Securities in Tokyo before the report. "It is very likely that the period ending deflation will be pushed back."

The outcome of the board of the Bank of Japan in core prices in October increased by 0.1 percent next fiscal year and 0.6 percent next year.

Also reduce the possibility of an end to deflation is the base change in the price index in August, BOJ Suda said. The statistics office of a redistribution of the basket of goods used to measure the CPI every five years, as Goldman Sachs Group Inc. estimates may decrease the rate of inflation at around 0.4 percentage point. The review of the last government pushed down prices on about half a percentage point.

Cutting forecasts

"Prices continue to fall, although the rate of decline is likely to moderate," said Jun Ishii, chief fixed income strategist at Mitsubishi UFJ Morgan Stanley in Tokyo. "The BOJ will likely have to cut its forecast for consumer prices after a reset, which can intensify deflationary expectations."

The central bank in October cut its key interest rate to the range of zero percent and 0.1 percent and pledged to maintain the policy until it can predict the steady price increases, members of the Council feel about 1 percent.

falling prices tend to erode corporate profits, putting pressure on wages, weakening consumption and making debts harder to repay. Deflation has affected Japan for more than a decade.

Companies are lowering prices to consumers in the economical system to loosen their wallets.

Zensho Co., a national chain of beef bowl restaurant, this month slashed prices by 11 percent to boost sales, its third price-cutting campaign this year.

Any additional action by the Hong Kong government to cool the housing price gains is a risk-demand media between "real buyers" and speculators, a senior executive of HSBC Holdings Plc said.

Government of Hong Kong on November 19 announced additional stamp duties on property holdings in the short term and a higher initial payment of some mortgages, stepping up measures to curb speculation when housing prices rose more than 50 percent since the beginning of 2009.

"What we want to be so careful that any additional restrictions would definitely affect the real buyer, the person who wants to live in that house," said Mark McCombe, chief executive of HSBC's Hong Kong unit, in an interview. "Hong Kong is important not to lose sight of the property to be an important engine of the economy.

Hong Kong Chief Executive Donald Tsang, said the latest measures were announced that the government was aimed at "speculative activity" and the curbs of the "will not affect users." On November 26, Tsang said he is willing to take further action if necessary to curb price increases.

McCombe said he supports the measures taken so far, including a duty of 15 per cent of stamp duty on homes sold within six months of purchase. "That was a good move, because it takes a bit out of the foam market," he said.

In the first weekend after they had been adopted, sales of existing homes in some of the largest in Hong Kong private housing fell 83 percent from the previous week, according to Centaline Property Agency Ltd. Sales have stabilized since then, Centaline said.

High prices

The real estate market rebound of the global financial crisis was driven by falling interest rates, an expanding economy and an influx of buyers from mainland China. The banks were quick to undermine each other in mortgage costs, and competing to block new customers and sell additional financial services.

HSBC is Hong Kong's largest provider of mortgages, which account for 19 percent of all home loans in the city in the first 11 months of this year, according to Centaline.

McCombe said that while there are signs the market has recovered, it is too early to judge the impact of the curbs last property on account of Christmas and Chinese New Year holiday season.

"What interests me is what the behavior is February to April," he said. "I think give us a better idea of whether or not it had any real impact on the market cooling."

The top five mortgage lenders in Hong Kong - HSBC, BOC Hong Kong (Holdings) Ltd., Hang Seng Bank Ltd., Standard Chartered Plc and Bank of East Asia Ltd. - last month increased the cost of mortgage loans linked to the Hong Kong Interbank Offered Rate, after margins hurt mortgage competition.

"I'm not going to be some sort of price war in 2011," McCombe said. "The aggressive price competition is unlikely in the short term. But it is very difficult to predict how other banks will behave."

Taiwan's Central Bank said it would step up curbs on the use of foreign exchange derivatives to combat currency speculation by foreigners.

Banks in the non-deliverable holdings and options in the Taiwan dollar will be limited to 20 percent of their positions in the local currency, with immediate effect, the central bank said in an emailed statement yesterday afternoon . The ceiling was previously one third. Available below are exempt from the restrictions as they are used by local companies to protect earnings from exchange rate fluctuations, he said.

The change aims to "maintain order in the foreign exchange market to prevent speculative foreign capital to intervene in the market," said the statement.

Developing economies have intensified efforts to curb the volatility of its currency as close to zero interest rates in the U.S. and Japan to stimulate demand for emerging market bonds and higher yielding stocks. Taiwan announced on November 9, limits on foreign investment in debt, only to allow offshore funds to be up 30 percent of their portfolios invested in all types of government bonds and money market products.

"The new regulations will not impact too much on the currency," said Henry Lin, a currency trader based in Taipei in Taiwan Shin Kong Commercial Bank. "The market was already expecting the new regulations and it took quite well."

Capital controls

Island dollar has appreciated 3.3 percent against the dollar in the last month, the best performance in Asia, and today touched a 13-year high of NT $ 29,450.

The U.S. currency remains under pressure to weaken, the Economy Minister Shih Yen-Shiang, said today in Taipei. "This means continued pressure for the Taiwan dollar to rise," he said.

The island's gross domestic product will expand by more than 10 percent this year and Taiwan is facing the risk of inflation in 2011, also said Shih.

Emerging economies have been the introduction of capital control measures in recent months to cool the foreign investment and purchases of bonds the Federal Reserve more funds available for investment in higher yielding assets.

South Korea aims to apply a tax on bank lending exchange and strengthen punishment for inadequate reporting of currency transactions, according to a joint statement from the government and central bank on 19 December . A cap can also be placed in banks' holdings of foreign currency derivatives after a review in January, said Finance Minister Yim Jong Yong.

Brazil Tax

Brazil tripled a tax on local purchases of fixed assets by foreign investors in October, while the Thai government took a 15 percent exemption of income tax for foreigners from local bonds.

Taiwan's Central Bank has intervened in the currency market almost every day for eight months to see recognition that can hurt exports, according to currency traders who declined to be identified because of the sensitivity of the matter.

"I do not think the new rules that actually affect the Taiwan dollar," said Tan Pin Ru, a strategist at Royal Bank of Scotland Group in Singapore. "Investors can still make NDF operations at sea without restrictions. The fact that the central bank decided to do this instead of stopping in the domestic market shows that the authority does not dare to go so hard."

The U.S. economy likely to grow no more than 2 percent in 2011, less than is needed to lower unemployment, economist Nobel laureate Robert Mundell said.

"I do not see economic growth that is better than two percent, " said economics professor at Columbia University in an interview, "Street Smarts" with Carol Massar. "You had the financial crisis that devastated the economy of trust, and there is nothing around the corner that looks set to be a strong boost to the economy."

The economy grew at an average rate of 2.9 percent annually in the five quarters from the worst recession in seven decades ending in June 2009. That pace of recovery has lowered unemployment from a peak of 10.1 percent in October 2009 to 9.8 percent last month.

Mundell, 78, said unconventional Fed monetary policy actions, known as quantitative easing, had the desired effect of strengthening the dollar.

"The policy of the Fed was working three or four times before, but was cut because the dollar has soared, and that's what really broke the back of the economy, " he said. The Fed has been "negligent " by not taking into account the influence that a rising dollar would have on the economy, he said.

Swiss central banker Philipp Hildebrand, who completed 15 months of intervention in currency markets this year, may be unable to stop the free registration to extend a rally that he called a "burden."

Options traders are more optimistic about the franc for the next three months all the money in large, except the yen. Bank of Tokyo-Mitsubishi UFJ Ltd. says it can be appreciated by 8.3 per cent to 1.17 per euro in six months after rising more than any other important point since the intervention ended in June. Standard Bank Plc advance estimates of 1.20.

Currency traders say Hildebrand probably not going to renew efforts to stop the profits after the previous sales failed to stem the appreciation which made exports more expensive and saddled the Swiss National Bank with $ 22 billion of losses on exchange currency in the first nine months of 2010. While political leaders said June 21 that the intervention was no longer necessary because the risk of deflation has decreased, the price increases have since declined.

"The negotiating committee can not do much, they are just observers," said Beat Siegenthaler, senior currency strategist at Zurich-based UBS AG, ranked by Euromoney Institutional Investor PLC as the world's second largest currency trader. "Of course we are very concerned. Your options are limited."

The franc advanced 1.2 percent last week to 1.2627 per euro, rising to a record $ 1.2439 on 22 December. It gained 0.7 percent against the dollar to 96.23 cents, extending its origin to 2010 by 7.6 percent. The Swiss currency weakened 0.3 percent against the euro and was little changed against the dollar as of 11:05 am in London today.

Monetary Union

the currency of Switzerland, a refuge in times of economic crisis, has strengthened 17 percent against the euro this year amid concerns about the fiscal crisis involving Greece, Ireland, Portugal and Spain will drag down growth in the region of 16 countries and may force some countries of the monetary union.

The gain of the franc against the euro is an additional "burden" on Swiss exports, which account for about 50 percent of gross domestic product, Hildebrand, 47, told reporters in Zurich on 16 December. The growth of 492 billion U.S. dollars in Swiss economy is likely to be "significantly lower in coming quarters," partly because of the strength of the currency, he said.

The Swiss National Bank said it had started selling the March 12, 2009, his first solo foreign exchange intervention since 1992. The policy, designed to prevent deflation, to protect exports and revive growth, caused the biggest daily fall since 1999 to start the euro. The franc fell 3.4 percent to 1.5299 per euro. In late June 2010, had been strengthened by 16 percent to 1.3184.

SNB losses

The central bank said Nov. 12 that there was a nine-month loss of 8.46 billion francs (8.8 billion U.S. dollars) after depreciation of the euro and the dollar caused its assets to decline in the value of a 21 2 million francs. A year earlier, the bank's 103 years old, reported a profit of 6.89 billion francs.

"The SNB tried to intervene, and that clearly did not work, so they turned away," said Richard Benson, an executive director at London-based Millennium Asset Management, which oversees $ 14 billion of currency funds. The French "continue to strengthen at the same time the stresses and strains in the euro zone will no longer be resolved," he said.

derivative operators are paying a premium of 2.56 percentage points for stock options three months, giving the right to buy the franc against the euro in relation to places that allow sales. That compares with an average premium of about 1 percentage point over the past two years.

Ratings Downgrades

The franc could strengthen to 1.10 per euro next year as the debt crisis in Europe deepens, Lee Hardman, a London-based strategist at Bank of Tokyo-Mitsubishi, wrote in a note to clients on 22 December.

Fitch Ratings downgraded the debt of Portugal with a level of A + on December 23, citing concern for the environment "financing" for the government. Moody's Investors Service said on December 15 can be reduced Aa1 credit rating of Spain and a day after Greece's Ba1 rating placed on review for possible downgrade. Ireland fell five levels by Moody's on 17 December. Switzerland top AAA rating from all three companies.

Analysts forecasts are pessimistic about earnings for the franc. As recently as 30 November was for free until the end of 2010 of 1.33 euro. The currency of trade to 1.30 in late March, an independent study of 34 strategists showed.

Some investors say that the franc is too strong, to the point of reference interest rate 0.75 nationwide below 1, the European Central Bank percent. The two-year notes yielded 48 basis points less than German securities of similar maturity on 23 December, compared with 39 basis points in late September.

Relative Value

The currency is overvalued by 34 percent against the euro, based on the relative costs of tradable goods and services measured by the Organization for Economic Cooperation and Development in Paris.

"The market is getting a little carried away by his concern for European sovereign debt risks," said Jurgen Buscher, Zurich-based head of JB Private Asset Management and former director of foreign exchange at Deutsche Bank Private Wealth Management. The franc may weaken to 1.30 per euro to 1.40 over the next year, he said.

Swiss trade surplus, freeing the country from dependence on foreign capital and may boost purchases in times of crisis, fell to 1.93 billion francs last month from 2.05 billion francs in October, the Federal Office Customs said on 21 December.

While the strong franc helped fuel a 3.4 percent drop in exports last month, the Swiss economy benefits from its proximity to Germany, according to Steven Barrow, chief currency strategist Group 10, Standard Bank in London.

'Saving Grace'

German gross domestic product will grow 3.6 percent this year, more than double the 1.7 percent for the euro region. Switzerland's GDP will rise 2.7 percent, the projections show.

The gain of the coin "is obviously harmful in terms of trade is concerned," said Barrow. "Salvation has been the closest of neighbors trading Switzerland, Northern Europe and Germany in particular have been really strong."

German benchmark DAX stock has risen 18 percent this year, while the Swiss market index has changed little since the end of 2009.

Switzerland's economic growth probably will slow down one percentage point next year to 1.7 percent. That compares with 1.45 percent for the euro area and 2.5 percent in Germany, polls show. Greece and Portugal contract with Spain's GDP increased by 0.6 percent.

Inflation Forecast

Hildebrand's central bank cut the inflation forecast for 2012 of 1 percent on 16 December from 1.2 percent, almost six months after the SNB Vice President Thomas Jordan said the intervention was not necessary because the threat of deflation had largely disappeared. Consumer prices rose 0.2 percent in November from the previous year, compared to a gain of 1.1 percent in May.

Policy makers said in its quarterly report on 24 December that "if a risk of deflation rises, the bargaining committee to take the necessary measures to ensure price stability," repeating a statement from their meeting one week before .

They may have to live with a stronger currency as long as the euro zone remains in crisis, according to Collin Crownover, director of currency management at State Street Global Advisors Inc. in Boston, which manages assets of $ 1,900,000,000,000.

"The problems in the periphery of the euro area will not be resolved, which will continue into next year," said Crownover. "I look back negotiating again. Of course there is always a set of circumstances in which they feel they have to. But in the absence of strong appreciation, most likely going to be on the sidelines. They have very little to intervene .

U.S. Retail expected to call sales in the days after Christmas & intensify their disposal after a snowstorm hit the East Coast yesterday

U.S. Retail expected to call sales in the days after Christmas will have to intensify their disposal after a snowstorm hit the East Coast yesterday, disrupting one of the trading days of the year.

Parts of New York and New Jersey have up to two feet of snow in recent days, keeping many shoppers at home. The expenditure may change in January, according to Marshal Cohen, industry analyst at NPD Group Inc. chief, a research firm based in Port Washington, New York.

"It's like a party and nobody comes because the focus has gone shopping after the holidays to travel after the holiday," Cohen said in a telephone interview yesterday. "Look for a repeat sales by retailers. They're going to be more aggressive. They have to throw another party."

The day after Christmas is one of the five busiest shopping days of the year, and it is possible that retailers two weeks to capture lost sales yesterday, said Cohen. At the same time, buyers can lose their enthusiasm as the holiday season declines, he said.

In New York, Sanitation Commissioner John Doherty said the storm was the fifth largest recorded in the history of the city.

Mayor Michael said the city's finances would be affected most by the economic activity lost cleaning costs.

"That hurts"

"Yesterday and today were great days shopping, and that has not happened to their sales tax revenues will be lower, and those are the things that really hurts," said at a news conference at City Hall today .

Some buyers went on to get deals. Ten minutes before the opening at 10 am today, an employee of Bloomingdale's flagship store in Manhattan, about 30 early-bird shoppers in a hallway with heating to keep warm.

"It's Christmas, so that means we're shopping," said Ed Hutlas, 68, an engineer from Dallas visiting the city for the holiday, which was inside the hall with her son and granddaughter. Hutlas said her first purchase would be a new heavy winter coat for her granddaughter.

Bloomingdale's can not be the only benefit. snow shovels, ice melt and snow blowers gas engine "are in high demand" at Lowe's Cos. Inc. from eastern Pennsylvania through Maine, Karen Cobb, a spokeswoman for the U.S. chain . UU. second biggest improvement of his house, said today.

Snow blowers

Home Depot Inc. was additional shipping blowers and other snow-related products to stores in North Carolina to Maine, Ron DeFeo, a spokesman for Atlanta-based company said today.

500 of Standard & Poor's retail index fell 1.35 points to 510.48 at 4:03 pm, New York. The index has gained 24 percent this year compared with an increase of 13 percent for the S & P 500.

Earlier this month, the National Retail Federation raised its forecast for holiday retail sales by 1 percentage point, an increase of 3.3 percent. Today, SpendingPulse MasterCard Advisors, a Purchase, New York, research firm based in expected to release sales figures for the entire holiday season.

Consumer confidence rose in December to the highest level in six months as more Americans, whose purchases account for about 70 percent of the U.S. economy, putting faith in the workplace and improving prospects income.

Little impact

Ultimately, the storm may have little impact on retailers, according to Craig Johnson, president of Customer Growth Partners, a retail consulting firm based in New Canaan, Connecticut.

"Everyone who wanted to return something yesterday in New York or was before or will do later today or tomorrow," Johnson said in an e-mail. "Whoever wants to redeem gift cards, which do not expire for at least 2 years, can make it later or online."

The storm also is likely to give online sales a "slight bump" yesterday and today, Johnson said.

Meanwhile, retailers and buyers are facing the storm and its immediate aftermath. New York, Saks Inc. had delayed openings today. So did Bloomingdale's, Inc. Cincinnati-based Macy's in the northeast.

At 9:30 am yesterday, just two cars had pulled into the parking lot of a Sears Holdings Corp. in Charlotte, North Carolina, even though the retailer had announced early bird discounts of up to 60 percent on clothing and 30 per cent in refrigerators and washing machines.

"The wife was not happy"

"My wife was not happy when I decided to leave," said Michael Scarlett, shopping in Hoffman Estates, Illinois-based chain, after three inches of snow had accumulated overnight. He planned to pick a Tablet PC Android had ordered online and go home.

At 10:30 am, Apple Inc. store in Greensboro with 17 clients and 17 employees in red shirts, four of them in the front window watching the snow yellow bulldozer push a pile in the parking lot. In a Macy's store, the cosmetics had no customers shortly before 11 am

Up the east coast, in Whitehall, Pennsylvania, Camille Qualtere buyer was surprised to find the Lehigh Valley Mall "desolate."

"We thought, 'Is the Mall Closed?'" Said Qualtere, 54, who brought her two daughters to return unwanted gifts and discount clothing store in Macy's before the storm began. "I did not hear about the snow because I was cooking all day yesterday. My daughter just told me about it."

New Year's Resolutions

Consumers can moderate your expenses if after the storm made shopping for several days and frugality of the new year's resolutions into action, said Michael Dart, head of San Francisco private equity in the New York consulting firm Kurt Salmon Associates.

"You are moving in an environment where the consumer is going to be pulled back," Dart said yesterday. "Retailers do not want to lose many of those shopping days. If only today, no big deal. But the longer the time is still wrong, it becomes a problem for retailers."

New York had 18 to 20 inches (46 to 51 centimeters) of snow at 7:30 am local time today as the center of the storm moved north and east, commercial forecaster AccuWeather said. The National Weather Service issued blizzard warnings for Boston and Maine. In New York, service on several lines of transportation was suspended, pushing some people to the shops - though shopping was not his first priority.

"I'm here to keep warm, so cold, my hands are numb," said Marcia Alleyne, 21 years old, of Queens, a Forever 21 store in New York. "There are no buses running -. I'm just trying to kill time I can"

Oil may return to Gulf Coast U.S. in January & rising the crude unit at $ 100 a barrel

Oil supplies may return to Gulf Coast U.S. in January, undermining the crude unit at $ 100 a barrel after the stock fell more than 30 years this month as refiners sought to avoid liabilities at fiscal year end.

Supplies in the states of the Gulf of Mexico, home to more than half of U.S. stocks have fallen 9.2 percent this month to 167.3 million barrels, the Energy Department data in Washington show. Oil settled at a maximum of two years of $ 91.51 a barrel on Dec. 23, bringing the gain this year to 15 percent.

"I suspect no more, $ 90 is sustainable beyond mid-January, because I think we will see some action builds" since 1 January, said Ken Medlock, an energy type in the James A. Baker III Institute for Public Policy at Rice University in Houston.

The accounting rules allow refiners to take a greater deduction fiscal 2010 by reducing reserves that have jumped this year prices went up. Gulf Coast supplies fell in 27 of the last 29 Decembers. Have increased in four of the last five Januarys.

Gulf Coast inventories were 4.1 percent above the January 1 in the week ended Dec. 17, down from 15 percent in late November. The decline so far this month is almost twice the drop of a 4.8 percent average in the last five Decembers.

"I expect to see more and continued based on early January and then see the barrels replaced later in January and February," said Stephen Schork, president of Schork Group Inc. in Villanova, Pennsylvania.

LIFO Accounting

Oil traded above $ 90 a barrel for three consecutive days last week as signs of U.S. economic recovery is gaining pace fueled optimism fuel demand will increase in 2011.

Crude for February delivery fell 51 cents, or 0.6 percent to settle at $ 91 a barrel on the New York Mercantile Exchange. Touched $ 91.88 today, the highest since the October 7, 2008, on an intraday basis. Oil traded above $ 100 a barrel on October 2, 2008.

Companies often pay for the items that were sold from their taxable income. Many refiners to use an accounting method known as "last in, first out" or LIFO, allowing them to deduct the cost of more expensive crude oil has recently purchased and enforce tax purposes than oil in its tanks was purchased before at lower prices.

"We want to build large increases in the prices high, because what ends up happening is that it stays on its balance sheet," said Scott Rabinowitz, director of PwC's national tax services practice in Washington. "You're on your net income taxes, less spending bills. One of your expenses is the cost of the item you sold."

In recent years when prices rise, companies get a larger tax deduction through LIFO accounting if they get their supplies for their year-end inventories are approaching the levels at the beginning of the year.

Higher oil prices

"The higher oil price is going on in your storage system is the one down from the earlier books," said Doug MacIntyre, senior market analyst of oil in the Energy Information Administration in Washington, the statistical arm of the Department of Energy. "They're trying to get the crude oil so your system is not on the value price of oil."

LIFO accounting oil and gas companies benefited when oil reached U.S. $ 100 per barrel in 2007 and 2008. President Barack Obama proposed eliminating the budget announced in January 2009.

The accounting method has been used since the 1930's and is considered the most accurate measure of income for financial statement purposes, according to the Congressional Joint Committee on Taxation, a nonpartisan group in 2009.

Texas, Louisiana

Texas and Louisiana, two states with drilling rigs and refineries than any other, offering an extra incentive for oil companies to reduce their supply on hand, because firms are subject to local property taxes, based on fair market value of oil on January 1.

The two states are among the minority who impose property taxes on business inventories, according to the Tax Foundation, a nonpartisan policy center in Washington.

"If they are managing their businesses efficiently, they will pay attention to the amount of crude oil or distillate, or whatever it is in storage and try to reduce as much as possible," said Michael Cooper, a lawyer specializes in the areas of energy taxation with Haynes and Boone LLP, the largest law firm in Dallas.

U.S. imports Oil prices have fallen 22 percent since July to 8.74 million barrels per day in the week ended Dec. 17, based on Energy Department figures. They fell 15 percent in the seven days ended Dec. 10 to the lowest level since September 2008. Imports in the states of the Gulf of Mexico have declined 28 percent since July.

The drop in supplies

U.S. Total Inventories have dropped 19 million barrels this month to 340.7 million in the week ended Dec. 17, ready for the biggest monthly decline since December 2006. Inventories were 4.1 percent higher than at the beginning of the year, compared with 9.9 percent in late November, Energy Department data show.

"There may be some movement in stocks to adjust for these things, but there is more movement in the inventories of commercial reasons normal day to day," said Bill Day, a spokesman for the San Antonio-based Valero Energy Corp. most U.S. refinery. "There is more demand in the summer, so it can build inventories in the middle of the year and then draw inventories at the end of the year."

linked bonds offers car loans and leases are about to dominate the sale of asset-backed debt

linked bonds offers car loans and leases are about to dominate the sale of asset-backed debt for a third consecutive year in 2011 after the issuance of all securities fell 31 percent in 2009.

Vehicle debt securities grouped in total probably $ 70 million to $ 75 billion, as much as 23 percent from 2010, as auto sales rebound from a minimum of 27 years, according to Barclays Capital. Sales of bonds linked to auto loans and education, and credit cards may reach $ 115 billion in 2011, Barclays said.

the total emission is reduced to $ 92 million this year from 134 billion U.S. dollars that banks relied more on deposits to fund credit card loans and the Federal Reserve ended its Asset-Backed Term Loan Fund Securities, investors who financed the purchase of asset-backed securities.

"The auto finance companies are still good volumes of new loans," said Brian Wiele, managing director at Barclays in New York, in a telephone interview. "There are banks, and the securitization offers attractive financing."

Automakers are taking advantage of market backed by assets denominated bonds as they anticipate sales of cars and trucks to reach 12.8 million next year. Dearborn, Michigan, Ford Motor Co., the only one of the three Detroit-area manufacturers that did not support the government during the financial crisis was the largest issuer of ABS in 2010, show data from Barclays offering $ 9,800,000,000 .

Bond spreads

More than 66 percent, or $ 61 billion in sales this year asset backed securities were debt related to the car.

Top rated securities linked to performance car loans by 56 basis points, or 0.56 percentage point more than Treasuries, according to data from Bank of America / Merrill Lynch. That compares with relative yields of 193 basis points for bonds backed by student loans and a spread of 68 basis points for credit cards.

Spreads on self-supported debt fell 25 basis points from December 31, 2009 through December 24, the index shows the Bank of America. Spreads on asset-backed securities linked to student loans dropped 3 basis points to 193, while bonds linked to credit card payments, saw his contract relative yields of 24 basis points.

Elsewhere in credit markets, corporate bond sales total of 3180000 million dollars in worldwide this year, down from $ 3,877,000,000,000 in 2009. The extra yield investors demand to own company debt rather than Treasuries ended last week at its lowest in a month. American International Group Inc., the insurer bailed out by the U.S., earned $ 4.3 billion in bank credit lines. Prices of leverage, or speculative grade, loans rose for the third week, while emerging market debt narrowed.

Credit Default Swaps

The Markit CDX North America Investment Grade Index, which investors use to cover losses on corporate debt or to speculate on creditworthiness, an increase of 0.24 basis points at an average price of 85.88 as of 12:20 pm New York, according to Markit Group Ltd. The overall rate increases with deteriorating investor confidence and decreases as improvement.

The credit-default swaps pay the buyer face value if a borrower defaults on its obligations, less the value of the defaulted debt. A basis point equals $ 1,000 annually on a contract protecting $ 10 million of debt.

The extra yield investors demand to own corporate bonds around the world rather than similar-maturity government debt remained unchanged at 166 basis points, or 1.66 percentage points, according to Bank of America Merrill Lynch Global Broad Market Corporate index. Average yields of 4.2 percent.

Corporate bonds have lost 1.01 percent in December, cutting earnings this year to 6.81 percent, including reinvested interest. That compares with 3.42 percent for the company's global Sovereign broader market index and 11.9 percent in the MSCI World Index of shares, including reinvested dividends.

AIG Credit Line

4.3 billion U.S. dollars of AIG's credit, provided by more than 30 banks and managed by JP Morgan Chase & Co., includes two installations of 1.5 billion U.S. dollars, one for three years and the other for 364 days, AIG said today in a regulatory filing. AIG's property-casualty division of Chartis Inc. received $ 1.3 billion, the insurer said. AIG, which is trying to replace government funding with private capital, said on 08 December it agreed to pay 20 billion of Federal Reserve credit line from New York and then turn to stock sale to pay the U.S. Treasury Department. The company rose $ 4.61, or 8.54 percent, to $ 8.97 at 12:27 pm Market New York Stock Exchange.

The S & P / LSTA U.S. Leveraged Loan 100 Index ended 23 December at 92.55 cents, up from 87.68 cents in late 2009. The index, which reached 92.9 cents in April, tracks the 100 largest loans in first lien leveraged dollars.

In emerging markets, the extra yield investors demand to own corporate bonds rather than government debt declined 4 basis points to 236 basis points from December 27, according to JPMorgan Chase & Co. index data. Spreads have ranged from as wide as 346 basis points in May to as narrow as 219 this month.

Fed Fund

Sales of bonds linked to consumer loans and small business plummeted 42 percent in 2008 and shrunk the loans during the credit crunch.

Fed Term Asset-Backed Securities Loan Fund, or TALF helped revive sales temporarily for loans to investors seeking to buy bonds backed by assets. The program ran from July 2009 until March.

While TALF reinforced the market sales of asset-backed debt tied to household debt are falling due mainly to a 85 percent drop in sales of bonds linked to credit card payments, according to a report of 13 Barclays December.

Financial Accounting Standards Board rules that took effect in January requiring banks to keep loans that were packaged and sold to investors in the balance, which means they have to maintain capital against the debt.

"Level of Deposit '

Credit card companies are also enjoying cheaper financing for deposits, said analysts at Barclays in New York led by Joe Astorina.

"Most of the issuers are banks flush with deposits," Wiele said Barclay. "The banks incentives to securitize credit cards are not what they used to be."

The prices of bonds linked to credit cards, can get a temporary boost supply remains muted response to the demand decreases, "said James Grady of Deutsche Asset Management.

"At some point this becomes an area of orphans," said Grady, a managing director in New York in the company, which manages $ 240 billion. "There will be less liquidity, and can not have portfolios of large investors a significant impact '."

Issue of securities tied to student loans dropped to 17.8 billion U.S. dollars in 2010 to $ 20 million last year as the U.S. government eliminated the Federal Family Education Loan Program. Changing market cut private lenders to originate loans guaranteed by the government, reducing the volume of debt for companies in bond package, according to Barclays.

Riskier assets

Sales will be between $ 12 million and $ 15 billion in 2011, analysts at Barclays said in the report earlier this month. The issue of so-called esoteric asset-backed securities, or bonds tied to risky assets or unusual, are set to rise in 2011, according to Barclays Wiele. Barclays and Morgan Stanley sold $ 253,750,000 of bonds tied to the remuneration of billboards operated by Adams Outdoor Advertising LP 3 December.

"The market has recovered to the point where people are willing to look at these transactions and the risks and rewards," he said. "As spreads have narrowed in other assets, investors must look beyond income assets."

The Bank of Israel kept the benchmark interest rate unchanged for third consecutive month as the shekel appreciated and slowed the growth of housing prices.

Stanley Fischer, governor maintained the rate at 2 percent, the central bank based in Jerusalem and other expected to increase by a quarter point.

Near-zero interest rates in the U.S. and Europe have pushed the log entries to Israel and other countries where rates are higher, conducting foreign exchange earnings and exports to undermine. The shekel has strengthened about 6 percent against the dollar since August 2009, when Fischer began to increase the rate, even though the Central Bank purchased foreign currency to limit gains.

"Fischer held the type, due to the difference in rate of interest and concern that this could hurt exports," said Ayelet Nir, chief economist at Tel Aviv-based Israel Brokerage & Investments Ltd., by telephone. "Other factors include lower expectations of inflation and a slowdown in the increase in housing prices."

The bank said in its statement that the gap between the highest interest rates in countries like Israel and other developed countries "pose a serious challenge for policy makers."

The shekel strengthened 0.3 percent to 3.5803 per dollar as of 18:21 in Tel Aviv, little changed from before the announcement.

Fischer has raised the benchmark rate by 1.5 percentage points since last August. The Bank of Israel has been buying foreign currencies since March 2008, more than double the reserves of 68.3 billion U.S. dollars in late November.

Shekel strengthens

The central bank said his decision to leave rates unchanged was also due to a slowdown in the growth of housing prices.

Fischer said 22 December that there are "preliminary signs" that the expansion of housing prices is slowing, after the warning in November of the risk of a "bubble" that could destabilize the financial system. Inflation has been driven by increases in housing prices over the past two years, slowed last month to 2.3 percent, the first time it has fallen since July.

To contain prices, the bank has tightened the requirements for mortgages, while the government has taken steps to release more land for development. The growth of housing rental costs slowed to 3.9 percent last month from 4.5 percent the previous month, the Central Bureau of Statistics said on 15 December.

Economic Growth

Economic growth slowed to an annualized rate of 3.8 percent in the third quarter, from 4.5 percent in the second quarter, exports fell by 9.6 percent. About 40 percent of gross domestic product of Israel is based on exports. The economy is expected to increase 3.5 percent next year compared to 4 percent this year, Bank Hapoalim Ltd. said last week.

Fischer, who has sole responsibility for setting interest rates, was appointed to a second term as governor in March. He is in the process of implementing a new law requiring the creation of a six-member Monetary Policy Committee to make decisions on rates.

The benchmark TA-25 stock has gained about 15 percent in the last 12 months, led by Avner Oil Exploration LP, a partner in the gas fields off the coast of Israel.

Business

Welcome to our website

Tuesday, December 28, 2010

The dollar weakened against their counterparts from Australia

China stocks will bounce back next quarter of the biggest annual fall in the Shanghai Index

Bernanke may be about to get help in an attempt to boost the economy

Confidence among U.S. consumers unexpectedly fell in December

Home prices fell more than expected in October

here are 10 things that may (or may not) happen in 2011

Thailand's economic growth will slow in 2011 exports fail

investors remain bullish on commodities that beat stocks and bonds for a second year

Japan's industrial production rose for the first time in six months in November

consumer prices in Japan fell for a month 21 in November

Any additional action by H.K to cool the housing price gains is a risk-demand media

Taiwan's Central Bank said it will rein in limits on the use of exchange-rate derivatives

U.S. economy likely to grow no more than 2 percent in 2011,Robert Mundell said

Swiss central banker Swiss may be unable to stop the free registration to extend a rally

U.S. Retail expected to call sales in the days after Christmas & intensify their disposal after a snowstorm hit the East Coast yesterday

Oil may return to Gulf Coast U.S. in January & rising the crude unit at $ 100 a barrel

linked bonds offers car loans and leases are about to dominate the sale of asset-backed debt

The Bank of Israel kept the benchmark interest rate unchanged for third consecutive month

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