| Australian shares open deep in the red
THE stock market haemorrhaged 2.65 per cent in the first 15 minutes of trade today following heavy falls on Wall Street overnight. At 10.15am AEDT the benchmark S&P/ASX200 index had fallen 158.2 points, or 2.73 per cent, to 5637.9 while the broader All Ordinaries had fallen 160.5, or 2.74 per cent, to 5696.5.On the Sydney Futures Exchange, the March share price index futures contract was down 150 points to 5642.US equity markets fell sharply overnight following the weak Philadelphia Fed manufacturing data which stoked recession fears.Financial stocks declined after Merrill Lynch announced a larger than expected fourth quarter loss and $US16.7 billion ($A19.1 billion) in writedowns.US Federal Reserve chairman Ben Bernanke pointed to a worsening economic outlook, reinforcing expectations of further interest rate cuts.The Dow Jones industrial average settled down 306.95 points, or 2.46 per cent, at 12,159.21, more than 1000 points lower since the beginning of 2008.The Standard & Poor's 500 Index was down 39.95 points, or 2.91 per cent, at 1333.25.The Nasdaq Composite Index was down 47.69 points, or 1.99 per cent, at 2346.90.At 10.18am, BHP Billiton was down $1.97, or 5.34 per cent, at $34.53, and Rio Tinto had shed $8.10, or 6.75 per cent, to $110.50.
Trouble with Trade
If we're going to open our markets up to the low cost resource suppliers, we need to make sure the playing field is a little more level by mandating at least approximate levels environmental and work place safety protections. I know tariff is a bad word but it would certainly be appropriate to levy them on goods coming from countries that did not meet such standards. Such a system would not stop outsourcing of jobs but it would certainly dampen its pace and the negative effects. While Pareto efficiency may not be achievable, we can and must do a better job of sharing the gains of Globalization. We need to improve training and assistance programs for those displaced by outsourcing. The tariffs noted above could help fund such efforts as could increased taxes on corporations. These policies would not stop Globalization but they would change the game from one where one set of players – MNCs and Developing Countries, in particular, received all of the benefits at the expense of another set – US workers.
Dollar nears US88c
THE dollar opened stronger today, knocking on $US0.8800, as the weakest US home sales numbers in 25 years teamed up with higher gold prices to boost the currency. At 7am AEDT, the dollar was trading at $US0.8789/99, up from yesterday's close of 0.8738/42. Overnight, the domestic currency traded between a low of $US0.8700 and a high of 0.8811. High-yielding units climbed overnight after US existing home sales data showed the biggest annual slump in 25 years. Home purchases in the year to December dived by 2.2 per cent to 4.89 million, which was lower than market forecasts of 5 million sales, the National Association of Realtors said. A Toronto-based corporate dealer with OzForex, Darren Richardson, said high interest rate currencies benefited from a weaker US dollar.
EgyptAir to use IPO proceeds to buy jets
National carrier EgyptAir will use the proceeds of an initial public offering (IPO) to raise money to purchase new aircraft, Minister of Civil Aviation Ahmed Shafik said. He gave no date for the public offering, but confirmed that it would be about a 20-percent stake in the company. The IPO is expected to raise $750 million, which will be used to purchase 22 new planes.
Shafik said a preparatory study for the privatization was nearly complete, but a second study by an international bank would be needed.
Egypt, EU fail to set action plan Egypt and the European Union have failed to agree on a Neighborhood Action Plan (NAP) due to alleged differences over its wording on human rights issues and nuclear weapons.
Foreign Minister Ahmed Aboul Gheit led an Egyptian delegation to a one-day meeting in Luxembourg on June 13 with EU commissioner Benita Ferrero-Waldner.
C4, Sky, Carphone, Emap join in radio bid
Channel 4 has joined forces with BSkyB, Emap and Carphone Warehouse, and others in a bid to win a digital radio licence and challenge the dominance of the BBC. The combined group, called 4 Digital Group, submitted its bid for the 12-year licence promising to launch 10 new national digital radio stations from 2008. Channel 4 Radio would operate three national digital stations: one aimed at 15-to-29 year-olds; one on current affairs; and an all-music station. The other stations would include: Talk Radio from Ulster Television, a music station from Emap, and Sky News Radio, a joint venture between BSkyB and Chrysalis, a 24-hour news channel. Ofcom advertised for this second national digital multiplex licence in December in a bid to grow the industry. The first licence is majority owned by commercial radio group Gcap.
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