FOREX WORLD TREND

Aug. 21 (Bloomberg) -- A.P. Moeller-Maersk A/S, owner of the world’s largest container line, posted a first-half loss as lower global consumption hurt freight volumes and cargo rates and it forecast similar results in the second half.

The net loss was 3.67 billion kroner ($700 million) compared with net income of 11.6 billion kroner a year earlier, the Copenhagen-based company said today in a statement. That was in line with the 3.7 billion-krone median estimated loss of a Bloomberg survey of five analysts. Sales fell 14 percent to 127.4 billion kroner.

“The result for the second half of 2009 is expected to be at the same level as the first half year,” Maersk said. That means the company, Denmark’s largest, may post its first full- year loss in at least six decades.

The container market will decline more than 10 percent this year as consumers rein in spending during the recession, the first year of contraction since the 1970 birth of containerization, according to a June forecast by London-based Drewry Shipping Consultants Ltd. Maersk said today that volumes dropped 7 percent in the first six months of the year.

Maersk rose as much as 1,400 kroner, or 4.2 percent, to 34,400 kroner in Copenhagen trading and was up 3.6 percent as of 9:47 a.m.

“The outlook for the remainder of 2009 is subject to considerable uncertainty, not least due to the development in the global economy,” the shipping company said. “Specific uncertainties relate to the development in container freight rates, transported volumes, the USD exchange rate and oil prices.”

Maersk Line’s Loss

Maersk Line, which operates 470 vessels and owns 1.9 million containers, lost $958 million January to June compared with a profit of $268 million in the same period a year earlier.

Rates fell 30 percent in the period, it said, adding that it expected the trend to reverse, with “modest” rate increases starting in the third quarter. The container division has a global market share of some 15 percent, the unit’s chief executive officer, Eivind Kolding, said in a June 23 interview. Maersk said today the container division maintained its market share.

Maersk’s oil and gas business, the biggest profit contributor in the past three years, recorded a 57 percent drop in first-half net income to 2.8 billion kroner as oil prices fell.
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Aug. 17 (Bloomberg) -- Swedbank AB, the Baltic region’s biggest bank, announced a second rights offer in less than a year as it seeks 15 billion kronor ($2.1 billion) to shore up reserves and help it exit the Swedish state’s bank support plan.

Swedbank fell as much as 9.5 percent in Stockholm trading. About 46.6 percent of the sale will be taken up by shareholders, including Folksam Group, 48 independent savings banks and state- owned pension funds AP2 and AP4, Stockholm-based Swedbank said today. The rest is guaranteed by Bank of America Corp. and Credit Suisse Group AG, which are underwriting the sale.

Swedbank, which raised 12.4 billion kronor from shareholders last year, has had to rely on Swedish government guarantees when it borrows from other banks. The company faces soaring loan losses and provisions in Latvia, Lithuania and Estonia, which are in the steepest recessions in the European Union, and reported a net loss in the first and second quarters.

“With this strengthening of the capital base we want to, once and for all, remove the perception that Swedbank is, or could become, a burden on Swedish taxpayers,” Chief Executive Officer Michael Wolf said. “If the bank continues to be the sole participant among peers in the state-guarantee, there is a high risk of that becoming a restriction for the bank.”

Swedbank posted its biggest intraday drop since June 3, and was down 2.5 kronor, or 3.8 percent, to 63.50 kronor at 10:30 a.m. in Stockholm. The stock has gained 43 percent in 2009.

Independent Financing

The share sale will accelerate Swedbank’s return to independent financing, Wolf told a telephone conference.

“This helps remove the uncertainty that has been surrounding the stock about their Tier 1 ratio and capital requirement,” Magnus Oppenstam, head of equities at HQ Bank AB, said in a telephone interview from Stockholm today. “We think this will definitely help Swedbank compared to the other banks valuation-wise. We think this is the right move.”

SEK AB, which helps fund Swedish companies’ exports and which owns 3.3 percent of Swedbank’s shares, said the share sale was “positive and will strengthen Swedbank.” The government- owned agency said it would take part in the issue, although it doesn’t regard itself as a long-term owner of the shares.

Estonia, Latvia and Lithuania are reeling after a property bubble burst, cheap credit evaporated and ebbing demand in foreign markets undermined exports. The three countries, which had the European Union’s fastest-growing economies from 2004 to 2006, now have the steepest declines of all developing regions, the World Bank said on June 22.

Soaring Defaults

Swedbank reported on July 17 its second consecutive quarterly net loss as bad loans in Estonia, Latvia, Lithuania and Ukraine soared. The loss of 2.01 billion kronor in the second quarter compared with net income of 3.6 billion kronor a year earlier. Loan losses in the period soared to 6.67 billion kronor from 423 million kronor a year earlier. In the first quarter, Swedbank had a net loss of 3.36 billion kronor.

Through the rights offer, Swedbank will increase its core Tier 1 capital ratio, a measure of financial strength, to 12.1 percent from 9.8 percent at the end of June.

To contact the reporter on this story: Niklas Magnusson in Stockholm at nmagnusson1@bloomberg.net
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LONDON (Dow Jones)--U.K. recruiter Michael Page International PLC (MPI.LN) Monday said that weak economic confidence continued to hurt its business, resulting in a 49% decline in first-half pretax profit, amid expectations of yet another tough quarter ahead.

The company said that market conditions remain weak with a seasonally challenging quarter ahead, as people go away on holiday and don't move jobs, both in Continental Europe, which was later into the downturn, and in the U.K.

Collins Stewart analyst Julian Cater said he interprets the update as saying the third quarter will be loss-making.

Recruitment companies have been ...
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New Delhi, Aug 16 (PTI) Evading taxes would be tougher as the new Direct Taxes Code proposes to take away the powers from any tax authority to waive penalty, even as it reduces the amount of such fine to twice the tax liability against thrice at present.

"Every person who willfully under-reports his tax-base shall be liable to a penalty not less than and up to twice, the amount of tax payable in respect of the amount of tax base so under-reported," the draft code said.

Currently, the penalty is up to thrice the value of the tax liability.

However, the code proposes to impose penalty on those who "willfully under-report tax base".

Willful under-reporting would include not filing of tax returns by due date and reporting less taxable income in the returns than the actual.
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The latest US consumer price figures have calmed fears that the $787bn economic stimulus plan passed by congress earlier in the year would cause severe inflation.

The US's labour department said its consumer price index (CPI) remained level in July as declines in food and energy prices offset increases in other areas.

Consumer prices have now fallen 2.1 per cent from July 2008 – the biggest drop since 1950.

"The overriding message in the report is that inflation is not a problem at this point," Briefing.com analysts said in a note to clients.

Inflation was rising a year ago amid an increase in food and energy prices, but the collapse of several high-profile banks and the worldwide economic recession has stifled demand, leading to lower prices.
Industrial output rises

Core CPI, which excludes food and energy prices, rose 0.1 per cent in July, slowing from a 0.2 per cent rise in June, the department said.

Core CPI was up 1.5 per cent from July 2008, compared with a 1.7 per cent annualised rise in June, the data showed.

The labour department made no revision to a 0.7 per cent leap in the CPI for June, which had been the sharpest increase since July 2008.

That rise, which was due to an increase in fuel prices, had come after three months of virtually flat inflation.

July also saw the first increase in US industrial output for the first time in nine months, a report by the Federal Reserve, the US central bank, said on Friday.

Industrial output increased by 0.5 per cent over the previous month, the report said, against market expectations for only a 0.3 per cent rise.

Apart from a rise in industrial output in October 2008 – which came after a severe hurricane – July's increase marked the first monthly gain in output since December 2007, when the current recession started.
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WASHINGTON — Real estate lender Colonial BancGroup Inc. has been shut down by federal officials in the biggest U.S. bank failure this year.
The Federal Deposit Insurance Corp., which was appointed receiver of the Montgomery, Ala.-based Colonial and its about $25 billion in assets, said the failed bank's 346 branches in Alabama, Florida, Georgia, Nevada and Texas will reopen at the normal times starting on Saturday as offices of Winston-Salem, N.C.-based BB&T.
The FDIC has approved the sale of Colonial's $20 billion in deposits and about $22 billion of its assets to BB&T Corp.
Regulators also closed four other banks: Community Bank of Arizona, based in Phoenix; Union Bank, based in Gilbert, Ariz.; Community Bank of Nevada, based in Las Vegas; and Dwelling House Savings and Loan Association, located in Pittsburgh.
The closures boosted to 77 the number of federally insured banks that have failed in 2009.
The agency established a temporary government bank for Community Bank of Nevada to give depositors about 30 days to open accounts at other financial institutions. The failed bank had assets of $1.52 billion and deposits of $1.38 billion as of June 30.
Community Bank of Arizona had assets of $158.5 million and deposits of $143.8 million as of June 30, while Union Bank had assets of $124 million and deposits of $112 million as of June 12. The FDIC said that MidFirst Bank, based in Oklahoma City, has agreed to assume all the deposits and $125.5 million of the assets of Community Bank of Arizona, as well as about $24 million of the deposits and $11 million of the assets of Union Bank. The FDIC will retain the rest for eventual sale.
Dwelling House had $13.4 million in assets and $13.8 million in deposits as of March 31. PNC Bank, part of Pittsburgh-based PNC Financial Services Group Inc., has agreed to assume all of Dwelling House's deposits and about $3 million of its assets; the FDIC will retain the rest for eventual sale.
The failure of Colonial is expected to cost the deposit insurance fund an estimated $2.8 billion and that of Community Bank of Nevada, $781.5 million; Union Bank, $61 million; Community Bank of Arizona, $25.5 million; and Dwelling House, $6.8 million.
The 77 bank failures nationwide this year compare with 25 last year and three in 2007.
As the economy has soured — with unemployment rising, home prices tumbling and loan defaults soaring — bank failures have cascaded and sapped billions out of the deposit insurance fund. It now stands at its lowest level since 1993, $13 billion as of the first quarter.
While losses on home mortgages may be leveling off, delinquencies on commercial real estate loans remain a hot spot of potential trouble, FDIC officials say. If the recession deepens, defaults on the high-risk loans could spike. Many regional banks hold large numbers of them.
The number of banks on the FDIC's list of problem institutions leaped to 305 in the first quarter — the highest number since 1994 during the savings and loan crisis — from 252 in the fourth quarter. The FDIC expects U.S. bank failures to cost the insurance fund around $70 billion through 2013.
The May closing of struggling Florida thrift BankUnited FSB is expected to cost the insurance fund $4.9 billion, the second-largest hit since the financial crisis began. The costliest was the July 2008 seizure of big California lender IndyMac Bank, on which the insurance fund is estimated to have lost $10.7 billion.
The largest U.S. bank failure ever also came last year: Seattle-based thrift Washington Mutual Inc. fell in September, with about $307 billion in assets. It was acquired by JPMorgan Chase & Co. for $1.9 billion in a deal brokered by the FDIC.
Copyright © 2009 The Associated Press. All rights reserved.
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Rio Tinto has not been presented with any evidence relating to its four executives who are being held by the Chinese authorities on suspicion of corporate espionage, the mining company has said.
Officials in Shanghai arrested one Australian and three Chinese employees of Rio last month, just weeks after a deal unravelled between the Australia company and Chinalco, China's state mining company.
The Chinese authorities yesterday permitted an Australian envoy to visit Stern Hu, Rio's head of iron ore sales, who still does not have access to a lawyer.
"We are still not aware of any evidence that would support their detention," said Sam Walsh, head of Rio's iron ore division, adding that Mr Hu appeared to be in good health. "We continue to be concerned for the health and welfare of our three other employees detained at the same time as Mr Hu."
After the visits, the Australian government asked China to allow the appointment of legal representation for the mining company's employees, who have not yet been charged. Few details have emerged about the nature of the allegations made against the executives.
However, both Beijing and Canberra dismissed comments in a Chinese state-run magazine that Rio had been "winning over and buying off, prying out intelligence and gaining things by deceit".
The article also alleged that Chinese companies have overpaid by $102bn (£62bn) over six years for imports from Rio as a result – charges all strongly denied by the company.
"It is now quite clear, given that the article has been taken off the website, that it was essentially the opinion of the individual writer, and not, if you like, officially sanctioned," said Stephen Smith, the Australian foreign minister.
Tensions between China and Rio have been simmering for several weeks as mining companies remain locked in price discussions with steel mills.
Chinese imports of iron ore rose by 12pc in July, as steel output neared maximum capacity. This demand has weakened the claims of Chinese steel mills that they need iron ore prices to drop by a third.
Experts are also concerned that the steel mills could be storing up huge inventory surpluses that will prove difficult to shift in the recession. Trade between Australia and China was worth $53bn last year.
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(CNN) -- U.S. Secretary of State Hillary Clinton brought an offer of help Tuesday for victims, especially victims of sexual violence, of Africa's longest war, a regional conflict that's dragged on for more than a decade.
Clinton on Monday delivered a blunt message to Prime Minister Adolphe Muzito of the Democratic Republic of Congo when he hosted a dinner in her honor.

"There must be an end to widespread financial corruption and abuses of human rights and women's rights," she said. "There must be an improvement in governance and the respect for the rule of law."

She also called for "changes in the business climate, changes in the rules and regulations that involve contracts and the protection of property" to promote foreign investment.

On Tuesday, she offered help to the country's president, Joseph Kabila.

"I offered and the president accepted my sending of legal and financial and other technical experts to the DRC to provide specific suggestions about how to overcome these very serious obstacles to the potential of this country," Clinton said, according to a pool report from Goma, in the east of the country.

She also announced funding for victims of rape in Congo.
"We want to banish the problems of sexual violence into the dark past where it belongs," she said.

During a meeting with leaders of nongovernmental organizations, Clinton said the United States would provide more than $17 million in new funds "to prevent and respond to gender and sexual violence."

Clinton took a small U.N. plane on the 1,000-mile trip from Kinshasa to Goma, the scene of intense fighting over the past several years.

The smaller aircraft was necessary because the U.S. plane for her seven-nation Africa trip is too big for the local landing strip, Clinton told reporters earlier.

The secretary is due to visit U.N. peacekeepers in Goma later Tuesday.

The Congo conflict has resulted in an estimated 5 million deaths from fighting and collateral problems such as disease and starvation, according to an International Rescue Committee survey conducted more than a year ago.

In addition, tens of thousands of women have been raped in the ongoing regional strife stoked by competition for mineral riches.

"I will be pressing very hard for not just assistance to help those who are being abused and mistreated, in particular the women who are turned into weapons of war through the rape they experience, but also looking for ways to try to end this conflict," Clinton said.

She opened her Africa trip in Nairobi, Kenya, then went to South Africa and Angola. After Congo, the secretary of state will travel to Nigeria, Liberia and Cape Verde.

The Obama administration is using Clinton's tour to promote development and good governance and underscore the president's commitment to Africa
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MOSCOW — The Russian government has agreed to let U.S. troops and weapons bound for Afghanistan fly over Russian territory, officials on both sides said Friday. The arrangement will provide an important new corridor for the U.S. military as it escalates efforts to win the 8-year-old war.

The agreement, to be announced when President Obama visits Moscow on Monday and Tuesday, represents one of the most concrete achievements in the administration's attempt to ease relations with Russia after years of tension.

But the two sides failed to make a trade deal or resolve differences over missile defense, and are struggling to draft a preliminary nuclear-weapons agreement.

The blend of success and stalemate leading to Obama's visit suggests it is easier to talk about a "reset" button than to press it. The promise of a new era of cooperation was always predicated on the tenuous notion that a change of tone and a shift in emphasis might be enough to bridge deep divisions.

But even with both sides eager for warmer ties, the issues that have torn the two nations apart did not go away with the transition at the White House.

Obama is less enthusiastic than President George W. Bush was about an anti-missile system in Eastern Europe or NATO membership for Ukraine and Georgia, but has not abandoned either goal, to the consternation of Kremlin officials.

Despite U.S. pressure, Russia has not yielded in its continuing confrontation with Georgia a year after their brief war.

So Obama's first visit as president will be a test of his foreign policy. U.S. officials said the larger message is that if the Russians do not take his open hand, he will move on to other priorities.

But he faces a reservoir of resentment among Russians who believe the United States has rarely followed through on such gestures. Richard Burt, a former U.S. weapons-control negotiator and part of a Russian-American group called Global Zero that is pushing for nuclear disarmament, said Obama must overcome that suspicion. "I just get the sense that the Russians are kind of grumpy, so there's still some sharpness on the Russian side, despite pushing the reset button," he said.

At the same time, Obama faces pressure not to go soft on Russia. He sounded a tough note this week, saying Prime Minister Vladimir Putin "has one foot in the old ways." He is also sending Vice President Joseph Biden to Georgia and Ukraine.

The new transit agreement represents an important step. Until now, Russia has restricted use of its territory for the Afghan war to railroad shipments of nonlethal supplies. Under the new arrangement, officials said, military planes carrying lethal equipment and troops will be allowed to make thousands of flights a year through Russian airspace.

The agreement was a priority for Obama, who has ordered 21,000 more U.S. troops to fight the Taliban and al-Qaida. Supply routes through Pakistan have become complicated by its increasing volatility, while Uzbekistan evicted U.S. troops from a base in 2005 and Kyrgyzstan threatened to do the same. U.S. negotiators just persuaded Kyrgyzstan to reverse itself by increasing the rent.

VATICAN CITY (AP) — President Barack Obama sat down with Pope Benedict XVI at the Vatican on Friday for a meeting in which frank but constructive talks were expected between two men who agree on helping the poor but disagree on abortion and stem cell research.

"It's a great honor," Obama said as he greeted the pope, thanking him for the meeting. They sat down at the pontiff's desk and exchanged pleasantries before reporters and photographers were ushered out of the ornate room.

The pope was heard asking about the Group of Eight summit, the meeting of developed nations that concluded before Obama's arrival at Vatican City. Obama said it "was very productive."

With some Catholic activists and American bishops outspoken in their criticism of Obama, even as polls have shown he received a majority of Catholic votes, the audience was much awaited.

Obama's election presented a challenge for the Vatican after eight years of common ground with President George W. Bush in opposing abortion, an issue that drew them together despite the Vatican's opposition to the war in Iraq.

But the Vatican has been openly interested in Obama's views and scheduled an unusual afternoon meeting to accommodate him at the end of his Italian stay for a G-8 summit meeting in the earthquake-stricken city of L'Aquila and just before he leaves for Ghana.

In the tradition-conscious Vatican, most such meetings are held at midday. The Vatican has also arranged live TV coverage of the open session of the meeting after their private talks.

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LONDON (Reuters) - The pension deficit of the 200 largest corporate pension schemes in Britain soared 82 percent to 73 billion pounds in June due to a fall in corporate bond yields, according to an estimate on Wednesday.

Consultancy Aon said the defined benefit pension deficit at the end of June was the worst for three years. Aon estimated the asset loss since September 2007 stands at 50 billion pounds.

Corporate bond yields are used to estimate pension liabilities, which can be extremely volatile.

UK pension schemes have traditionally been more exposed to equity than their European counterparts but in the last few years allocations have been cut to align investments to pension liabilities.

The fall in equity prices over the last year has prompted pension schemes to be five to 10 percent underweight in the asset class compared to their long-term target position.

Pension trustees may also look for further diversification to spread risk.

"This decision not to rebalance is a passive form of asset reallocation and it is indicative of things to come as pension schemes may opt for lower allocations to pure equities," the consultant said.

Proposed changes in regulations may also encourage lower equity allocation, Aon said.
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Stock futures were higher on Wednesday, one day after investors closed the books on the best quarter since 203.

Less than 45 minutes before the start of trading in New York, futures on the Dow Jones Industrial Average were higher by about 33 points. Futures on the S&P 500 and Nasdaq were also stronger. Changes in futures don't always accurately predict early market moves after the opening bell.

Futures dipped slightly after a report from ADP showed private-sector job losses of 473,000 last month, surpassing expectations that the report would show job losses of about 400,000.
The Dow industrials rose 11% in the second quarter. But investors remain wary – the benchmark is still negative for the year to date, down 3.8%, and it remains 40% from the all-time high hit in Oct. 2007.

Overseas Wednesday, China's Shanghai Composite climbed 1.7% to move over the 3,000 mark for the first time in more than a year after the China Federation of Logistics & Purchasing said its purchasing managers' index rose for a fourth straight month. Elsewhere in Asia, a Japanese gauge of business activity for the second quarter rose but came in below expectations.

Manufacturing gauges in the U.K. and the euro zone showed improvement but remained below the level that indicates economic expansion. European stocks strengthened nonetheless, with the FTSE 100 rising 1.4% in London.

At 10 a.m. Eastern time, the Institute for Supply Management will release its latest reading on U.S. manufacturing activity.

Shares of American International Group were down sharply after the insurer's shareholders approved a 1-for-20 reverse stock split. Many shareholders are likely evening out positions or getting in or out of the market now that the split has taken effect. The stock was recently down 38%.

Crude-oil futures rose more than $1, lifted by supportive supply. The front-month August contract on the New York Mercantile Exchange was recently trading $1.11 higher at $71 a barrel.

The dollar rose against the yen but fell against the euro. Treasury prices were mixed, with the 10-year note declining 14/32 to yield 3.591%.
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An international human rights agency, Amnesty International, has released a 141-page report condemning the activities of oil companies in Nigeria's Delta region.

According to the report released on Tuesday, June 30; "the oil industry in the Niger Delta of Nigeria has brought impoverishment, conflict, human rights abuses and despair to the majority of the people in the oil-producing area.

"Pollution and environmental damage caused by the oil industry have resulted in violations of the rights to health and a healthy environment, the right to an adequate standard of living (including the right to food and water) and the right to gain a living through work for hundreds of thousands of people."

The report, Petroleum, Pollution and Poverty in the Niger Delta, also highlighted how the Nigerian government is failing to hold oil companies to account for the pollution they have caused.

"Oil companies have been exploiting Nigeria's weak regulatory system for too long.

"They do not adequately prevent environmental damage and they frequently fail to properly address the devastating impact that their bad practice has on people's lives."

The report also stated that the United Nations Development Program (UNDP) describes the region as suffering from "administrative neglect, crumbling social infrastructure and services, high unemployment, social deprivation, abject poverty, filth and squalor, and endemic conflict."

This poverty, and its contrast with the wealth generated by oil, has become one of the world's starkest and most disturbing examples of the "resource curse".

"Oil has generated an estimated US$600 billion since the 1960s. Despite this, many people in the oil-producing areas have to drink, cook with and wash in polluted water, and eat fish contaminated with oil and other toxins.

"More than 60 per cent of people in the region depend on the natural environment for their livelihood. Yet, pollution by the oil industry is destroying the vital resource on which they depend."


Impact of the pollution

The report stated that oil pollution kills fish, food sources and fish larvae, and damages the ability of fish to reproduce; causing both immediate damage and long-term harm to fish stocks and the oil pollution also damages fishing equipment. Oil spills and waste dumping have also seriously damaged agricultural land. And long-term effects include; damage to soil fertility and agricultural productivity, which in some cases can last for decades.

"In numerous cases, these long-term effects have undermined a family's only source of livelihood. The destruction of livelihoods and the lack of accountability and redress have led people to steal oil and vandalize oil infrastructure in an attempt to gain compensation or clean-up contracts."

Armed militant groups are increasingly demanding greater control of resources in the region, and engage in large-scale theft of oil and kidnapping for ransom of oil workers.

Reacting to the recent military onslaught in the region, the report stated that "government reprisals against militancy and violence frequently involve excessive force, and communities are subjected to violence and collective punishment, deepening anger and resentment."

On the major oil companies operating in the Niger delta, the report particularly pointed out Shell and condemned its activities. The report stated that "the oil industry in the Niger Delta involves both the government of Nigeria and subsidiaries of multinational companies."

Going by the reports and investigations by Amnesty international, Shell Petroleum Development Company, the main operator offshore is the major culprit in regions where oil spills, waste dumping, and gas flaring are notorious and endemic.

"The scale of pollution and environmental damage has never been properly assessed. The figures that exist vary depending on sources, but hundreds of spills occur each year," stated the report.

The report also quoted a UNDP report that more than 6,800 spills were recorded between 1976 and 2001 and also, according to the National Oil Spill Detection and Response Agency, some 2,000 sites require treatment because of oil-related pollution. "The real total may be higher," added the report.

Condemning the regulatory system in the region, the reports states that Nigeria has laws and regulations that require companies to comply with internationally recognized standards of "good oil field practice", and laws and regulations to protect the environment but these laws and regulations are poorly enforced.

The government agencies responsible for enforcement are ineffective and, in some cases, compromised by conflicts of interest.

"The people of the Niger Delta have seen their human rights undermined by oil companies that their government cannot - or will not - hold to account.

"They have been systematically denied access to information about how oil exploration and production will affect them, and they are repeatedly denied access to justice."

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Officials from 126 countries will gather at the United Nations headquarters in New York Wednesday as a three-day conference on reforming the global financial system begins.

Only 14 heads of state and government are scheduled to attend, including two leftist Latin American presidents: Venezuela's Hugo Chavez and Bolivia's Evo Morales. Other nations are sending low-level delegations.

The developing nations participating in the conference are calling for the U.N. to play a greater role in the global financial system. Martin Knor, the head of a Geneva-based research organization, South Center, says developing nations have borne the brunt of the current economic crisis, but feel shut out from "exclusive clubs" of developed economic nations, such such as the Group of Eight and Group of 20.

The conference has been organized by U.N. Assembly President Miguel D'Escoto Brockman of Nicaragua. The participants have been negotiating a final document that will spell out what role the world body could play in reforming the global financial system, as well mechanisms to assist developing countries.

Some information for this report was provided by AFP, AP and Reuters.

The United States and the European Union filed complaints with the World Trade Organization Tuesday, accusing China of restricting exports of key raw materials used in the steel and chemical industries.

U.S. Trade Representative Ron Kirk says China is a leading producer of these raw materials - including bauxite, coke, fluorspar, magnesium, manganese, silicon metal, silicon carbide, yellow phosphorus, and zinc. He says by limiting access to these materials, China is giving its own businesses an unfair advantage.

This is the first trade complaint that the United States has lodged against China since U.S. President Barack Obama took office.

Kirk says the U.S. must fight this type of domestic favoritism "now, more than ever."

The U.S. and EU say still they hope to resolve the dispute through dialogue.

The U.S. and China have taken other trade disputes to the World Trade Organization.

In April, China filed a complaint against the U.S. over a law banning Chinese poultry imports.

Earlier this year, the WTO ruled against China on some aspects of U.S. complaints about copyright infringements (over allegations China was illegally copying U.S. movies, music, software and luxury goods.)


Some information for this report was provided by AFP, AP and Reuters.

U.S. President Barack Obama is defending a proposed new agency designed to protect American consumers against deceptive practices by the financial services industry.

In his weekly address Saturday, Mr. Obama says a breakdown in government oversight led to an "epidemic of irresponsibility" from Wall Street to Washington, ultimately triggering the current economic crisis.

The president proposed a set of new regulatory reforms earlier this week, including a new Consumer Financial Protection Agency. He says the new agency will have the power to set tough new rules to force companies to offer innovative products that Americans can understand.

Mr. Obama says his proposals are facing strong opposition from the business community. But he warns that he is ready to fight them to prevent a similar crisis from happening again.

In their weekly address, opposition Republicans are strongly criticizing Democratic efforts to overhaul the U.S. health care system. Senate Republican leader Mitch McConnell argues that the Democratic proposals would lead to higher deficits and hurt the economy.

He referred to a recent study by the Congressional Budget Office that two competing Democratic plans would cost over $1 trillion over 10 years.

The cost of living in the United States has fallen at the sharpest rate in about six decades.

Wednesday's report from the Labor Department is fresh evidence that the recession is keeping businesses from raising prices and workers from demanding raises.

The data show that the U.S. consumer price index fell 1.3 percent in the 12-month period that ended in May. While costs fell for the year, there was a slight increase in prices (one-tenth of a percent) in May.

The recession is also cutting U.S. trade with the rest of the world. A Commerce Department report Wednesday says U.S. exports and imports dropped sharply.

The gap between the value of goods and services Americans buy from foreigners and what they sell abroad (the current account deficit) shrank to just over $100 billion for the first three months of this year.

Meanwhile, two of the world's top package delivery companies say the worst of the recession may be over.

Many economists look at U.S.-based United Parcel Service and FedEx as bellwethers because consumers and businesses send more packages when economic conditions are good.

FedEx said Tuesday it expects the next six months will be "extremely difficult" but that the company's fortunes should improve by early next year.

FedEx says revenue for the three months ending in May, $7.85 billion, fell 20 percent compared to the same time last year.

On Tuesday, UPS Chief Executive Scott Davis predicted the recession would be over by the end of the year.

Some information for this report was provided by AP and Reuters.

U.S. unemployment surged to a 25-year high of 9.4 percent in May, although the pace of job losses slowed.

Friday's report from the Labor Department says 345,000 jobs were lost last month - the lowest number since last September.

The new data helped send key world stock indexes higher, and oil prices climbed above $70 a barrel for the first time since September on hopes the lower-than-expected figures could indicate the worst of the recession may have passed.

However, the high unemployment rate suggests employers are still reluctant to hire new workers until there are more signs the recession is coming to an end.
By Deborah Tate
Capitol Hill
05 June 200

U.S. President Barack Obama said he hopes General Motors will emerge quickly from bankruptcy protection and he pledged another $30 billion in U.S. government assistance to help the automaker recover.

The president said he sees GM's bankruptcy filing not as a failure, but as the start of a new company.

"…a new GM that can produce the high quality, safe and fuel efficient cars of tomorrow, that can lead America to an energy independent future, and that is once more a symbol of America's success," he said.

General Motors was once the largest auto manufacturer in the world. But sales have plummeted in recent years, while the cost of production has risen. Bad management decisions have made the situation worse, and the current economic recession has put the future of the company in doubt.
The government stepped in earlier this year with a $20 billion emergency loan. And in late March, President Obama told General Motors it would have until June 1 to negotiate a restructuring plan with unions, creditors, and other stakeholders.

The president said the bankruptcy filing will enable the company to get rid of bad assets and a mountain of debt and set off on a new course.
"What we have then is a credible plan that is full of promise. But GM cannot put this plan into effect on its own," he said.

Speaking at the White House just hours after General Motors filed for bankruptcy protection, the president noted other countries have agreed to help company's foreign operations.

But he stressed that ultimately, responsibility for the future of General Motors and its tens of thousands of American employees rests with the United States.

"That is why our government will be making a significant additional investment of about $30-billion in GM - an investment that will entitle American taxpayers to ownership of about 60 percent of the new GM," he said.

President Obama said Washington will monitor the government's investment in the company, much as a brokerage house keeps watch on the investments of its clients.
Republicans in Congress quickly made it clear they were not in favor of continuing government bailouts for the auto industry. The Republican leader of the U.S. House of Representatives, John Boehner, questioned if politicians in Washington would be able to "successfully steer a multi-national corporation to economic viability."

President Obama said the administration will not take over day to day operations of General Motors, and intends to sell its shares as soon as possible.

"In short, our goal is to get GM back on its feet, take a hands-off approach and get out quickly," Mr. Obama said.

The president said in many ways the process will mirror the experiences of the Chrysler Corporation, the number-three American automaker, which is just emerging from bankruptcy protection.

Mr. Obama said a new, stronger Chrysler is emerging, and predicts General Motors will do the same, signaling the start of a dramatic turnaround in the U.S. automobile industry.

But while his public comments are full of hope, White House officials are warning the government's generosity is not without limits. They make clear this is GM's last chance for survival.

When asked if the government might be willing to pour more money into the beleaguered automaker, one top administration official said bluntly "this is it."

The U.S. government is becoming a majority stakeholder in General Motors, an iconic fallen titan of American automobile manufacturing. GM filed for bankruptcy Monday as part of a plan crafted by the Obama administration to make the company smaller, more competitive, and ultimately profitable. The plan includes a massive federal investment in the automaker.
Two years after losing its status as the world's biggest carmaker, General Motors surrendered a 60 percent ownership stake to the U.S. government in return for $30 billion of federal funds to continue operations and finance an ambitious restructuring effort. GM also filed for bankruptcy to shield it from creditors while the company retools itself. After years of declining car sales, shrinking market share, and ballooning costs and financial obligations, GM's debt is twice as large as the total value of its assets.

The government's cash infusion comes on top of $20 billion of federal loans whose repayment is far from assured. Canada's government is also taking an ownership stake in GM, as is the United Auto Workers union. Existing GM stock owners will lose their investment.
At the White House, President Obama said he did not want to see American car manufacturing disappear, but stressed the need for major reform of the industry. He explained the rationale for acquiring GM shares.

"Instead of taking so much stock in GM, we could have simply offered the company more loans. But for years, GM has been buried under an unsustainable mountain of debt," he said.

Mr. Obama said the U.S. government is acting as a "reluctant" shareholder.
"What we are not doing, what I have no interest in doing, is running GM. GM will be run by a private board of directors and management team with a track record in American manufacturing that reflects a commitment to innovation and quality," he added.

The president expressed confidence in GM's ability to restructure and thrive. That confidence was echoed by the head of the company, Fritz Henderson.

"This new GM will be built from the strongest parts of our business, including our best brands and our very finest products. We will have far less debt, fully-competitive labor costs, and the ability to generate sustained and positive bottom-line performance [profits]," Henderson said.

Not everyone is cheering. Among Republicans, House Minority Leader John Boehner said the administration's plan "makes clear is that the government is firmly in the business of running companies using taxpayer dollars."

Others said the plan is the best way to confront a disastrous situation and prevent catastrophic economic losses. Jennifer Granholm is governor of Michigan, where America's automobile industry is headquartered, and a state with the highest unemployment rate in the country.

"This is a really, really tough day. But our fortunes, meaning Michigan's fortunes and Gm's fortunes are inextricably bound together. And so at least now we can see the end of the slide [deterioration of auto industry]," she said.

Granholm spoke on CBS' "Early Show".

Along with filing for bankruptcy, GM announced the closing or idling of a dozen plants. The company's workforce stands at roughly 60,000 employees, down from more than 600,000 in the 1970s.

GM's drastic actions came as a painful blow to many workers. But some said the moves were inevitable.

"We knew it [bankruptcy] was coming. Just a matter of time," said one worker.
Another GM worker said Monday's turn of events would have been unimaginable just a few years ago.

"We kind of work for the government now. It is weird," he said.

Meanwhile, a federal judge has approved the sale of assets of America's number-three carmaker, Chrysler, to Fiat of Italy. Chrysler filed for bankruptcy earlier this year.

Nearly all carmakers, both domestic and foreign, have reported sharply lower vehicle sales coinciding with the global economic slowdown.