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Last Updated:
Oct 12, 2009 - 5:57:13 AM |
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| President Barack Obama and Vice President Joe Biden meet in the Oval Office Wednesday, June 10, 2009 with (from left) Senate Finance Committee Chairman Sen. Max Baucus, (D-Mont.) Sen. Michael Enzi,
(R-Wyo.) the ranking member on the Senate Committee on Health, Education, Labor and Pensions, Sen. Charles Grassley, (R-Iowa) the ranking member of the Senate Finance Committee, and Sen. Chris Dodd, (D-Conn.), the senior member of the Senate Committee on Health, Education, Labor
and Pensions to discuss health care reform. |
The German Kiel Institute for the World Economy said today that in the first quarter of 2009 global production continued to shrink at a breathtaking pace, but indicators increasingly point to stabilisation of output in the course of the summer semester. However, it expects the coming recovery to be modest by historical standards. Global GDP is forecast to rise by 2.3 percent in 2010, again significantly below its trend growth rate. While this represents a slight upward revision from March projections, the outlook for economic growth in 2009 has significantly deteriorated further. Kiel now expects world output to drop by 1.5 percent (March forecast: –0.8 percent). The Institute says German exports will start growing, again, in the second half of the year.
Global Economy: Germany Kiel Institute says bottom of output decline reached; Recovery to be modest by historical standards
Bloomberg reports Marc Dubois, the 58-year-old captain of the Air France flight that crashed in the Atlantic Ocean, may have been let down by an airplane part that weighs about a pound.
The plane’s three sensors, known as Pitot tubes, that measure airspeed may have malfunctioned when Dubois and two co- pilots were four hours into Flight 447, according to pilot union officials who examined the data. Air France pilots have reported mid-flight failures of one or two of the tubes before, and all three showing differing data could trigger a chain of events that break down systems meant to make air travel safer, pilots said.
“We have come so far, and accidents like these should no longer happen,” said Christophe Pesenti, an Air France pilot for 10 years who has flown as Dubois’s co-pilot in the past.
Ryanair today called on the Irish Government to scrap its €10 tourist tax to prevent a further collapse in Irish tourism and related jobs next winter. The low fares airline said in the first five months of 2009 over 1 million fewer passengers travelled through Irish airports, resulting in the loss of at least 1,000 jobs at Ireland airports and over €600 million in tourism revenues.
Ryanair says statistics from the Airport Council International (ACI) confirm that every 1 million passengers at an airport create and sustain 1,000 jobs. Similarly Fáilte Ireland statistics estimate that oversees visitors spend an average of €600 visiting Ireland. If the traffic collapse of the first five months continues for the full year the Irish economy will lose over 2.5 million passengers, over 2,500 airport jobs and over €1.5 billion in tourism spend in 2009 alone.
The Belgian, Dutch, Greek and Spanish Governments have recently scrapped similar tourist taxes and/or airport charges in order to reverse falling passenger numbers and prevent further tourism and job losses. Ryanair says the Irish Government must now follow their lead and scrap the €10 travel tax.
On Wednesday, the CSO reported overseas trips by Irish resident had only fallen by 10.5% in the first four month of 2009 despite the recession.
There are many changes underway such as the fall-off in migration and this is one of those arguments where intuition matters more than statistics.
Ryanair flights are cheap and the €10 travel tax is small beer when the total cost of most overseas trips are computed.
US retail sales rose in May - - the third rise in five months - - but the data is in current dollar terms and a big factor in the rise was due to gasoline station receipts resulting from higher oil prices. In another economic report, the number of US workers filing new claims for unemployment welfare benefits fell last week, signalling an improvement in the labour market. However, continuing claims hit their 19th-straight record high, indicating the difficulty of finding work.
US retail sales rose in May boosted by a rise in gasoline prices - - up 28% in past six weeks; Continuing jobless claims hit 19th-straight record high
The Wall Street Journal reports US lawmakers took aim at Bank of America Corp. Chief Executive Kenneth Lewis and government regulators Thursday, fuming over internal Federal Reserve emails that suggest the bank should've known earlier about growing losses at Merrill Lynch & Co.
"Why did a private business deal, announced in September, and approved by shareholders in December, with no mention of government assistance, end up costing taxpayers $20 billion in January," Rep. Edolphus Towns (D., N.Y.) said at a hearing featuring an appearance by Mr. Lewis on Capitol Hill.
Rep. Darrell Issa (R., Calif.) said Bank of America got itself "into a fix" with the acquisition of Merrill Lynch, where losses started to pile up throughout November and into December. But he said that pressure from the Fed and the Treasury Department for Bank of America to close the deal in a series of tense negotiations last December should raise serious concerns for policy makers.
"This committee should be most concerned .. about financial vigilantes at the [Fed and Treasury] who are dictating extralegal government directives through threats and intimidation to private companies," Issa said in his prepared remarks.
The Fed reported today that more wealth evaporated in the US this year, and both households and businesses reduced their borrowing.
The data Thursday also indicated slower commercial mortgage borrowing.
The Fed said total net worth of households fell 2.6% in the first quarter, as their property values fell and portfolios shrank before stock prices rallied in March.
Net worth dipped to $50.38 trillion from $51.71 trillion in the fourth quarter. Net worth is assets minus liabilities and the 2.6% drop followed a decline of 8.6% during the fourth quarter.
On the markets. the Dow Jones Industrial Average has risen 60 points, or 0.7%, at 8,799.16
Live US Indices
In Europe the Dow Jones Stoxx 600 rose over 1% on Thursday.
Irish Consumer Prices in May, as measured by the CPI, fell 0.5% in the month. This compares to an increase of 0.8% recorded in May of last year. As a result, price inflation, as measured by the CPI, was 4.7% lower in May compared with May 2008.
Irish Consumer Prices fell by 4.7% in the year to May 2009; Rate was down 1.2% excluding mortgage interest falls
In Dublin, the ISEQ is up 0.9%.
AIB rose almost 13% after announcing a planned buyback of debt.
IL&P gained 10%.
European Benchmarks
Irish Share Prices
Euribor Rates
Oil
On the New York Mercantile Exchange, oil for July delivery is trading at $72.29 up 96 centa from Wedneday's close in New York. In London, Brent crude for July delivery is trading at $71.72 a barrel up 92 cents.
BP Statistical Review of World Energy 2009: Developing World leapfrogs sluggish OECD in energy demand; Ex-Canada's tar sands oil reserves sufficient for 42 years at 2008 production
Crude oil futures rose after the International Energy Agency, the energy adviser to 28 developed countries, including Ireland, today made an upward revision to its 2009 world oil demand forecast.
The following are highlights of the IEA's June report:
Crude futures were up $10 in May, averaging $60/bbland reached $10/bbl higher by early June. The bull-run appears largely driven by perceived global economic recovery, with prices also recently underpinned by rising refinery throughput. OPEC’s late-May decision to maintain current production targets added further support to markets.
Forecast global oil demand is adjusted up 120 kb/d for 2009following stronger-than-expected 1Q09 OECD data. Global oil demand is projected at 83.3 mb/d, -2.9% or -2.5 mb/d compared with 2008. The IEA says these revisions do not necessarily imply economic recovery, but may reflect a slowing in previously sharp decline.
2009 non-OPEC supply is revised up 170 kb/don stronger growth at new Russian fields, more robust North Sea production and higher crude output in Colombia. Year-on-year, it is now expected to decline 100 kb/d to 50.5 mb/d. Global May oil supply edged down 210 kb/d from April to 83.7 mb/d. A non-OPEC decline of 370 kb/d, entirely in OECD countries, outstripped higher OPEC output.
OPEC crude oil production in May again increased, by 160 kb/d to 28.4 mb/d. OPEC-11 output rose 110 kb/d, to 26.0 mb/d, about 1.1 mb/d over the group’s 24.85 mb/d target. OPEC opted to hold output targets steady at its 28 May meeting in Vienna. The call on OPEC crude and stock change is cut 0.2 mb/d to 27.7 mb/d for 2009.
Forecast global 2Q09 crude runs are raised 0.2 mb/d to 71.3 mb/d, as a result of higher April preliminary data in OECD countries, reports of high crude runs in China and marginally stronger global demand. But 3Q09 crude runs are forecast at 72.8 mb/d, representing an annual decline of 1.2 mb/d.
OECD industry stocks rose by 10.4 mb in Aprilto 2,753 mb, 7.5% above a year ago. Higher North American inventory outweighed lower stocks in both Europe and the Pacific. Yet, end-April forward demand cover fell slightly to 62.0 days with rising seasonal demand, albeit still 7.5 days above a year ago.
Currencies
The euro is trading at $1.4078 and at £0.8513.
For live currency updates, check the right-hand column of the Finfacts home page.
The dollar traded at a record low $1.6038 per euro on July 15th.
