Global finance blog - news, jokes, life…

Toyota Motor Corp. said Monday that it’s inevitable the company will be forced to shut down all of its North American factories because of parts shortages due to the earthquake that hit Japan.

The temporary shutdowns are likely to take place later this month, affecting 25,000 workers, but no layoffs are expected, spokesman Mike Goss said.

Just how long the shutdowns last or whether all 13 of Toyota’s factories will be affected at the same is unknown and depends on when parts production can restart in Japan, Goss said.

So far the North American plants have been using parts in their inventory or relying on those that were shipped before the earthquake, Goss said. But those supplies are running low.

“We’re going to get to a point this month where that gap in the pipeline starts to show up. So we’ll have to suspend production for a while,” he said.

A March 11 earthquake and tsunami damaged auto parts plants in Northeastern Japan, causing shortages that idled most of the nation’s car production. Japan’s daily auto output has fallen by more than 500,000 vehicles since the disaster, says Scotiabank Senior Economist Carlos Gomes. Some manufacturers are bringing plants back on line, but only at low speeds due to a lack of parts.

Shortages of parts from Japan are also affecting manufacturers outside the country. Just last week, Ford Motor Co. and Nissan Motor Co. said that several North American plants would be closed part of this month, and Chrysler CEO Sergio Marchionne has said his company will see disruptions.

Toyota gets about 15 percent of its parts from Japan for cars and trucks built in North America, “but still you have to have them all to build the vehicles,” Goss said.

Goss made the comments Monday before an appearance in Louisville by Toyota’s head of North American operations savings account payday advance.

Toyota, he said, has about 500 companies supplying parts in North America, but many of them get components from Japan that might not be available.

During the shutdowns, workers will focus on training and reviewing operations for ways to improve, Goss said. They also can take vacation or time off without pay.

The shutdowns will affect all Toyota and Lexus models made in North America, he said. Already several large dealership chains are predicting shortages of models from Japanese automakers in the spring and summer.

Goss wouldn’t estimate how long the assembly lines would be shut down. “It depends on how fast we can help get those suppliers up and running again in Japan,” he said.

Toyota is running short of multiple parts, mainly electronics and paint pigments, said Yoshimi Inaba, chief operating officer for North American operations. The company, he said, is looking for alternate parts suppliers.

He also said it’s too early to predict the impact on Toyota’s sales and its effort to rebound from a string of safety recalls last year that have hurt sales.

“We have some inventory. So if the disruption on the production is short enough, then it wouldn’t have any major impact,” he told reporters after speaking at a literacy event in Louisville. “It is too early to predict how big the impact is.”

Toyota last month warned that production cuts were possible at some North American factories, but said it didn’t know when or for how long.

Source

Prime Minister Silvio Berlusconi’s push for NATO to take command of the Libyan no-fly zone shows how Muammar Qaddafi’s former friend is trying to hedge his bets over the civil war in Italy’s one-time colony.

“Italy is in a tight spot; it has the most to lose,” said Nicolo Sartori, an analyst at the Rome-based Institute for International Affairs. “If NATO takes over and things are run from Italy, this can be presented to rebels as proof Italy did its part to help.” If Qaddafi wins, Italy can say that “it only got involved when the international community rose up.”

Italy, Libya’s biggest trading partner, has threatened to withdraw access to its military bases unless the North Atlantic Treaty Organization take charge of operations. The country’s airfields, which include NATO bases, are closer to Libya than the sites now being used in France and the U.K.

A rebel victory would leave the African oil supplier under new ownership, threatening Italy’s Eni SpA (ENI), the dominant foreign crude producer since Qaddafi came to power in 1969. Qaddafi has called Berlusconi a traitor for participating in the campaign and has threatened to replace Eni, Finmeccanica SpA and other Italian companies with Russian and Chinese rivals.

Eni will continue to work in Libya “whatever the political system,” Chief Executive Officer Paolo Scaroni, told a parliamentary committee in Rome on March 16 online pay day loans.

‘Mad Dog’

For now, Italian companies in Libya are bracing for a hit to 2011 earnings. Ansaldo STS, a railway-technology company, said the Libyan unrest may cost it 100 million euros ($142 million) of revenue this year, more than 5 percent of forecast 2011 sales. Finmeccanica SpA (FNC), the defense contractor that owns Ansaldo, had about 600 million euros in Libyan sales last year.

Still, it was Italy, with its historic and cultural links, that gained the most from Qaddafi’s rehabilitation, culminating with the 2008 “Friendship Treaty” between the two nations. As reparation for its former colonial rule, Italy agreed to invest $5 billion to build a highway, using Italian construction companies such as Astaldi SpA (AST) and Impregilo SpA. (IPG) The agreement led Eni to announce plans for $25 billion of new investment in the coming decades.

Qaddafi, in turn, pledged to further open Libya to Italian companies, curb illegal immigration and invest his oil dollars in Italy. The country’s central bank and main sovereign wealth fund own a 7.2 percent stake in UniCredit SpA (UCG), Italy’s biggest bank. The shares, with a market value of 2.4 billion euros, have been frozen under European Union sanctions against Qaddafi. Libyan funds also own 2 percent of Finmeccanica, 7.5 percent of soccer team Juventus SpA, and the Libyan Investment Authority also holds about 1 percent of Eni, its former deputy CEO Mustafa Zarti said in a March 9 interview.

Source

The number of U.S. millionaires increased by 600,000 in 2010, according to a report by Spectrem Group.

About 8.4 million American households had assets of $1 million or more, not including their primary residences, a gain of 8 percent, according to Chicago-based Spectrem. The figure is still below the 2007 high for millionaires, when there were 9.2 million in the U.S., Spectrem said.

“The recovery is doing better in this population, probably better than for Main Street America,” said George Walper Jr., president of Spectrem. The Standard & Poor’s 500 index returned 15 percent last year.

The number of ultra-high-net-worth households, which Spectrem defines as those with $5 million or more in investable assets, increased 8 percent to 1 free instant credit score.1 million in 2010, the survey said.

Household wealth was $56.8 trillion at the end of 2010, according to the Federal Reserve. Millionaires control about 56 percent of U.S. wealth, according to a March 14 survey by Boston-based Fidelity Investments, the second-largest U.S. mutual-fund company after Vanguard Group Inc.

Source

Japan increased its holdings of U.S. government debt for an eighth straight month in January. But the second-largest holder of U.S. Treasury bonds will likely scale back its purchases of foreign holdings, and even sell off some, in coming months to divert money toward rebuilding a nation devastated by a powerful earthquake and an ensuing nuclear crisis.

The Treasury Department said Tuesday that Japan boosted its holdings 0.4 percent to $885.9 billion in January.

Economists said a reduction in Japan’s foreign holdings would put some upward pressure on U.S. interest rates. But they cautioned the change would have a limited impact.

The Federal Reserve, which has been buying Treasury securities as part of its efforts to keep interest rates low, would move to counteract any significant increase in rates, they said.

“Any impact from the sales would be short-term and relatively small,” said Nariman Behravesh, chief economist at IHS Global Insight.

China, the second-largest holder of U.S. debt, reduced its holdings for a third straight month, trimming them 0.5 percent to $1.15 trillion.

Overall, foreign holdings of Treasury securities rose 0.3 percent to $4.45 trillion in January. This data is carefully followed to determine whether foreign countries still have an appetite for Treasury debt at a time of record federal deficits.

If the biggest buyers of U.S. debt began trimming their holdings significantly, that could send interest rates higher not just on government debt but also on consumer loans and business loans. That would slow America’s economic recovery and increase Washington’s costs for financing the $14.3 trillion national debt.

Source

Part of a Michigan auto parts factory that was shut down by a fire last week is back in operation.

The blaze at the Magna International Inc. factory had forced General Motors and Mazda to cut production due to parts shortages.

But a Magna spokeswoman says crews were able to reopen about half of the factory and start producing parts during the weekend.

The plant makes ceilings, consoles and other plastic interior parts for at least five automakers.

GM closed its Lordstown, Ohio, assembly plant on Friday and Monday. But the company now says production is expected to resume on Tuesday. Work will restart at an adjoining parts plant on Monday night.

The Magna Plant in Howell Township, Michigan, northwest of Detroit also makes parts for Nissan, Chrysler and Ford.

Source

European Central Bank council member Yves Mersch said officials may toughen their language on inflation next week, indicating a readiness to raise interest rates in coming months.

“I would not be surprised at most colleagues concluding that we have upside risks to price stability,” Mersch said in an interview in Luxembourg yesterday. With the economy strengthening and inflation in breach of the ECB’s 2 percent limit, policy makers will “inevitably” have to “rebalance our monetary policy stance,” Mersch said, without giving a timeframe.

The ECB, which has kept its benchmark interest rate at a record low of 1 percent for almost two years, is growing more concerned that soaring energy and food prices will drive up wages and entrench faster inflation. At the same time, raising borrowing costs too soon could exacerbate Europe’s sovereign debt crisis by increasing pressure on stressed banking systems in countries such as Greece and Ireland.

The euro rose more than a cent against the dollar to as high as $1.3695 after Mersch’s comments were published. Euribor futures extended a decline, with the implied yield on the contract expiring in December gaining eight basis points to 1.98 percent, as traders added to bets on higher ECB rates. German two-year government notes fell, sending the yield up seven basis points to 1.45 percent.

August Increase?

So far, ECB President Jean-Claude Trichet has said risks to the inflation outlook are “broadly balanced,” though they “could move to the upside.”

Investors today brought forward expectations for the ECB’s first quarter-point rate increase in three years to August from September, Eonia forward contracts show.

“There is a risk now that the ECB may raise before September,” said Nick Kounis, chief European economist at ABN Amro in Amsterdam. “While Mersch is a traditional inflation fighter, even the normally dovish members are sounding hawkish.”

ECB council member Athanasios Orphanides told Dow Jones in an interview published yesterday that the bank “must be ready to act as appropriate to safeguard price stability.” Nout Wellink of the Netherlands said in an interview with the Wall Street Journal published today that the ECB’s key rate may “distort the economic and financial process” if left at 1 percent too long.

Inflation Projections

Executive Board member Juergen Stark said last night that the ECB is “prepared to act decisively and immediately if needed” to maintain price stability, and fellow board member Lorenzo Bini Smaghi said the bank may need to reassess its policy stance.

At the next policy meeting on March 3, the ECB will publish its latest economic projections. Mersch said he expects ECB economists to lift their 2011 inflation forecast to more than 2 percent from 1.8 percent predicted in December. Inflation accelerated to 2.4 percent last month.

“Now the question is what about 2012, will this be a temporary hump or will this translate into a plateau?” Mersch said. “This very much depends on second-round effects.”

Crude oil prices have surged 27 percent over the past six months, pushing up import prices and adding to pressure on labor unions to secure bigger pay increases for workers.

Economic Outlook

Faster growth in countries like Germany, Europe’s largest economy, may also fan inflation. German business confidence surged to a record high this month and expansion in the euro region’s service and manufacturing industries accelerated to the fastest pace in more than four years.

Mersch said policy makers may next week change their view that risks to the economic outlook are “slightly tilted to the downside.”

Mersch, 61, has been touted by some economists as a possible successor to Trichet when his eight-year term ends on Oct. 31. Asked if he’s interested in the job, the Luxembourg central banker declined to comment, saying it’s a question for “the leaders who will make this decision.”

Wellink today declared his interest in the position, telling an audience at the University of Amsterdam that if asked, he would “think about it seriously.” Other possible candidates include Italy’s Mario Draghi and Finland’s Erkki Liikanen.

Before the Fed

Mersch said the ECB is not concerned that raising borrowing costs before the Federal Reserve could drive up the euro’s exchange rate. “We’ll raise rates when we find the situation warrants it, not on the time axis that belongs to market analysts,” he said. “We have no exchange-rate objective.”

The ECB is “fully aware that excessively low interest rates create distortions in the economy,” Mersch said.

Still, he warned against “moving into a posture of over- confidence by trying to make forward commitments in a period where uncertainty is still quite high.”

The ECB has twice been forced to abandon its exit from emergency measures designed to help banks through the financial and debt crises.

Mersch said officials are looking at resuming a “gradual” exit. One step may be to charge banks more when they borrow excessively from the ECB in an effort to wean them off the funds. Some banks have become too reliant on ECB cash after the central bank made unlimited amounts available at its benchmark rate to ease a liquidity squeeze.

“I cannot confirm that the solution that will be announced is a solution that is only a solution where price is affected,” Mersch said. “There can also be solutions where you act on the quantity. I can tell you that we are very far in our decision- making process.”

Source

Home sales probably fell in January, while orders for long-lasting goods climbed, a reminder that housing lags behind manufacturing as the U.S. recovery strengthens, economists said before reports this week.

Combined purchases of new and existing homes fell 2 percent to a 5.5 million annual pace, according to the median forecast of economists surveyed by Bloomberg News. Durable-goods bookings increased 3 percent last month, the survey showed.

Unemployment hovering near 9 percent means foreclosures may keep rising, adding to a glut of inventory that is depressing property values, hurting builders and homeowners. Growing exports, combined with increasing profits and tax incentives signed into law by President Barack Obama in December, will probably keep orders flowing to companies like Caterpillar Inc.

Source

At least eight people were killed and 72 missing after the latest downpour to hit Australia’s flood-wracked Queensland state sent raging torrents rushing through several towns, washing away cars and houses, officials said Tuesday.

Emergency services officers plucked more than 40 people from houses isolated by the torrent that hit the Lockyer Valley with little warning on Monday, but thunderstorms and more driving rain were keeping helicopters from reaching an unknown number of other people still in danger on Tuesday morning.

Queensland state Premier Anna Bligh said there were “grave concerns” for at least 11 of the missing.

“Right now we have every possible available resource deployed into this region to search for those people that we know are missing,” Bligh told Australia’s Nine Network. “This is going to be I think a very grim day.”

Queensland has been in the grip of its worst flooding for more than two weeks, after tropical downpours across a vast area of the state covered an area the size of France and Germany combined. Entire towns have been swamped, more than 200,000 people affected, and coal and farming industries virtually shut down. Monday’s deaths took the death toll since late November to at least 18.

Until Monday, the flood crisis had been unfolding slowly as swollen rivers burst their banks and inundated towns as they moved downstream toward the ocean.

But Monday’s flash flooding struck without warning in Toowoomba, a city of some 90,000 people nestled in mountains 2,300 feet (700 meters) above sea level. Bligh said an intense deluge fell over a concentrated area, sending a 26-foot (eight meter), fast-moving torrent crashing through Toowoomba and smaller towns further down the valley.

“We had just begun to believe that we might be in a stabilizing situation when mother nature has delivered something totally shocking to us in the last 24 hours,” Bligh told Australian Broadcasting Corp. radio. “This is an intense and grim situation and it is far from over.”

Rescue workers were battling more bad weather Tuesday. Heavy rain and thunderstorms were forecast for the region for most of the day, which could lead to more flash flooding, the Bureau of Meteorology warned.

Officials urged residents of towns downstream from Toowoomba to immediately move to higher ground. Residents in low-lying regions of the state capital of Brisbane _ Australia’s third-largest city _ were urged to sandbag their homes.

Deputy Police Commissioner Ian Stewart said rescue efforts were concentrated on towns downstream of Toowoomba, including hardest-hit Murphy’s Creek and Grantham, where about 30 people sought shelter in a school isolated by the floodwaters.

News video from late Monday showed houses submerged to the roof line in raging muddy waters, with people clambering on top. A man, woman and child sat on the roof of their car as waters churned around them with just inches (centimeters) to spare.

Among the dead were a mother and her two children, Bligh said.

In Toowoomba, the waters disappeared almost as fast as they arrived, leaving debris strewn throughout downtown and cars piled atop one another.

The flooding in recent weeks has cut roads and rail lines have been cut across Queensland, and the state’s coal industry has been virtually shut down, and cattle ranching and farming across a large part of the state are at a standstill.

Queensland officials have said the price of rebuilding homes, businesses and infrastructure, coupled with economic losses, could be as high as $5 billion.

Source

India’s economy is likely to surpass the government’s 8.5 percent growth target for the fiscal year, forcing the central bank to resume interest-rate increases as domestic demand offsets [bn:WBTKR=INQGGDPY:IND] risks from abroad.

Gross domestic product [] climbed 8.9 percent for a second straight quarter in July to September, a government report showed yesterday, with the gains propelled by the manufacturing and services industries. Kaushik Basu, chief economic adviser to the finance ministry, said after the data release that India could achieve a 9 percent growth rate sooner than expected.

India’s expansion bucked a growth slowdown in Asian neighbors from Thailand to Malaysia, where currency appreciation and risks to exports from Europe’s debt crisis and U.S. unemployment have clouded the outlook. Without higher borrowing costs, India risks reigniting inflation stoked by rising commodity prices, expanding credit and strengthening consumer demand for products such as Maruti Suzuki India Ltd.’s cars.

“There will be a strain on the infrastructure, which in turn will create more pressure on inflation,” said Sajjid Chinoy, a Mumbai-based economist with JPMorgan Chase & Co. He predicted that central bank Governor Duvvuri Subbarao will raise interest rates by a quarter of a percentage point in January.

Chinoy, who previously worked at the International Monetary Fund, said that India’s challenge will be to boost private investment and expand the nation’s capacity in industries such as power generation.

Irregular Roads

The finance ministry estimates that India produces about 10 percent less electricity than it needs, and roads, used to transport about 65 percent of the nation’s cargo, are plagued by single lanes and irregular surfaces.

The $1.3 trillion economy is likely to expand 8.5 percent in the fiscal year through March, the most in three years, Prime Minister Manmohan Singh said Nov. 20. Finance Minister Pranab Mukherjee said yesterday the pace may exceed that target, and Basu said growth in the second half of the financial year that ends March 31, 2011 will be better than the first half.

Rising car sales and expanding bank credit provide evidence of growing consumer demand in Asia’s third-biggest economy.

Maruti Suzuki, India’s biggest carmaker, Tata Motors Ltd. and others sold a record 182,992 cars in October, according to the Society of Indian Automobile Manufacturers. Loans given by lenders such as State Bank of India Ltd. and rivals rose 22 percent in the fortnight to Nov. 5 from a year earlier, the fastest pace since January 2009.

Stocks Rise

The Bombay Stock Exchange’s Sensitive Index, or Sensex, rose 0.6 percent yesterday in Mumbai trading.

India’s GDP gain last quarter compares with an expansion of 1 quick payday loans.9 percent in the 16-nation Euro area and 2.5 percent in the U.S. In China, where growth cooled to 9.6 percent in the same period, the central bank has raised interest rates and bank reserve requirements in the past two months to slow inflation.

China’s yuan has gained 2.3 percent against the dollar this year, more than the Indian rupee’s 1.4 percent, which is also less than the Thai baht’s 10.2 percent increase and the Malaysian ringgit’s 8 percent jump. The smaller gain in India’s currency may have prevented a bigger moderation in the country’s inflation via lower import costs, compared with Thailand, where consumer-price gains slowed to 2.8 percent in October.

India’s wholesale-price inflation rate was 8.58 percent in October, compared with the “ideal” level of 4 percent to 5 percent, according to Finance Minister Mukherjee. Consumer prices are rising at a pace near 10 percent, the fastest in the Group of 20 nations after Argentina.

Rate Forecasts

The Reserve Bank of India may need to resume raising interest rates in the coming months after lifting borrowing costs six times this year. Ten of 15 economists surveyed by Bloomberg News yesterday expect the central bank to raise borrowing costs by the end of March, while the rest predict no change for the period.

“The pressure on inflation is still significantly high,” said Sailesh Jha, chief Asia strategist at Jefferies Singapore Ltd., who expects rate increases in December and January. “India’s trajectory of growth is likely to be in the range of 9 percent to 9.5 percent over the next several years, which means that the pressure on infrastructure will accelerate.”

Central bank Governor Subbarao on Nov. 2 raised the benchmark repurchase rate and the reverse repurchase rate by a quarter-point each to 6.25 percent and 5.25 percent, saying inflation continues to hold above the “comfort zone.”

Luring Capital

Economists including Anubhuti Sahay of Standard Chartered Bank said faster growth and a higher interest-rate differential may attract capital inflows that contribute to inflation.

The Reserve Bank of India’s benchmark repurchase rate is 6.25 percent. By comparison, the U.S. Federal Reserve’s target for overnight interbank loans is zero to 0.25 percent, where it has been since December 2008.

The rate differential between India and advanced countries spurred an unprecedented $10 billion inflow into rupee debt this year. Overseas funds also invested a record $28.5 billion in Indian stocks on prospects of faster economic expansion in the South Asian nation.

Source

Count World Wrestling Entertainment Inc. among those wanting to draw a crowd to the new KFC Yum! Center.

Stamford, Conn.-based WWE (NYSE: WWE) announced Tuesday it will bring its nationally televised Monday Night Raw program to the 22,000-seat arena on Monday, Dec. 6.

Monday Night Raw is broadcast live each week on the USA Network.

A ticket presale will be held for Wednesday, Sept. 29, at 10 a.m., for Kentucky Future Club Events members, according to an e-mail announcement from the Kentucky State Fair Board no fax payday loans. They will go on sale to the general public Saturday, Oct. 2, at 10 a.m.

Tickets for the show are $63, $48, $37, $27 and 16. They will be available at all Ticketmaster outlets, at the Kentucky Exposition Center and Kentucky International Convention Center box offices, and online at www.ticketmaster.com.

Source