Libya’s oil minister defected and fled to Tunisia, a Tunisian security official said Tuesday, one of the highest profile figures to abandon Moammar Gadhafi’s government.
Shukri Ghanem, the head of the National Oil Co. and Libya’s oil minister, crossed into Tunisia by road on Monday and defected, the Tunisian official said. The official, based in the region around the Ras Jdir border crossing, spoke on condition of anonymity because he was not authorized to speak to the media.
Ghanem is one of the most prominent members of Gadhafi’s government to leave amid fighting between the military and rebels seeking to end Gadhafi’s more than 40-year rule.
Others who have defected include Foreign Minister Moussa Koussa, one of Gadhafi’s earliest supporters; Interior Minister Abdel-Fatah Younes; Justice Minister Mustafa Abdul-Jalil, and Ali Abdessalam Treki, a former U.N. General Assembly president. A number of ambassadors and other diplomats also have resigned their posts.
A NATO-led campaign _ authorized by the United Nations _ is enforcing a no-fly zone over the country and launching airstrikes to try to protect civilians from attacks by Gadhafi’s forces.
Early Tuesday, NATO jets pounded two government buildings in the Libyan capital, including the Interior Ministry, setting them on fire. A government spokesman suggested that the ministry was targeted because it contained files on corruption cases against senior members of the Benghazi-based rebel leadership.
In Geneva, meanwhile, the U.N. refugee agency said Tuesday that Libyan authorities appeared to be encouraging African migrants to board unseaworthy boats bound for Europe.
Melissa Fleming, a spokeswoman for the U.N. High Commissioner for Refugees, told reporters that the Libyan conflict has opened up a route for migrants that was closed for two years because of an agreement between Libya and Italy.
Already some 14,000 people _ mostly from sub-Saharan Africa _ have used Libya as a springboard to reach Europe, and thousands more are poised to make the treacherous sea journey in the coming weeks as weather conditions in the Mediterranean improve.
“The authorities (in Libya) are not discouraging, at all, in fact there may be signs that they are encouraging these boat journeys,” she said.
Some are migrants fleeing the fighting in Libya, but others appear to be crossing into Libya from elsewhere in Africa because it is easier to get onto smugglers’ boats there.
Ghanem, the latest minister to defect, had been at odds with the Gadhafi regime before, basically losing his post for a while in 2009 as two of Gadhafi’s sons differed on the direction the country should take in reforming its political and economic systems. His resignation was seen, at least in part, as linked to the creation of a new superstructure governing the nation’s oil sector, with the new agency designed to replace one he supported.
Before assuming the oil ministry’s portfolio, Ghanem served for around three years as prime minister at a time when Libya was emerging from under the cloud of more than a decade of international sanctions.
Ghanem is among Gadhafi government officials under U.S. sanctions announced by the Treasury Department in early April.
Abdel Moneim al-Houni, a former Libyan Arab League representative who was among the first wave of Libyan diplomats to defect, confirmed that Ghanem had defected but said no official announcement has been made out of concern for the safety of family members who are still in Tripoli. Al-Houni said that he spoke to Ghanem after he crossed the border.
“Most of the officials remaining in Tripoli are forced to stay under intimidation and pressure. They are not happy with what is happening,” Al-Houni told the AP.
Guma El-Gamaty, London-based spokesman for the Libyan opposition’s Interim National Council, said “all what we know is that Shukri Ghanem is in Tunisia.”
NATO has stepped up strikes on the Libyan capital Tripoli, and one of the buildings hit early Tuesday was used by the Interior Ministry, which is responsible for internal security.
Libyan spokesman Moussa Ibrahim suggested the ministry was targeted because it contained files on rebel leaders in Benghazi, the de-facto capital of the eastern half of the country, which is under opposition control.
“If they (NATO) are really interested in protecting civilians … then we call upon them to stop and start talking to us,” Ibrahim said.
In Moscow, Russia’s foreign minister on Tuesday urged Libya’s government representatives to allow the delivery of humanitarian aid.
Minister Sergey Lavrov says that Gadhafi’s representatives reiterated their willingness to consider a peace plan tabled by the African Union that called for an immediate cease-fire and dialogue between the government and the rebels. The rebels have rejected that plan.
The meeting follows a Monday visit to Moscow by the United Nations special envoy for Libya.
China’s statistics bureau said it “condemns” leaks of economic data and those responsible will be punished, after the office released economic indicators that matched rumors circulating in the market and online yesterday.
“We believe any illegal behavior will be punished by law,” Sheng Laiyun, a spokesman for the department, told a briefing in Beijing today. “Those spreading state secrets on the Internet or other public information networks should be held accountable.”
China’s first-quarter growth figure and other monthly economic data including the inflation rate were leaked yesterday ahead of the official release. Phoenix Satellite Television Holdings Ltd. reported 10 economic indicators on its website yesterday morning, citing an unidentified source. Figures released later yesterday by China’s central bank and today by the National Bureau of Statistics matched 9 of the numbers. Phoenix TV didn’t immediately respond to questions from Bloomberg News.
“Key data are widely circulated in the Chinese bureaucracy prior to their release,” said Brian Jackson, an emerging markets strategist at Royal Bank of Canada in Hong Kong. “The recent accuracy of market rumors must raise concerns about the integrity of the process.”
China’s economy, the world’s second-biggest, grew a more- than-estimated 9.7 percent in the first quarter and consumer prices rose 5.4 percent in March from a year earlier, the fastest pace since 2008.
Improving the System
Government departments, institutions and individuals have a responsibility to keep state secrets, Sheng said at the briefing. The bureau has narrowed the personnel who have “dealings with relevant information,” he said.
The bureau is studying ways to improve the system, including shortening the time-frame between production of the information and its release so as to reduce risks, Sheng said.
The Phoenix TV site said March consumer prices would rise 5.3 percent to 5.4 percent, while rumors circulating on China’s microblogs by yesterday afternoon had a consensus on 5 payday advance online.4, which also matched the official release today.
Jiang Guangce, a Shanghai-based partner and fund manager at Congrong Investment Management Co., got the correct numbers for China’s gross domestic product and consumer price index from a Hong Kong fund management company yesterday.
‘Normal in China’
“It’s normal in China, there are always channels for this sort of information,” Jiang said in a phone interview today, “The short side and the futures market in Hong Kong are always a step ahead. This is a result of China’s power structure.”
It was the fifth time in six months that an accurate consumer price index number was accurately circulated in the market and press reports before release. It’s become one of the most sought-after numbers because of China’s battle to curb inflation, which jumped to a 32-month high in March.
Early disclosure happens because too many government offices see data before they’re made public, He Keng, a former deputy head of the department and now a member of its consulting committee, said in an interview last month.
“A new set of procedures just has to be developed,” said David Cohen, a Singapore-based economist at Action Economics. “They’ll have to give more authority to the people in charge of data collecting and dissemination, and make clear to people, such as those in the central bank, not to talk about it.”
Any unauthorized release violates the Statistics Law and is punishable by a warning, demotion or firing, according to a rule issued by the government in March 2009.
A legal “loophole” means China’s laws don’t count profiting on leaked economic indicators as insider trading, according to Yan Yiming, a Shanghai-based securities lawyer.
–Kevin Hamlin, Fan Wenxin. With assistance by Zheng Lifei in Beijing and Sophie Leung in Hong Kong.
Companies that act as brokers for trucking services are gaining favor with investors as the 20- month-old rebound shifts into a new phase that’s less dependent on inventory restocking.
The so-called asset-lite truckers such as Roadrunner Transportation Systems Inc. and C.H. Robinson Worldwide Inc. lease vehicles for businesses that need to ship goods, so they have more cost flexibility than companies that own and operate most of their trucks. Shares of these brokers have risen 6.9 percent since July 30, 2010, compared with a 1.5 percent decline for operators including Celadon Group Inc. and Werner Enterprises Inc., according to two new Bloomberg indexes.
“We are way past the early cycle rally,” and now see “sustainable elements to the recovery,” said Benjamin Hartford, transportation analyst at Milwaukee-based Robert W. Baird & Co., who co-wrote Baird’s 2011 freight-outlook report. As the rebound matures, investors will find “greater resiliency” in companies with flexible costs.
Trucking demand varies with the economy, accounting for 71 percent of the value, or $8.3 trillion, of U.S. goods shipped in 2007, according to the most recent data from the Department of Transportation.
The Baird report shows the recovery spanning 26 months so far, based on the Institute for Supply Management’s manufacturing index, which hit a recession low in December 2008. That’s more than halfway through an average of 40 months, which the current expansion may exceed, Hartford said. The recession that ended in June 2009 was the longest since the 43-month slump during the Great Depression, according to the National Bureau of Economic Research.
Expanding Economy
The U.S. economy likely will expand at a 3.2 percent rate this year, according to the median estimate of 63 economists surveyed in February by Bloomberg News, with exports and business spending on equipment and software poised to generate most of the growth, said Joseph Carson, director of economic research at AllianceBernstein LP in New York.
When the rebound began in the third quarter of 2009, growth was driven by government spending, along with companies that were building stockpiles and needed truckers to move their products. This made the operators more appealing to investors because their profits rise more quickly in this stage of recovery.
“I tend to favor the asset-based guys” early in the cycle, because they “are able to get rate increases as well as higher volumes,” said Kevin Sterling, an analyst in Richmond, Virginia, at BB&T Capital Markets.
Rising Stock
Indianapolis-based Celadon’s stock more than tripled to $14.79 at the end of last year from $4 payday loans for bad credit.47 on March 9, 2009, as the operator reported net income of $2.86 million in the quarter ended Dec. 31, compared with a loss of $2.08 million in the January-March 2009 period.
Freight volumes peaked in September and have dropped 10 percent since then, as measured by the Cass Freight Shipments Index. Momentum for Celadon stock has slowed as well; it has fallen 2.6 percent since the end of December.
The Bloomberg U.S. Truckload Trucking Index tracks the performance of Celadon, Werner and seven other operators. The Bloomberg U.S. Non-Asset Based Trucking Index tracks Roadrunner, C.H. Robinson and six other brokers. The two indexes show that shares of the operators rose 25 percent between May 30, 2008, and July 31, 2010, compared with a 16 percent decline for the brokers.
The asset-heavy companies also outperformed in 2001 and 2002, coming out of the recession that ended in November 2001. As the recovery matured, the asset-lite truckers outperformed from 2003 to early 2008.
Slashing Costs
When freight volumes started to cool off in 2007, Roadrunner responded quickly to protect profits, adopting cuts that slashed its vehicle-leasing costs by 17 percent over two years.
“The advantage we have is we don’t run empty miles,” said Peter Armbruster, chief financial officer of the Cudahy, Wisconsin, company. If customers “go from needing to do eight trips instead of 10 between our Milwaukee terminal and southern California, we just do eight. It is more efficient.”
Inventory building aided economic growth for five consecutive quarters through the third period of 2010, when it contributed 1.61 percent to the 2.6 percent gain. When companies stopped adding to their stockpiles in the fourth quarter, the reduction subtracted 3.7 percent from growth, the most since the first quarter of 1988.
Adjust Expenditures
John Wiehoff, chief executive officer for Eden Prairie, Minnesota-based C.H. Robinson, said the broker’s lower-cost model allows it to adjust expenditures rapidly in response to demand.
“We’re very proud that we were able to manage through the recession with an earnings increase in each of the past two years,” he said on a Feb. 1 conference call with investors. “We think that’s a pretty visible statement about our business model.”
Brokers like C.H. Robinson “have higher returns, very little debt and a lot of cash on the balance sheet,” along with “more financial flexibility” and fewer capital-expenditure requirements, according to Sterling, who said BB&T Capital Markets is recommending investors purchase the Minnesota company and Roadrunner.
C.H. Robinson announced in December a 16 percent increase in its cash dividend to 29 cents a share. It had $398.6 million in cash at year-end, compared with $11.1 million for Celadon.
“The asset-lite guys can act countercyclically,” said Peter Nesvold, managing director and senior equity research analyst in New York at Jefferies & Co. “As fundamentals start to improve, we have a long way we can ride.”
Twenty months ahead of the 2012 election, President Barack Obama is traveling the nation, vying for the public’s attention one state at a time, while international crises and budget fights compete with his plans for economic revival.
On Tuesday, Obama curried favor with small businesses in politically important Ohio, pushing his plans to boost American competitiveness by increasing spending on sectors like education and infrastructure. That agenda, however, is running up against opposition from some Republican governors in cash-strapped states, and GOP lawmakers on Capitol Hill, whose demands for deep spending cuts raise the prospect of a federal government shutdown.
The president’s domestic initiatives have also been overshadowed by the turmoil in the Middle East. Tuesday’s trip came amid an escalation of violence in Libya, where government-backed security forces clashed with protesters, and news that four Americans were killed at the hands of pirates off the coast of Africa.
Since his State of the Union address last month, Obama has traveled away from Washington at least once a week, mostly stopping in political battleground states that will be crucial to his re-election bid, including Wisconsin, Michigan and Pennsylvania. He plans a trip to Florida next week.
As was the case during the 2008 campaign, Obama aides are willing to forego national media headlines in favor of mostly positive coverage in local media outlets in regions the president visits. They’re also courting the press in swing states even when Obama is not on the road, inviting reporters from local television stations in Virginia, Wisconsin and Ohio to the White House for interviews last week.
Keeping with his pledge to focus more on jobs following his party’s sweeping defeats in the midterm elections, Obama’s message to swing state voters is strictly economic. He’s touting cuts to some domestic programs in his proposed budget as a way to bring down the deficit, while also citing the need for increased spending on education, infrastructure and research as a way to boost job growth and help the country compete in the global economy.
“By cutting back on what we don’t need, we can invest in the future. We can invest in the things that are critical to our long-term success,” Obama said Tuesday to more than 100 small business leaders gathered at Cleveland State University.
However, Obama’s calls for increased spending run counter to the deep budget cutting steps being taken by governors in Wisconsin, New Jersey, Indiana and Ohio, where Gov. John Kasich is backing state legislation that would end collective bargaining for public employees. Kasich greeted Obama at the airport Tuesday upon his arrival in Cleveland.
Supporters of the Ohio bill, as well as a similar measure backed by Wisconsin Gov. Scott Walker, say the measures would help control spending and provide cash-strapped states greater flexibility.
Opponents of the bill were expected to protest in Ohio’s capital Tuesday. Similar protests in Wisconsin have attracted national attention, and Obama himself waded into the dispute last week by arguing that limiting bargaining rights “seems like more of an assault on unions.”
Obama also faces budget battles back in Washington, where the lawmakers are debating a bill to fund the government through Sept. 30. The Republican-led House passed a bill early Saturday that cuts $61 billion for hundreds of federal program. Though the bill faces longer odds in the Senate, Obama has threatened a veto should the measure land on his desk.
If no compromise over the budget is reached by March 4, parts of the government could shut down.
Obama has said the drastic cuts could cause the still fragile economic recovery to stale, and make it harder for small business owners, like the ones he spoke to in Cleveland, to access capital and hire new workers.
“It’s small businesses like your that help drive America’s economic growth,” Obama said Tuesday. “When our small businesses do well, then America does well.”
Administration officials also plan to hold additional forums with small business owners across the country. Sessions are planned for Atlanta, Boston, Pittsburgh, Minneapolis and Silicon Valley as well as Austin, Texas; Durham, N.C., and Boulder, Colo.
It’s a stock picker’s market.
For 1 1/2 years, individual stocks moved with the broad market with little regard for the prospects of the companies behind them. Would they make big profits? Were they in industries that were shrinking or growing? Was the CEO a bumbling idiot? It didn’t seem to matter.
But now some stocks are zigging while others are sagging, and knowing something about the companies, themselves, is important if you don’t want to lose money.
“You can’t shove all your chips on the roulette table anymore and expect to win,” says Nicholas Colas, chief market strategist at BNY ConvergEx Group, a stock brokerage. “You have to watch your portfolio carefully.”
Until a month ago, for instance, you could have bought all manner of consumer-products companies and made money. Stocks of companies that make soap and cereal and other staples rose in lockstep with stocks of makers of discretionary goods like jewelry and perfume and cigars. So far this year, though, stocks of the staple makers have barely budged while those of discretionary companies have risen 2.1 percent.
To some on Wall Street, the new disarray is welcome.
“When everything is up, it’s frustrating,” says Charles Blood, senior equity strategist at Brown Brothers Harriman. “You do all the work, you figure out what’s better and worse, and there’s no reward.”
The folks who run stock funds pore over financial statements for hours, parse CEO comments like Kremlinologists, project profits down to the penny _ and get paid a lot to do so.
But why pay them if the stocks they pick do no better than the broad market? The typical mutual fund that’s actively managed by a pro charges $1 or so annually for every $100 invested. That might not seem like much until you consider that $100 stocks have gained $8 or $9 in value annually on average over the long run. Index or exchange-traded funds that passively mimic the market often cost 50 cents or less so you get to keep more of your money, and allow it to compound those returns each year.
It’s no wonder that fund managers were already under fire by studies showing they don’t earn their keep. A University of Maryland study of 2,076 funds over 32 years through 2006 found that actively managed funds lagged passive index funds by a risk-adjusted 0.97 percentage point a year, after accounting for those steep fees.
Then the stock market crashed and investors pulled money out of U payday loans guaranteed no fax.S. equity funds. What’s more, the money that stayed in went more and more into indexes and ETFs. One sign of the times: A book touting passive investing that was co-written by a reformed Wall Streeter _ “The Investment Answer” _ just hit No. 2 in the “advice” category of the New York Times’ best-sellers.
Now Wall Street is abuzz with news of falling “correlations.” The term refers to how tightly prices and other financial measures move together. A recent report by ConvergEx’s Colas shows a correlation between consumer staple stocks and the Standard & Poor’s 500 index of 41 percent, which means they move together 41 percent of the time, down by half in one month. Other stocks that are moving to their own rhythm now: utilities, telecoms and energy.
Gold is going its own way, too. When investors buy gold, a sort of Armageddon currency, they usually sell stocks, and vice versa. But they’ve been buying and selling the two in tandem __ until recently. The correlation was 57 percent three months ago but has since plunged past zero. That means the two more often move in opposite directions now.
Some Wall Streeters are skeptical the synchronized dance is over. Most stocks still track the market nearly three-quarters of the time versus a two-third average since 1990. Mark Bronzo, a money manager at Security Global Investors, says correlations will remain high this year, too. “It’s not just about fundamentals,” he says.
Blood of Brown Brothers is more optimistic. He notes that it was only natural that stocks should move together given the “historical mindbenders” of late _ the biggest downturn since the 1930s, a seizing up credit markets, a sovereign debt crisis and then a historic stock rally.
“A lot of weird things have been going on,” Blood says. “But if extreme events diminish, then individual stories get more important.”
As he spoke, TV screens were showing Egypt’s Tahrir Square swarming with protesters above a news ticker flashing that an estimated 5,000 had been wounded.
“If we get a big oil shock or the Saudis have a revolution, correlations will go up,” Colas says. And if that happens and you’re a stock picker? “You throw up hands and walk away,” he says.
Ford Motor posted its highest annual income in more than a decade Friday, although fourth-quarter earnings disappointed investors.
The problem for Ford was more one of expectations than execution, as Ford’s results included a lot of good news, but also some increased costs, such as the price of raw materials as well as spending on engineering and marketing, that caught Wall Street analysts by surprise.
As a result of its first earnings miss in two years, Ford (F, Fortune 500) shares fell more than 12% in midday trading. Still, even with that sell-off, shares are up more than 40% over the course of the past 12 months.
Despite the earnings miss, full-year profits for 2010 climbed to $6.6 billion from $2.7 billion in 2009, the best since 1999.
But the company, which recaptured its position as the No. 2 automaker in terms of U.S. sales in 2010, posted a fourth-quarter operating profit of $1.2 billion, or 30 cents a share, excluding special items. That was down from 43 cents a share on that basis a year earlier.
Analysts surveyed by Thomson Reuters forecast earnings of 48 cents a share excluding special items. The result was below even the most conservative forecast of a 36 cents a share profit.
At least part of the fourth-quarter disappointment came from a small loss in its European unit, compared with a profit there a year earlier. Ford had previously said it expected to be profitable in Europe in the quarter.
But Lewis Booth, Ford’s chief financial officer, said a bigger part of the problem was that the company failed to sufficiently communicate to Wall Street the impact of higher expenses.
"We recognized we missed," he said during the conference call to discuss results with analysts and reporters. "We’ll have to continue to do a better job communicating what the outlook is."
CEO Alan Mulally said the company was pleased with full-year results.
"Our 2010 results exceeded our expectations, accelerating our transition from fixing the business fundamentals to delivering profitable growth for all," he said in the company’s statement.
Mulally and Booth both said they expect the company will report better results in 2011 than it did in 2010, but they wouldn’t give any details about how much better. Mulally declined to say whether current forecasts — for a 29% improvement in first quarter earnings and a 15% increase in full-year earnings, were realistic.
For the most part, analysts continued to see more positives than problems at Ford.
"I don’t think anyone doubts your ability to make more money in 2011," said Adam Jonas, auto analyst with Morgan Stanley, to Booth during the conference call.
In a note Friday, Jonas reiterated that he expects Ford’s earnings to jump by more than 50% in 2011 — well above consensus estimates.
Efraim Levy, auto equity analyst with Standard & Poor’s, said it is a significant milestone that Ford’s cash flow and debt repayments during the quarter left it with more cash on hand than total debt for the first time since early 2008.
"It’s a good sign when you have cash available to deploy on product development and overseas expansion, rather than having to scramble for cash," he told CNNMoney. He also wasn’t too worried about Ford missing earnings targets.
"Sometimes after a long string of success, the analysts get a little too enthusiastic," he said. "The fundamental story I see remains positive. Forget the earnings — look at the trend."
Rank-and-file auto workers will benefit from Ford’s strong results as well, as the company announced it would pay profit-sharing bonuses averaging about $5,000 to 40,600 members of the United Auto Workers at its U.S. plants. That’s well above the $450 average they received a year ago.
Despite the disappointing bottom line, Ford’s quarterly sales of $32.5 billion topped forecasts of $30.4 billion, even though they fell from the $34.8 billion in sales a year earlier.
For the year revenue rose to $120.9 billion, up $4.6 billion from 2009, even though the company sold off its Volvo brand during the course of the year. Excluding Volvo sales, revenue rose $17 billion, or 15%.
Ford (F, Fortune 500) was the only U.S. automaker that did not need a federal bailout or a trip through bankruptcy court in 2009. Its rivals — General Motors (GM) and Chrysler Group, have also enjoyed a turnaround, but neither are making the gains with U.S. buyers that Ford has.
Ford also benefited from the recall troubles at Toyota Motor (TM) in 2010, which caused the Japanese automaker to lose market share for the first time since 1999, and drop out of the No. 2 sales position in U.S. sales.
President Barack Obama wants to cast some light on economic success stories in the shadows of a slow recovery. And he is looking to find some more.
On Friday, the president travels to Schenectady, N.Y., birthplace of the General Electric Co., to showcase a new GE deal with India and announce a restructured presidential advisory board to focus on increasing employment and competitiveness.
Obama is naming GE CEO Jeffrey Immelt as the head of a Council on Jobs and Competitiveness. The panel replaces Obama’s Economic Recovery Advisory Board, which had been chaired by former Federal Reserve Chairman Paul Volcker. Obama announced late Thursday that Volcker, as expected, was ending his tenure on the panel.
Obama, in a statement after midnight, said the council’s mission will be to help generate ideas from the private sector to speed up economic growth and promote American competitiveness.
“We still have a long way to go, and my number one priority is to ensure we are doing everything we can to get the American people back to work,” the president said.
For Obama, the visit to upstate New York is also an opportunity to claim credit for tax, trade and energy policies pursued by his administration as the nation attempts to recover from the worst recession since the 1930s. It’s the first of many treks during the second half of his term that the president is expected to take to put a more hopeful countenance on the economy amid stubbornly high unemployment.
The GE plant is benefitting from a power turbine contract with India announced during Obama’s Southeast Asia trip in November. Immelt also has been an advocate of alternative forms of energy, and the GE facility, the company’s largest energy plant, is the future site of GE’s advanced battery manufacturing program. New battery technology has become something of an Obama pet project as a symbol of innovation, clean energy and job creation.
“This is a company that has brought jobs from overseas back into the United States,” Obama spokesman Robert Gibbs said.
Obama also plans to take note of GE employees as examples of middle class Americans who are benefiting from the payroll tax cut he negotiated with Republicans in a December economics package that retained Bush-era tax rates for all taxpayers.
In Immelt, Obama has a useful corporate ally. As chief executive of a multinational company, Immelt was one of 20 CEOs who met with the president during a daylong summit at Blair House last month. He was one of 14 U.S. business leaders invited to meet with Chinese President Hu Jintao this week at the White House and was among the guests for the lavish state dinner that followed.
In an opinion piece Friday in the Washington Post, Immelt said the restructured council under his leadership would focus on manufacturing and exports, trade and innovation.
“The president and I are committed to a candid and full dialogue among business, labor and government to help ensure that the United States has the most competitive and innovative economy in the world,” he wrote.
His appointment adds another corporate insider to the White House orbit, underscoring the administration’s efforts to build stronger ties to the business community. Earlier this month, Obama named former Commerce secretary and JPMorgan Chase executive William Daley as chief of staff.
The change also signals Obama’s intention to shift from policies that were designed to stabilize the economy after the 2008 financial meltdown to a renewed focus on increasing employment, a vexing task that could affect his re-election efforts. The White House says the board’s mission will be to help generate ideas from the private sector to speed up economic growth and promote American competitiveness.
The advisory board has included past government officials and representatives from labor and the corporate community. Volcker has been a regular White House adviser, though the board itself has met infrequently with the president.
Immelt has been supportive of Obama since the start of his presidency, though his political contributions tend to be bipartisan and he financially supported Hillary Rodham Clinton and Republicans John McCain, Rudy Giuliani and Mitt Romney during the 2008 presidential campaign.
General Electric employees and their spouses, however, supported Obama over any other presidential candidate.
GE is a conglomerate with interests in diversified technology, media and financial services.
WASHINGTON
U.K. consumer confidence fell to a 20-month low in November as the looming government budget squeeze dented Britons’ outlook for 2011, Nationwide Building Society said.
The index of sentiment slipped 7 points from October to 45, the lowest since March 2009, the customer-owned lender said in an e-mailed report today. The gauge has now fallen for three consecutive months. The measure of consumers’ future expectations fell 9 points to 61, also a 20-month low.
Prime Minister David Cameron’s drive to tackle the record budget deficit with the deepest spending cuts since World War II threatens to slow economic growth. The squeeze will eliminate 330,000 public-sector jobs and increase sales tax to 20 percent next year from its current level of 17.5 percent.
“The strong rally in sentiment that took place from the middle of 2009 into the first quarter of this year has now been almost completely reversed,” Martin Gahbauer, chief economist at Swindon, England-based Nationwide, said in a statement. “The fall in confidence can largely be attributed to consumers growing increasingly cautious over the outlook.”
An index of people’s current perception of the economy dropped 5 points to 21, while a gauge of whether now is a good time to spend slumped 13 points to 79, the report showed. TNS-RI questioned 1,000 people for Nationwide between Oct. 18 and Nov. 21. GfK NOP Ltd.’s consumer-confidence index fell in November to a four-month low, according to a Nov no fax cash loans. 30 report.
Sentiment Lag
Weakening sentiment is “not uncommon in the early stages of a recovery” as improvements in the labor market often lag turnarounds in the wider economy, Gahbauer said.
While jobless claims fell in November, unemployment measured by International Labour Organization methods rose by 35,000 to 2.5 million people in the quarter through October.
The Chartered Institute of Personnel and Development said in a separate report that fewer British employees expect a pay raise next year as government workers grow more pessimistic about the future. Fifty-eight percent of the 3,000 respondents in a survey said they anticipate a wage increase in 2011, compared with a result of 67 percent last year, CIPD said.
Meanwhile, a gauge of U.K. residential rents was little changed in November as increases in London offset declines in other areas of England. The average monthly rent for a home in England and Wales was 692 pounds ($1,079) last month, compared with 691 pounds in October, the Newcastle, England-based company said today. While London posted a 1.8 percent gain, rents fell by 3.1 percent in eastern England and 2.4 percent in the East Midlands.
RBC Economics is predicting the pace of Canada
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