China will roll out measures to boost consumption this year as it strives to meet challenges posed by a global slowdown, Commerce Minister Chen Deming said.
The government is studying policies to encourage spending on energy-saving products, and will take other measures including the promotion of online shopping and tourism, Chen told the ministry
Industrial orders in Germany dropped sharply in November as demand from abroad dropped _ nearly erasing a strong gain from the previous month.
Orders were down 4.8 percent compared to the previous month, the Economy Ministry reported Friday. In October, orders rose 5 percent _ a figure that was revised downward from the initial reading of 5.2 percent.
The decline was the largest monthly drop since January 2009 but UniCredit economist Andreas Rees said it was less a “harbinger of a nasty recession” than giving back some ground after October’s “tremendous rise.”
“There is no reason to get overly concerned about the state of the German economy, or even to become panicky,” Rees said. “As a matter of fact, exactly the opposite is true for German industrial companies as indicated by forward-looking sentiment indicators in the last few weeks overnight pay day loans.”
According to the report, foreign orders were down 7.8 percent on the month in November while orders from inside Germany _ Europe’s biggest economy _ declined 1.1 percent.
The sharpest month-on-month drop was in orders for investment goods such as factory machinery, which fell 6.5 percent.
On a less volatile quarter-on-quarter basis, the ministry says figures so far show orders in 2011’s final three months were “slightly under” the level of the third quarter.
American bought more cars and trucks last year, spurred by easier credit, an improved economy and a desire to replace the aging vehicles that got them through the Great Recession.
Sales rose sharply for Detroit’s three carmakers and for Japan’s Nissan in 2011, aided by a surge in November and December. Analysts expect that momentum to continue into 2012.
Low interest rates, looser credit standards and pent-up demand are driving demand. The average age of a car on U.S. roads is the oldest ever, closing in on 11 years. Americans want to trade in those older vehicles now that a tentative recovery has begun and they’re feeling a little more secure about jobs and finances.
Buyers also were drawn out by an array of high-quality small cars with nice, roomy interiors and more features than in the past. That made it easier to downsize from bigger cars amid high gas prices. Pickups also sold well as business began to replace the trucks they need to haul equipment.
Those trends were good for the industry, which needs sales to keep growing after a scary drop in 2009. Healthy sales are also good for the economy, which benefits from jobs created by carmakers and spending by buyers.
After final figures are tallied late Wednesday, U.S. auto sales should rise to around 12.7 million for 2011. That’s a 10 percent jump from 2010 and 22 percent from 2009, when the U.S. auto industry and the financial system were in peril. Sales are almost certain to rise again in 2012, perhaps as high as 13.8 million, marking the third straight year of growth.
“Over the course of the fourth quarter of 2011, clear signs emerged that U.S. consumers are more confident and that other underpinnings of our economy are either stable or slowly improving,” said Don Johnson, GM’s U.S. sales chief.
Chrysler led the 2011 sales gains with a 26 percent increase, followed by Nissan at 15 percent, GM at 13 percent and Ford at 11 percent, the companies reported Wednesday.
For December, Chrysler sales surged 37 percent from a year earlier on strong demand for the Jeep Wrangler and the Chrysler 200 sedan. GM was up 5 percent for the month, aided by the Chevrolet Cruze compact and pickup sales. Ford sales rose 10 percent, led by the new Explorer SUV. Nissan sales rose nearly 8 percent for December.
Chrysler Group LLC’s strong showing for December capped a remarkable turnaround under its new Italian ownership. And it’s expected to jump ahead of Honda as the No. 4 U.S. automaker in 2011.
Chrysler and GM nearly ran out of cash in 2009 and needed government help and a trip through bankruptcy protection to survive.
Chrysler, now majority owned by Fiat SpA, sold 1.37 million vehicles last year, about 284,000 more than in 2010. It has introduced 16 new or revamped models in the past two years, vehicles that have fueled its recovery.
Sergio Marchionne, CEO of Chrysler and Fiat SpA, is predicting a net profit for 2011 of $600 million.
“Over the past 12 months, we successfully changed the conversation from Chrysler’s survival to products and service that consumers expect and want from a great American automaker,” Marchionne said in an e-mail to employees.
Nissan sold just over one million cars and trucks last year, its best calendar year ever. The company said it sold 944,000 Nissans and more than 98,000 of its Infiniti luxury cars and SUVs. Previously, 2007 had been the company’s best year.
U.K. Prime Minister David Cameron pledged more action to deal with
Covidien plc will spin off its Hazelwood-based drug business, turning it into an independent company that may restore the historic corporate name of Mallinckrodt.
Covidien, based in Dublin, makes medical devices and medical supplies in addition to drugs. The proposed spinoff also will have its legal headquarters in Ireland, largely for tax reasons, company executives said in a conference call.
But the spinoff’s U.S. operation will be based in Hazelwood, and its new CEO will work from here. Spokesman Steve Littlejohn said the company has not made a final decision on its name, “but chances are good that it will be Mallinckrodt.”
Covidien’s pharmaceutical business has $2 billion in sales, with two-thirds of that coming in the U.S. market. It turned an operating profit of $318 million this fiscal year.
The drug business is a large provider of acetaminophen, the ingredient in Tylenol, and the largest U.S. supplier of opioids; both are pain medicines. Other lines include contrast products used with medical imagery and nuclear medicine products.
The pharmaceutical operation currently employs about 2,500 people in metro St. Louis. A company spokesman said the move should have no immediate impact on jobs here. Some jobs might be added as the firm sets up its own administrative operation.
Analysts had speculated that Covidien might get rid of the drug operation. Although profitable, it is less lucrative than the rest of Covidien and demands a higher investment in research and development. The drug operation earns a 16 cent operating profit for every dollar of sales, compared with 28 cents for the rest of the company.
The drug operation has a “lumpy” revenue history, notes analyst Aaron Vaughn of Edward Jones in Des Peres. The division is largely a generic drugmaker, and that sector suffered through a price war in past years, he noted.
“We thought they would be getting the business right-sized so that they could spin it off and let it grow on its own,” he said.
Covidien Chief Executive Jose Almeida said the pharmaceutical drug division’s performance had improved in recent years.
“We’re confident the business can now stand on its own,” he said in a conference call Thursday morning.
He said the company had been thinking about shedding the business for several years, citing “major differences” between drugs and Covidien’s other medical products. The operations have different business models, sales channels, customers and capital requirements, and demand different talents, he said.
Separating the operations would allow both to focus on their own strategies, Almeida said payday loans no teletrack. Shareholders also might get more value over the long term, he said.
The drug business “definitely needs some investment,” said analyst Jeff Jonas of Gabelli & Co. in an interview with Bloomberg News. “They need to find new products, invest in the pipeline. That’s a multiyear process.”
Research and development consumes 7 percent of revenue in the drug division, compared with 4 percent in the rest of Covidien.
The spinoff would be in the form of a stock distribution, tax-free to U.S. shareholders, the company said. That tax-free aspect made the option of a spinoff superior to the alternative of selling the unit, company officials said.
The spinoff could take 18 months to complete and would need approval of regulators.
Bloomberg News, citing unidentified sources, reported last summer that Covidien had tried to sell the unit, but talks broke down.
Almeida said he has picked a CEO for the new company, although he didn’t name the person. The person is a ’strong leader” with “broad pharmaceutical experience,” Almeida said, and will join the spinoff from another company.
The drug operation is now headed by Matt Harbaugh, the drug division’s chief financial officer serving as interim president. Based in Hazelwood, he has led the unit since the previous president left last year.
Besides its Hazelwood headquarters, the drug unit has a research operation in Webster Groves, a nuclear medicine facility in Maryland Heights and a plant just north of downtown St. Louis.
That plant sits on what was the Mallinckrodt family farm. G. Mallinckrodt & Co. was founded there in 1867 and grew up as a chemical and drug firm. It refined uranium for the Manhattan Project, which created the atomic bomb during World War II.
Avon Products acquired Mallinckrodt in 1982. Avon sold the company to International Minerals and Chemical Corp. in 1986, which later changed its own name to Mallinckrodt.
In 2000, Tyco bought the company. After Tyco went bankrupt amid scandals, its health care operations were spun off as Covidien in 2007.
Without the drug business, Covidien would have $9.6 billion in sales. Covidien’s remaining business makes trays, hypodermic needles, retractors, pumps for patient feeding and pain management, and other medical devices.
Covidien stock rose $1.39 to $43.55 on Thursday.
Two executives at MF Global are seeking to distance themselves from an estimated $1.2 billion in customer funds that has gone missing, according to their prepared testimony for a Senate hearing.
Bradley Abelow, the president and chief operating officer, and Henri Steenkamp, the chief financial officer, both say they don’t know where the money is or why it is missing.
Abelow says he cannot explain what happened to the money without access to MF Global documents, which a trustee now controls.
Steenkamp says he had no direct involvement with transfer of funds.
Former Sen. Jon Corzine, who led MF Global as CEO until last month, told a congressional panel last week he doesn’t know what happened to the money. All three will testify Tuesday before the Senate Agriculture Committee.
Federal authorities are investigating a suspected embezzlement of potentially millions of dollars from a St. Louis area medical practice, according to a source close to the investigation.
The FBI and U.S. attorney’s investigation comes on the heels of the termination by Metropolitan Urological Specialists PC of Dunard Morris, who until recently served as its chief executive. The investigation focuses in part on whether money was diverted from the firm’s bank loans, the source said. The amount of missing money isn’t known but could be millions, the source said.
The medical practice also maintains that Morris subleased a $5,475-a-month luxury apartment using company funds without approval of the firm’s board of directors.
During the last two years, the company has shown signs of cash flow problems, including the buildup of about $1 easy payday loans.3 million in delinquent federal, state and local taxes, interest and fees, St. Louis County records show.
Asked about the federal investigation, U.S. Attorney Richard Callahan said Thursday, “I don’t want to prejudge anything, but it is a matter that has our interest.”
Morris did not return phone calls Thursday. One of his lawyers, Patrick Smith at DLA Piper law firm in New York, has declined to comment. “I’m not authorized to talk with you,” he said. Morris’ local counsel, Richard Sindel, declined to comment.
Metropolitan’s attorney, Mayer Klein, said the medical firm “terminated” Morris in mid-September but would not detail why. He did confirm that the company is investigating the missing money.
“There were some concerns with regard to prior management, and we’re working with everyone involved
Stocks rallied Wednesday on hopes that a deal to save the euro would be agreed at a summit of European leaders at the end of the week.
Investors are betting EU leaders will agree on Friday a strategy that will allow the 17 countries that use the euro to link up their economies more closely. The tighter budget rules, proposed by the leaders of Germany and France, could then allow the European Central Bank to play a bigger role in solving the crisis by buying up the bonds of the most-imperiled countries.
“The market is becoming optimistic that the ECB will aggressively step up its action as both a reward for political action or in reaction to the threat of recession,” said Jane Foley, an analyst at Rabobank International.
Ahead of Friday’s meeting, the ECB is expected to cut interest rates on Thursday, possibly by as much as half a percentage point. If it did sanction such a big move, then the rate would fall to 0.75 percent and below the 1 percent that had previously been considered the floor.
Lower interest rates would help the eurozone economy, which has been sliding back toward recession under the weight of the debt crisis that threatens to spread from the relatively small economies such as Greece to much-bigger Italy and Spain.
Concerns that this could happen have eased this week. That was most evident in the performance of Italian and Spanish bond prices. Both have recovered this week, sending their yields _ the interest rates the countries would pay to borrow on markets _ down to more manageable rates. The yield on Italy’s ten-year bond was at 5.75 percent on Wednesday, way down from the 7 percent level it had traded at in recent weeks.
In Europe, Germany’s DAX rose 0.4 percent to 6,051 while the CAC-40 in France rose 1 percent to 3,212 paperless payday loans. The FTSE 100 index of leading British shares was 0.4 percent higher at 5,593.
Wall Street was poised for a solid opening too _ Dow futures were up 0.5 percent at 12,176 while the broader Standard & Poor’s 500 futures rose 0.6 percent to 1,262.
The euro was trading flat on the day at $1.3400.
U.S. Treasury Secretary Timothy Geithner said Wednesday he is very encouraged with the progress Europe is making in coming up with a plan to shore up the euro in the wake of a crippling debt crisis. Geithner’s comments to reporters followed a meeting with French Finance Minister Francois Baroin on the second day of his whirlwind trip through Europe.
“A more upbeat tone from Geithner in his support for Europe’s efforts to unify fiscal policy across the eurozone has been well received by investors,” said Jordan Lambert, a trader at Spreadex.
Earlier in Asia, Japan’s Nikkei 225 jumped 1.7 percent to end at 8,722.17 _ its highest close in a month. South Korea’s Kospi added 0.9 percent to 1,919.42 and Hong Kong’s Hang Seng gained 1.6 percent to 19,240.58.
Mainland Chinese shares edged higher, with the benchmark Shanghai Composite Index climbing 0.3 percent to 2,332.73, ending a five-session losing streak.
Oil prices meanwhile edged higher alongside stocks _ benchmark crude for January delivery was up 51 cents to $101.79 a barrel in electronic trading on the New York Mercantile Exchange.
____
Pamela Sampson in Bangkok contributed to this report.
Twelve former employees of the St. Louis Post-Dispatch sued the newspaper today for fraudulent inducement and negligent misrepresentation, alleging the newspaper reneged on a promise to pay for health insurance for life.
The former employees sued the newspaper, publisher and president Kevin Mowbray and Astrid Garcia, vice president of human resources and labor operations, in St. Louis Circuit Court.
The Post-Dispatch denied the allegations.
“The St. Louis Post-Dispatch believes there is no basis for these allegations and that we will be vindicated in court,” spokeswoman Tracy Rouch said in a statement.
The former employees who filed suit are: Rayburn Jordan, Melinda Krummrich, Mary Delach Leonard, Samuel Leone, John Linstead, Linda Lockhart, Odell Mitchell Jr., John Naunheim Jr., Carolyn Olson, Kathleen Richardson, Suzanne Tarrant and Larry Williams.
The former employees allege in the lawsuit that they agreed in 2007 to voluntarily early retirements from the newspaper with benefits including payment for health insurance for life payday loans for bad credit.
However, all of the employees were notified in late 2010 by the newspaper’s parent company, Davenport, Iowa-based Lee Enterprises, that the St. Louis Post-Dispatch would stop paying for their health insurance effective Jan. 1, 2011.
“Had they known that the Post would renege on their promise for lifetime health insurance benefits, my clients would not have accepted the early retirement offer and buyout,” the former employees’ attorney, Staci Yandle, said in a statement.
The former employees are seeking an unspecified amount of compensatory and punitive damages.
If Toronto fireman Alexander Gunn was alive today, he might well feel like the Warren Buffett of his times.
The semi-detached home he bought in Toronto’s Riverdale neighbourhood for $1,200 in 1906, sold in November for $825,000.
Conventional wisdom has it that buying a home is one of the smartest things we can do. If you have been lucky enough to live in the Greater Toronto Area, especially in the last 10 years when house prices have doubled, that would be true.
But over the long run, is home ownership such a great deal? To find out Moneyville took a close look at Gunn’s house over the last 105 years.
Here’s what we found: Adjusted for inflation, an investment in the stock market would have yielded a better return, including all the ups and downs — starting with the 1929 stock market crash that ushered in the Great Depression.
Toronto was still rebuilding from the Great Fire of 1904 when Alexander Gunn was promoted to district captain after years of climbing the ladder at the city’s No. 3 firehall at Yonge and Carlton Sts. With his new responsibilities came a pay hike, from $850 to $1,000 a year.
It was the nod he needed to buy his first home.
The three-storey house in what is now known as Riverdale was brand new, part of a development on what had been fields where locals grew food to sell at market. It promised good luck: A shamrock had been crafted into its soaring gable, most likely by Irish immigrants who helped build these turn-of-the-century subdivisions.
Each day on his way to work, Gunn would have headed down Broadview Ave. with its sweeping view of the downtown and watched the burned-out city being rebuilt.
He would have kept warm at night in front of the house’s wood-trimmed fireplace and watched through its lead-glass windows as thousands more homeowners flocked to the area after 1912 when Danforth Ave. was paved and, later, the Bloor Viaduct erected across the Don Valley.
Gunn paid just a little more than a year’s salary for the modest house on a 20 foot by 112.5 foot lot. Today, a buyer would pay a fortune, relatively speaking — about five times their annual income given that the average price of a GTA home in October was $465,000 and the average household income $82,000, according to the Canada Mortgage and Housing Corp.
Gunn and his family lived at 56 Simpson Ave. for more than four decades, through two World Wars, the Great Depression and the remarkable transformation of Toronto.
The house changed hands just four times before its most recent sale. And the average annual gain over the 105 years, adjusted for inflation, was just 3.9 per cent.
“If I had to give new homebuyers some advice, it’s that houses aren’t always the ultimate investment. You should never bet the farm on the house, so to speak,” says Francis Fong, an economist with TD Economics.
Fong and his colleague Sonya Gulati helped Moneyville adjust prices for inflation and compare the appreciation of the home against Toronto Stock Exchange returns.
The challenge was to compare apples to apples. We had the home’s sale price going back to 1906, but the Bank of Canada’s inflation records don’t begin until 1914. Toronto Stock Exchange records start in 1919.
So we opted to track gains from 1947 onward, seven years after Gunn’s death, when the house sold for $6,300. We found that in those 64 years, the house appreciated at an average annual rate of 2.3 per cent, adjusted for inflation. (Inflation averaged 3.9 per cent during the same period, largely because of spikes in the 1970s and early ’80s.)
The TSX, on the other hand, did marginally better — producing average returns of about 3 per cent.
But when the everday costs of a house were included, things likes taxes, maintenance and upkeep, 56 Simpson fared much worse
“A house is not a good investment. It is a roof over your head,” says James McKellar, director of the real estate and infrastructure program at York University’s Schulich School of Business.
These days, homeowners in hot markets like Toronto and Vancouver may feel they have hit the jackpot: Most Toronto homes have virtually doubled in price over the last decade and in Vancouver they have almost tripled.
But once you factor in the other costs — interest on the mortgage, new kitchens, bathrooms, furnaces and electrical updates, “you’re lucky to make anything,” says McKellar. Studies have shown that it’s $800 a month cheaper to rent a 1,000-square-foot home than to own it, he notes.
“By any empirical study, houses do not inflate. They are a cost. But we all have to live somewhere.
“Calling a house a good investment is a process of rationalization. The last thing you want to admit is that, ‘I bought the house because I fell in love with it.’”
Catharine Grossi is proud to admit that. She and her husband Paul bought 56 Simpson for $462,500 back in 2001 because they were keen to move back to the city from the suburbs.
“When I saw that so much of the original house was there, and it was updated . . . That was good for me. I loved it as soon as I saw it.”
She became fascinated by the home’s history — she spent a day at the City of Toronto archives — and details such as its original fireplace, century-old exposed brick, the shamrock.
The house proved to be the perfect place for Grossi’s two sons and daughter to drop their bags after university or stints abroad.
Grossi wasn’t thinking so much about the gains she’s made, but rather the life she’s lived at 56 Simpson when the house sold Nov. 4. She and Paul are downsizing into a home two doors from their daughter and her newborn twins.
Grossi asked just one thing when her realtor called to say there had been an offer at asking price: “Do they love the house?”
James McKellar gets that.
He has lost money in the housing market: About $25,000 in the wake of the oil patch bust in Calgary in 1983 and $35,000 on a Boston home during the ’90s recession.
He now owns a home in Moore Park.
“The big drawback of renting is that it doesn’t give you the emotional satisfaction of owning,” he says with just the slightest chuckle.
“At the end of the day, when you go home and make dinner and relax, the numbers really don’t matter.”
Also read:
How we paid off our mortgage in three years
Why I sold my house and rent instead
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