GOLD HITS NEW HIGH OF $1040 AN OUNCE, AFTER MONDAY'S REPORT THAT 4 NATIONS WON'T USE U.S. DOLLARS TO BUY OIL. OTHER METALS UP.

LONDON, Oct 06, 2009 - Gold prices hit a high of above $1,040 a troy ounce on Tuesday, propelled by investors seeking an alternative to the US dollar and a haven for their savings, traders and hedge fund managers said.

The dollar suffered after Australia’s central bank unexpectedly raised interest rates, prompting investors to dump the dollar in favor of higher yielding currencies.

Gold also rose when denominated in other currencies, including the euro and sterling, suggesting that other factors were at play on top of the dollar weakness.

Lower-than-expected gold sales from European central banks also supported the market. The World Gold Council, an industry-backed body, said European central banks sold 155 tonnes in the 2008-09 year, far below a limit of 500 tonnes.

Traders said gold buying was widespread and not confined to the traditional players in the precious metals market. “We are witnessing strong volumes,” a senior trader in London said. Sellers were extremely reluctant, he added.

Nick Moore, head of commodity strategy at Royal Bank of Scotland in London, added that gold had proved itself not to be the barbaric relic that John Maynard Keynes described “but has come of age during this crisis as a serious component to an investment portfolio”.

Since the collapse of Lehman Brothers in September 2008, bullion prices have surged 42 per cent.

In London, spot bullion hit an intraday high of $1,043.45 an ounce, up 2.6 per cent from New York’s last quote on Monday of $1,016.75 an ounce.

The surge boosted miners’ shares. The S&P/TSX global gold index, which tracks mid-to-large size gold miners in several markets, rose 5 per cent by midday trading.

Gold’s advance lifted other precious metals, with silver up 4.3 per cent to $17.3 an ounce ounce, platinum adding 1.7 per cent to $1,315 a troy ounce and palladium hitting the $306.5 a troy ounce mark, up 2.7 per cent.
 

SEAN O'GRADY COMMENTARY: CHINA WILL OVERTAKE AMERICA. THE ONLY QUESTION IS WHEN?

Sean O'Grady: China will overtake America, the only question is when

Few things would be more powerfully symbolic of the shift in the balance of global economic power than to have oil traded in the Chinese renminbi rather than the American dollar.

True, no one is going to price a barrel of West Texas Intermediate Crude in renminbi tomorrow. But you can see how that could change. Oil is traded in dollars for economic reasons – not sentimental ones.

The oil business pretty much started in the US (vividly portrayed in the film There Will be Blood), the giant oil companies are still mostly American, and the US has long been the world's largest consumer, importer and one of the largest producers of oil.

The presidency of George W Bush offered ample evidence of the intimate connections between politics and oil. And the dollar is easily the most traded currency in the world. As such, it makes sense to trade oil in dollars.

Yet the financial tectonic plates are shifting – fast. Yesterday the president of the World Bank, Robert Zoellick, articulated what must be weighing on the minds of many Western policy-makers. A legacy of the current crisis "may be a recognition of changed economic power relations". In other words, the recession has accelerated the rise of China.

The brutal truth is that for most of the next decade China's economy will grow by more than 10 per cent a year; America's by less than 2 per cent.

China will soon be the world's largest economy, and largest creditor nation, a position enjoyed by a pre-eminent America in the 1950s. China will also be the largest consumer of oil, which will help push trading in it and other commodities towards a "basket" of currencies.

Now America is the world's greatest debtor, she can no longer sustain her role as protector of the world's only reserve currency in the long term. The humbling of Wall Street was proof that the American system was not invincible.

Suddenly, a G20 embracing China, India and the other emerging powers is the only forum that matters. China has helped bail out our banks. Spats with the Americans and Europeans are set to grow more bitter. Yesterday the head of the IMF, Dominique Strauss-Kahn and the president of the European Central Bank, Jean-Claude Trichet, resumed their attack on the value of the yuan.

Next will come an increasing US resentment at the vast debts built up with China, and, in turn, Chinese nervousness about their long-term worth.

And that is the paradox. China holds approaching $3 trillion in dollar assets, so she cannot afford to see the dollar collapse. Longer term, China does want to become less reliant on the dollar as a place to keep its savings.

America needs China to buy her Treasury bills; and China needs America to buy her exports. They are like two drunken giants leaning on each other. Yet a sobering reckoning of some sorts seems inevitable; and it is difficult to see how both can be winners.

THE U.S. DOLLAR'S IMPENDING LOSS OF DOMINANCE IN WORLD TRADE SPELLS THE RISE OF A NEW ERA

The end of the dollar spells the rise of a new order

LONDON, Oct 06, 2009 - Last autumn's global financial crisis set off an economic earthquake. And we are still feeling the tremors. The latest sign of the ground shifting beneath our feet is our report today of plans by Gulf states, China, Russia, France and Japan to end their practice of conducting oil deals in US dollars, switching instead to a diverse basket of currencies.

It is not hard to see the motivation for oil exporters to move away from the dollar. The value of the US currency has fallen sharply since last year's meltdown. And fears are growing, in the light of a spiralling US government deficit, that a further depreciation is likely. They do not want to sell their wares in return for a currency with an uncertain future.
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It is also easy to see why China would like a world trading system that is underpinned by other currencies as well as the dollar. For the past decade Beijing has been recycling the proceeds of its giant national trade surplus into purchases of US government bonds and other dollar-denominated assets. China too stands to make a significant loss if the value of the dollar falls.

For China, however, the timing is much more sensitive. Beijing needs to reduce its dollar holdings, but if it does so too quickly it will bring about the very devaluation it fears. This explains why Chinese officials appear to want this transition to take place gradually over the next decade.

But the significance of this development goes much further. Since the end of the Second World War the dollar has been the bedrock of world trade. The pre-eminence of the American currency flowed naturally from the economic dominance of the US. Virtually everyone traded with America so it made sense to use their currency.

But the US is not the dominant power that it once was. The financial crisis has left it hobbled with significant government and household debts and sharply reduced prospects for growth.

Developing nations such as China, Brazil and India, on the other hand, have weathered the economic storm significantly better. So while this latest proposal is born of financial calculation, it is also a reflection of a new economic world order.

We should not be sentimental for the dollar. It makes economic sense for world trade to be conducted in a variety of currencies. Relying on one only has the advantage of clarity, but it also creates instability if the economy that underpins it faces uncertain prospects.

Yet we need to understand that exchange rate volatility is a symptom, rather than a cause, of what truly ails the world economy. The biggest driver of global economic instability in recent years has been the determination of China to boost its export sector at all costs.

Beijing's persistently large trade surpluses and manipulation to prevent its own currency from appreciating have effectively forced Western nations into running persistently large trade deficits. It was this pressure that blew up various asset bubbles that burst with such disastrous effect last year.

A gradual move away from the dollar makes sense. But without a commitment from world governments – both in the rich and developing world – to reduce these destabilising global trade imbalances we will enter an uncertain new era; and one that could yet make us pine for the days of the dominant greenback.
 

AIR NEW ZEALAND CEO BLASTS IMPOSITION OF LEVIES ON AIRLINES TO CUT EMISSIONS AS "MONEY-GRABBING"

Auckland, Oct 07, 2009 (4:00 a.m.) - Air New Zealand chief executive Rob Fyfe has lashed out at dithering over cutting emissions, described climate talks as a "bureaucratic circus" and blasted the imposition of some levies on airlines in Europe as money grabbing.

Speaking in Hong Kong last night, Fyfe said hand-wringing over emission reduction targets was interminable and a distraction from taking action and that was "simply a travesty".

He said he was happy to see carbon charges but they should be applied equitably around the world, across all industries and aimed at encouraging investment in new green technology rather than penalizing all activity.

But he was not happy about the procrastination at conferences, turgid presentations and backroom deals that were determining unwieldy global agreements.

"To my mind, the UN climate change discussions amplify all that is wrong with global politics," Fyfe said.

"From our small country alone, hundreds of long-haul hour sectors will have been flown this calendar year by Government officials to take part in UN climate-related talks.

Frankly, I would rather forgo the revenue we get from this bureaucratic circus," he said at a Greener Skies conference on aviation and the environment. "I look forward to the day when we all stop protecting our respective butts in the endless policy debates and start focusing, globally, on concerted action."

In New Zealand politicians had been arguing for three years about an emissions trading scheme and nobody had yet paid for any of the cost of their carbon emissions.

As in other countries businesses were urged to spend millions of dollars on consultants to minimize their liability and the proportion of the population paying to meet international obligations was getting smaller.

Time and money was being wasted on "unproductive hot air", Fyfe said.

"This is a travesty given this focus and resource could be channeled into capital investment, operational improvements, and research and development into clean technology."

He took a swipe at the United Nations agency, the International Civil Aviation Organisation, saying he was appalled at its "paralysis" on environmental issues.

"In the aviation industry we have no excuse for inaction - emission reductions make sense irrespective of the science of climate change and irrespective of the cost of carbon."

Airlines within New Zealand will pay for emissions indirectly through the increased price of aviation fuel but international flights will be hit by other countries' schemes.

The airline industry is seen as a relatively a high-profile and easy target for emissions schemes although globally it contributes just 2 per cent to 3 per cent of CO2.

The EU's own emissions scheme will impose costs on all airlines flying into and within the bloc which could rise to the equivalent of $80 a passenger for long-haul flights between New Zealand and Europe.

Fyfe said it was a "no-brainer" for Air New Zealand to cut emissions itself. With a fuel bill last year of $1.7 billion there was an enormous financial incentive to reduce that and therefore emissions.

He said he deplored the European Union's "money-grabbing" imposition of its emissions scheme on airlines, but he praised it for taking action.

However, Britain's air passenger duty was just a blunt money grab with no consideration given to how efficient flights were.

THE BREAKING DOLLAR : GULF ARABS, WITH CHINA, RUSSIA, JAPAN, FRANCE, INDIA PLAN TO TO STOP USING U.S. DOLLARS IN OIL TRADE !

LONDON, October 06, 2009 (Tuesday) In the most profound financial change in recent Middle East history, Gulf Arabs are planning – along with China, Russia, Japan and France – to end dollar dealings for oil, moving instead to a basket of currencies including the Japanese yen and Chinese yuan, the euro, gold and a new, unified currency planned for nations in the Gulf Co-operation Council, including Saudi Arabia, Abu Dhabi, Kuwait and Qatar.

Secret meetings have already been held by finance ministers and central bank governors in Russia, China, Japan and Brazil to work on the scheme, which will mean that oil will no longer be priced in dollars.

The plans, confirmed to The Independent by both Gulf Arab and Chinese banking sources in Hong Kong, may help to explain the sudden rise in gold prices, but it also augurs an extraordinary transition from dollar markets within nine years.

The Americans, who are aware the meetings have taken place – although they have not discovered the details – are sure to fight this international cabal which will include hitherto loyal allies Japan and the Gulf Arabs.

Against the background to these currency meetings, Sun Bigan, China's former special envoy to the Middle East, has warned there is a risk of deepening divisions between China and the US over influence and oil in the Middle East. "Bilateral quarrels and clashes are unavoidable," he told the Asia and Africa Review. "We cannot lower vigilance against hostility in the Middle East over energy interests and security."

This sounds like a dangerous prediction of a future economic war between the US and China over Middle East oil – yet again turning the region's conflicts into a battle for great power supremacy. China uses more oil incrementally than the US because its growth is less energy efficient.

The transitional currency in the move away from dollars, according to Chinese banking sources, may well be gold. An indication of the huge amounts involved can be gained from the wealth of Abu Dhabi, Saudi Arabia, Kuwait and Qatar who together hold an estimated $2.1 trillion in dollar reserves.

The decline of American economic power linked to the current global recession was implicitly acknowledged by the World Bank president Robert Zoellick. "One of the legacies of this crisis may be a recognition of changed economic power relations," he said in Istanbul ahead of meetings this week of the IMF and World Bank.

But it is China's extraordinary new financial power – along with past anger among oil-producing and oil-consuming nations at America's power to interfere in the international financial system – which has prompted the latest discussions involving the Gulf states.

Brazil has shown interest in collaborating in non-dollar oil payments, along with India. Indeed, China appears to be the most enthusiastic of all the financial powers involved, not least because of its enormous trade with the Middle East.

China imports 60 per cent of its oil, much of it from the Middle East and Russia. The Chinese have oil production concessions in Iraq – blocked by the US until this year – and since 2008 have held an $8bn agreement with Iran to develop refining capacity and gas resources.

China has oil deals in Sudan (where it has substituted for US interests) and has been negotiating for oil concessions with Libya, where all such contracts are joint ventures.

Furthermore, Chinese exports to the region now account for no fewer than 10 per cent of the imports of every country in the Middle East, including a huge range of products from cars to weapon systems, food, clothes, even dolls.

In a clear sign of China's growing financial muscle, the president of the European Central Bank, Jean-Claude Trichet, yesterday pleaded with Beijing to let the yuan appreciate against a sliding dollar and, by extension, loosen China's reliance on US monetary policy, to help rebalance the world economy and ease upward pressure on the euro.

Ever since the Bretton Woods agreements – the accords after the Second World War which bequeathed the architecture for the modern international financial system – America's trading partners have been left to cope with the impact of Washington's control and, in more recent years, the hegemony of the dollar as the dominant global reserve currency.

The Chinese believe, for example, that the Americans persuaded Britain to stay out of the euro in order to prevent an earlier move away from the dollar. But Chinese banking sources say their discussions have gone too far to be blocked now.

"The Russians will eventually bring in the rouble to the basket of currencies," a prominent Hong Kong broker told The Independent. "The Brits are stuck in the middle and will come into the euro. They have no choice because they won't be able to use the US dollar."

Chinese financial sources believe President Barack Obama is too busy trying to fix the US economy to concentrate on the extraordinary implications of the transition from the dollar in nine years' time. The current deadline for the currency transition is 2018.

The US discussed the trend briefly at the G20 summit in Pittsburgh; the Chinese Central Bank governor and other officials have been worrying aloud about the dollar for years. Their problem is that much of their national wealth is tied up in dollar assets.

"These plans will change the face of international financial transactions," one Chinese banker said. "America and Britain must be very worried. You will know how worried by the thunder of denials this news will generate."

Iran announced late last month that its foreign currency reserves would henceforth be held in euros rather than dollars. Bankers remember, of course, what happened to the last Middle East oil producer to sell its oil in euros rather than dollars. A few months after Saddam Hussein trumpeted his decision, the Americans and British invaded Iraq.

 

THE GREENBACK EFFECT - WITH DEBT CLOSE TO ITS 2008 GDP, U.S. IN DANGER OF BECOMING A "BANANA REPUBLIC," WARREN BUFFETT WARNS

BIZ INDIA Editor's note: October 05, 2009 -- We would like to share this excellent Op-Ed piece in The New York Times, written Warren E. Buffett, the world's most successful investor and we believe, one of the wisest people on earth in the financial arena. The Gross Domestic Product of the U.S. was round $14.2 trillion in 2008. However the US government debt is reaching $12 trillion whereas the GDP for 2009 is expected to be under $14 trillion according to economists. You can view the numbers here:

www.usdebtclock.org

August 19, 2009
Op-Ed Contributor
The Greenback Effect
By WARREN E. BUFFETT
Omaha

IN nature, every action has consequences, a phenomenon called the butterfly effect. These consequences, moreover, are not necessarily proportional. For example, doubling the carbon dioxide we belch into the atmosphere may far more than double the subsequent problems for society. Realizing this, the world properly worries about greenhouse emissions.

The butterfly effect reaches into the financial world as well. Here, the United States is spewing a potentially damaging substance into our economy — greenback emissions.

To be sure, we’ve been doing this for a reason I resoundingly applaud. Last fall, our financial system stood on the brink of a collapse that threatened a depression. The crisis required our government to display wisdom, courage and decisiveness. Fortunately, the Federal Reserve and key economic officials in both the Bush and Obama administrations responded more than ably to the need.

They made mistakes, of course. How could it have been otherwise when supposedly indestructible pillars of our economic structure were tumbling all around them? A meltdown, though, was avoided, with a gusher of federal money playing an essential role in the rescue.

The United States economy is now out of the emergency room and appears to be on a slow path to recovery. But enormous dosages of monetary medicine continue to be administered and, before long, we will need to deal with their side effects. For now, most of those effects are invisible and could indeed remain latent for a long time. Still, their threat may be as ominous as that posed by the financial crisis itself.

To understand this threat, we need to look at where we stand historically. If we leave aside the war-impacted years of 1942 to 1946, the largest annual deficit the United States has incurred since 1920 was 6 percent of gross domestic product. This fiscal year, though, the deficit will rise to about 13 percent of G.D.P., more than twice the non-wartime record. In dollars, that equates to a staggering $1.8 trillion. Fiscally, we are in uncharted territory.

Because of this gigantic deficit, our country’s “net debt” (that is, the amount held publicly) is mushrooming. During this fiscal year, it will increase more than one percentage point per month, climbing to about 56 percent of G.D.P. from 41 percent. Admittedly, other countries, like Japan and Italy, have far higher ratios and no one can know the precise level of net debt to G.D.P. at which the United States will lose its reputation for financial integrity. But a few more years like this one and we will find out.

An increase in federal debt can be financed in three ways: borrowing from foreigners, borrowing from our own citizens or, through a roundabout process, printing money. Let’s look at the prospects for each individually — and in combination.

The current account deficit — dollars that we force-feed to the rest of the world and that must then be invested — will be $400 billion or so this year. Assume, in a relatively benign scenario, that all of this is directed by the recipients — China leads the list — to purchases of United States debt. Never mind that this all-Treasuries allocation is no sure thing: some countries may decide that purchasing American stocks, real estate or entire companies makes more sense than soaking up dollar-denominated bonds. Rumblings to that effect have recently increased.

Then take the second element of the scenario — borrowing from our own citizens. Assume that Americans save $500 billion, far above what they’ve saved recently but perhaps consistent with the changing national mood. Finally, assume that these citizens opt to put all their savings into United States Treasuries (partly through intermediaries like banks).

Even with these heroic assumptions, the Treasury will be obliged to find another $900 billion to finance the remainder of the $1.8 trillion of debt it is issuing. Washington’s printing presses will need to work overtime.

Slowing them down will require extraordinary political will. With government expenditures now running 185 percent of receipts, truly major changes in both taxes and outlays will be required. A revived economy can’t come close to bridging that sort of gap.

Legislators will correctly perceive that either raising taxes or cutting expenditures will threaten their re-election. To avoid this fate, they can opt for high rates of inflation, which never require a recorded vote and cannot be attributed to a specific action that any elected official takes. In fact, John Maynard Keynes long ago laid out a road map for political survival amid an economic disaster of just this sort: “By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens.... The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

I want to emphasize that there is nothing evil or destructive in an increase in debt that is proportional to an increase in income or assets. As the resources of individuals, corporations and countries grow, each can handle more debt. The United States remains by far the most prosperous country on earth, and its debt-carrying capacity will grow in the future just as it has in the past.

But it was a wise man who said, “All I want to know is where I’m going to die so I’ll never go there.” We don’t want our country to evolve into the banana-republic economy described by Keynes.

Our immediate problem is to get our country back on its feet and flourishing — “whatever it takes” still makes sense. Once recovery is gained, however, Congress must end the rise in the debt-to-G.D.P. ratio and keep our growth in obligations in line with our growth in resources.

Unchecked carbon emissions will likely cause icebergs to melt. Unchecked greenback emissions will certainly cause the purchasing power of currency to melt. The dollar’s destiny lies with Congress.
 

"GANDHI'S IDEALS TRANSFORMED AMERICAN SOCIETY THROUGH OUR CIVIL RIGHTS MOVEMENT," SAYS PRES. OBAMA

WASHINGTON D.C., October 02, 2009 - As the world celebrates International Day of non-violence, US President Barack Obama today said America has its "roots in the India of Mahatma Gandhi".

"His teachings and ideals, shared with Martin Luther King Jr. On his 1959 pilgrimage to India, transformed American society through our civil rights movement," Obama said on the occasion of the birth anniversary of Mahatma Gandhi. Americans owe enormous gratitude to Gandhi, he said.

"The America of today has its roots in the India of Mahatma Gandhi and the nonviolent social action movement for Indian independence which he led," Obama said in a statement.

On behalf of the American people, Obama said he wants to express appreciation for the life and lessons of Mahatma Gandhi on the anniversary of his birth.

"This is an important moment to reflect on his message of non-violence, which continues to inspire people and political movements across the globe," he said.

"We join the people of India in celebrating this great soul who lived a life dedicated to the cause of advancing justice, showing tolerance to all, and creating change through non-violent resistance," Obama said.

As the world remembers the Mahatma on his birthday, Obama said: "We must renew our commitment to live his ideals and to celebrate the dignity of all human beings.

Last month Obama had said that if given a chance he would love to have dinner with Mahatma Gandhi.

Obama expressed his desire in response to a question from a student Lilly during his discussion with 9th graders at Wakefield High School in Arlington Virginia where he, accompanied with the Education Secretary, gave a national speech welcoming students back to school.

Obama called for students to take responsibility and to learn from their failures so that they succeed in the end. "Hi. I'm Lilly. And if you could have dinner with anyone, dead or alive, who would it be," Obama was asked by one of the students.

"Dinner with anyone dead or alive? Well, you know, dead or alive, that's a pretty big list," Obama responded amid laughter. The next moment he was serious. "You know, I think that it might be Gandhi, who is a real hero of mine," Obama said. "Now, it would probably be a really small meal because he didn't eat a lot," he said amid laughter. But Mahatma Gandhi is someone who has inspired people across the world for the past several generations, he said.

McDONALDS TO OPEN 120 MORE RESTAURANTS ACROSS INDIA, INVESTING AROUND $100 MILLION

MUMBAI, Oct 02, 2009 - US-based McDonalds will set up 40 outlets ever year through its two equal joint ventures in the country — Connaught Plaza Restaurant and Hardcastle Restaurants.

Mc Donalds restaurants in India do not serve beef burgers. Instead they serve vegetarian, chicken,goat and lamb patties between buns.

"McDonalds in India currently runs a total of 170 quick service restaurants (QSR). Between the two franchisees, we will be spending around Rs 400-500 crore (about $80 million to $100 million) over the next three years to open 120 outlets," Hardcastle Restaurants Managing Director Amit Jatia said here.

While Delhi-based Connaught Plaza Restaurant operates 90-odd restaurants in the north and east of India, Mumbai-based Hardcastle Restaurants runs 78 outlets in the south and west.

The investment would be funded equally through debt and equity, Jatia said.

McDonalds serves 180-200 million people every year across India, which boils down to 5 lakh customers per day, he said.

"The food industry in India is very small. Informal eating out is a very small market, which shrank a bit in 2008 because of the recession, but there is enough room to grow," Jatia said.

McDonalds, too, had to bear the brunt of curtailed spending by consumers between September 2008 to March 2009.

"September (2009) same-store sales growth were closer to 20 per cent compared to single-digit growth last year," Jatia said.

The quick-service restaurant, which still has not broken-even in India, expects to start making profits in the next couple of years.

"We have always said we never make money. McDonalds took 14-years to break-even in Australia. In the UK, it took 12-years. We have been in India since 1996 and should break-even in a couple of years," Jatia said.

McDonalds India has introduced the 'Extra Value Meal', which offers patrons meals at a price that is 25 per cent less than used to be.

"At a time when food prices are going through the roof, the 'Extra Value Meals' are priced much lower. We manage to do this by working directly with the farmers. We have anticipated increased volumes of produce because we are pushing yield," Jatia said.

McDonalds sources 99 per cent of its products from within the country and has a strong backward integration right up to the farm level and a dedicated supply-chain.

The food retailer will also launch, across all restaurants, its "Breakfast Meals" between 0700 hours and 1100 hours, which is presently available only at a few select outlets in the city.

INDIA ADDED A WHOPPING 35 MILLION MOBILE PHONE USERS IN APRIL-JUNE QUARTER. WIRELESS TOTAL NOW 427 MILLION, 92% OF ALL PHONES!

MUMBAI, Oct 02, 2009 - India added a whopping 35.5 million wireless telephone users during the quarter ended on June 30 this year, taking the wireless subscriber base to 427.2 million.

The wireless user base grew by 9.06 per cent during the April-June quarter of this year to 427.2million from 391.7 million in the preceding quarter, the Telecom Regulatory Authority of India (TRAI) said in a statement.

The total telecom subscriber base (wireline and wireless) touched 464.8 million for the quarter ended June this year from 429.7 million in the quarter ended March, registering an increase of 8.17 per cent.

The tele-density (number of telephones per 100 people) for the quarter ended June reached 39.86 compared to 36.98 in the previous one, TRAI said.

However, the all-India blended Average Revenue Per User (ARPU) per month for the GSM segment (full mobility) decreased by 10 per cent to Rs 185 in June from Rs 205 in March, while the ARPU for the CDMA segment during the same period dipped 7.2 per cent to Rs 92 from Rs 99.

The subscriber base of wireline service has declined to 37.5 million at the end of June, taking the wireline tele-density to 3.22.

 

LABOR DEPT. REPORTS ANOTHER 263,000+ PEOPLE LOST JOBS IN SEPTEMBER, BRINGING TOTAL TO 15.1 MILLION UNEMPLOYED.

BIZ INDIA Editor's Note: The number of jobs lost in September - 263,000 - as reported by U.S. Labor Department below, is very close to the number of jobs lost - 258,00 - as counted by the payroll processing firm Automatic Data Processing, which we reported two days ago. Below is the report from the U.S. government's Bureau of Labor Statistics, an agency of the U.S. department of Labor.
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WASHINGTON D.C., Oct 02, 2009 - Nonfarm payroll employment continued to decline in September (-263,000), and the unemployment rate (9.8 percent) continued to trend up, the U.S. Bureau of Labor Statistics reported today. The largest job losses were in construction, manufacturing, retail trade, and government.

Household Survey Data
Since the start of the recession in December 2007, the number of unemployed persons has increased by 7.6 million to 15.1 million, and the unemployment rate has doubled to 9.8 percent.

Unemployment rates for the major worker groups--adult men (10.3 percent), adult women (7.8 percent), teenagers (25.9 percent), whites (9.0 percent),blacks (15.4 percent), and Hispanics (12.7 percent)--showed little change in September. The unemployment rate for Asians was 7.4 percent, not season-ally adjusted. The rates for all major worker groups are much higher than at the start of the recession. (See tables A-1, A-2, and A-3.)

Among the unemployed, the number of job losers and persons who completed temporary jobs rose by 603,000 to 10.4 million in September. The number of long-term unemployed (those jobless for 27 weeks and over) rose by 450,000 to 5.4 million. In September, 35.6 percent of unemployed persons were job-
less for 27 weeks or more. (See tables A-8 and A-9.)

The civilian labor force participation rate declined by 0.3 percentage point in September to 65.2 percent. The employment-population ratio, at 58.8 percent, also declined over the month and has decreased by 3.9 percentage points since the recession began in December 2007. (See table A-1.)

In September, the number of persons working part time for economic reasons (sometimes referred to as involuntary part-time workers) was little changed at 9.2 million. The number of such workers rose sharply throughout most of the fall and winter but has been little changed since March. (See table A-5.)

About 2.2 million persons were marginally attached to the labor force in September, an increase of 615,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12
months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-13.)

Among the marginally attached, there were 706,000 discouraged workers in September, up by 239,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The other 1.5 million
persons marginally attached to the labor force in September had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

Establishment Survey Data
Total nonfarm payroll employment declined by 263,000 in September. From May through September, job losses averaged 307,000 per month, compared with losses averaging 645,000 per month from November 2008 to April. Since the start of the recession in December 2007, payroll employment has fallen by 7.2 million.

In September, construction employment declined by 64,000. Monthly job losses averaged 66,000 from May through September, compared with an average of 117,000 per month from November to April. September job cuts were concentrated in the industry's nonresidential components (-39,000) and in heavy construction (-12,000). Since December 2007, employment in construction has fallen by 1.5 million.

Employment in manufacturing fell by 51,000 in September. Over the past 3 months, job losses have averaged 53,000 per month, compared with an average monthly loss of 161,000 from October to June. Employment in manufacturing has contracted by 2.1 million since the onset of the recession.

In the service-providing sector, the number of jobs in retail trade fell by 39,000 in September. From April through September, retail employment has fallen by an average of 29,000 per month, compared with an average monthly loss of 68,000 for the prior 6-month period.

Government employment was down by 53,000 in September, with the largest decline occurring in the non-education component of local government (-24,000).

Employment in health care continued to increase in September (19,000), with the largest gain occurring in ambulatory health care services (15,000). Health care has added 559,000 jobs since the beginning of the recession, although the average monthly job gain thus far in 2009 (22,000) is down from the average monthly gain during 2008 (30,000).

Employment in transportation and warehousing continued to trend down in September. The number of jobs in financial activities, professional and business services, leisure and hospitality, and information showed little or no change over the month.

INDIASKILLS TO INVEST ABOUT $40 MILLION TO OPEN 200 CENTERS IN 20 CITIES, TRAIN ONE MILLION PEOPLE IN HOSPITALITY, RETAIL, ETC.

NEW DELHI, September 30, 2009 - IndiaSkills, a joint venture between India's leading higher learning organisation Manipal Education and UK-based City & Guilds, will invest Rs 200 crore (roughly $40 million) over the next five years to offer vocational training courses across sectors like hospitality and retail.

IndiaSkills plans to commence operations by January and open up to 100 centres in about 20 cities and towns across the country within the first year of operations.

"The JV will invest around Rs 200 crore (around $40 million) over the next five years to train up to a million people in various vocations like tourism, hospitality, banking and financial services, personal care and retail," Manipal Education Chief Executive Officer and Managing Director Anand Sudarshan said.

IndiaSkills will have 500 Vocational Training Centres and will cover around 50 per cent of the country's districts within five years, he added.

While City & Guilds will provide basic course material and international level assessment and certification of skills to the students, the Indian partner will focus on areas like faculty training, marketing and research as well as tailoring the courses to meet local requirements.

Sudarshan said the duration of courses will range from 45 days to a year and cost from Rs 15,000 to around Rs 50,000 (about $300 to $1,000). Students from matriculation onwards will be eligible to apply for these courses, which will also focus on skills like English speaking.

 

BRAZIL, RUSSIA, INDIA, CHINA SAY U.S. DOLLAR SHOULD NO LONGER BE THE WORLD'S STANDARD RESERVE CURRENCY

September 08, 2009 - The United Nations Conference on Trade and Development said in a report on Monday that the U.S. dollar should be replaced as the world’s standard reserve currency. The U.N. said the establishment of a new currency would protect emerging markets from the “confidence game” of financial speculation.

It's not the first time this has been suggested, but it's the first time the U.N. has suggested it. China, India, Brazil and Russia this year called for a replacement to the dollar as the main reserve currency after the collapse of the U.S. mortgage market led to the worst global recession since World War II.

The report said that

“[...] dominance of the dollar as the main means of international payments [has] played an important role in the build-up of the global imbalances in the run-up to the financial crisis. Another disadvantage of the current international reserve system is that it imposes a greater adjustment burden on deficit countries (except if it is a country issuing a reserve currency) than on surplus countries.

“Such a multilateral system would tackle the problem of destabilizing capital flows at its source. It would remove a major incentive for speculation and ensure that monetary factors do not stand in the way of achieving a level playing field for international trade.

It would also get rid of debt traps and counterproductive conditionality. The last point is perhaps the most important one: countries facing strong depreciation pressure would automatically receive the required assistance once a sustainable level of the exchange rate had been reached in the form of swap agreements or direct intervention by the counterparty.”

China owns a huge amount of U.S. debt. As late as Sunday, they expressed their dismay at the current U.S. monetary policy.

"If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies."
 

CHINA ALARMED BY U.S. GOVERNMENT PRINTING MONEY, SAYS IT IS "SPENDING TOMORROW'S MONEY TODAY"

LONDON, September 06, 2009 - The US Federal Reserve's policy of printing money to buy Treasury debt threatens to set off a serious decline of the dollar and compel China to redesign its foreign reserve policy, according to a top member of the Communist hierarchy.

Cheng Siwei, former vice-chairman of the Standing Committee and now head of China's green energy drive, said Beijing was dismayed by the Fed's recourse to "credit easing".

"We hope there will be a change in monetary policy as soon as they have positive growth again," he said at the Ambrosetti Workshop, a policy gathering on Lake Como.

"If they keep printing money to buy bonds it will lead to inflation, and after a year or two the dollar will fall hard. Most of our foreign reserves are in US bonds and this is very difficult to change, so we will diversify incremental reserves into euros, yen, and other currencies," he said.

China's reserves are more than – $2 trillion, the world's largest.

"Gold is definitely an alternative, but when we buy, the price goes up. We have to do it carefully so as not to stimulate the markets," he added.

The comments suggest that China has become the driving force in the gold market and can be counted on to buy whenever there is a price dip, putting a floor under any correction.

Mr Cheng said the Fed's loose monetary policy was stoking an unstable asset boom in China. "If we raise interest rates, we will be flooded with hot money. We have to wait for them. If they raise, we raise.

"Credit in China is too loose. We have a bubble in the housing market and in stocks so we have to be very careful, because this could fall down."

Mr Cheng said China had learned from the West that it is a mistake for central banks to target retail price inflation and take their eye off assets.

"This is where Greenspan went wrong from 2000 to 2004," he said. "He thought everything was alright because inflation was low, but assets absorbed the liquidity."

Mr Cheng said China had lost 20m jobs as a result of the crisis and advised the West not to over-estimate the role that his country can play in global recovery.

China's task is to switch from export dependency to internal consumption, but that requires a "change in the ideology of the Chinese people" to discourage excess saving. "This is very difficult".

Mr Cheng said the root cause of global imbalances is spending patterns in US (and UK) and China.

"The US spends tomorrow's money today," he said. "We Chinese spend today's money tomorrow. That's why we have this financial crisis."

Yet the consequences are not symmetric.

"He who goes borrowing, goes sorrowing," said Mr Cheng.

It was a quote from US founding father Benjamin Franklin.

 

RUSSIA'S PUTIN SAYS U.S. DEBT "OUT OF CONTROL," AND "UNCONTROLLED ISSUE OF DOLLARS" WAS "ONE OF THE TRIGGERS" OF GLOBAL CRISIS

SOCHI, Russia, September 18, 2009 - Russia’s Prime Minister Vladimir Putin on Friday said other currencies besides the dollar should be used as global reserves to reduce the risks posed by swelling U.S. debt.

Putin, who spoke at an international investment forum in the Black Sea resort of Sochi, chided the United States for “an uncontrolled issue of dollars” and said the American currency’s dominance had been “one of the triggers” of the global crisis.

Putin renewed Russia’s call on the U.S. administration and global community to give the green light to alternative reserve currencies: “If there are several reserve currencies, this will not harm the U.S. economy in any way.”

President Dmitry Medvedev’s economic advisor, Arkady Dvorkovich, said Thursday that Russia would at next week’s G-20 summit in Pittsburgh press for more follow-throughs on measures to confront the global downturn and to change Western-dominated international financial institutions.

Russia and China have pushed for alternative reserve currencies, but being the world’s largest holders of U.S. dollar assets — such as Treasuries — they are unlikely to abandon it. Dvorkovich stressed on Thursday that Russia is not out to replace the dollar, but only diversify.

CHINA'S GDP TO GROW 9% IN 2010, INDIA AT 6.4%, WORLD AT 3.1%, JAPAN AT 1.7%, U.S. AT 1.5%, EUROPE AT 0.3%, FORECASTS THE I.M.F.

ISTANBUL, Oct 01, 2009 - Major Asian economies achieved a remarkable rebound from the global financial crisis, but it is not certain the recovery can be sustained, the International Monetary fund said on Thursday.

Export-dependent China, Japan and smaller neighbors faced slumping demand for their manufactured goods and a decline in investment after the collapse of Lehman Bothers last year. Their outlook improved during first half of 2009.

"The recent, swift turnaround of economic fortunes is remarkable," the IMF said in its World Economic Outlook. "Questions remain about whether the rebound can become a self-sustaining recovery -- ahead of a stronger growth pickup in the rest of the world."

Overall, the world's gross domestic product will grow at a modest 3.1 percent, the report said. It forecast growth for the U.S. in 2010 at 1.5 percent, and 0.3 percent average for Europe.

China -- which along with Indonesia and India were the only Asian economies to escape severe recession -- achieved growth of 7.1 percent in the first half of 2009 fueled by a huge domestic stimulus plan. That helped a region-wide recovery, the IMF said.

Asia's intensifying rebound was driven by expansionary fiscal and monetary policies, a recovery in financial markets and capital inflows, as well as the build-up of depleted inventory, the IMF said.

"Despite these positive signs, a sustained turnaround is not assured," the outlook warned.

"The pickup in activity is so far being supported by many factors that could turn out to be temporary: rebounding capital markets, inventory adjustment, and expansionary fiscal and monetary policy," said the Fund.

Consumption was likely to be dragged down by weakening labor markets while investment demand would drop in the face of excess capacity in industry, it said.

"The main driver of past recoveries -- a durable rebound in external demand from outside the region -- may be lacking this time around," the IMF said. Continued...


To ensure a sustained recovery in the face of lower demand from North America and Europe, Asian economies need to shift their source of growth to more domestic demand, it said.

This would require a combination of demand- and supply-side measures, as well as steps to improve social safety nets and health care systems in order to reduce household savings, it said.

Asian countries should also move toward more flexible exchange rate regimes to rebalance growth and buffer the economic impact of external shocks, it said.

The IMF forecast China and India will lead Asia's expansion in 2010, growing at rates of 9.0 and 6.4 percent, respectively.

Japan will grow 1.7 percent in 2010, the IMF forecast.

ADDITIONAL 254,000+ JOBS LOST IN U.S. IN SEPTEMBER, PER A.D.P. OFFICIAL TOTAL ABOUT 24 MILLION UNEMPLOYED-UNDEREMPLOYED

BIZ INDIA Editor's Note -
Automatic Data Processing (ADP is a $9 billion (annual revenues) payroll services firm with hundreds of its clients employing some 570,000 people. It issues monthly reports on employment and unemployment statistics. Below is their report on job losses in the U.S. in September, 2009

The Bureau of Labor Statistics reports that there were "a total of 14.9 million persons were unemployed in August...Among the employed, there were 9.1 million persons working part time in August who would have preferred full-time work." This makes 24 million unemployed-underemployed which represents 1 in every 6 employable people in the U.S.

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ADP Report:
Nonfarm private employment decreased 254,000 from August to September 2009 on a seasonally adjusted basis, according to the ADP National Employment Report®. The estimated change of employment from July to August was revised by 21,000, from a decline of 298,000 to a decline of 277,000.

Source: ADP
September’s employment decline was the smallest since July of 2008 and employment losses have diminished significantly over the last two quarters. Nevertheless, employment, which usually trails overall economic activity, is likely to decline for at least several more months, with losses continuing to diminish.

About ADP Employment Reports:
The ADP National Employment Report® is a measure of nonfarm private employment, based on a subset of aggregated and anonymous payroll data that represents approximately 400,000 of ADP's 500,000 U.S. business clients and roughly 23 million employees working in all 19 of the major North American Industrial Classification (NAICS) private industrial sectors.

The ADP National Employment Report was developed to help meet the need for additional timely and accurate estimates of short-term movements in the national labor market among economists, financial professionals, and government policy-makers.

Because ADP pays 1-in-6 private sector employees in the United States every pay period across a broad range of industries, firm sizes, and geographies, it has a unique and significant perspective on the U.S. labor market.

 

 

INDIA IS IMPORTANT TO AMERICA: PRIME MINISTER SINGH'S NOV. 24TH STATE VISIT WILL BE OBAMA'S FIRST

BIZ INDIA Editor's Note: First, Hillary Clinton addressed members of the US-India Business Council at an anniversary gathering in Washington in June. Then in July she went to India, met with and handed a personal invitation from President Obama to Prime Minister Manmohan Singh inviting him to the first state visit to the by Obama.

She also met with Indian multinational business leaders. President Obama and Prime Minister Singh had also previously met in London during the G-9 Summit. President Obama has also been reciprocally invited to a state visit to India, but it is not clear whether a formal acceptance has been received by India and if a date for the visit has been set.

There are many reasons why the U.S. is interested in developing closer relations with India, but we are not going to get into that right now.
--------------------------

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WASHINGTON D.C., September 30, 2009 - Indian Prime Minister Manmohan Singh is coming to America for a state visit Nov. 24, just before Thanksgiving. Such visits include an elaborate arrival ceremony on the White House South Lawn, one-on-one time with the president and, in the evening, a state dinner.

It's a plum presidential nod of recognition for the world's largest democracy and most stable U.S. ally in a hostile corner of the world.

But why India first?

It was just four years ago that President George W. Bush and Singh raised their glasses and toasted the U.S.-India relationship at the start of a July 2005 state dinner.

Indian officials, however, have watched warily since then as the U.S. has become more engaged with its archrival, Pakistan, focusing on greater military cooperation in dealing with Islamist extremists there and in neighboring Afghanistan. Honoring Singh with what is considered one of the grandest and most glamorous of White House affairs 10 months into Obama's presidency may allay some of those concerns, along with perceptions that Pakistan has surpassed India as America's best friend in South Asia.

It also may be Obama's way of closing the loop with all the major U.S. allies as his freshman year in office draws to a fast close.

Obama's first-year international itinerary has taken him to the major European power centers of England, France, Germany, Italy and Russia. He has toured the Middle East and is scheduled to visit China and possibly other Asian countries in November, before Singh visits.

The president has even scheduled a day trip to Copenhagen this week — he'll spend more time in the air than on the ground — in a bid to personally boost his adopted hometown's chances of bringing the 2016 Olympic Games to Chicago.

Secretary of State Hillary Rodham Clinton hand-delivered the state-visit invitation from Obama during her July trip to India.

Singh, re-elected to a second term earlier this year, and Obama met on the sidelines of a London economic summit in April, and discussed cooperating on the economic downturn, climate change and counterterrorism. Obama later called him a "very wise and decent man."

After years of mutual wariness during the Cold War, U.S.-Indian relations are at a high point, thanks partly to the Bush administration's push to allow American civilian nuclear trade with India. The Obama administration has used that accord as a foundation for improving ties and hopes of cooperation on the president's priority issues, such as climate change and countering terrorism.

"We are very committed to this relationship," Clinton said of India when questioned about deepening U.S. relations with Pakistan.

But a trip to India so far has escaped the sights of the president's travel planners.

That's where the state dinner comes in.

Obama's first one will be the talk of the town, perhaps second only to his inauguration and the parties that followed in terms of celebrity star power and got-to-be-there fever.

A ton of planning is involved, from creating the invitation itself to compiling a guest list. Meals, desserts and wines are tasted until the right pairings are found. Flowers must be chosen and arranged just so, along with the seating, place settings and entertainment.

Responsibility for the planning falls to first lady Michelle Obama and her staff, and people will be waiting to see what twists she and her social secretary, Desiree Rogers, will put on one of the White House's most staid traditions.

Early state dinner rumblings after Obama took office were about opening the events up to "real people."

Inquiring minds also want to know what other changes may be in store. Will they eat in the State Dining Room or shift chairs to the larger East Room? Will dinner courses be prepared with vegetables pulled from Mrs. Obama's popular South Lawn garden?

Would they consider putting their well-dressed guests on boats headed down the Potomac River to Mount Vernon? John F. Kennedy did that for his first state dinner a just few months into his term, in May 1961, for the president of Tunisia.

Or how about dinner and black-tie inside a big tent in the Rose Garden? Bill Clinton did that for his first such dinner a year and a half into his presidency, in June 1994, for the Japanese emperor.

Bush held his first dinner eight months in. It was for Mexico, less than a week before the terrorist attacks of September 2001. 

 

 

INDIAN TEACHERS, AMERICAN STUDENTS: ONLINE TUTORING COULD BECOME A $17 BILLION BUSINESS FOR INDIA BY 2010, SAYS C.I.I.

BIZ INDIA Editor's Note: This is a story from three years ago: it sums up the major benefits for U.S. students requiring tutoring for them to excel in school and be prepared for college.

* Online tutoring companies in India, which have Indian teachers giving math and science lessons to American students, earned $10 million last year.
* The demand has been triggered by a US Educational Act where state funding for schools hinges on their improving their students’ grades.
* Special software and a whiteboard (digital notebook) enable students in the US and their teachers in India to conduct lessons through audio and visual contact.
* There’s a fast-growing demand for such services, with the Confederation of Indian Industries (CII) estimating 46 per cent annual growth and projecting that India will become a KPO (Knowledge Process Outsourcing) hub worth $17 billion by 2010.
* Indian online tutoring companies charge $20-30 an hour as opposed to $60-100 charged by US companies. Indian tutors working online from their homes can earn $15-30 (Rs 645-1,200) per hour.
* Bombay, Delhi, Bangalore and Kochi are the main centres for e-learning though cities like Ludhiana, Rishikesh, Jamshedpur and Rourkela also report booming business.
* NRI students in the US are now also signing up to acquire more esoteric skills from Indian tutors such as in Carnatic music or classical dance.
* Indian online tutors are required to take special training to adapt their accents and to understand American cultural practices, which frown on teachers scolding their students or being too formal with them.

 

2009 WORLD INFO TECH VOLUME EXPECTED TO BE ABOUT $380 BILLION. INDIA WILL HAVE $48 BILLION OR ONE-EIGHTH SHARE, SAYS XML GLOBAL

Chennai, Sept. 29 The global information technology and business process outsourcing market will end 2009 with total revenues of $373 billion, 14.4 per cent higher than the $326 billion recorded in 2008.

India and China will remain at the top of the list, with expected revenues amounting to $48 billion and $28 billion, respectively.

India would have 44.8 per cent of the total outsourcing pie and China 25.9 per cent, according to Canadian-based ICT research and advisory firm XMG Global.

The growth rate for 2009 will be, however, less than the 19 per cent that the industry recorded in 2008 over 2007, XMG said in its annual year-end prediction of where the offshoring and global outsourcing industry will finish.

“The market share of India is similar to 2008 and has mostly to do with the Satyam accounting adjustments and the shifting of work to other offshore countries. In other words, we are seeing new levels of normalcy in which the recession has provided the opportunity to rationalise and shift work to offshore destinations other than India,” XMG Global’s Senior Analyst, Mr Vincent Altez, said in the report.

The Philippines is expected to close the year with $7.3 billion or 21.7 per cent growth — lower than the 24 per cent growth forecast due to the slower growth for IT services and the delay in expansion plans of several captive players. Foreign direct investment is also expected to slide this year as investors are streamlining capital.

Pressure on India

While South Africa, Egypt and Mexico are emerging as alternative destinations for offshoring, the Chinese and Vietnamese governments continue to attract foreign investors and build advance infrastructure, putting pressure on mature offshore countries such as India.

63 INDIA FIRMS' ORDERS DOUBLED TO $14.66 BILLION IN 2ND QTR FROM 1ST - 86% IN CAPITAL GOODS, ENGINEERING, INFRASTRUCTURE

MUMBAI, September 30, 2009 - The trickle has turned into a deluge. India Inc’s order book has more than doubled to an all-time high of Rs 73,320 crore ($14.664 billion) in the second quarter of the current financial year, compared to the first quarter. On a year-on-year basis, the increase is 21 per cent.

An analysis of order book announcements by 63 companies shows that capital goods, engineering and infrastructure have led the way, cornering 86 per cent (Rs 63,439 crore) of the total orders. The remaining Rs 9,881 crore went to gems & jewellery, pharmaceuticals and telecom. Larsen & Toubro (L&T) topped the list with new orders worth Rs 14,253 crore.

The order backlog is equally impressive and suggests strong revenue streams for the next few years.

Electrical equipment giant Bharat Heavy Electricals Ltd has an order backlog of over Rs 117,000 crore, which could see the company through for the next four years. Engineering major L&T has a total order book of Rs 70,000 crore, which is almost 1.75 times its annual turnover.

It’s not the big boys alone who are comfortably placed. For example, BGR Energy, which has won contracts worth Rs 1,633 crore each for two power projects, has an overall order position of Rs 12,500 crore, providing a revenue stream for more than three years.

The bulk of orders has come from public sector undertakings and central and state governments. Foreign companies accounted for a quarter and the private sector for the rest.

India Inc’s bosses are predictably upbeat. Pervez Umrigar, managing director of Gammon Infrastructure Projects, said the infrastructure sector has a huge long-term potential.

“The financial position was grim last year, but now it is recovering. I hope complete recovery will take place by this year-end.”

Bankers said the order book would continue to be impressive. The banking sector's exposure to the infrastructure sector went up 35 per cent year-on-year and is expected to improve further.

ICICI Bank’s Managing Director & CEO Chanda Kochhar said she expected the next level of credit growth to come from project finance apart from home and auto loans. For example, the government’s $20 billion roads program1st is well on track and a lot of orders are expected to flow into the books of Indian companies.

Panasonic Develops 50-inch Full HD 3D PDP

Aiming to bring Full HD 3D TVs to the market in 2010, Panasonic steps up its efforts in developing the related technology. The company has just developed a 50-inch Full HD 3D compatible plasma display panel (PDP) and high-precision active shutter glasses that enable the viewing of theater-quality, true-to-life 3D images in the living rooms.

The new PDP and glasses evolved from Panasonic's Full HD 3D Plasma Home Theater System that was developed in 2008 and comprised of a 103-inch PDP and a Blu-ray Disc player. The prototype PDP has a 50-inch screen, which is expected to become the most popular size for home theaters.

Mobile application sales to hit $16 billion per year by 2013

The number of smartphones sold each year will increase from around 165.2 million in 2009 to 422.96 million in 2013, with the total number of smartphone users approaching 1.6 billion, according to Wireless Expertise, an UK-based wireless market research and consulting firm.

Its latest report “The future of mobile application storefronts” shows how smartphone penetration will reach approximately 28-30% of the total mobile market by 2013.

COMING HOME LATE WITHOUT INFORMING WIFE AMOUNTS TO CRUELTY, RULES MUMBAI HIGH COURT

MUMBAI, September 28, 2009 - Husbands, who come home late, beware! The Bombay High Court has ruled that regularly coming home late without informing the wife amounts to cruelty.

"Such type of conduct on the part of the husband. amounts to cruelty to the wife," observed a division Bench comprising Justice P.B. Majmudar and Justice R.V. More.

It is expected that the husband "at least inform the wife on telephone" so that she won't wait for him, the high court added while delivering the judgment on Thursday.

Pune-based Deeplakshmi had filed a petition challenging the Pune family court's May 29 order, which had dissolved her marriage acting on her husband Sachin Zingade's petition.

Zingade had accused his wife of picking up quarrels with him, suspecting him of having an extramarital affair and insulting his parents and friends whenever they visited his home.

The family court had accepted his contention on the point of suspicion and termed it as cruelty. The high court, however, clarified that the spouses are entitled to point out their legitimate grievances against each other.

"If the circumstances so warrant, the wife may have some suspicion about the act and behavior of her husband," observed the high court. The family court has also treated Deeplakshmi's complaint under the Domestic Violence Act against her husband and in-laws as an act of cruelty.

It had concluded that it was a false case as there was no independent evidence or police complaint.

"THERE IS NO ECONOMIC CRISIS IN INDIA," SAYS INDIA PRIME MINISTER MANMOHAN SINGH

PITTSBURGH, USA, September 28, 2009 - Prime Minister Manmohan Singh said on Friday that there is no economic crisis in the country. "There is no economic crisis in India. It is certainly true that as a sequel to the global economic crisis our exports have suffered that has affected the rate of growth, but even then our economy is growing at a rate of six and half per cent. Therefore there is no crisis, as such in India," Singh said.

However, the Prime Minister acknowledged that in a highly interdependent world, India has a stake in the stability and growth of the world economy.

"If world economy collapses, there is obviously some effect on our country. Already the rate of our growth of our economy particularly our exports have suffered," he said, adding that this has led to decline in exports of important labour intensive products like gems and jewellery, leather goods textiles.

"So in an increasingly interdependent world, I think, no country by itself can ensure that all its goals of economic life can be achieved working to the exclusion of other participants in an increasingly interdependent world," Singh said.

As such there is therefore a necessity for India to ensure that the global economic system continues to progress, he observed.

"We need an external environment which is conducive to the growth of our exports. We need an external environment which is conducive to an external flow of Capital in an international environment which is conducive to increased growth of technology and all these things have a bearing on the rate of growth of our economy," he said.

Noting that interdependence of nations is fact of life, the Prime Minister said interdependence in a globalised world means that no country how so ever powerful it may be can take on the entire burden of economic adjustment and economic decision making that may be required to manage the global system in an orderly passion.

"It is that perception, that reality which has, I think persuaded many people in Europe and the United States that G-8 is ill equipped to handle all the global issues with the rise of Asia. With growth of India, China, Brazil, economic decision-making has to take into account the view of these countries if it is to have an optimum impact," he said.

Responding to a question, the Prime Minister said: "As of now, inflation is not a problem, it is under control, but our options are limited and constrained...

PRES. OBAMA'S SPENDING IN U.S. BUDGET WOULD ADD $4.9 TRILLION MORE TO U.S. DEBT OF $12 TRILLION, SAYS HERITAGE FOUNDATION, D.C.

President Barack Obama has repeatedly claimed that his budget would cut the deficit by half by the end of his term. But as Heritage analyst Brian Riedl has pointed out, given that Obama has already helped quadruple the deficit with his stimulus package, pledging to halve it by 2013 is hardly ambitious. The Washington Post has a great graphic which helps put President Obama’s budget deficits in context of President Bush’s.

What’s driving Obama’s unprecedented massive deficits? Spending. Riedl details:

* President Bush expanded the federal budget by a historic $700 billion through 2008. President Obama would add another $1 trillion.
* President Bush began a string of expensive finan­cial bailouts. President Obama is accelerating that course.
* President Bush created a Medicare drug entitle­ment that will cost an estimated $800 billion in its first decade. President Obama has proposed a $634 billion down payment on a new govern­ment health care fund.
* President Bush increased federal education spending 58 percent faster than inflation. Presi­dent Obama would double it.
* President Bush became the first President to spend 3 percent of GDP on federal antipoverty programs. President Obama has already in­creased this spending by 20 percent.
* President Bush tilted the income tax burden more toward upper-income taxpayers. President Obama would continue that trend.

* President Bush presided over a $2.5 trillion increase in the public debt through 2008. Setting aside 2009 (for which Presidents Bush and Obama share responsibility for an additional $2.6 trillion in public debt), President Obama’s budget would add $4.9 trillion in public debt from the beginning of 2010 through 2016.

UPDATE: Many Obama defenders in the comments are claiming that the numbers above do not include spending on Iraq and Afghanistan during the Bush years. They most certainly do. While Bush did fund the wars through emergency supplementals (not the regular budget process), that spending did not simply vanish. It is included in the numbers above. Also, some Obama defenders are claiming the graphic above represents biased Heritage Foundation numbers. While we stand behind the numbers we put out 100%, the numbers, and the graphic itself, above are from the Washington Post. We originally left out the link to WaPo. It has been now been added.

CLARIFICATION: Of course, this Washington Post graphic does not perfectly delineate budget surpluses and deficits by administration. President Bush took office in January 2001, and therefore played a lead role in crafting the FY 2002-2008 budgets. Presidents Bush and Obama share responsibility for the FY 2009 budget deficit that overlaps their administrations, before President Obama assumes full budgetary responsibility beginning in FY 2010. Overall, President Obama’s budget would add twice as much debt as President Bush over the same number of years

 

REMAX PROPERTY GROUP TO OPEN OFFICE IN GUJARAT, INDIA

Ahmedabad September 25, 2009 - After Jones Lang LaSalle and Cushman & Wakefield, another US based real estate organisation is now making inroads in Gujarat.

RE/MAX India, a division of US-based RE/MAX International Property Group, is all set to commence its operations in Gujarat next month.

The Delhi-headquartered real estate brokerage franchising company is currently identifying companies interested in buying broker-office franchises to operate throughout Gujarat.

According to Manan Choksi, regional franchisee owner in Gujarat, "The market for real estate broking services is currently fragmented and unorganised in the state. As there is a lot of migration in to the state, coupled with investments, we expect a compound annual growth rate (CAGR) of 20 per cent in the next 5 years.

Besides, we expect to conquer 25 per cent of the brokerage transactions in Gujarat. We wish to employ the top 15 per cent of brokers in the state who are most productive. This will ensure the desired market share as we believe in 'outstanding agents, outstanding results. Eventually, over a period of 10 years, we expect a 35 per cent market presence in Gujarat."

RE/MAX, among other things, brings the network support needed for real estate transactions by selling broker offices to provide a variety of real estate services.

The broker-offices of RE/MAX provides guidance to both the buyer and the seller for a real estate transaction. The company plans to open 20 broker offices at the end of first year. "By the end of five years, we expect around 80 offices across the state. A country like Czech which has a population of 10 million has 155 RE/MAX broker-offices. Hence, Gujarat has a potential of around 200 offices in 10 years time," Choksi added.

RE/MAX has opened its office at Mithakhali in Navrangpura area in Ahmedabad.

Commenting on the growth of the company, Choksi further said, "RE/MAX Gujarat is investing Rs 3 crores in the next two years in developing the region. Moreover, the company will be spending a lot of money in branding and advertising. Internationally RE/MAX spends $ 1 billion (Rs 4800 crore approx) on advertising."

RE/MAX forayed into India a year ago and has presence in Bangalore, Chandigardh-Panchkula, Pune, Tamil Nadu and Kerala.

RE/MAX is an international network of independently owned and operated offices offering a variety of real estate services. Based in Denver, Colorado, RE/MAX International has presence in over 79 countries and has around 6850 offices, with 1,00,000 broker agents across the world.

While Jones Lang LaSalle Meghraj set up its shop in Ahmedabad in July this year, Cushman and Wakefield is still to set up a office here. Both the firms have, however been operational in the state from past few years. Besides, another global real estate consultancy firm UK based Knightfrank has also been active in the state.

KMG INFOTECH TO INVEST UP TO $20 MILLION TO BUY COMPANIES IN U.S., EUROPE AND INDIA

NEW DELHI, September 25, 2009 - The US-headquartered KMG Infotech Ltd, a software services and consulting company having offices in various parts of India, including Bengalore, Gurgaon, Kolkata and Mohali, is looking for acquisitions in India, the US and Europe.

Speaking to Business Standard, KMG Infotech Ltd Founder and Chairman Subhash C Bhatia said, “We are open to acquisitions. Already we are in advance talks with few companies for the acquisition. Firstly, we plan to acquire a company in the US that does not have presence in India.

Secondly, we are also eyeing BPO firms having presence in India. Thirdly, we are also eyeing companies that have foothold in Europe, preferably dealing with property & casualty (P&C) insurance sector.”

He added, “We would be shelling out anywhere between Rs 50-100 crore ($10 to $20 million) towards acquisition, which can funded through internal accruals, diluting promoters stake etc.”

At present, the promoter has 70 per cent stake in the company and plans to dilute 20-25 per cent of its equity.

The company is engaged in providing integrated IT solutions to global insurance, banking and financial services companies and inaugurated its facility in Mohali (Punjab).

On the Mohali facility, he added, “Our objective is to make our Mohali facility one of the focal points for exports to the US and other countries.

In keeping with this goal, the Mohali facility will be a software development, BPO/KPO and KMG education centre. We have invested over Rs 12 crore in the Mohali project so far and plan to invest about Rs 6 crore more in the next few years for creation of more infrastructure.

Presently, 50,000 sq ft space has been created with a possibility of additional 25,000 sq ft in the near future.”

The company also has 1 acre in possession at Rajiv Gandhi Chandigarh Technology Park and has plans to invest Rs 20 crore in the future to set up software development centre.

Bhatia said, “Over the next 3 years, KMG will provide quality training to more than 1,000 people in software development and soft skills.

It is also in touch with more than 50 colleges in the region to provide industrial-level training in IT and soft skills to get engineers ready for the real job market. It will also generate direct technical employment for more than 600 people from Punjab and related indirect employment for the general public.”

Giving an overall perspective of KMG, Bhatia said, “We have created a special niche in the P&C insurance sector and established brand equity in the insurance domain through the range of services provided to our client base and the domain knowledge of our professionals.”
 

WELLS FARGO, 4TH LARGEST U.S. BANK BY ASSETS, TO EXPAND ITS B.P.O. OPERATIONS, HIRE MORE PEOPLE IN INDIA

Mumbai, September 25, 2009 - Wells Fargo, the fourth-largest bank in the US by assets, is expanding its back-end business processing unit in India and is on a hiring spree, even as most other multinational banks downsize their corresponding units. Steve Ellis, executive vice president, wholesale services group, told ET that India is a key international center in its global services and the bank would continue to beef up its operations here.

Over the past few years, several foreign financial services firms including Citibank, UBS and Aviva have either sold or are in the process of selling their captive BPOs. Most banks feel that economies of scale are limited in such operations and outsourcing work to third party BPOs is more effective. However, Wells Fargo believes that its unit here is of tremendous value and considers the team in India as an extension of teams in the US.

Mr Ellis’ visit to India comes at a time when the San Franscisco based bank has been still completing its merger with Wachovia Bank in India. Wells Fargo, which bought Wachovia’s global assets last year, has been relatively less affected by the global financial crisis. But the bank has over the years attracted criticism against its business practices, customer service and fee levels.

“As we aim to provide our global lines of businesses with a strong delivery capability around technology and business operations, we feel the need to broaden the scope of our search for talent,” said Mr Ellis in an exclusive interaction with ET. “The talent pool in India has been a key success factor in moving us into the future, and further strengthening our customers’ experience,” he added.

Mr Ellis said the company’s recent recruitments in its Hyderabad office have ranged from from 1 to 50 or more in a month and currently has people strength of over 800 spread across technology and business operations.

Neither Wachovia nor Wells Fargo has any retail or commercial banking operations in the country, but Wachovia is active in global payments, cash management, trade finance, treasury services and other activities. Wells’ BPO unit is involved in application development and other business brocesses related activities like financial analysis, financial modeling and service operation.

Disney To Buy Indian TV Channel For $ 30.5 Million

Walt Disney Co. on Tuesday announced its plans to buy Hungama, an Indian children's television channel that broadcasts in Hindi. The $44.5 million deal includes a stake in UTV Software Communications Ltd as well.
The Burbank, California-based company said that under the deal, Walt Disney Company India Ltd will acquire a 100 percent stake in Hungama TV for $30.5 million and an equity stake of 14.9 percent in UTV Software Communications Ltd. However, officials clarified that both the transactions are subject to regulatory approvals.
“The acquisition of Hungama TV and the investment in UTV will significantly diversify our presence in India,” Walt Disney International President Andy Bird said at a press conference in Mumbai.
Disney, launched in Dec 2004, already operates a Disney Channel and Toon Disney/Jetix in India, which reaches over 30 million homes on cable and satellite.
UTV said Disney would be issued 3.4 million shares of UTV Software Communications at 192.5 rupees ($4.11) each.

Number One Mobile Cellular Market of the world

With 6.8 million new subscribers a month in November alone, India recently surpassed China as the fastest-growing cell phone market in the world. India still lags behind China in total subscribers, with a mere 143 million compared with China's 449 million. But that's almost double the 75 million amassed a year ago -- and India is closing the gap with rival China fast. India has set an ambitious goal of reaching 500 million subscribers by 2010.
For many who celebrate the emergence of India as a global economic power, the rapid spread of cell phones is a much more important development than "high tech" India. While the high tech off-shoring industry is the province of the elites, the spread of cell phones has been remarkably democratic and is allowing taxi drivers, farmers and fishermen to participate directly in India's economic boom.
The explosion of the cellular industry in India also shows what happens when government gets out of the way. At the turn of the millennium, it took months, sometimes years, to get a phone in India. Shaky infrastructure and stifling bureaucracy meant that telephone penetration had barely hit 2% -- one of the lowest phone penetration rates in the world. Then, in 1999, government reforms rationalized phone tariffs and allowed competition from private-sector telecom companies.
The results have been nothing short of astounding. Fierce competition among mobile phone operators have driven down rates to 7-8% of their former levels. Indian firms today offer the cheapest mobile services in the world, with outgoing calls for as little as a penny a minute. The cost of mobile phone handsets also has fallen to as little as $35, as manufacturers such as LG, Ericsson and Nokia opened factories in India. Today you can buy a second hand phone in New Delhi for $15 or less. A small businessman in Mumbai (Bombay) or Kolkatta (Calcutta) now can have a mobile phone in his hand in a matter of a couple of days. Mobile networks now cover 38% of the population and coverage is expected to increase to 50% by the end of 2007. Overall, phone penetration has jumped to 16.6% for India as a whole, and up to 50% in larger cities.
The Indian Cellular Market: The Challenges
Not surprisingly, Indian cell phone operators are thriving. Industry leaders like Reliance Communications and Bharti's Airtel are earning a pre-tax profit margin of around 40%. Those margins have a lot to do with clever business models. Bharti has outsourced most of its operations to global giants IBM, Ericsson and Nokia. It spends nothing on research and development -- focusing instead on marketing and customer management.
Yet, India represents a unique set of challenges. Overall wireless revenue may continue to grow as the market grows by leaps and bounds, but average revenue per user is falling -- 11% alone in the quarter that ended in September. As a result, cell phone players are being forced to focus on expanding to broadband Internet, commercial phone networks and telecom infrastructure. Bharti Airtel, Reliance Communications and BSNL are already diversified telecom businesses set to take advantage of these opportunities.
The biggest challenge is financing the industry's breathtaking rate of expansion. Cell phone penetration is 40-50% in cities but hovers at a pitiful 2-3% in villages. Clearly, the future lies in India's rural areas, where about 70% of India's 1.1 billion population lives. Consider the case of Uttar Pradesh (UP) -- an area in India with a population 170 million -- about 60% the size of the U.S. As an independent nation, it would be the sixth-biggest in the world -- and include a whopping 8% of the world's poor. Here cell phone operators face the hurdle of setting up infrastructure to reach villages that barely have electricity -- let alone selling to villagers who have little purchasing power to own and to operate a cell phone.
Indian Cellular Phone Market: You've Gotta Pay to Play
With India now the fastest-growing market in the world, it is little wonder that the auction for Hutchison Telecom's 67% stake in India's fourth-biggest operator, Hutchison Essar, is making headlines. Interest from India's number two operator Reliance, the U.K.'s Vodafone, the minority shareholder Essar, as well as private equity bidders, are turning the auction into a feeding frenzy.
Vodafone appears to have gained the upper hand by offering a bid that values the company at about $19 billion. That's a rich valuation. The book value of the Indian unit's assets in Hutchison telecom's 2005 accounts -- including goodwill -- is less than $3 billion. As recently as June, Hutchison Telecom bought out a 5% shareholder at a valuation of $10 billion.
India's low penetration and exceptional size demands a premium. But to justify its bid of $19 billion, the number crunchers at Vodafone will have to assume huge market share gains, massive rises in average revenue per user, and earnings before interest, tax, depreciation growth of more than 40% in the long term.
And not all emerging market cell phone deals are a slam dunk. Spain's Telefónica struggled in Mexico. Others faced collapsing margins in Brazil. The Indian market is highly competitive. Monthly revenues are almost one-third of Chinese rates and operators' pricing power will fall as they move into rural areas.
The best news is that, after decades of stifling progress, the Indian government is doing the right thing. Recently, the Indian government agreed to free up radio spectrum now used for military and satellite communications for advanced 3G cell phone services sooner than originally expected. The government's motivation? A desire to launch 3G before China does. There's nothing quite like competition to spur progress.
by Investment advisor
Nicholas A. Vardy

Coca-Cola To Invest $ 120 Mil In India

Brushing aside the pesticide controversy, Coca-Cola has said it is investing $ 120 million (Rs 560 crore) more during the year in its Indian company Hindustan Coca-Cola Beverages (HCCB) to grow the per capita consumption of its beverages.

The new investment in HCCB is expected to increase the urban and rural penetration of its brands and diversify its range of beverages.  Coca-Cola during the last 13 years invested over $ 1 billion in its Indian operations. The company has 60 per cent share in the Indian carbonated soft drink industry whose current size is 500 million cases (each case consisting of 24 bottles).

Coke would also expand its vended tea and coffee business, Georgia. Its `Georgia Gold' hot vending machines will be expanded further through a concept called `Georgia Junctions'. About 100 Georgia junctions will be rolled out within this calendar year in Delhi, Chennai, Mumbai, Bangalore, Kolkata and Hyderabad.

Some interesting economic facts about India

Democracy is India’s destiny. A country of diversity and complexity • 17 major languages, 22000 dialects and all the world’s major religions • cannot be governed any other way.

  Villages have a greater voice in their affairs. Village councils must reserve 33% of their seats for women. As a result, there are over 1 million elected women in villages across the country.

  India is the most pro-American country in the world, other than the US itself. The Pew Global Attitude Survey, in 2005, found 71% of Indians having a favorable impression of the US. Only Americans had a more favorable view of America (83%).

  India has a real and deep private sector, a clean well-regulated financial system and a sturdy rule of law.

  BMW (23 million USD), Cisco (1.1 billion USD), Nokia (150 million USD) are some of the investors in India.

  Indian companies benchmark to global standards and are better managed than Chinese firms.

  A study by MIT’s Yasheng Huang points out that India’s companies use their capital far more efficiently than their counterparts in China.

  Over the last 4 years, Japan’s Deming prizes for managerial innovation have been awarded more often to Indian companies than to firms from any other country, including Japan.

  Over 54% of Indians are less than 25 years old making India one of the youngest countries in the world.

  Indian middle class is 300 million strong.

  Personal consumption makes up 67% of GDP in India, much higher than China (42%) or any other Asian country.

  India offers a 14 billion USD luxury goods market.

  Against just 3 shopping malls in 2001, India had 100 in 2005 and will have 345 by 2007.

  Over 2 million student graduate from India's universities every year out of which 350,000 are engineers.

  India's GDP is expected to grow at around 8% this fiscal.

  Over the last 15 years, India has been the second fastest growing country in the world after China, averaging above 6% growth per year.

  Goldman Sachs study in 2003 predicted that over the next 50 years, India will be the fastest growing among the world’s major economies.

  By 2040, India will be the world’s third largest economy. By 2050, it will be five times that of Japan and its per capita income will have risen to 35 times its level in 2003.

  India is inching towards becoming the largest producer of two-wheelers in the world.

  Automobile parts business (made up by 100’s of small companies) was a 4 billion USD industry five years ago. It will be up at 10 billion USD this year. General Motors alone will import 1 billion USD of auto components from India.

  India's Mobile phone population has grown by 45% in 2005 over 2004.

  80 million Indians mobile phones as of March 2006.

  India is set to become one of the largest markets in the world for mobile handsets.

  Investments on roads from 2001 to 2006 will be 10 times that of the investment made from 1947 to 2000.

  India is the world's 2nd largest producer of fruits and vegetables.

  India is among the top 5 producers in the world for foodgrains, pulses, poultry and first of milk

  Arrival of international tourists in India has gone up 60% in 2005 over 2002.

  India's IT and ITES industry exports grew 34.5% in 2004-05 to touch 17.8 billion USD and continue to grow at around 40% per year.

  Gartner estimates that India Will generate 13.8 billion USD from offshore BPO exports in 2007. 

78% OF PEOPLE "WORRIED" PRES. OBAMA'S $787 BILLION "STIMULUS" SPENDING IS JUST BEING WASTED: USA TODAY/GALLUP POLL

WASHINGTON D.C., September 27, 2009 - Six months after President Obama launched a $787 billion plan to right the nation's economy, a majority of Americans think the avalanche of new federal aid has cost too much and done too little to end the recession, according to a poll taken around mid-August.

About 70 percent of the people polled responded that over the long term, the $787 billion stimulus plan will either make their financial situation "worse" (34 percent) or it will have "no effect" at all (36 percent) on them. Only 28 percent believe it it make their financial situation better, and 2 percent had no opinion.

The August 17th USA TODAY/Gallup Poll found 57% of adults say the stimulus package is having no impact on the economy or making it worse. Even more —60% — doubt that the stimulus plan will help the economy in the years ahead, and only 18% say it has done anything to help improve their personal situation.

That skepticism underscores the challenge Obama faces in trying to convince the public that the stimulus has helped turn the economy around. It also could complicate the administration's plans to overhaul the nation's health care system.

"This is a wake-up call for the administration." says House Minority Whip Eric Cantor, R-Va. "People see the stimulus hasn't worked, and now you want to lay on over $1 trillion in a health care plan."

The administration declined to comment on the poll results.

The stimulus package contains $288 billion for tax cuts and $499 billion in new spending, much of it meant to pay for unemployment and other social services. The $1 billion "cash for clunkers" program was not part of the bill, although its $2 billion expansion comes from stimulus funds.

The government has allocated more than $200 billion in aid. Since the plan began, however, the recession has left an additional 2.2 million Americans without jobs, according to Labor Department surveys.

Economists generally say the recession would have been worse without the stimulus, though they disagree widely on how much it has helped.

"The economy was like a huge pothole we had to fill, and what we did was throw a little gravel in the bottom. You don't fill the hole, not even close. But you make it better," says University of Oregon economist Tim Duy. "Many people don't see the effects so they assume it's not working."

The poll Aug. 6-9 of 1,010 adults has a margin of error of +/–4% for the full sample. In a question asked of a subsample, 51% of Americans say the government should have spent less on the stimulus; 31% say the amount was "about right." Also, almost half in the full sample say they are "very worried" that stimulus money is being wasted.

U.S. UNEMPLOYEMENT: SHOCKING RATIO OF 6 JOB SEEKERS FOR EVERY 1 JOB AVAILABLE: HIGHEST EVER SINCE TRACKING BEGAN IN 2000

WASHINGTON D.C., September 25, 2009 - The United States Bureau of Labor Statistics revealed today that for the first time since 2000 when the government started tracking the ratio of job seekers to jobs available, the number of job seekers now outnumber job openings by more than six to one.

According to the Labor Department’s latest available numbers from July, only 2.4 million full-time permanent jobs were open, with 14.5 million people officially unemployed.

In August, some additional 466,000 people in the U.S. lost their jobs, bringing the official unemployed to 15 million people.

However, the BLS does not track people who don't return to unemployment offices within four weeks (the labor agency assumes they have already found jobs, which is rarely the case) as well as the vast number of under-employed people. The BLS counts the part-time employed as full-time employed.

The formerly full-time workers who now work part-time includes those whose full-week 40 work hours have been cut to as little as 10 hours per week in a five-day work week. Economists have calculated thet there are many more than 14.5 million people reported by the government as unemployed, when one counts those who do not return within four weeks.

When those two sets of people are counted, many economists have calculated that there are some 25 million people - or 1 in 6 of the 154 million people in the U.S. labor force - that are unemployed or underemployed.

When the number of hours worked by under-employed are factored in, the actual U.S. unemployment rate is around 17 percent, according to economists, far higher than the 9.7 percent U.S. unemployment rate reported by the Bureau of Labor Statistics in early September.

The people who do not return to the government unemployment offices to file for unemployment benefits have their own reasons for not returning.

Many companies remain anxious about growth prospects in the months ahead, making them reluctant to add to their payrolls.

This caution and scarcity of jobs reflects the caution of many American businesses when no one knows what will emerge to propel the economy.