UPDATED! Will the US Fall Over the Fiscal Cliff?

US president Barack Obama will return to Washington – from vacation in his home state of Hawaii – to host congressional leaders, including his bitter Republican rivals, in a last-ditch attempt to halt America’s slide over the fiscal cliff.

A White House spokesman said the president would meet House speaker John Boehner and Senate minority leader Mitch McConnell, and Democratic allies Senate majority leader Harry Reid and House minority leader Nancy Pelosi.

The meeting – scheduled for Friday afternoon local time – comes amid bitter partisan exchanges and mounting pessimism over whether a budget deal can be struck.

Before leaving his Hawaiian Christmas vacation, President Obama telephoned congressional leaders to discuss the situation, which could push the US back into recession.

He returned to Washington overnight, but Senator Reid said a deal to avert the $US600 billion package of higher taxes and spending cuts, due to kick in with the New Year, looked unlikely.

With the deadline to solve the latest potential economic crisis in the US rapidly approaching, you have probably heard of the fiscal cliff – but what is it? :: Read the full article »»»»

Fords $AU100 Million Dollar Government Gift Equates to 400 LOST JOBS

In January this year we wrote – The Cost of Keeping Auto Makers Local – as sales of Australian made large cars – GM Holden Commodore and Ford Falcon – dramatically dropped the auto makers stood in line for serious government financial assistance. GM’s Commodore 15-year run as Australia’s best-selling vehicle was ended abruptly in 2011 by the Japanese manufactured Mazda3, while Ford Falcon sales plummeted to fewer than 19,000 units in 2011.

In May we questioned the validety of Australian Government subsidies granted to the nations 2 big auto makers – General Motors & Ford – The Cost of Keeping General Motors ‘Holden’ Local, And asking the question: So Exactly How Much Does it Cost to Keep Auto Makers in Australia? At the time, the Australian Government answered the question by handing General Motors Holden more than $AU275 Million to help keep auto manufacturing in Australia.

Ford Australia in the last few days has shockingly announced the loss of 440 jobs in it’s Victorian plants.

In the case of Ford, the Australian Government granted the company $AU103 million in subsidies with the promise of  plant – Geelong – upgrades and the longevity of Fords large sedan the Ford Falcon. Right about now the Federal Government, and Prime Minister Julia Gillard must be wondering if they’d simply thrown good money after bad, with Ford announcing that it will shed 440 jobs?  :: Read the rest of this entry »

Australian Billionaire Clive Palmer Claims Green Groups Funded by CIA

Australian mining magnate Clive Palmer has outlandishly accused the United States Government of funding environmental group Greenpeace via the CIA to undermine Australia’s coal mining sector. Palmer made the extraordinary claim over Greenpeace’s plan to use the court system to tie up coal mining applications.

Palmer is apparently angry at Greenpeace’s plan to use lawyers to thwart future coal mining projects and claims funding is coming from US environmental charity the Rockefeller Foundation. He alleges it is funded by the CIA and says it is trying to harm Australia’s industry and help American interests.

Palmer referred to a paper produced by environmental group Greenpeace which calls for action to stop the expansion of the Queensland coal industry. Greenpeace’s plans were leaked to the media earlier this month as it organises a campaign to raise $6 million to fund legal battles against controversial coal mining projects across Australia. Read the full article »»»»

China 2012: Inflation Eases, Surplus Shrinks, Manufacturing Steadies, GDP Strong!?

China’s outlook for 2012 is positive if not slightly dulled, as the dust settle from the previous two years, China should keep a good pace toward reaching it’s goal as the worlds largest economy.

Currently the world’s second-largest economy, China is forecasted to grow at 9 percent throughout 2012. Due to its export-oriented economy, China is affected by an economic slowdown in its key trading partners—Europe and to some extent the United States.

The slowdown in the Chinese growth is also partly policy driven, as the People’s Bank of China is expected to further tighten its monetary policy—particularly its foreign exchange rate policy to keep inflation under wrap.

Other challenges for China include policies to disincentivize domestic savings (such as creating a welfare state) and further rely on domestic demand for growth.

Finally, if the tightening regime continues it will help keep the dollar’s value low and rebalance trade between the U.S. and China :: Read the full article »»»»

The High Cost of Keeping Auto Makers Local

Australia: Sales of the Australian made large cars - Holden Commodore and Ford Falcon - have dropped alarmingly in recent years. The Commodore’s 15-year run as Australia’s best-selling vehicle was ended abruptly in 2011 by the Japanese manufactured Mazda3, while Ford Falcon sales plummeted to fewer than 19,000 units in 2011. So Exactly How Much Does it Cost to Keep Auto Makers in Australia? Between $100 and $200 Million!? Holden says it is getting closer to announcing co-investment from the Federal Government and parent company General Motors as it looks to secure the local manufacturing of the Cruze and Commodore beyond 2018. Ford has announced a fresh $103 million investment for it’s Falcon range of large car and Territory SUV, though the future of the Australian-built vehicles is still guaranteed only until the end of 2016. Australia’s Minister for Manufacturing, Kim Carr, and South Australian Premier Jay Weatherill have been in talks with GM at this week’s 2012 Detroit motor show as part of a political delegation seeking future support for the Australian car industry.State and federal governments could be forced to pay up to $200 million to keep Holden factories in Australia, a workforce analyst said. Both the federal and South Australian governments have indicated they will pay Holden’s parent company General Motors a “substantial sum” to prevent manufacturing from being moved offshore. Holden wasn’t able to announce its own confirmed co-investment strategy but the car maker’s managing director, Mike Devereux, said parties are working towards an agreement. Read the full article »»»»

Retail Sales Remain in the Doldrums

Australian retail sales were flat in November, falling short of expectations, despite the Reserve Bank cutting interest rates for the first time in 2.5 years that month. Australian Bureau of Statistics figures for the month show retail turnover was unchanged on a seasonally adjusted basis at $20.93 million. The result was well below economists’ expectations of a rise of 0.4 per cent for the period, extending a downward trend in the sector that began in August.

There was an increase of 0.4 per cent in the category that includes books and newspapers, sports goods and pharmaceuticals and cosmetics, and a rise of 0.1 per cent in cafes and restaurants. Sales of food and household goods remained unchanged, but turnover fell 0.4 per cent in clothing and footwear and 0.1 per cent in department stores.

In the U.S. Bloomberg is reporting a similarly flat November: Retail sales rose in November at the slowest pace in five months, indicating American consumers were trying to live within their means heading into the holiday shopping season as wages dropped. The 0.2 percent gain in purchases fell short of the 0.6 percent median forecast of economists surveyed by Bloomberg News and followed increases in the prior two months that were larger than previously estimated, according to data from the Commerce Department today in Washington. Other reports showed inventories climbed in October and job openings fell. Read the full article »»»»