Financial thoughts

For Continental Airlines passengers, an e-mail-enabled cell phone is now as good as a paper boarding pass in a growing number of cities.

Continental said Friday it would expand its "paperless" boarding system at airports in Newark, N.J., and Boston over the next two weeks, following up on the introduction of the service this week at Washington’s Ronald Reagan National Airport. The carrier started the pilot program in December in Houston, where it is based.

Air Canada also offers a paperless boarding pass for its customers.

Boarding passes that Continental e-mails to passengers’ cell phones and other handheld devices will display an encrypted bar code along with passenger and flight information. Transportation Security Administration (TSA) officials will use hand-held scanners to validate the passes.

Eligibility for the service is restricted to passengers flying alone and to domestic destinations guaranteed cash advance. Customers have the option of signing up for the e-passes when checking in.

The TSA and Continental - the first U.S. carrier to test the system - said the technology increases the ability to detect fraudulent boarding passes, but also reduces paper consumption and improves customer service.

Continental spokeswoman Mary Clark said she had no details on the costs of the program or how much it would save the airline. She said other airports would be added to the program this year, but would not say which ones or when.

Continental Airlines Inc. (CAL, Fortune 500) shares dipped 42 cents, or 3.1 percent, to $17.13 in afternoon trading. 

Source

The European economy will slow for a third year in 2009 as faster inflation weighs on consumer spending and discourages the European Central Bank from cutting interest rates, the European Commission said.

Economic growth in the euro region will slow to 1.5 percent next year, the commission said today in its spring economic forecast, 0.6 percentage point less than it projected in November and below the 1.7 percent expansion expected for 2008. Inflation will jump to 3.2 percent this year, 0.6 percent more than the commission's February forecast, before easing to 2.2 percent in 2009.

“I'm surprised they felt the need to bring it down so far,'' Jonathan Loynes, chief European economist at Capital Economics Ltd. in London said. “It's very early days, there are an awful lot of uncertainties.''

Record oil prices, declines in the pound and the dollar, and a global credit shortage are buffeting the European economy as the U.S. teeters on the brink of a recession. The fastest inflation since 1992 is preventing the ECB from cutting interest rates to support economic growth.

“These things will have an impact on the economy over a long period of time,'' said Stephane Deo, chief European economist at UBS AG in London. “The growth rate will be not catastrophic, but weak.''

The euro extended its gains against the dollar following the release of the report, rising as much as 0.53 percent. It traded up 0.4 percent at $1.5664 at 1:10 p.m. Brussels time.

`Great Risk'

Thomas Enders, chief executive officer of Airbus SAS, last week said the dollar's decline poses a “great risk'' to Europe's aerospace industry and threatens thousands of jobs.

“There have been at times sharp fluctuations between major floating currencies and we're concerned about their possible implications for economic and financial stability,'' ECB President Jean-Claude Trichet said today.

The commission's forecast for euro-region growth next year is more pessimist than the 1.7 percent median estimate in a Bloomberg News survey of 21 economists. The commission forecast a 1.7 percent expansion this year, compared with the 1.8 percent expansion forecast in February. Economists expect 1.5 percent.

Business confidence in Germany, the world's biggest exporter, dropped to its lowest level in more than two years in April while investor confidence fell to close to a 15-year low no fax payday advance. Germany's growth rate will decline to 1.8 percent this year and 1.5 percent in 2009, the commission forecast today, after 2.5 percent expansion last year.

Public Finances

Slower growth will see public finances deteriorate across the single currency area, the commission said. The aggregate budget deficit for the region will widen to 1.1 percent of gross domestic product after 1 percent this year. The commission previously forecast the deficit narrowing to 0.8 percent.

“We are facing a very challenging time, particularly concerning inflation,'' EU Commissioner for Economic and Monetary Affairs, Joaquin Almunia, said today in Brussels.

Banks and securities firms have so far posted at least $290 billion in asset writedowns and credit losses after the collapse of the market for mortgages aimed at borrowers with poor credit histories. The International Monetary Fund has described the turmoil as the worst “since the Great Depression.''

“The financial turmoil is proving deeper, wider and longer-lasting, while the downturn in the U.S. looks set to be more pronounced and protracted than assumed in the autumn forecast,'' the commission said in today's report. “The balance of risks for the growth outlook continues to be tilted to the downside, especially for 2009, while the risks for inflation are somewhat on the upside.''

Confidence in Germany

Still, consumer confidence in Germany rose against economists' expectations today and inflation slowed across the five German states that have reported April data.

Growth in the French economy will slow to 1.4 percent in 2009 from 1.6 percent this year, while the U.K. economy will expand 1.6 percent after 1.7 percent.

ECB policy makers said that the inflation pressures stemming from the rise in global oil and food prices preclude a cut in borrowing costs after the governing council left its benchmark rate at 4 percent this month.

“We considered that was the best policy to prevent all this inflation imported from outside being passed on and producing second-round effects,'' Bank of Spain governor Miguel Angel Fernandez Ordonez said last week. “If the data changes the policy could shift, but so far I haven't seen any radical change in the data.''

Source

Australia said on Sunday no Chinese companies have been told to withdraw applications to buy into Australian resource firms, despite media reports Canberra was pressuring China to back away from such investment.

China’s miners and steelmakers are looking to buy mining assets in Australia to lock in supplies of raw materials such as coal and iron ore to fuel an expected construction boom lasting decades and to ease reliance on resource sector heavyweights BHP Billiton (BHP.AX: Quote, Profile, Research) (BLT.L: Quote, Profile, Research) and Rio Tinto (RIO.AX: Quote, Profile, Research) (RIO.L: Quote, Profile, Research).

“There’s been no suggestion that China or any other investor should back off,” Australian Resource Minister Martin Ferguson told Australian television.

“As China makes investments, some will be rejected, some will be changed to meet our national interest test. That’s no different to previous investments by companies out of key markets such as Japan and Korea,” he said.

The Australian newspaper reported last Friday the government was discreetly pressuring the Chinese at high levels to back off and resubmit applications at a later date cash advance.

Australia’s vast outback is rich with minerals, but its governments have resisted becoming merely a quarry for raw materials to fuel Asia’s rapid expansion, despite counting iron ore and coal as its top generators of foreign revenue.

Early in April, China’s No.6 steelmaker Shougang Group was rebuked by Australian regulators who judged it was behind two firms that were building up a large stake in Mount Gibson Iron Ore Ltd without making a formal bid.

Shenzhen Zhongjin Lingnan Nonfemet Co Ltd 000060.SZ is bidding jointly with Indonesia’s PT Aneka Tambang Tbk ANTM.JK for Australian miner Herald Resources Ltd (HER.AX: Quote, Profile, Research) and state-owned MCC Mining has applied to buy a A$400 million ($373 million) iron ore project from Cape Lambert Iron Ore Ltd (CFE.AX: Quote, Profile, Research). 

Read more

Ford Motor Co. surprised Wall Street on Thursday with a $100 million profit in the first quarter as strong results from Europe and South America helped offset the impact of a slumping U.S. economy that cut car and truck sales in its main market.

The company also said Thursday its latest round of early retirement and buyout offers netted 4,200 hourly workers, fewer than Ford had targeted.

Ford says it earned 5 cents per share in the January-March period. The No. 2 U.S.-based automaker lost $282 million, or 15 cents a share, in the same period last year.

Excluding special items, the company said it made $525 million after taxes, or 20 cents per share. That beat Wall Street’s expectations. Thirteen analysts surveyed by Thomson Financial had predicted a loss of 16 cents per share.

It was Ford’s first profitable quarter since the second quarter of 2007 when it made $750 million. Ford reported a full-year loss of $2.7 billion last year, and it cautioned that the rest of this year will be tough.

"The remainder of 2008 will be a challenge but we are cautiously optimistic despite the external challenges," CEO Alan Mulally said in a statement paydayloans. "Our plan is working."

Ford also lowered its industrywide U.S. vehicle sales forecast for the full year to a range of 15.3 million to 15.6 million. In January it had expected full-year sales of 16 million.

The profit came despite a $45 million pretax loss in Ford’s core North American automotive market. That was an improvement over a $613 million loss in the year-ago quarter, driven by $1.2 billion in cost reductions.

Company spokesman Mark Truby said Ford may offer additional buyout and early retirement packages on a plant-by-plant basis to further reduce its blue-collar work force.

Ford (F, Fortune 500) reported first quarter revenue of $39.4 billion, down from $43 billion a year ago due to the sale of its Jaguar-Land Rover and Aston Martin units. Excluding the sale, revenue would have been up slightly, the company said. 

Source

European Central Bank President Jean- Claude Trichet said he's concerned the euro's gains will hurt Europe's economy and signaled interest rates are high enough to curb inflation.

The ECB is worried about the euro's “sharp fluctuations'' and the “possible implication for financial and economic stability,'' Trichet told reporters at a conference in Frankfurt today. Current interest rates “will contribute to achieving our objective, which is price stability,'' he said, adding that's “the position of the Governing Council.''

ECB policy makers including Axel Weber, Juergen Stark, Yves Mersch and Klaus Liebscher have suggested the bank's benchmark rate of 4 percent may not be high enough to rein in inflation, which accelerated to a 16-year high of 3.6 percent last month. The widening gap between ECB and Federal Reserve interest rates has fueled the euro's gain to a record against the dollar, undermining the outlook for European exports.

“Trichet probably realized that some of his colleagues had moved a step too far towards a tightening bias,'' said Aurelio Maccario, an economist at Unicredit MIB in Milan. “I would label it a welcome retrenchment from comments that made headlines in the past week.''

Business confidence in Germany and France, which account for about half the euro-region economy, slumped this month as record oil and food prices stoked inflation, reports showed today.

The euro, which reached a record $1.60 on April 22, dropped 2.5 cents today and traded at $1.5653 at 6:40 p.m. in Frankfurt.

G-7 Frustration

The euro has gained about 10 percent against the dollar in the past six months, prompting the Group of Seven nations to warn April 12 that recent “sharp fluctuations'' risk hurting the global economy instant payday advance. While it was the first significant change in wording on currencies since February 2004, Canadian Finance Minister Jim Flaherty said yesterday it “doesn't seem to have affected the market very much.''

Luxembourg Finance Minister Jean-Claude Juncker has also expressed frustration that investors haven't paid more attention to the change in the G-7's language and yesterday said he didn't like “the way things are developing.''

Stark, who on April 15 said the ECB “cannot be sure'' interest rates are high enough to contain inflation, today struck a more optimistic tone. The ECB's past rate increases are still working through the economy and will help to curb price pressures, Stark told reporters in Frankfurt.

Difficult Argument

“We increased interest rates by 200 basis points'' since December 2005, Stark said. “This will have its impact in the quarters to come. This is the reason why we say up to now that the current monetary-policy stance will contribute to achieving our medium-term objective.''

ECB council member Michael Bonello also indicated today he doesn't see a need for rates to be increased from their current level. “No one thinks interest rates should be higher than 4 percent,'' said Bonello, who heads Malta's central bank. “It's very difficult to make the argument for higher interest rates.''

The ECB aims to keep average inflation just below 2 percent, something it has failed to do every year since 1999.

Source

French consumer spending on manufactured goods declined more than economists forecast in March, as accelerating inflation undermined households' purchasing power.

Spending by consumers, which accounts for about 15 percent of the economy, fell 1.7 percent from February, when it rose a revised 1.3 percent, Insee, the Paris-based national statistics office, said today. Economists expected a 0.2 percent drop in March, the median of 33 estimates in a Bloomberg News survey showed.

“We can see how rising prices are hardening purchasing behaviors outside of food consumption,'' said Jean-Christophe Caffet, an economist at Natixis in Paris. “Almost all the consumption sectors fell. Tightening loan conditions are worsening households' situations.''

Surging food and energy prices pushed euro-area inflation to 3.6 percent last month, the fastest pace in almost 16 years, underscoring the European Central Bank's reluctance to lower interest rates. Inflation in France, the second-biggest economy among the 15 nations that use the euro, accelerated to 3.5 percent, the highest since 1996, when Insee started reporting the data.

“Our big problem is to make sure that inflation falls back below 2 percent next year,'' ECB Governing Council member Christian Noyer, who also is Bank of France governor, said yesterday in an interview on RTL radio. “We'll do what it takes for that,'' he said, adding that “if needed we'll move rates.''

`A Bit Optimistic'

The French government expects the economy to expand 1.7 percent to 2 percent this year, a forecast Noyer calls “maybe a bit optimistic.'' The ECB sees growth “somewhere between 1.5 percent and 2 percent, maybe close to the lower end of the range,'' Noyer said cash till payday.

Du Pareil au Meme SA, France's largest publicly traded maker of children's apparel, said the first quarter “ended with difficulties, in particular in France and Italy, where the climate and the general gloom have weighed on business.''

Spending on cars fell 1.5 percent from the previous month after a 7.5 increase in February, and increased 8.7 percent from the year-earlier month, Insee said. Textile and leather goods slid 7.9 percent, following a revised 1.4 percent rise in February. From March of last year, they declined 6.9 percent.

Household goods slipped 0.7 percent last month after February's 0.2 percent drop. From March last year, they added 7.9 percent.

“With the inflation and the deterioration of the conjuncture, we can see that households are starting to save more again,'' Caffet said.

Consumer spending rose 1.2 percent in March from a year earlier, today's report showed. It increased 0.6 percent in the first quarter after a 0.1 percent drop in the last quarter of 2007.

Source

Google Inc, the world’s Internet services leader, plans to boost hiring in China by one-third this year and increase promotional spending to win market share, a senior company executive said on Saturday.

Lee Kai-Fu, Google’s president for Greater China, said in an interview that the Silicon Valley company intends to add 200 staffers in 2008 to its existing 600 employees and to keep up that level of hiring for the next three to five years.

The new jobs will be in technology and sales and marketing and half of the jobs will go to new university graduates, Lee told Reuters on the sidelines of the Committee of 100 conference, an annual gathering of Chinese-American leaders. The three-day event in Beverly Hills ends on Saturday.

Google, one of the most popular places to work among recent graduates, has sharply curtailed hiring. The company has hired around 800 new employees worldwide in each of the past two quarters, excluding acquisitions, half the rate of a year ago.

Google, China’s No payday loans application. 2 provider of Web search services behind domestic market leader Baidu.com Inc, also will increase promotional spending for its products such as Google Maps and its e-mail service called Gmail, Lee said.

“You will not see a Google advertisement on TV but you will see more and more promotions and advertisements about Google’s products at Chinese Web sites,” Lee said, describing how Google plans to rely on search ads instead of conventional marketing.

He said Google also would look to strike more profit-sharing partnerships with Web site operators along the lines of one it already has with Chinese Internet media site Sina.com for news, advertising and search services.

The goal is for Google to boost its own online advertising revenue in China, where millions of young Chinese people are rapidly adopting Internet shopping, Lee said. 

Read more

The U.S. and Europe may have to reconsider their promotion of biofuels in the wake of surging food prices around the world, International Monetary Fund Chief Economist Simon Johnson said.

“I think rethinking is the right word,'' Johnson said in an interview on Bloomberg Television's “Political Capital with Al Hunt,'' to be aired today. “It used to be the case that biofuels, corn-based ethanol in the United States and also the development of bio-diesel in Europe, seemed like kind of a side issue. It's now front and center in global geopolitics.''

Johnson also warned of a “new form of protectionism'' as major food-producing nations, including Vietnam, India and Egypt, have restricted exports in an effort to limit increases in domestic prices.

“There is a real danger of a downward spiral here, where the more people feel restrictions, the more you want to hoard your stuff,'' Johnson said. “We're in a nasty situation right now.''

World food prices have surged by about 83 percent in the past three years, provoking riots in poor nations and threatening to set back efforts to reduce global poverty, according to the World Bank and IMF.

Rice Prices

The price of rice, the staple food for half the world, has doubled in the past year to an all-time high. Countries including Indonesia and Egypt have seen social unrest over high prices, and are attempting to restrain inflation and curb instability by limiting food exports or removing import duties on basic food staples fast cash online.

“The implications are huge,'' Johnson said. “In almost every corner of the world, poor people primarily eat rice these days, so the rice prices are clearly hurting people.''

The U.S. and other nations are encouraging the use of fuels made from crops such as corn and soybeans to reduce dependence on petroleum and limit environmental damage. Demand for biofuels, along with increased competition for cropland between food and fuel uses, is taking up much of the increase in the global crop production, according to a World Bank report. Food production is failing to keep up with demand, the bank said on April 9.

IMF and World Bank policy makers meeting in Washington last week sought to raise the $500 million that the United Nations World Food Program says is necessary for easing food shortages and stabilizing markets. The IMF said consumer-price inflation in poor or so-called developing countries will accelerate this year to 7.4 percent, compared with a January forecast of 6.4 percent.

U.K. Prime Minister Gordon Brown last week sent a letter to Group of Eight leaders saying countries should study the impact of using biofuels.

Source

Japan's factory production rose in February, revised Trade Ministry figures showed today, after the government initially said output declined.

Industrial production increased 1.6 percent from a month earlier, compared with an earlier estimate of a 1.2 percent drop, after the government changed its measuring criteria. The new index showed January output fell 0.5 percent, less than an earlier estimate of a 2.2 percent drop faxless payday loans.

The revision was mainly the result of two adjustments to the index: the base year was changed from 2000 to 2005, and the relative weighting of items in the index was adjusted to reflect current production patterns. The Trade Ministry adjusts the index every five years.

Source

The U.K. property market slump deteriorated in March to the worst since records began in 1978 as mortgage lending dried up, a survey of real-estate professionals showed.

The number of residential property agents and surveyors saying prices fell exceeded those reporting gains by 78.5 percentage points in March, down from 65.7 in February, the Royal Institution of Chartered Surveyors said. A separate report showed retail sales fell for the first time in two years.

Falling house prices threaten to exacerbate the slowdown in the economy, which may grow 1.6 percent this year, the least since 1992, the International Monetary Fund predicts. The Bank of England cut the benchmark interest rate for the third time since December this month after banks raised borrowing costs and curbed mortgage lending.

“The situation we have is serious and it will get worse,'' David Stubbs, an economist at RICS, said in an interview on Bloomberg Television. “It will take more interest-rate cuts and a restoration of confidence before we see a return to health.''

Revenue at shops open at least a year fell for the first time in two years in March, declining by 1.6 percent from the same month in 2007, the British Retail Consortium said. The group, which represents 80 percent of U.K. retailers, conducted its survey of stores from March 2 to April 5.

`Concerned' Shoppers

“Here is the strongest evidence yet that customers are making serious economies and are increasingly concerned about the future,'' Stephen Robertson, director general at the BRC, said in a statement.

Gains in consumer prices are still accelerating, eroding shoppers' spending power. Inflation probably reached 2.6 percent last month, an 11-month high, according to the median of 37 economists in a Bloomberg News survey. The statistics office will release that report at 9:30 a.m. in London.

The RICS balance of buyers registering with property agents fell to minus 49, the lowest since March 2003. The price balance for London dropped to minus 76 from minus 60, the lowest since February 2003. The only region where home values rose was Scotland, the report showed payday loans lenders.

“We are finding it harder to get applicants to view,'' said Richard Cotton, a surveyor at Cluttons in London's Holland Park neighborhood. “They feel the market is dropping.''

Brown's Reputation

Prime Minister Gordon Brown, whose reputation for economic competence is threatened by the housing slump, says the economy will remain resilient this year. Unemployment is at the lowest since 1975, and manufacturing in February unexpectedly climbed to the highest level in seven years.

“No country can insulate itself from the current volatility affecting global financial markets,'' Brown will say in prepared remarks at Goldman Sachs Group Inc. in London today. “But just last week the IMF forecast that Britain would be the fastest growing of the world's major economies this year.''

Banks are making it harder for Britons to secure a mortgages after the collapse of the U.S. subprime market, which will result in $945 billion in losses worldwide, the IMF predicts.

The credit squeeze may lead to almost 20,000 job losses in London's financial services industry in the next two years, and employment levels may not recover until 2012, the Centre for Economic and Business Research Ltd. said April 13.

The Bank of England cut its main rate by a quarter-point to 5 percent on April 10. Banks have declined to pass on the central bank's reductions, and the cost of two-year, fixed-rate home loans with smaller deposits rose to the highest since 2000 last month. The number of mortgage products for residential borrowing plunged to 3,392 yesterday, a 65 percent drop since Feb. 1.

“Sentiment is at a very low ebb and will continue to remain depressed while the economy suffers from this unique liquidity blight,'' said Jeremy Leaf, a spokesman for RICS. “The slowdown in prices is directly attributable to a lack of available finance which has hit demand.''

Source