Fundamental Analisis By InstaForex

[IFX Darika]

Buffett Warns Economy Has "Fallen Off A Cliff"

Billionaire investor Warren Buffett warned Monday that the economy has "fallen off a cliff," accompanied with a drastic change in consumer habits. The CEO of Berkshire-Hathaway (BRK), Buffett offered long-term optimism to temper his short-term pessimism.

Appearing on CNBC, Buffett was blunt about his short-term outlook, adding that consumers are really changing their habits.

"It's fallen off a cliff," Buffett said of the economy. "Not only has the economy slowed down a lot, but people have really changed their habits like I haven't seen."

However, despite gloomy skies on the immediate horizon, Buffett said he has confidence in the U.S. economy.

"Everything will be alright. We do have the greatest economic machine that's ever been created," Buffett said.

The famous investor also explained his bets on the market. For example, he has invested in Tiffany & Co. (TIF), despite the fact that he recognized that it will be a bad year for all luxury dealers and he will likely deal with some losses in the short term. Looking ahead, however, Buffett predicted that Tiffany's will survive, and when the stock rebounds he will catch a big upside.

He has noticeably toned down his presence in the political arena, specifically with the Obama administration. During the campaign and transition period, Buffett served as an advisor to Obama and then on his Transition Economic Advisory Board.

Buffett, 78, expressed on his frustration that some members of Congress have been unable or unwilling to put aside partisan differences and really attack the problem at hand. Although he said overall the economy will recover no matter how Congress acts, the speed of the recovery will be greatly impacted by their decision to cooperate or not.

"It's important in terms of the speed with which we work," Buffett said. "I've been very pleased actually with the immediate response.kind of disappointed as we've gone along in terms of we can't quite get our act together."

He had brief words of advice for Barack Obama, stating that "what is required is a commander in chief that's looked at like a commander in chief in a time of war."

Last week, Berkshire Hathaway reported a steep decline of about 96% in its fourth-quarter profit, while earnings for 2008 declined 62% from last year. Further, the Oracle of Omaha said the economy would be in shambles throughout 2009 and probably well beyond, but expressed hope that America's best days lie ahead.

In his letter to shareholders, the investment guru noted, "Though the path has not been smooth, our economic system has worked extraordinarily well over time. It has unleashed human potential as no other system has, and it will continue to do so."

Buffett's comments and outlook on companies are closely watched by investors and analysts alike, who consider him an astute business man and a far-sighted investor. He was named the richest American by Forbes last year. He took over Berkshire when it was an ailing textile maker. Now, Berkshire owns companies operating in sectors as varied as insurance, utility, furniture, restaurants, carpet and jewelry. It also has interests in companies like Coca-Cola Co., Wells Fargo & Co. and Kraft Foods Inc.

The Omaha, Nebraska-based company's net income for the fourth quarter plummeted to $117 million or $76 per share from $2.947 billion or $1,904 per share in the year-ago period. Revenues dropped to $24.592 billion from $28.043 billion in the same period in 2007.

In a candid admission in the letter, Buffett said, "During 2008 I did some dumb things in investments. I made at least one major mistake of commission and several lesser ones that also hurt...

Furthermore, I made some errors of omission, sucking my thumb when new facts came in that should have caused me to re-examine my thinking and promptly take action.''

For comments and feedback: contact [email protected]

Copyright(c) 2009 RTTNews.com, Inc. All Rights Reserved

News are provided by InstaForex in partnership with RTT.

 

[IFX Darika]

World witnessing unprecedented economic crisis, says ECB's Jurgen Stark

The world is witnessing the deepest economic downturn since World War II, Jurgen Stark, Member of the Executive Board of the ECB said in a speech in Luxembourg, Monday. The current crisis could not be solved by the Central banks alone. "The onus is now on governments, supervisory and regulatory authorities and the financial industry itself, to cooperate to act resolutely to restructure, recapitalize and consolidate the banking system," Jurgen Stark said. To help ease the financial crisis the ECB had cut its policy rates by 275 basis points since October 2008.

The year 2009 will be a very difficult one, he said. It will be the year of adjustments in the balance sheets of banks, firms and private households. The present economic crisis started in 2007, triggered by losses in the U.S. sub-prime mortgage market, according to the ECB member. However, the crisis deteriorated into global economic downturn after the collapse of Lehman Brothers in September 2008. Since then, global trade too had fallen sharply, impacted by the financial crisis.

Advanced economies were witnessing weakening house prices and plummeting financial markets leading to a collapse of business and consumer confidence. The need to restructure was curbing private consumption and investment, the ECB Board member pointed out. "In emerging economies, nose diving global trade and the unwinding of both internal and external imbalances accrued in past years have led to a sharp decline or even negative GDP growth rates," Jurgen Stark said.

World GDP growth would be negative in 2009, according to the IMF. Advanced economies were forecast to shrink 2%, while developing economies were anticipated to grow 3.3%, just half the pace of growth witnessed in 2008. The global economy was expected to recover in 2010, even though the outlook on the downside risks regarding the depth and length of the downturn would depend on the unwinding of the financial crisis, Stark said.

Economic activity in the euro area decreased 1.5% on a sequential basis in the fourth quarter, after declining moderately in the second and third quarters. The euro area economy grew just 0.8% in 2008, the lowest since the early Nineties. All signs pointed to a further sharp decline in 2009, according to the ECB Board member. The year would see further slowdown in investments, private consumption and employment even while the financial markets remained tight. The process of adjusting to these hard conditions would lay the basis for future growth, Jurgen Stark pointed out. However it was not realistic to expect financial markets to function the same way as they were doing prior to the crisis.

Inflation in the euro area had decreased quickly, pulled down by the fall in global commodity prices. Euro area HICP inflation was 1.2% in February 2009, compared to the 4% inflation registered in July 2008. HICP inflation was likely to decline further in the months ahead, leading to a period of disinflation due to 'base year' effects, Stark said. Prices now are low, compared to the very high prices especially commodity prices in the same period of the previous year. Yet, this would mark only a trough in inflation and the very factors that were pulling inflation down in the first half of 2009, would act to push up inflation in the second half.

The ECB had supported the banking sector by extending unlimited funds at maturities of up to six months against an expanded range of eligible collateral. Further, the ECB would do whatever was deemed necessary and appropriate to maintain price stability and contribute to the preservation of financial stability. Central banks can alleviate liquidity risks, but they cannot address the perceived solvency problems that impair the financial system, Jurgen stark pointed out. Further measures could include taking over some of the credit risk on commercial paper held by banks or even by buying corporate debt outright. Again, the ECB would not shy away from cutting rates further if circumstances warranted such a cut.

A downside to such robust intervention was that the Eurosystem's consolidated balance sheet had grown from 13% of euro area GDP in 2007 to 20% of GDP today. "At the ECB we have demonstrated a willingness and capacity to react rapidly to exceptional circumstances," the ECB Board member said. "Most importantly, we will remain faithful to our mandate and provide an anchor of confidence and stability in difficult times," Jurgen Stark said.

For comments and feedback: contact [email protected]

Copyright(c) 2009 RTTNews.com, Inc. All Rights Reserved

News are provided by InstaForex in partnership with RTT.

 

[IFX Darika]

German Exports Continue To Fall In January on Weak Demand

German exports dropped for the fourth straight month in January as global demand weakened amidst economic slowdown.

Data released by the Federal Statistical Office showed that calendar and seasonally adjusted shipments fell 4.4% month-on-month in January to EUR 66.6 billion after falling 4% in December. Exports declined quicker than the expected 4% fall. On an annual basis, overseas sales plunged 20.7%, much sharper than a 7.9% drop in December.

In January 2009, Germany dispatched commodities to the value of EUR 43.9 billion to the Member States of the European Union, which marked a decrease of 18.7% over the previous year. Exports to euro area countries dropped 17.4% to EUR 30.3 billion. Commodities to the value of EUR 13.6 billion were dispatched to EU countries not belonging to the euro area, a fall of 21.4%. Exports of commodities to countries outside the European Union decreased 24.5%.

Imports also slid for the fourth consecutive month in January, but the pace of decline moderated. According to the official data, imports dropped 0.8% month-on-month after a relatively quicker decline of 4.8% in January, while the consensus forecast was for a 3.5% drop. On an annual basis, imports plunged 12.9% following a 4.1% contraction in the previous month. Value of imports was EUR 58.1 billion in January.

The foreign trade balance showed a surplus of EUR 8.5 billion in January, up from December's revised surplus of EUR 7.3 billion, but down from EUR 17.3 billion surplus recorded in January 2008. Upon calendar and seasonal adjustment, the foreign trade balance recorded a surplus of EUR 8.3 billion in January, the statistical office said.

Commerzbank analyst Simon Junker said, "The economy is being hugely impacted also in the first quarter of 2009 by the global recession especially though foreign trade."

"Weak foreign trade is one of the decisive factors why Germany's economy has most probably contracted by 1.5% in the first quarter," Junker said.

The largest Eurozone economy experienced the biggest sequential contraction since the reunification in 1990 on plunging exports in the final quarter of 2008. Gross domestic product fell 2.1% in the fourth quarter, after contracting 0.5% each in the second and third quarters of 2008. The International Monetary Fund projects a 2.5% decline in German output this year.

According to provisional results of the Deutsche Bundesbank, the current account of the balance of payments showed a surplus of EUR 4.2 billion in January 2009, which included EUR1.5 billion service deficit, a surplus of EUR 2.8 billion in net income, EUR 4.3 billion shortfall in current transfers and EUR 1.2 billion deficit in supplementary trade items. In January 2008, the German current account showed a surplus of EUR 15.6 billion.

For comments and feedback: contact [email protected]

Copyright(c) 2009 RTTNews.com, Inc. All Rights Reserved

News are provided by InstaForex in partnership with RTT.

 

[IFX Svetlana]

European Economics Preview: UK Trade Deficit Forecast To Widen.


(RTTNews) - The UK trade balance and German factory orders are expected to dominate the news flow on Wednesday.

At 3.00am ET, the Federal Statistical Office is scheduled to issue German producer price details for the month of January. Producer price annual inflation is seen at 3.4% in January compared to 4.3% in December.

Thereafter, the Hungarian CPI and GDP reports are due at 4.00am ET. Consumer price inflation is forecast to fall to 2.8% in February from 3.1% in January. According to preliminary estimate, the Hungarian economy had contracted 2% on a yearly basis in the fourth quarter. The final quarterly report for Hungarian GDP is expected to confirm the initial estimate.

In the meantime, the Romanian CPI is also due. Annual inflation is forecast to ease to 6.5% in February from 6.7% in January.

Half an hour later, the Danish current account and trade balance details are expected. The trade surplus in January is forecast to fall to DKK 1.3 billion from DKK 1.8 billion in December.

At 5.30am ET, the Office for National Statistics is slated to report UK's trade balance. The trade deficit is seen at GBP 3.7 billion in January, larger than the GBP 3.6 billion in December. The visible trade deficit is forecast to widen to GBP 7.5 billion from GBP 7.36 billion in December.

Afterwards, the Federal Ministry of Economics and Technology is set to issue German factory orders. Economists predict factory orders to tumble 28.3% annually in January compared to a 25.1% decline in December.

For comments and feedback: contact [email protected]
Copyright(c) 2009 RTTNews.com, Inc. All Rights Reserved

News are provided by InstaForex in partnership with RTT.

 

[IFX Svetlana]

European New Car Registrations Continue To Fall.


(RTTNews) - New car registrations in Europe dropped 18.3% in February from the same period of the previous year, the European Automobile Manufacturers' Association reported Friday. This follows a 27% annual fall in January. The number of passenger cars registered in February totaled 968,159.

The downturn was more marked in the new EU Member States than in Western Europe, where the German market pushed total registrations upward.

In the new EU Member States, passenger car registrations dropped 30.3% in February, with mixed results from individual nations. Sales in Poland improved considerably, while other major markets like Czech, Hungary and Romania recorded decline.

For comments and feedback: contact [email protected]
Copyright(c) 2009 RTTNews.com, Inc. All Rights Reserved

News are provided by InstaForex in partnership with RTT.

 

[moneymaker3000]

wah rajinnya depa ni update kat sini...nak amik hati para supporter insta kat cg kot

 

[Panglima Sunan IV]

NEWS byk pun tak guna... broker ni suka kacau SPREAD!!!!!

sebab x paham r cakap melayu..hahaha..kang paham kecik ati plak..

 

[moneymaker3000]

betul gak tu, buat apa bagitau news...baik bagitau camni : pada 20 mac jam 8.00 malam kami akan buat spike 200 pips di pair aud/usd...sila pasang buy siap2 untuk profit, terima kasih.

muahaha

 

[Panglima Sunan IV]

mampus..esok2 lusa gulung ikar mbr..hahaha

 

[monohaihyip]

betul gak tu, buat apa bagitau news...baik bagitau camni : pada 20 mac jam 8.00 malam kami akan buat spike 200 pips di pair aud/usd...sila pasang buy siap2 untuk profit, terima kasih.

muahaha

Ye betul tu, baik cakap awal2, pair apa nak sell / buy, bole aku tumpang skaki, tulis bnyak pun x guna bukn nya aku tau baca omutih.