New Currency Requires To Obsecurity Of Financial Market

A paper written ahead of the recent G20 summit by Zhou Xiaochuan, governor of the Chinese central bank, caused quite a stir. Zhou called for the establishment of a global reserve currency, a step which would firmly tip the balance of economic power in the direction of emerging economies like China and India, but would also bring benefits to poorer nations in the developing world.

The dollars role in international trade should be reduced by establishing a new currency to protect emerging markets from the confidence game of financial speculation, the United Nations
said.

Two very obvious changes have prompted this reaction: First, there is a growing recognition that
the course towards the current crisis was plotted when President Nixon severed the link between the dollar and gold in 1971. Second, the fact that, quite unlike any president before him, not only does Barack Obama believe in a more just and inclusive world, he also seems to recognise that creating such a world requires some levelling of the global economic playing field. The creation of a global reserve currency would be an essential first step in that process.

UN countries should agree on the creation of a global reserve bank to issue the currency and to
monitor the national exchange rates of its members, the Geneva-based UN Conference on Trade and Development said on Tuesday in a report.

China, India, Brazil and Russia this year called for a replacement to the dollar as the main reserve currency after the financial crisis sparked by the collapse of the US mortgage market led
to the worst global recession since World War II. China, the world's largest holder of dollar reserves, said a supranational currency such as IMF's special drawing rights, or SDRs, may add
stability.

There's a much better chance of achieving a stable pattern of exchange rates in a multilaterally-agreed framework for exchange-rate management, Heiner Flassbeck, co-author of the report and a UNCTAD director, said. An initiative equivalent to Bretton Woods or the European Monetary System is needed. The 1944 Bretton Woods agreement created the modern global economic system and World Bank and IMF.

While it would be desirable to strengthen SDRs, a unit of account based on a basket of currencies,
it wouldn't be enough to aid emerging markets most in need of liquidity, said Flassbeck, a former
German deputy finance minister who worked in 1997-1998 with then US Deputy Treasury Secretary Lawrence Summers to contain the Asian financial crisis.

Emerging-market countries are underrepresented at the IMF, hindering the effectiveness of enhanced SDR allocation. An organization should be created to manage real exchange rates between countries measured by purchasing power and adjusted to inflation differentials and development levels, UN said. The most important lesson of the global crisis is financial markets
don't get prices right, Flassbeck said.

Top 10 Technology Kings Of Cash

When the economy gets ugly, nothing talks like cash in the bank. Although banks and car companies may be pretty much screwed right now, IBM, Hewlett-Packard and other big tech companies are rolling in greenbacks. Check out the list and suggest some more info's you need to be here..

1. IBM

Armonk, N.Y.

Cash and Equivalents : $12.7 billion

2 . Hewlett-Packard [ HP ]

Palo Alto, Calif.

Cash and Equivalents : $11.2 billion

 3. Google

Mountain View, Calif.

Cash and Equivalents : $8.7 billion

4. Dell

Austin, Texas

Cash and Equivalents : $8.4 billion

5. Microsoft

Redmond, Wash.

Cash and Equivalents : $8.3 billion

6. Oracle

Redwood City, Calif.

Cash and Equivalents : $7.4 billion

7. Apple

Cupertino, Calif.

Cash and Equivalents : $7.2 billion

8. EMC

Hopkinton, Mass.

Cash and Equivalents : $5.8 billion 

9. Cisco Systems

San Jose, Calif.

Cash and Equivalents : $4.2 billion

10. Intel

Santa Clara, Calif.

Cash and Equivalents : $3.4 billion

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Google's Top Expectations

The rotten economy may have broken Google's string of sequential sales gains, but the search giant's shares surged more than 5% in after-hours trading Thursday thanks to stronger than expected first quarter earnings and year-over-year sales gains.

Google ( GOOG - news - people ) also announced that its longtime sales chief, Omid Kordestani, will be moving to the position of senior advisor to the office of the chief executive and founder. Kordestani will be replaced by Nikesh Arora, now president of international operations, as president of global sales operations and business development.

The moves come after Tim Armstrong, Google's North America sales chief, jumped ship to take the CEO slot at struggling portal AOL in March. Since then Google has laid off 200 employees in its sales and marketing group.

Nevertheless, Google's advertising-driven results stand in stark contrast to those reported by sagging print media titles. The company's net income rose 8.4% in its first quarter to $1.42 billion, or $4.49 cents a share, from $1.31 billion, or $4.12, in the corresponding period a year earlier.

Excluding special items, Google reported earnings of $5.16 per share, beating the consensus estimate of $4.93 reported by Thomson Reuters. After subtracting traffic-acquisition costs, sales rose 10% to $4.07 billion from $3.70 billlion.

However, the results do mark the first sequential sales drop for the online powerhouse, with sales, when not adjusted for traffic-acquisition costs, down 3% from the previous quarter.

Google shares surged $19.52, or 5.02%, to $409.25 in after-hours trading.

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Barack Obama's Economic Optimism Falls On Deaf Ears

President Barack Obama spoke of seeing "glimmers of hope" in the economic outlook for the first time since the current downturn began, while Federal Reserve chairman Ben Bernanke said he was witnessing "tentative signs that the sharp decline in economic activity may be slowing".
But the pair's comments, coming on the same day as worse-than-expected retail sales and inflation figures, did little to revive investors. The Dow Jones Industrial Average index traded down 137.63 points at 7920.18 on Wall Street.

Barack Obama's words failed to boost Wall Street as the Dow Jones Industrial Average index traded down

The speeches came days after Larry Summers, the President's most senior economic adviser, suggested that America's economic "free-fall" is coming to an end.

Although the Fed remains independent of the Obama administration, the three speeches, coming in such quick succession, appear to be part of an orchestrated campaign by the White House to forge a positive attitude among the population.

Coming in a month when tens of millions of Americans will begin to receive several thousand dollars in tax rebate cheques, it appears that the White House is trying to kick-start the economy by encouraging consumers to return to spending, rather than continuing to hoard savings.

The need for such a strategy was highlighted in March's retail sales figures, which showed a 1.1pc decrease in total sales, a surprise to economists who had been forecasting a 0.3pc increase.

Goldman Sachs' chief US economist Jan Hatzius said the report puts "consumption on a weak path into the second quarter", noting that electronics sales were down by 5.9pc.

Retail sales are key as consumers account for two-thirds of the US economy.

Headline producer prices also fell, by 1.2pc month-on-month. The decline was concentrated in energy and food prices, due to weakening demand and, for energy, pipeline pressures.

But the negative economic data did not stop Mr Obama from appearing positive during a speech on the efforts taken to revive the American economy.

"There is no doubt that times are still tough" he said. "By no means are we out of the woods just yet. . . But from where we stand, for the very first time, we are beginning to see glimmers of hope."

Mr Bernanke based his assessment of the economy on recent positive data from the housing and other markets, but stressed that this is still the worst financial crisis since the Great Depression.

"A levelling out of economic activity is the first step toward recovery," Mr Bernanke said, adding that he is "fundamentally optimistic" about the US economy, the foundations of which he believes remain "strong".

But not everyone agrees. With reference to Mr Bernanke's comments last month about the "green shoots" of recovery, Ethan Harris, Barclays Capital's co-head of US economic research, said: "The green shoots are looking a little brown."

Source : http://www.telegraph.co.uk

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How To Earn Manifold On Your Savings

Interest rates have been cut to such an extent that you could be earning as little as 0.04 per cent after tax (0.05 per cent before tax) - or 40p interest a year on each £1,000.

But you can earn as much as 2 per cent (2.5 per cent) in some top-paying accounts used by banks to tempt in savers.

Now is the perfect time to switch, even if you are in an account that demands you give notice to get at your money. With interest rates this low, you will lose only a few pennies' interest if you move immediately without giving notice - and you can make that back in a couple of weeks.

David Black, from financial researcher Defaqto.com, says: 'If you have been in an easy access variablerate account for more than six months then check your rate. Best buy tables are full of newly launched accounts and those boosted by an introductory bonus.'

Nearly a quarter of the 460 easy access accounts on offer pay 0.08 per cent (0.1 per cent) or less on balances of £5,000, research from Defaqto shows.

But these figures only include accounts open to new savers. There are hundreds more among accounts closed to new savers where your money might have been languishing for years.

Switch and save: Banks are tempting customers to switch accounts

These appalling rates have come to light after banks and building societies adjusted the interest they pay to savers following the 0.5 percentage point cut in base rate to 0.5 per cent on March 5.

They tend to wait until the start of the following month after a base rate change to make adjustments to their savings rates.

Among larger providers, accounts where you earn a pitiful 0.04 per cent 0.05 per cent) are Barclays Savings Builder, six accounts from C& G - Cheltenham Gold, London, Direct Transfer, Instant Transfer, Young Saver and Cash Isa - First Direct Savings, HSBC Flexible Saver, Intelligent Finance Direct Access Savings and West Bromwich's Oak Account.

Branch-based accounts paying 0.08 per cent (0.1per cent) - or 80p a year on each £1,000 - include Abbey Flexible Saver, three accounts from Halifax (60 Day Gold, Instant Saver and Saver Reward) and three from Lloyds TSB (90 Day Notice, Flexible Saver and Instant Access Saver)

Notice accounts, such as Halifax 60 Day Gold, typically demand that you give 60 days' notice to take out money or pay a fine equivalent to 60 days' interest.

But with rates so low, the fine is tiny. The fine on £5,000 in a 60-day notice account earning 0.08 per cent (0.1per cent) works out at just 65p in lost interest. On a 90-day notice account it is £1.

You could also be earning appalling rates on tax-free cash Isas. Older versions of Alliance & Leicester Direct Isa pay just 0.1per cent, as does Abbey Postal Isa and Easy Isa to some savers and RBS Instant 60 Day Isa.

Both Halifax Isa Saver and Barclays Cash Isa pay 0.1per cent on balances up to £18,000.

A £10,000 sum earns you £10 interest a year against £300 in a top-paying account. And don't be fooled into thinking you earn a good rate on your internet account. Old Alliance Online Saver and Lloyds TSB Online Saver accounts, along with Abbey eSaver and Barclays e-savings, pay 0.08 per cent (0.1 per cent) once your introductory bonus has run out.

Top 10 Halloween Costumes For The Financial Crisis

Forget werewolves and vampires. With markets melting and 401(k)s dwindling, people are much more afraid of going broke. This Halloween, give revelers a real shot of terror with a costume that reflects the tough times.

1. AIG Executive

You'll need a fluffy robe and a respectable manicure.

Accessories:

--Spa slippers
--Clay facial mask
--Fluffy slippers
--AIG "Hi My Name Is..." sticker badge

2. Cowboy Capitalism

Dress up in a business suit but with a cowboy hat and boots. Sport a black eye.

Accessories:

--Adult beverage in a brown bag

3. Dow Jones Industrial Average

Paint a large piece of cardboard with a downward plunging arrow and write "DJIA" across your chest.

Accessories:

--A teddy bear
--A case of the shakes

4. Fannie Mae and Freddie Mac

A guy and a gal dress up as drunken sailors in the style of Raggedy Ann and Andy.

Accessories:

--Bottles of booze
--Toy houses

5. Financial Bailout

Gear up in red and gold as the Hammer and Sickle Superhero. You'll need: a headband, tights and a cape.

Accessories:

--A bucket labeled $700 billion and stuffed with cash.

6. Golden Parachute

Put on a jumpsuit (preferably gold). Then spray-paint a trash bag gold and attach parachute strings.

Accessories:

--Affix giant dollar sign to chest
--Safety goggles or golden superhero mask, depending on taste
--Play money tucked into belt and pockets.

7. Lehman CEO Dick Fuld

Climb into your Skeletor costume. Put on a golden parachute.

Accessories:

--"Blame the Shorts" button
--Golden handcuffs

8. Mortgage-Backed Security

Strap a small, plastic child's play house on your back.

Accessories:

--Wrap two bike chains across your chest
--Makeup to turn face black and blue

9. Treasury Secretary Hank Paulson

Get a sharp looking suit, bald cap, rimless spectacles.

Accessories:

--Toy bazooka

--Assistant Secretary Neel Kashkari "mini me" doll.

10. Underwater Mortgage

Make a diorama of a house with a hole in the bottom for your head. Paint fish and furniture floating in the windows. Wear a snorkel and diving mask

Accessories:

--Life preserver labeled "foreclosure relief plan"

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Top 7 Forbes Rich List

The much-watched Forbes annual rich list put Microsoft founder Bill Gates back on top with a net worth of $US40 billion, although he saw his bank balance lose $US18 billion over the last 12 months.

In second place came Warren Buffett with $US37 billion, despite losing $US25 billion this year in the value of his Berkshire Hathaway shares

Carlos Slim Helú - who owns 90 per cent of Mexico's telephone landlines - is the world's third richest person. He has lost $US25 billion since the economic downturn, but is still worth $US35 billion.

Database titan Lawrence Ellison came in at fourth place with a $US22.5 billion fortune.

Ingvar Kamprad opened his first Ikea store 50 years ago. He retired in 1986 but still works on his brand's image. His $US22 billion fortune makes him the fifth richest person in the world.

Karl Albrecht, the founder of the Aldi Sud supermarket chain, moved from number 10 to 6 as he cashed in on shoppers after cheaper products. He is worth $US21.5 billion. No photo of Albrecht was available.

Indian businessman Mukesh Ambani comes in at 7th place with a $19.5 billion personal fortune. He is the chairman, managing director and the largest shareholder of Reliance Industries

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Global Economy Set To Shrink, India Loses Half A Million Jobs

With over half a million jobs lost in India alone in recent months, the World Bank predicts the global economy and global trade would both shrink this year for the first time since World War II.

While the global economy is likely to grow at least 5 percentage points below potential in 2009, world trade is on track to record its largest decline in 80 years - with the sharpest losses in East Asia.

World Bank forecasts show that global industrial production by the middle of 2009 could be as much as 15 percent lower than levels in 2008, it said in a paper for next Saturday's meeting of the Group of 20 finance ministers and central bank governors.

Developing countries face a financing shortfall of $270-700 billion this year, as private sector creditors shun emerging markets, and only one quarter of the most vulnerable countries have the resources to prevent a rise in poverty.

The paper said that 94 out of 116 developing countries have experienced a slowdown in economic growth. Of these countries, 43 have high levels of poverty.

To date, the most affected sectors are those that were the most dynamic, typically urban-based exporters, construction, mining, and manufacturing.

For example, 'more than half a million jobs have been lost in the last three months of 2008 in India, including in gems and jewellery, autos and textiles,' the paper noted.

Many of the world's poorest countries are becoming ever more dependent on development assistance as their exports and fiscal revenues decline because of the crisis.

Noting that donors are already behind by around $39 billion on their commitments to increase aid made at the Gleneagles Summit in 2005, the bank said: 'the concern now is that aid flows will become more volatile as some countries cut their aid budgets while others reaffirm aid commitments, at least for this year.'

The World Bank said that international financial institutions cannot by themselves currently cover the shortfall-that includes public and private debt and trade deficits-for these 129 countries, even at the lower end of the range.

A solution will require governments, multilateral institutions, and the private sector. Only one quarter of vulnerable developing countries have the ability to finance measures to blunt the economic downturn, such as job-creation or safety net programs.

'We need to react in real time to a growing crisis that is hurting people in developing countries,' said World Bank Group President Robert B. Zoellick.

'This global crisis needs a global solution and preventing an economic catastrophe in developing countries is important for global efforts to overcome this crisis.

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Time To Fix - Proper Utilization Of Your Mortgage

WITH interest rates low, 13above.com takes a look at what that means for your mortgage, your savings and the prospect of dipping your toe back in the share market.

Interest Rates Dice : Low rates ... Use extra cash from interest rate cuts to keep paying off your mortgage, say financial planners.


Mortgages :

The Reserve Bank left interest rates unchanged at 3.25 per cent at today's meeting.

The decision surprised economists, who were tipping a cut of between 25 and 50 basis points. With rates on pause, is now the time to lock in a fixed rate mortgage?

Give it a few more months, since rates could fall further, says Prescott Securities chief economist Daryll Gobbett.

"I think we’re looking at a cash rate of 2 per cent or 2.25 per cent. Not tomorrow, but maybe by May,” says Mr Gobbett.

Existing fixed rate deals don’t hold great appeal anyway, says Count Wealth financial planner Desiree Fraser.

She advocates using fixed rate mortgages to shield yourself when you know you can’t afford a bigger monthly repayment – not for second-guessing the future.

"If you know you can’t afford interest rates to go up another 3 per cent, lock it in now. So use it as a protective mechanism,” she says.

"Do it on the basis of what is affordable to you, rather than what you think will happen in the future."

Keep putting extra cash from a rate cut towards your mortgage.

"The best advice to give when interest rates are falling is to maintain your payments at the high interest levels,” says Heraud Harrison private client adviser David Marasea.

"Don’t reduce the payments just because interest rates have gone down. You’d be surprised at the compounding effect."

Paying down a mortgage at 6 or 7 per cent is a better deal than socking it away in cash and earning just 3 per cent interest, says Mr Gobbett.

"Keep chipping away at that mortgage,” he says.

Savings :

People who yanked money out of the haemorrhaging share market last year now face dwindling returns on their cash as interest rates tumble.

Term deposits that paid 7-8 per cent late last year have fallen to around 3 per cent – less than the inflation rate of 3.7 per cent.

Australians have upped their savings from zero to 4 per cent of income as nerves about the economy dampen the urge to spend, but are hardly earning anything on that cash. So should they consider investing that money instead?

"It depends on why they’re saving,” says Mr Gobbett.

"It really comes down to if people are saving for a house or something for the next 12 -18 months, (or) keeping that money (as) savings or term deposits because of the risk."

Those looking to the longer term should consider shares offering good dividends (some give an 8 per cent return), instead of tiny interest returns, says Mr Gobbett.

"If saving for retirement or lifestyle, they should start looking at bank shares where they will get a better level of dividend, even with cuts we’ve seen with ANZ lately,” he says.

Ms Fraser says things are tough for savers.

"They’re getting hit quite hard,” says Ms Fraser of people who parked cash in what used to be high-interest accounts.

Rates will stay low, so look at your spending and consider if you need the income from savings to live on. Ask yourself what your priorities are. If protecting your capital isn’t important, you might be better off spending the money and rebuilding savings later, Ms Fraser says.

Shares :

Low interest rates discourage savings, but with the ASX at five-year lows, is it a good time to invest in shares? What about borrowing to invest now that rates are low?

"Obviously there is still so much concern in the general public about what’s going to happen and when it’s going to occur,” says Ms Fraser.

"There is no end goal. No one can tell them when the market is going to recover."

Few clients are showing up with a pool of cash to get into the market, she says.

Mr Gobbett urged caution with margin loans: they can burn you if you pick the wrong market bottom.

"Just be a bit careful at the moment,” he says.

"The problem is that if the market falls further, you have to tip more money in."

If you do invest, focus on companies paying good dividends or consider buying into new share offerings by big companies, often at a discounted price.

Commbank invited retail investors to buy in with just $1000, and Wesfarmers offered shares at a few dollars discount. Many banks are still paying good dividends, he says.

"Twelve or 18 months ago, it would have been quite risky, but now all shares are down, even ones that are good value. So it may be time to buy into some share offerings that are offered at discounts," he says.

The market is always a good long-term bet, says Ms Fraser.

"I think it’s appropriate as always for people with a long term horizon, say seven years, who don’t require it for income and don’t need the capital,” she says.

"It depends largely on your risk tolerance and your investment time horizons. If you’ve got the next 20 years to invest, then you’ve got to accept the share market represents value, even if it goes lower," says Mr Marasea.

Source

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Google's Biggest Failure Is Marissa Mayer

Google's perfectionist cupcake princess is totally misunderstood! That's the claim Marissa Mayer the VP who oversees Google search, makes to a credulous New York Times, which licks up the frosted version of her career.

Mayer, who runs Google's core search business, is the best known Google executive outside the search engine's CEO, Eric Schmidt, and its billionaire founders, Larry Page and Sergey Brin. And she's proven far more willing to pose for magazine covers and appear on morning news shows, making her the company's public face.

But she seems surprised that with such publicity comes criticism. According to Mayer, the reason why she draws negative press is because of sexism and stereotypes:

I think it's very comforting for people to put me in a box. ‘Oh, she's a fluffy girlie girl who likes clothes and cupcakes. Oh, but wait, she is spending her weekends doing hardware electronics.'

It's true that San Francisco, the last mainstream publication to profile her, focused on her most girly habits. But that has nothing to do with why so many rank-and-file Googlers outside the company's cloistered management despise Mayer.

To grasp that, it helps to understand Google's grandiose self-image: The company's spoiled engineers are led to believe they work in the most perfect meritocracy of ideas that the world has ever seen, motivated by the betterment of mankind through technology. At Google, the theory goes, who you are and who you know doesn't matter. It's only your ideas that count.

And yet, as the Times profile reveals, the real source of her power is the ability to manipulate Schmidt, Page, and Brin:

" Given her longstanding relationship with Google's founders and Mr. Schmidt, she has become something of a sounding board for other managers, a number of whom routinely gravitate to her office.

At the end of a recent day, she met with two senior executives, Joe Kraus and Sundar Pichai, to discuss the company's social networking projects. Many executives at Google believe that social networking is important to its future. Ms. Mayer was meeting with Mr. Kraus and Mr. Pichai to help them prepare for a meeting the next day with Mr. Schmidt, Mr. Brin and Mr. Page to discuss how the company could leverage information-sharing among Google's many services.

"It's important you pregame Eric or it will be a disaster," Mr. Pichai tells Ms. Mayer about the pending meeting, asking her to seek Mr. Schmidt's support on their behalf.

"I know, I know," she responds. "I will call him or write an e-mail. I want them to see how complicated this will be."

Ms. Mayer e-mails Mr. Schmidt that evening. At the meeting the next day, Mr. Pichai's and Mr. Kraus's ideas are approved

The Times article does not mention a key reason why Mayer has such influence: Early in the company's history, she dated Page. (He is now married, and Mayer is engaged to Zack Bogue, a real-estate investment manager and lawyer.)

In dictating the appearance of Google's Web pages, Mayer freely admits she makes subjective decisions. In more than a decade on the job, she has not yet codified her design instinct into a written style guide. Instead, Mayer's whims, which managers under her must make a study of, are what rule.

Mayer may be talented. But her personal ties to Google's top management and her exerscise of arbitrary power are a betrayal of Google's supposedly meritocratic values — a betrayal obviously tolerated at the very top of the company. That, and not her spending time putting cupcake recipes in spreadsheets, is what exasperates her fellow Googlers.

That, and her perfectionist streak. Look at how Mayer dismisses a potential hire over a single bad grade:

" One candidate got a C in macroeconomics. "That's troubling to me," Ms. Mayer says. "Good students are good at all things."

Another candidate looked promising with a quarterly rating from a supervisor of 3.5, out of 4, which meant she had exceeded her manager's expectations. Ms. Mayer is suspicious, however, because her rating hasn't changed in several quarters.

"She is looking for a way out," Ms. Mayer says.

Mayer complains that the media has not examined her life deeply:

Besides, Ms. Mayer says, there are some things that she hasn't previously revealed about herself and that the media have overlooked. Like her self-described athletic prowess.

"It hasn't shown up anywhere that I am really physically active," she says. "I ran the San Francisco half marathon this year. I did the Portland marathon. I went skiing just yesterday. I'm going to do the Birkebeiner, which is North America's longest cross-country ski race. That just shows you how much there are gaps."

Ah yes, the Portland Marathon, in which Mayer placed 7,074th out of 7,862 contestants. Or the Birkebeiner ski race, in which she placed dead last in the women's competition. Good students are good at all things.

Did she really mean to invite media scrutiny of her athletic career? What's really telling about it: In the handful of times where Mayer has competed on her own, without the backing of a billionaire ex-boyfriend and a pliant boss, she has proven to be an outright failure.

At the beginning of the piece, Mayer once again denies rumors of her impending departure from Google — rumors which Valleywag first reported. Perhaps she has realized that without Google, she's nothing. Can you blame her for clinging to her job?

Source

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