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Posted by : sambala

BJP charges govt with misleading people on growth figures


NEW DELHI: The BJP on Monday made light of Prime Minister Manmohan Singh’s claim that the impact of the global meltdown on the Indian economy would be ‘minimal’, and that it’d continue to grow at 7-7.5%, and maintained that the assertion was not backed by facts.

“While the economy is showing definite signs of a slowdown, retrenchments and layoffs were taking place in various sectors,” BJP spokesman Prakash Javadekar, and cited the case of diamond-cutting industry to prove his point.
The BJP spokesman criticised the knee-jerk reactions of the government to revive the economy, and said that what was needed at this juncture was an “out-of-the-box” thinking.

The attack on the UPA government’s economic policies and the measures adopted by it to re-charge the economy was in keeping with the party’s stance that the prime minister and his economic managers had goofed up badly on the front, and that the ‘economy was being forced to pay a heavy price for their mismanagement’.

The assault on the UPA government comes three days ahead of Leader of the Opposition in the Lok Sabha L K Advani’s scheduled meeting with industry bigwigs to get a feel of the situation staring the country and prepare an alternative road-map to get the economy moving again.

The principal opposition party has been very critical of the manner in which the Manmohan Singh government has addressed the situation. The BJP’s assault has been masterminded by former Union ministers Jaswant Singh, Yashwant Sinha and Arun Shourie.

With the Indian economy facing the heat of the global slowdown, the three BJP leaders have in the recent past intensified their attack on the Congress-led government, going to the extent of blaming the economic managers for doggedly’ refusing to plug the loopholes.

Job losses....

Posted by : sambala

And it was this underlying sentiment that Chidambaram sought to highlight while asking India Inc not to panic and assuring that the United Progressive Alliance (UPA) government and the central bank would take all necessary steps to minimise the impact of global crisis on India.

"The classic response to demand slowdown is to cut prices for the short-term," he told participating industrialists, while calling specifically upon airlines, realtors, automobile makers and consumer durables companies to lower prices to stimulate demand.

“All I ask is, there are enough people to spread gloom and doom. Just have your chin up, and in six-nine months, or maybe 12, we will be back to normal growth rates that we are used to.”

Job losses....

Posted by : sambala

NEW DELHI: An underlying unease amid hope! This perhaps best describes the mood among the participants at this year`s India Economic Summit, which evidently lacked the high-profile attendance that the Davos, Switzerland-based World Economic Forum (WEF) had generally managed to draw in the past.

The ill-effects of a recession in the US and an overall global economic downturn weighed heavily in the minds of corporate leaders, even though many felt that India, with its high growth rate, even if slowing, was better equipped than many others to tide over the situation.

And this sentiment was best summed up by Finance Minister P. Chidambaram, while speaking on “Risks to India` Economy in a Post-Crisis World” on the concluding of the three-day summit, now in its 24th edition, that began here Sunday.

“This recession threatens to be a longer and deeper recession affecting most industrialised countries and we in India are experiencing the spill-over effects of what is happening in advanced countries,” he said.

“While world output will decline - and to that extent affect our exports, affect some capital inflows, affect external credits - we must be able to quickly substitute or compensate for that by stimulating domestic demand and providing liquidity in the domestic market,” Chidambaram said.

“Let us assume that for another month or two there will be further bad news, but even then we will grow at a satisfactory growth rate. Next year we will bounce back to a much better growth rate.”

The Indian economy is predicted by various think tanks and the central bank to grow at between 7-8 percent this year.

But the corporate sector remained apprehensive, having to contend with a demand slowdown, mounting inventories, higher input costs, rising cost of borrowings, depreciating rupee, volatile capital markets, lower profits if not losses, and resisting the unpleasant task of job cuts.

“There is a crisis of confidence,” said K.V. Kamath, president of the event`s co-host, the Confederation of Indian Industry, and managing director of ICICI Bank, India`s largest in the private sector.

“There is an urgent need to boost public confidence in the fundamentals of the economy for a recovery to take place,” said Kamath, adding: “I am also the first to concede that there is a change of mood to the other end of the spectrum."

Last year, the mood was entirely different. The Indian economy was racing ahead with the nine-percent-plus growth, exports were booming, inflation was moderate, the markets were on an upswing and corporate India was rolling in profits.

As a result, this year`s event saw few participants talk about the need for the government to push ahead with reforms, the need to spruce up infrastructure or the need to liberalise foreign direct investment regime further.

Their focus was clear: The US economy was in recession, which had spilled over to some European counties as well, and that Japan, the world`s second largest economy, was now adding to the depressing news with a confirmed recession.

Yet, not all participants agreed with the gloom and doom theory being propagated by some stakeholders, especially in the backdrop of a 50-percent-plus fall in a key equity market index and falling corporate profits.

“I`m hearing concern expressed here about six percent growth. In the West, that growth would be considered quite fantastic," said James Quigley, chief executive of the US-based accounting giant Deloitte, among an estimated 700 delegates from 35 countries.

From the managing director of Asian Development Bank Rajat M. Nag to World Economic Forum founder Klaus Schwab, and from Gujarat Chief Minister Narendra Modi to India`s Commerce Minister Kamal Nath, all maintained that the Indian economy was resilient enough to tide over the crisis.

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Job losses....

Posted by : sambala

India last bastion for high jobs growth

NEW DELHI: Bad times in the West may force companies to offshore more jobs to cheaper destinations like India, making it the last bastion for jobs growth, although US President-elect Barack Obama is vocally against outsourcing.

US-based staffing services firm Manpower, whose India business has grown 50% this year, sees some slowing down in ITeS and finance sectors in the short-term but growth would return by mid-summer when effects of stimulus packages announced by multiple countries start showing, its CEO Jeff Joerres said.

"In the global scenario India looks optimistic. Though the employment outlook looks slightly down but optimistic on a relative basis... we have to see how the wave hits the shores," he said.

However, companies that struggled to justify outsourcing in good times would find it easier to move jobs to low-cost destination citing savings, Joerres said.

Obama, in the run up to the presidential election, had spoken of ending tax breaks for companies that shift jobs overseas and give them to those investing at home.

Since the sub-prime credit crisis brewed into a global economic storm, there has been a 15-20% slowdown in jobs growth globally as companies see their bottom lines shrinking.

Besides India, the countries that look promising in terms of hiring are China, Middle East and East Europe. These countries are likely to report promising growth rate as they have a booming domestic market and also because the base is small, he said.

A survey by Manpower in September had ranked India as the most optimistic market for new jobs.

Job losses....

Posted by : chchch

Sambala, In reference to the Citigroup Chairman`s statement, in the Indian context, don`t you think that it would be irresposible on the part of the Central Govt./Fin.Min. incase they agree for salary revision of bank employees leave alone job-cuts (since Prime Minister himself is against job-cuts in any industry in this financial turmoil and he is (indirectly)agreeable for reduced wages) just before Parliamentary elections?

Job losses....

Posted by : sambala

Deep Cuts Planned at Citi
Bank Will Cut 50,000 Jobs, Slash Expenses by 20%

NEW YORK -- Citigroup Inc. is cutting approximately 53,000 more jobs in the coming quarters as the banking giant struggles to steady itself after suffering massive losses from deteriorating debt.

The plans, posted on the company`s Web site, are being discussed by CEO Vikram Pandit at the company`s town hall meeting in New York Monday with employees.

The company said total headcount is being reduced by 20% from its peak of 375,000 at the end of 2007; the company had already announced in October that it was eliminating about 22,000 jobs from those levels.

Citigroup is also planning to reduce expenses by 20%, targeting 2009 expenses of $50 billion to $52 billion.

The New York-based bank has posted four straight quarterly losses, including a loss of $2.8 billion during the third quarter.

Shortly before the town hall meeting in New York, Citigroup Chairman Win Bischoff said at a business forum in Dubai, United Arab Emirates, that it would be irresponsible for Citi and other companies not to look at staffing in the event of a prolonged economic downturn.

"What all of us have done -- and perhaps injudiciously -- we`ve added a lot of people over … this very benign period," Mr. Bischoff said.

"If there is a reversion to the mean … those job losses will obviously fall particularly heavily on the financial sector," he added. "Certainly they will fall particularly heavily on London and New York."

In his comments to the Associated Press, Mr. Bischoff didn`t rule out the likelihood that Citi`s leaders would go without bonuses this year -- a move that would effectively amount to a substantial pay cut for the company`s executives.

"Watch this space," he said when asked about lost bonuses.

On Sunday, Goldman Sachs Group Inc. said seven top executives, including Chief Executive Lloyd Blankfein, opted out of receiving cash or stock bonuses for 2008 amid the ongoing credit crisis.

Job losses....

Posted by : marketman

Citi group planning to cut upto 50000 jobs....

Job losses....

Posted by : sambala

Sun Microsystems to lay off up to 6,000 workers

By announcing one of the biggest tech layoffs so far this year, Sun Microsystems on Friday bought more time for its effort to expand sales and show that a strategy built around open-source software can carry the struggling Santa Clara computer-maker out of the current recession and into profitability.

But analysts said the long-term prognosis is still uncertain for the venerable tech giant, which has been the subject of takeover speculation as its stock price plunged over the past year — even before the economy began battering other Silicon Valley companies.

Sun said Friday that it will lay off between 5,000 and 6,000 workers, more than 15 percent of its global workforce, over the next year. Sun also will reorganize its software business and merge some divisions into other operations. Rich Green, who has been Sun`s executive vice president for software since 2006, will leave the company.

The moves are a response both to the recent economic crunch, which has hit Sun harder than other tech firms, and to a longer-term trend in which customers are buying more lower-cost commodity systems and fewer of the high-end proprietary servers and systems that were Sun`s flagship products for many years.

Welcome to the world of Obamanomics.

Posted by : sambala

Financial overhaul added to Obama`s to-do list

WASHINGTON – Barack Obama isn`t president yet, but his must-do list just got longer. The newest addition to the lengthy list of tasks after taking office: helping oversee the overhaul of the world`s financial regulatory system.

That is one of the assignments to the president-elect from current global leaders after their weekend summit, where they pledged action to avoid a repeat of the financial mess that has caused worldwide economic chaos.

"Obama has a tall order," said Morris Goldstein, a senior fellow at the Peterson Institute for International Economics who spent years working at the International Monetary Fund, the world`s financial firefighter.

"He has a lot of things he has to do quickly in a number of areas and doesn`t have a lot of time to think about them," Goldstein said in an interview Sunday.

That will put a lot of pressure on Obama. He did not participate in the emergency two-day summit that concluded Saturday, instead sending representatives to meet with leaders on the sidelines.

After taking the oath of office Jan. 20, Obama will have to figure out in short order how far his administration is willing to go in revamping oversight of financial companies and products, in the United States and abroad, and nailing down the crucial details.

"Obama has an incredible mountain to climb in the way of the economic and financial situation," said Richard Yamarone, economist at Argus Research.

President George W. Bush hosted the summit, where nearly two dozen foreign leaders endorsed broad goals to fend off any future calamities and to revive the global economy.

It will be up to finance ministers to flesh out the details to put such changes in place by the end of March. Leaders plan to hold the next summit by April 30 — just months into Obama`s term.

"I think this puts Obama and a new administration in a very difficult position," said Steven Schrage, a former Bush administration trade official now at the Center for Strategic and International Studies.

"It`s really going to be up to the next administration to figure, do they breathe life into this? Does this go forward? Do they take it in a different direction?"

All the while, the new president will be under immense pressure to bring relief to millions of Americans who have watched jobs disappear, nest eggs shrink, home values plunge, foreclosures zoom upward and banks — along with storied Wall Street firms — laid low by the financial and economic crises.

"Make no mistake: This is the greatest economic challenge of our times," Obama said Saturday in the weekly Democratic radio address. "And while the road ahead will be long and the work will be hard, I know that we can steer ourselves out of this crisis."

The president-elect himself did not weigh in after the summit about whether he agreed with the thrust of the leaders` broad goals. But he indicated the global gathering was a good idea because "our global economic crisis requires a coordinated global response," he said Saturday.

Translating the leaders` sweeping principles into specific actions will be difficult. "That`s the rub. That`s where you really see the differences across countries in what you want to do," Goldstein said. "In the coming months, we`ll see to what extent Obama`s agenda will conflict with the Europeans."

Leaders pledged to make the global financial system more accountable to investors and less vulnerable to risky investing. But there are sure to be differences of opinion on exactly how to accomplish that, which could impede progress at the next summit in the spring.

To provide relief from the current woes, the leaders supported the benefits of enacting government spending plans to stimulate their economies. But they stopped short of a commitment for all to act at the same time, as some Europeans had favored.

Welcome to the world of Obamanomics.

Posted by : sambala

Economists See No Growth Until 2nd Half of 2009

The U.S. economy is in the midst of the worst part of the recession, but growth may return by the second half of next year, according to economists in the latest Wall Street Journal forecasting survey.

"The intensity of decline will wane," said Stephen Stanley of RBS Greenwich Capital. "We`ve cut out a lot of the low-hanging fruit, and it gets progressively tougher to see such rapid rates of decline."

On average the 54 economists surveyed expect gross domestic product to decline 3% at an annualized rate in this year`s fourth quarter. That comes after the Commerce Department reported a 0.3% drop in the third quarter. Another negative reading is forecast for the first three months of next year with an essentially flat reading for the second quarter. Slow growth is seen for the second half of 2009, reaching 2.1% by the fourth quarter.

"By the third quarter of next year a recovery will be under way," said John Lonski of Moody`s Investors Service, but he added that expansion won`t return to pre-crisis levels until 2010.


A number of economists surveyed gave a much more pessimistic forecast, due in part to pressure on consumers. "We`re not only in an economic downturn, but a serious banking crisis. The idea that you can just have a couple of quarters of negative growth and then we`re off to the races is just too optimistic," said Paul Ashworth of Capital Economics, who is predicting GDP contractions throughout next year.

Government action is one reason why some economists see the landscape eventually improving. Nearly two-thirds of respondents say the Treasury Department`s Troubled Asset Relief Program, which has taken stakes in major financial institutions, is helping markets.

"The cost of doing nothing is greater than the cost of doing something, as we saw in the case of Lehman," said Diane Swonk of Mesirow Financial, referring to the collapse of Lehman Brothers Holdings Inc. in September. "The idea is still to save the core ideas of a market-based economy, even if that means using government as a bridge to get there."

Economists were supportive of more government stimulus. More than 80% favor a stimulus package in January, even if one is passed before the end of 2008. Some 34% of respondents said the top priority in such a package should be permanent tax cuts. On average, economists said the total size of government stimulus this year and early next should be more than $250 billion.

"By the second half of next year the impact of measures to stimulate the economy should become evident," Mr. Lonski said.

Economists saw other factors boosting the chances of recovery. "Stimulus will help, but it won`t get us out of the problem. It`s tantamount to taking aspirin, as it will only temporarily ease pain," said California State University`s Sung Won Sohn, who cited rebuilding confidence as essential for recovery.

President-elect Barack Obama "needs to extend unemployment, work to stem foreclosures and use other plans to demonstrate that he`s doing something. To stabilize confidence, you need programs to ease pain. People see that they can count on you, and confidence recovers," he said.

Confidence is in short supply these days. In October, the Conference Board`s measure of consumer confidence posted the lowest reading since the survey began in 1967. Consumer spending also has suffered, recording a 0.3% decline in September.

Mounting job losses have exacerbated the consumer downturn, and even though economists are forecasting some improvement by late next year, the picture for the labor market remains grim. On average, respondents expect the unemployment rate to rise to 7.7% by December 2009, up from 6.5% last month, while they see the economy shedding more than 100,000 jobs a month over the next year.

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