Markets Weak/australia Strong?

Markets in the US fell, Asia was lower, and Europe was weak as doubts continued over the US treasury's $US700 billion bailout plan.

The Dow was down 161.52 points, or 1.47%, at 10,854.17. The Standard & Poor's 500 Index was off 18.87 points, or 1.56%, at 1188.22 while Nasdaq was down 25.64 points, or 1.18%, at 2153.34.

Worries about the economy saw the US dollar rise again most currencies, especially the euro and the Aussie which traded around 83.10 US cents, down around a cent in a day.

Gold fell $US11 an ounce to around $US897; oil dropped more than $US2.50 to just over $US106.70 a barrel and copper lost 11 US cents to end at $US3.14 a pound in New York.

Our market was off more than 1%, according to the overnight futures market and the ASX/200 could start around 70 points down this morning.

In new York BHP Billion and Rio Tinto shares were weak as analysts saidf iron ore exporters would get smaller than expected price rises next year.

Rio's American depositary receipts fell the most since at least 1990, losing 13% to $US289.14 and BHP's ADRs slipped 5.2% to $US61.77.

General Electric was the biggest drag on the S&P 500, falling more than 4%, after Goldman Sachs cut the company's profit outlook. GE's fall also hit the Dow. GE had itself added to the uS anti-shorting list.

Downgrades also hurt Bank of America shares, off 2.5%, while energy company shares fell as the price of oil retreated.

More details were made public with US Congressional hearings starting overnight in Washington, but Wall Street didn't like the debate and delays..

Treasury Secretary, Hank Paulson, President Bush and Fed chairman Ben Bernanke all urged Congress to swiftly approve the plan.

Chairman Bernanke warned that the US economy would contract if the plan was not adopted and adopted quickly.

But there are concerns the Democrats might try to ram through one off pork barrel deals or attempts to control banking salaries, while some Republicans have expressed doubts about the whole idea.

Comments from the head of the Senate banking Committee, Senator Dodd didn't help sentiment.

He said this morning government economic rescue plan was "not acceptable" in its current state.

"A lot of reservations have been expressed this morning by Democrats and Republicans on this matter," said Dodd, a Democrat, speaking after Paulson and Federal Reserve chief Ben Bernanke testified in Congress.

"What they have sent to us this is not acceptable," said Dodd. "This is not going to work."

Wall Street tumbled more than 160 points after hearing that, going from being slightly up, to well down on the day.

European stock-index futures dropped with Dow Jones Euro Stoxx 50 Index futures off 1.9%

National indexes decreased in all 18 western European markets. London's FTSE 100 lost 1.9%.

Asian markets ended the sharp two day rally on those doubts about the Paulson plan.

The MSCI Asia Pacific Index (excluding Japan) fell 1.9% with financial shares the big fallers.

stocks fell around the region, except in South Korea, Taiwan and Malaysia. Markets in Japan are shut for a holiday.

China's CSI 300 index dropped 3.8%. Hong Kong was off 3.9%.

The Australian share market lost 1.9%, ending the two-session rebound, as doubts grew about whether the $US700 billion ($A840 billion) US financial bailout package would work.

The ASX 200 index ended down 97 points, or 1.9% at 4923.5, after rising 4.5% on Monday.

Australian shares traded lower as regulators announced exemptions to the ban on short selling and detailed proposed legislation to better control it.

At the close the All Ordinaries was down 92.4 points, or 1.8%, to 4957.7.

BHP Billiton fell $1.80, or 4.5%, to $37.90, Rio Tinto dropped $2.76, or 2.5%, to $108.24 and Fortescue Metals shed 64 cents, or 9%, to $6.51.

Banking led the way down with the ANZ losing $1.11 to $18.04, the Commonwealth Bank 38 cents to $44.22, the National Australia Bank 44 cents to $23.86 and Westpac 20 cents to $24.50.

Retailers were mixed, with Harvey Norman adding one cent to $3.51, Woolworths dropping 52 cents to $27.01, Wesfarmers retreating 57 cents to $31.18 and David Jones falling one cent to $4.39 ahead of the release of its full year results later today.

Media was mixed, with Consolidated Media Holdings adding three cents to $2.75, Fairfax falling 13 cents to $2.85, News Corp shedding 71 cents to $15.78 and its non-voting shares losing 70 cents to $15.51.

Telecommunications provider SP Telemedia lost one cent to 14 cents after reporting a full year loss of $18.93 million following debt write-offs, and cut its earnings guidance for the new year.

It's part of the Washington Soul Patts group whose 61% owned subsidiary New Hope Corp losing six cents to $4.40 despite forecasting significant earnings growth this year and delivering a rise in annual profit to $90.68 million

Santos added 17 cents to $18.70; Woodside dropped a cent to $56.99 and Oil Search lost nine cents to $5.53.

The spot price of gold was higher was trading at $US891.30 an ounce by late yesterday, up $US20.15 on yesterday's local close of $US871.15 an ounce.

Gold miners were stronger, with Newcrest adding $1.34 to $26.84, Lihir 12 cents to $2.77 and Newmont 16 cents to $5.15.

Telstra was the most traded stock on the market, with 42.05 million shares changing hands, collectively worth $172 million. Its shares rose 16 cents to $3.98.

And in a report issued this morning, the International Monetary Fund says Australia is well placed to withstand the credit crunch.

In particular, the report notes that IMF "Directors welcomed the support that prudent fiscal policy is providing for monetary policy."

The IMF Executive Board considered that Australia's banking system remains resilient, with stable profits, high capitalisation and few non-performing loans.

This was evident in stress tests undertaken by the IMF and presented in their report, which showed that Australian banks are able to absorb 'extreme' shocks.

The IMF considers that the outlook for the economy is more uncertain than usual due to large countervailing forces impacting on the economy, with the commodity boom providing a substantial stimulus and the global downturn exerting a contractionary effect.

IMF staff forecast that real GDP growth will moderate as required to bring underlying inflation back within the RBA's target range.

On an annual basis the IMF consults with the Australian authorities, private sector economists and academia to provide an independent and comprehensive assessment of Australia's economic performance.

This forms part of its program of economic consultations with all IMF member countries.

IMPORTANT: AIR reports about financial markets and investment products in the widest sense possible. The AIR website and all its contents is prepared for general information only, and as such, the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore talk with their financial planner or advisor before making any investment decisions.

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Using Your Card: What Is Its Purpose?

There is a wonderful feeling to having a credit card when you need one, but that blanket term "credit card" can be misleading at times. Not all Credit Cards are the same, and this goes beyond the APR that most people are aware of. Before choosing a credit card, consider what it is that you plan to use it for. This can make a big difference in how you use it and what you will pay in charges and fees for using it.

There are some consumers who will pay off their bill each and every month, and rarely, if ever, carry the balance over into the next billing cycle. If you intend to follow this routine, then APR will not matter as much to you. Keep in mind that finance charges do not kick in unless you carry over a balance. If you pay in full, you do not incur finances charges which are based on the company APR.

For those who will be paying the full balance each month, consider a credit card that has a longer grace period and has no annual fees. This allows you to use the credit for little, if any, charge. Do keep in mind, however, that if you happen to lapse and carry a balance, you will have to pay the finance charges and then APR will matter to you.

Most people, however, do carry over a balance and for those individuals it is important to find the credit card that offers the lowest annual percentage rate (APR). The APR is the number that the credit card company will use to calculate your monthly finance charge so the lower this number the less money you will pay.

If you think that you may use your credit card to get cash advances, you will certainly want to look at the fees and charges for that service. It is important to remember that many, if not most, of the credit card companies charge a higher rate for cash advances than they do for purchases. Some companies will charge a substantial amount more and you would do well to avoid using these cards for cash advance purposes.

Many people are lured into poor credit card choices by the promotions that many companies offer. These might include such things as frequent flyer miles, phone minutes, rebates and other things. There is nothing wrong with opting into these programs if they are benefits that you are going to actually use. The old adage that nothing is free applies here as well. Many of the companies that offer these promotions will have a slightly higher APR to help offset the cost of the programs. Make sure you look for that before you sign up, as it may not be in your best interest to pay higher rates for benefits that you will not use.

In order to find out what the APR and other fees are for any particular company, you can visit their website or you can look at the information that comes to you through the mail. Federal law requires that all solicitations and applications for Credit Cards include key information on the rates and fees that they charge consumers. This information must be clearly printed and if you have to hunt for it, then you may want to avoid dealing with that company.

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Details On Obtaining Your Own Bad Credit Mortgage

A bad credit mortgage doesn't sound like it would be too appealing, even if a consumer would be able to apply for it. But in reality, bad credit mortgages can be as agreeable to one's situation as a normal mortgage, sometimes even more so by allowing for more lenient payback terms: making them great choices for those with poor credit.
Credit companies do make mistakes sometimes, often more so than you would think. If this type of accident has occurred on your account, you will get an unfair interest rate as a result. Even though you can apply for a mortgage with bad credit, you probably won't agree with the interest rate given- so you will need to look for quick ways in improving your Credit rating. Many Internet websites allow you to get your credit report free.
After you have done your thorough research, you are then able to go to the lender and show your findings. Lenders appreciate applicants who know what situation they are in, and it saves time in the approval process. You should try to barter at this stage, since you know full well what your Credit rating is and how competitors would supply loans in terms of overall cost.
Let the lender know that you will be shopping around with competitors. With the economy as it is, lenders are looking for good investments, and will make costs as small as possible in order to gain profit from interest. Taking 24 hours to think about the decision is also a good idea, since you will have more time to think through what you are getting into.
Even if the search for a bad credit mortgage loan ended up empty, there are options. Most people have a close family member or friend who can vouch for them to say that they are good for the money. Lenders will accept those with poor credit on such terms, as the one who cosigns will be liable for any money not paid. Obviously this takes a large amount of trust on the cosigner's part, so pick someone close to you.
If possible, research the company you are thinking about taking a bad credit mortgage out with. You will be interfacing with this company for years, so it's good to find someone with the skills and experience to provide a good and honest service. Try going online to read reviews, confer with others in the community, or ask the Better Business Bureau for more information.
Final Thoughts
The best way to get started in finding a mortgage loan if you have bad credit is to talk to a broker or lender in your area. Do follow up with a few options from the Internet, since lenders online are giving local lenders across the globe a run for their money when considering costs.

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How To Consolidate Credit Card Debt

It is so easy to get heavily into debt on Credit Cards that you within a few months or even weeks you could find yourself not being able to keep up with the repayments. If this is the case, then you should think about consolidating your credit card debt. Consolidating your debt can make it easier to manage your money problems as well as helping you to save money. Here are some useful hints about consolidating credit card debt.

What is consolidation?

Consolidation is where you take all of your debts and combine them into one debt. For example, if you have 2 or 3 Credit Cards with a balance on them, you could get one credit card to cover all of the debts and transfer each balance onto this card. This way all of your debts are covered in one place and you only have one bill to pay.

How to consolidate?

There are different ways you can consolidate your credit card debt. One way is to get out a loan in order to cover your credit card debts and then pay off your Credit Cards using this loan. Then you can pay back the loan over a longer period of time. Although this is good because the interest rate will be lower than the Credit Cards, it will most likely take you longer to pay off. Another way is to get a credit card that has a limit that can cover the debts you have, or at least most of them. This way you can put all your debts in one place and pay them off.

Cards for consolidation

In order to consolidate your credit card debt onto one credit card, you need to make sure that you get the right card in order to make it worthwhile. Getting a card with a higher or equal interest rate than you currently have will not make any difference. Instead, look for a card with a lower interest rate that will help you to save money and pay off debts quicker.

0% cards

The best cards to get for consolidation are cards that offer 0% interest on balance transfers. Some of these cards offer 0% for up to one year, which will mean that you will pay no interest on the balance you transfer to the card for a year. This can save you a lot of money as well putting all your debt into one convenient place. For example, if you have a balance of around ?3,000 to transfer from 15% cards, with 0% for a year you could save around ?200. These cards are especially good if you can pay off the debt within the promotional period.

Cancel your cards

Remember, when you consolidate your credit card debt, it is important to cancel all or some of the cards that you have transferred from. Although cancelling too many cards can hurt your Credit rating, it is better to cancel them, as this will stop you from being tempted to use them again and thereby further increasing your debt. If you have 2 or 3 cards with no balance, then get rid of all but one of them so that you have less chance of increasing your debt. If you consolidate your credit card debts correctly then you will make paying your bills easier and save yourself money on interest payments.

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How Currency Calculators Benefit Forex Investors

The foreign exchange market, commonly referred to as forex, is a type of market where investors stand to make and trade vast sums of money each day. The foreign exchange market isn't without its intricacies, however, and learning the system can be tough. But those who are armed with proper knowledge, experience, and a handy currency converter- breaking the market is simple.

The foreign exchange market revolves around the simple fact that converting a currency from one type to another. For instance, we might want to exchange a United States dollar for the equivalent in Mexican pesos. By doing so, we essentially just made an investment in the new currency. In this case, we use the forex calculator to determine which currency would be good for a return on investment.

The investment in another currency is simple: as soon as the currency from raises in value, the investor can make the switch again. Only this time around, the investor is making a large sum of money off each and every monetary unit they invested in. This procedure can be a risky one, however, and should only be attempted by experts in investing topics.

One handy feature that investors should look for in a foreign exchange market calculator is an option to compare one monetary unit of a country to multiple other countries. This helps in the brainstorming process, in which an investor marks down possibilities of investment. In this phase of the investment process, investors should take note of any possible opportunities is foreign exchange they wish to investigate.

The next stage in the process is to track all currencies that an investor is watching. After all, if a currency increases in value over time, isn't it safe to say it will continue to do so in the near future? This isn't always true, but more often than not, this simple rule makes investors quite a bit of money. Foreign exchange calculators should be able to track several different currencies for investors in this case, which usually requires a user registration for tracking purposes.

Lastly, there comes a need for foreign exchange market calculators to make use of current trends in technology. Technologies such as Java, Javascript. Macromedia Flash, or even AJAX should be used to make the experience of an investor quicker and more simple. This is in comparison to technologies such as PHP, where the page must be refreshed before results can be displayed- which can dramatically slow down the process.

Closing Comments

In the end, there is a lot to benefit or lose from the forex market. Only those experienced in the market should try their luck. After all, there's nothing worse than losing thousands in investments just because of the constantly changing trends in global economies. But with the help of calculators, experts who aren't afraid to give out advice, and brokers- the process can be quite a profitable one indeed.

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Securing A Credit Card When You Have Bad Credit

Having bad credit can make getting a credit card difficult, but the situation is not impossible. If you need or want a credit card but are worried that your poor credit history will stop you, then you perhaps you need some advice about how to get a credit card even with poor credit. If you follow these steps then you will have a much better chance of getting a credit card:

Retail store cards

If you have poor credit then the best place to start applying for Credit Cards is at small retail stores. These companies are more likely to give you a chance, although their rates are usually much higher and your credit limit will be low. If your application is approved, then buy something small each month and then pay off the bill. This will show other credit card companies that you are able to handle credit and pay your bills.

Go to your bank

After you have had a store card for some time, you can apply for a card at your bank. If you have been with your bank a long time and you have performed well with them, then they might be able to help you out.

Secured cards

If you are unable to get a bank or store card, then try and get a secured card. This involves putting down a deposit that is held by the lender whilst you use the card. This collateral takes away some of the risk for the lender and you are much more likely to be approved for this type of card. If you pay your bills then eventually you can upgrade to a regular unsecured card.

Co-signing

If you are still having problems, then get a friend or family member with good credit to co-sign for the card with you, as their credit will count towards the application. Remember that if you cannot pay the bill they will have to, so be sure you can pay back anything you spend or you will not only damage your credit but someone else's as well.

Avoid annual fees

Even if you are desperate for a card, avoid getting a credit card with an annual fee. There are plenty of cards that do not charge fees, and even if the interest rate is higher you will be better off. Also, stick to well known card types like Visa and MasterCard as they are widely accepted. This will help you to make the most of the credit you have.

Using your card

Once you have a card, remember that you can use it to your advantage rather than putting yourself into debt. Only spend what you can pay back easily, and if possible pay back the whole balance each month so that you avoid paying interest. If you pay off your bills well then your Credit rating will improve quickly and you can get better terms and a higher credit limit.

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Discount Auto Insurance By Zip Code

Does where you live impact your auto insurance premiums? Getting a clear understanding of its effect will help you make better decisions when buying your next house: You will see how saving a few hundred on a new home might actually cost you thousands in auto insurance costs over the course of a few years.

Here are a few of the reasons.

Your new home's location will largely determine your automobile mileage in a number of ways. If you live far from the places you frequently go to you will accumulate higher mileage. Take your place of employment for example: If your home is 20 miles from your place of employment and you drive there five days a week, you'll accumulate four times as much mileage as your neighbor whose office is just 5 miles away.

Is there access to standard public transit where you are moving to? Using public transit will definitely help you lower down your auto insurance rate.

Does your place of residence have a high crime rate? This will determine your auto insurance rates to a high extent. Your area's crime rate affects your risk of vandalism and theft.

If you are thinking of moving to new home in a different area, take some time out to do these calculate. The small amount of money you save on your new house in one neighborhood might be totally canceled out by the rate hike you incurred on your new auto insurance premium.

Also, take some time to do thorough comparison shopping to locate insurers who offer better rates for the area you are moving to. Different insurance company's rates may vary drastically.

Remember when you're considering a new place to live; get multiple auto insurance quotes to compare car insurance for the different zip codes you are interested in. If a zip code adds $400 to your yearly auto insurance costs, you'll pay an extra $8,000 over the course of 20 years!

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It Will Get Worse Before It Gets Better

The depth and length of the global recession now underway will be the key determinant of how shares and other financial assets perform this year.

Compared to the 1930s, the global policy response this time around has been far more positive and far quicker, so a re-run of the Great Depression is very unlikely.

AMP Global Investors' chief economist, Dr Shane Oliver says its early days and the financial crisis is continuing but some key signposts to global economic recovery are showing tentative signs of improvement.

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It is obvious the global economic situation is bleak.

The key problem last year was the financial crisis. Given ongoing bank problems this is clearly still with us, but this year the key problem will be the economic fall out.

The US, Europe and Japan are now contracting in a synchronised fashion and this, along with a gathering slump in the emerging world, is likely to make it the worst global recession in the post war period.

The Australian economy is also being hard hit and looks destined for recession.

The OECD's leading indicator is plunging at its fastest rate ever.

Talk of not just recession but depression has become common place as evident in the next chart.

The key to when shares and other growth oriented financial assets get back on to a sustainable rising trend will be the depth and duration of the global recession and a big driver of this will be the global policy response.

The Policy Response

The financial crisis and the synchronised global economic slump that is still unfolding is unprecedented.

But so too has been the policy response by governments all around the world. This has focused on:

? A rapid reduction in interest rates with rates falling to near zero in the US and Japan, to record lows in the UK and falling sharply in other countries including Australia.

? Fiscal stimulus including spending increases and tax cuts with a massive mix of tax cuts and extra spending soon to be announced in the US.

? Unprecedented measures to stabilise the financial system. These vary by country but include providing loans to financial institutions, providing funds for credit markets and buying private sector securities such as mortgage backed securities, injecting capital into banks, insuring some banks against additional losses on their bad debts, the provision of guarantees over bank borrowing and, in some countries, bank lending.

More measures are on the way with the US now looking into a comprehensive way to remove toxic debt from banks? balance sheets.

The question is will it work? This raises several issues.

Very different to the 1930s

One criticism of the policy response to date has been that it has been too slow and inconsistent. Interest rates weren?t cut quickly enough and the US response has seemed haphazard at times.

However, these problems partly reflected a combination of uncertainty about the size of the problem and the Bush Administration's ideological bias against intervening in free markets.

The latter problem is likely to be removed by the more pragmatic Obama Administration.

But the policy response in the last year has been far more positive than was the case in the early 1930s as the Great Depression unfolded when:

? US interest rates were in fact initially raised and only started to fall aggressively in 1933 and never reached zero despite consumer price deflation.

This time around US interest rates have reached zero in just over 12 months after the share market peak.

? Fiscal policy was initially tightened in the early 1930s in the US reflecting an obsession with balancing the budget and there were no ?automatic stabilisers? such as unemployment insurance.

Even when the New Deal arrived after Franklin D. Roosevelt became president in 1933 fiscal stimulus was modest amounting to just 1% of annual GDP compared to what is now being proposed by President Obama with over $US800bn spread over two years equating to 2.7% of annual GDP.

? In the 1930s over 5000 US banks went bust taking their depositors? savings with them as there was no deposit insurance or government guarantees over bank borrowing.

This led to a massive collapse in the US money supply and was a major contributor to the severity of the Depression.

Now having learned the lessons of the Depression governments have been bending over backwards to prevent losses to depositors and to prevent an implosion in the financial system.

Won?t the monetary expansion just create inflation?

Some fear that by pumping cash into the financial system central banks will simply create inflation. This is unlikely.

Narrow money supply measures have increased largely reflecting increased bank reserves.
But to get inflation we need the banks to lend more, so that broader credit measures increase and we need people to start spending in excess of the economies? capacity to produce.

So far, while the increase in reserves has boosted narrow money measures, banks are leaving them on deposit at the Fed, broader money supply measures have picked up but not by much, credit growth is still negative, and spending in the economy is contracting such that excess capacity is rising.

Until demand picks up there is no reason to worry about inflation. In fact the big concern is more likely to be deflation.

When demand does pick up then the Fed and other central banks will need to reverse their policy stimulus, but they seem well aware of this.

Will the deficit financing just push up bond yields?

Every time there is a recession and public sector budgets shift into large deficits as is occurring now there is concern that it will boost inflation and that the increased supply of bonds will boost bond yields. Both fears are misplaced.

Expanding budget deficits don?t cause inflation or higher bond yields in economic downturns because they are offsetting an increase in private savings as private consumption and investment are slashed.

The Japanese experience in the 1990s was a classic example of this ? the budget deficit and public debt blew out but inflation turned into deflation and bond yields fell below 2%.

Why not let market forces just run their course?

A more fundamental criticism from free market ideologues is that market forces should be left to run their course so as to cleanse the system of past excesses.

In other words, after the good times of the boom we now all need to suffer!

This was the approach to economic management prior to World War Two and it resulted in regular wild swings in economic activity and unemployment.

The trouble with this approach is that it can cause massive economic pain.

Sure, the 1930s depression unwound the excesses of the 1920s but this came at a big cost to society and much of the pain was borne by innocent people ? ordinary workers who lost their livelihoods as unemployment rose above 20% and ordinary people who lost all their savings in bank failures.

It also runs the risk that the people on the receiving end of the pain will decide that capitalism is not for them possibly leading to more extremist fascist or socialist governments.

As such a 'do nothing? approach is not politically acceptable to most governments.

Are there any signs it is working?

Given the ongoing losses in global banks and the latest slide in bank shares it is clear that the financial crisis is still with us.
However, were it not for the capital injections into banks and guarantees over bank borrowing, the situation today would likely be far worse.

More fundamentally though there have been some signs of improvement. Focusing mainly on the US situation, which is the key in all this:

? The gap between interbank lending rates and government short term borrowing rates has fallen sharply from levels in October.

The gap between corporate borrowing rates and long term bond yields has also fallen, albeit only tentatively. See chart below.

Mortgage rates in the US have fallen over the last two months from around 6.5% to around 5%.

This in turn has seen a huge increase in US homeowners refinancing their mortgages to lower fixed rates, which is normally a precursor to stronger consumer spending.

? Consumer confidence measures are showing tentative signs of stabilising in the US and in Australia.

? Chinese money and credit growth have recently started to pick up again.

? There are some signs of stabilisation in global trade, as indicated by the Baltic Dry Freight index (a measure of shipping costs) which has stabilised after a 90% fall.

To be confident that economic recovery is definitely on the way a range of other signposts need to turn positive including: a slowing in the pace of US house price declines, an easing in bank lending standards and an improvement in credit growth.

However, the fact that some indicators have turned a bit more positive is a good sign and consistent with our expectations for a global economic recovery from later this year and/or through 2010.

Conclusion

The global policy response is absolutely necessary in providing a counterweight to the global financial crisis.
More action is needed in the way of fiscal stimulus and measures to get banks lending again and this looks to be on the way.

The economic news will likely get worse before it gets better and this will ensure a volatile ride for investors in the short term.

But there are signs that the policy response is helping. And this provides some confidence that growth will start to stabilise/improve later this year and through 2010, which would be consistent with shares getting back onto a sustainable recovery path this year.

IMPORTANT: AIR reports about financial markets and investment products in the widest sense possible. The AIR website and all its contents is prepared for general information only, and as such, the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore talk with their financial planner or advisor before making any investment decisions.

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Job Losses Tell Us It?s Going To Get Worse

There is one overriding message from the jobs bloodbath of this week.

That is: this slowdown is going to be long, hard and tough and things are going to worsen.

Indeed US brokers Merrill Lynch now says it thinks estimates for 2009 profits for US companies are still too generous, that earnings are going to be lower.

Brokers already believe that December 2008 quarter earnings will be down 28%, so Merrill Lynch's warning should be seen as a pointer to the future.

Anyone thinking it's going to be a quick exit/rebound later this year, or even in 2010, had better think again.

The 100,000 job cuts that echoed around the world on Monday came from retailing, cars, heavy manufacturing, light manufacturing, technology, finance, insurance, technology and more.

On top of the cuts from the likes of BHP Billiton the week before, Intel and Microsoft, the trail of losses is mounting rapidly, day by day as employers, who have tried to keep staff on for as long as possible, are forced by plunging profits, to chop and chop deeply.

Companies reported badly damaged 4th quarter earnings in the US and Europe and used these profit slumps as the basis for the jobs cuts: Texas Instruments, Caterpillar and ING for example (it was bailed out by the Dutch government for a second time with a deal to takeover dodgy real estate assets and keep lending to the economy).

The IMF saw the US economy contracting 1.6% this year, with the euro zone shrinking 2% and Japan 2.6%. Media reports said the Fund, later this week, would reveal world growth for this year 0.5% at best. Next year an optimistic 3%.

Overnight the Japanese economy okayed a modest stimulus package of about $US75 billion and the German Cabinet signed off on a 50 billion euro package. The UK Government revealed a $US4 billion-plus assistance package for its car industry.

The aim of these packages is to try and slow the downturn and keep as many people as possible in jobs.

Companies in the US and Europe chopped more than 90,000 jobs Monday that also saw the Iceland government collapse, General Motors chop more factories as sales slump, and America's second biggest cardboard processor collapse with $US5.6 billion in debts.

Around 80 000 jobs were cut in the US, the rest in Europe.

A survey of private sector economists in the US had bad news: they see the slump as worsening. (Source)

The survey found that companies will lay off more workers and hoard more cash in the next 12 months. A large majority of the 105 economists polled believe the country's gross domestic product will continue to sink in 2009.

Respondents to the survey were getting more pessimistic about the macroeconomic outlook. "78% of respondents expect U.S. real GDP to be lower in 2009 than in 2008."

"NABE's January 2009 Industry Survey depicts the worst business conditions since the survey began in 1982, confirming that the U.S. recession deepened in the fourth quarter of 2008," said Sara Johnson, a NABE economist.

Nearly half (47%) of surveyed economists said overall industry demand was falling, compared with 35% who said so in the October survey.

"Just 10% of respondents said profit margins were rising, compared with 52% who believe they are falling. And 38% of economists said capital expenses are falling, up from just 15% in October.

"Over half expect real GDP to fall by more than one percent this year, and only three percent project growth of over one percent.

"Falling profit margins outnumbered rising margins five-to-one among respondents? firms?the worst reading since 1982.

"Job losses accelerated in the fourth quarter, and the employment outlook for the next six months has weakened further.

"With market prospects deteriorating, firms slammed the brakes on capital spending in the fourth quarter of 2008; the percentage of firms reducing capital expenditures (38%) was the highest in the history of the survey."

The survey found that a majority of those replying said credit conditions hurt businesses, as customers had less leverage to buy discretionary products. 78% of respondents said tightening credit conditions affected customers, and 52% said the credit crunch directly hurt businesses in their industries.

Rapidly deteriorating global market conditions are hammering business profits.

"For the fourth consecutive quarter, reports of falling profit margins (52% of respondents) outnumbered reports of rising margins (10%). This was the worst result since the spring of 1982.

Job losses accelerated in the fourth quarter, producing the worst survey result in 17 years. Some 44% of firms cut payrolls, while only 14% added workers.
"Looking ahead, 39% of companies plan to reduce payrolls over the next six months, while 17% plan to increase employment. Only the services sector continues to create jobs."

If anything, that explains why so many big and small companies are now cutting jobs, more than a year after the US economy officially slipped into this recession. Business conditions have become so fraught, thanks to the credit crunch and drought, that they have no alternative.

With US first time jobless claims running at more than half a million a week for the past two months, there's no let up in the flow of bad news for US workers, and increasingly employees in Europe and Japan.

US unemployment looks certain to surge from the December level of 7.2%, even as thousands of workers stop actively searching for the few jobs that are there.

But there was some rare good news from the battered US housing sector with the National Association of Realtors reporting a 6.5% rise in the number of pre-owned houses sold in December: 4.74 million unit annual rate. Economists had expected a 4.40 million unit pace.

The US Conference Board said its index of leading economic indicators rose 0.3%: economists had expected a fall of the same size.

However, the realtors' report also had the now familiar bad news with the median national home price in the US down 15.3% in December from the same month of 2007, the largest fall on record.

The financial crisis claimed Iceland's Prime Minister Geir Haarde who announced the resignation of his government after months of protests over economic policies that brought the country close to Bankruptcy.

A coalition of Green and leftwing parties is expected to win the election later this year, which could provoke tensions between the country, the banks and the IMF. The Social Democrats will form a new Government in the meantime.

But Canada will spend $US5.7 billion on infrastructure over the next two years and officials said Canada will run budget deficits totalling $US53 billion over the next two years.

And the Norwegian government presented a $US2.87 billion fiscal stimulus package to prevent a surge in unemployment. It is dipping into its state-owned wealth fund to help bolster spending, as is Singapore.

But it was the toll of job losses that staggered observers: construction equipment giant Caterpillar axed 20,000 places worldwide to cope with plunging sales. Its big Japanese rival, Komatsu warned of a 15% drop in sales and a 42% plunge in profit in the year to March 31.

New York-based drug maker Pfizer announced it would acquire its rival Wyeth for $US68 billion ($A104 billion), and then announced it would chop the combined workforces of the two companies by 19,000, or 15%, and its own global workforce by 10%, or 8,000 jobs. It's halving dividend to help finance this big deal. Investment banks will carve up $US207 million from this mega-merger.

Texas Instruments reported a big fall in 4th quarter profits, and plans to shed up to 3,400 jobs. And still in technology, an American union reckons IBM, which last week reported better than expected 4th quarter profits, is readying itself to chop at least 2500 jobs soon. .

General Motors dropped an extra 2000 jobs at two US plants as it continues restructuring. US telecom operator Sprint Nextel said it would cut 8000 jobs, or 14% of its staff, and top US home improvement retailer Home Depot is culling 7000 employees across America.

The big Dutch financial services group, ING, has obtained more help from its government to stay alive and is sacking thousands of people, as is the huge Philips lighting and technology group.

All up, ING and Philips are shedding around 13,000 people from their businesses worldwide to try and cut costs as sales and demand slump faster than expected.

And Corus, the big Anglo-Dutch steelmaker is cutting 3,500 jobs around the world, some 2,000 of them in Britain, due to a sharp fall in demand for steel.

The company is Europe's second-largest steelmaker now owned by the Indian company, Tata which is struggling to keep Jaguar Landrover alive in Britain..

Another major US company has collapsed: the Smufit-Stone Container Corp, a cardboard packaging giant and one of the world?s largest paper recyclers, has gone bust in the US with $US5.6 billion in debt. It was unable to service amid a slumping economy and demand for its products.

The company, which is based in the US but was founded in Ireland, filed for Chapter 11 protection in the US: besides the $US5.6 billion in debt the company had $US7.5 billion in assets. 24 subsidiaries or affiliates also sought protection. It had net sales of $US7.4 billion in 2007.(Source)

Smurfit-Stone, based in Chicago is North America?s second- largest maker of corrugated packaging, and has 22,000 employees in the US, Canada, Mexico and Asia.

In Britain two retail chains selling shoes went bust overnight and their listed owner, Stylo, was suspended from trading.

Barratts Shoes and PriceLess became the latest British chains to go into administration, putting the jobs of around 5,00 people at risk. The 400 stores in the two chains will remain open for now.

They join fashion chains, Dolcis, Stead & Simpson and Faith which have all gone into administration. Woolworths has closed, at a loss of 30,000 jobs and the home improvement group, MFI has failed. The UK children's retailer, Adams has shut, while furniture retailer, Land of Leather is a failure.

And a sure sign of the damage the credit crunch is doing to business can be seen from the 72% plunge in 4th quarter operating earnings for American Express.

The credit card giant said quarterly profit from continuing operations hit $US238 million, down from $US858 million in the same quarter of 2007 (Source).

American Express received a $US3.4 billion from the US Treasury's bank bailout fund earlier this month as surging consumer defaults forced it to set aside more reserves and the market for bonds backed by credit-card debt froze.

The company has chopped 7,000 jobs, frozen management salaries and cut other costs to try and save $US1.8 billion a year. For the year earnings fell 32% to $US2.8 billion.

IMPORTANT: AIR reports about financial markets and investment products in the widest sense possible. The AIR website and all its contents is prepared for general information only, and as such, the specific needs, investment objectives or financial situation of any particular user have not been taken into consideration. Individuals should therefore talk with their financial planner or advisor before making any investment decisions.

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Playing Resistance Levels With Better Trades

I have been on traveling a lot recently, and it is amazing to me what people are saying about the stock market. Most reply, wow this is not a good time to be in the market while I am thinking "what an INCREDIBLE time to be in the market"!

If you stick to the basics, looking for good companies at support or resistance, that the odds of the trade working are so much better. However, a stock testing resistance and not being able to break through it seems like such an incredible play in uncertain times like today's market. Even if the market goes up, this stock already did. So when it doubt, looking for stocks that really have a chance of falling is always a good choice when selecting a play.

It is simple to learn how the downside works, whether you decide to sell stock short, buy puts, or write covered calls. Once you have learned the upside plays, learning the downside will only take about 10% of the effort to learn because you already know so much. The sad thing is that most people are missing the best money in the stock market if they are not playing the downside. Falling stocks mean FAST PROFITS! Who could ask for anything more?

A big secret to playing a trade, when you are not quite sure of the market direction, is to set alarms (bracket trade). I set alarms in my REAL TIME MARKETS that go to my cell phone and my computer. These alarms are real time and come to me instantly, which is critical. It takes my broker a few minutes to call me when I set them with him. The alarms allow me to follow my plan, and not have to worry in between. The alarms also give me TIME FREEDOM and I don't have to watch real time charts, which most of the time get you out at the wrong times. If you set the alarms, make sure you have one set to get you out immediately if a trade goes against you, but you can check first to see if the stock is just kissing good-bye a price and heading the right direction before you get out. You can find REAL TIME MARKETS on my home page. Just one trade will be worth the fee for the whole year!

Looking at the statistics that may give us some direction of what the market is possibly going to do is the Put-Call ratio, the VIX Index and the Commercial Traders.
1. As of last week the Commercial Traders increased their shorts from 4.8% to 5.2%. This means they were 4.8% more short than long in the now they increased their shorts another .4% from the week before indicating a bottom is not yet formed in the market. 2. The put call ratio has tested the high of a soft resistance but has a lot more to go to test the lows we saw this last two years. This is a second confirmation that the bottom is not yet hit. 3. The VIX index is the same situation, it tapped almost 40 - a soft resistance, but a market close price of 50 is a more serious number that called that last two market bottoms. This makes a third confirmation of a bottom not being reached in this last pullback.

Based on these we might consolidate and head up some, but it seems like we have some bearish movement due us to get to a serious bottom still.

In my LEAPS class I teach you some bearish trading - as a matter of fact, I teach you when you write covered calls how you can make money twice when you are falling versus just once - along with how to insure a stock or an entire portfolio. Would it be wonderful to trade with peace of mind in any market? You bet it would.

Darlene Nelson with BetterTrades

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Playing Resistance Levels With Better Trades

I have been on traveling a lot recently, and it is amazing to me what people are saying about the stock market. Most reply, wow this is not a good time to be in the market while I am thinking "what an INCREDIBLE time to be in the market"!

If you stick to the basics, looking for good companies at support or resistance, that the odds of the trade working are so much better. However, a stock testing resistance and not being able to break through it seems like such an incredible play in uncertain times like today's market. Even if the market goes up, this stock already did. So when it doubt, looking for stocks that really have a chance of falling is always a good choice when selecting a play.



It is simple to learn how the downside works, whether you decide to sell stock short, buy puts, or write covered calls. Once you have learned the upside plays, learning the downside will only take about 10% of the effort to learn because you already know so much. The sad thing is that most people are missing the best money in the stock market if they are not playing the downside. Falling stocks mean FAST PROFITS! Who could ask for anything more?

A big secret to playing a trade, when you are not quite sure of the market direction, is to set alarms (bracket trade). I set alarms in my REAL TIME MARKETS that go to my cell phone and my computer. These alarms are real time and come to me instantly, which is critical. It takes my broker a few minutes to call me when I set them with him. The alarms allow me to follow my plan, and not have to worry in between. The alarms also give me TIME FREEDOM and I don't have to watch real time charts, which most of the time get you out at the wrong times. If you set the alarms, make sure you have one set to get you out immediately if a trade goes against you, but you can check first to see if the stock is just kissing good-bye a price and heading the right direction before you get out. You can find REAL TIME MARKETS on my home page. Just one trade will be worth the fee for the whole year!

Looking at the statistics that may give us some direction of what the market is possibly going to do is the Put-Call ratio, the VIX Index and the Commercial Traders.
1. As of last week the Commercial Traders increased their shorts from 4.8% to 5.2%. This means they were 4.8% more short than long in the now they increased their shorts another .4% from the week before indicating a bottom is not yet formed in the market. 2. The put call ratio has tested the high of a soft resistance but has a lot more to go to test the lows we saw this last two years. This is a second confirmation that the bottom is not yet hit. 3. The VIX index is the same situation, it tapped almost 40 - a soft resistance, but a market close price of 50 is a more serious number that called that last two market bottoms. This makes a third confirmation of a bottom not being reached in this last pullback.

Based on these we might consolidate and head up some, but it seems like we have some bearish movement due us to get to a serious bottom still.

In my LEAPS class I teach you some bearish trading - as a matter of fact, I teach you when you write covered calls how you can make money twice when you are falling versus just once - along with how to insure a stock or an entire portfolio. Would it be wonderful to trade with peace of mind in any market? You bet it would.

Darlene Nelson with BetterTrades

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Easy Ways To Stay Out Of Debt By Minimizing Expense

No one likes the idea of being in debt. But when consumers are on the verge of being in debt, there are little short term solutions that can be found. Instead, proper budgeting and helpful guidelines should be observed so as to minimize the prospect of being in debt.

The concept of debt is simple: consumers are likely making less money than what their expenses are demanding. If that's the case, it's a good idea to help cut down expenses by following several different methods. This will require a proper budget of course, which should outline one's expenses, income, and any present debts so an analysis can be made.

Out of all the causes of debt and unnecessary expenses, the characteristic of motivation is likely in short supply and adding fuel to the fire. Motivation is a necessary component to the debt situation, since it allows consumers to say no to unnecessary expenses and save money to pay off debts or to otherwise invest. This is made apparent in examples of where friends might want to go out and have fun for an expensive evening, in which case those on the verge of debt should decline and instead think of alternative forms of entertainment that are more thrifty.

Having a defensive lifestyle is a good way to stave off debt. An example might be with vehicles, which typically breakdown much less when they are driven in a defensive manner. This is also apparent in terms of gas prices, where driving slower and in a defensive manner will cost less money per mile on average.

As consumers will agree, one of the biggest expenses will always be food. Food doesn't always have to be expensive, but cheaper forms of food often taste less appealing or consumers start to tire of the limited selection. Regardless, buying food that isn't branded is a good way to save money on many varieties of food. Such off brands are usually the same quality of branded items, but just lack the colors or logos that more expensive brands use to appeal to consumers.

There are far too many ways to cut back in expenses for anyone in debt to not do so. Getting a proper budget composed is the first step in realizing which areas need to be cut back, and which areas can have a little more money. It's good to note that it shouldn't be bad to have fun and buy forms of entertainment- in fact, we need it as human beings! Just try to limit expensive forms of entertainment as much as possible so as to stay on track to saving money.

Closing Comments

It isn't easy getting out of debt, or trying to fend it off when it comes close to ruining a consumer's life. But cutting expenses is the easiest way to make the prospect of debt disappear. Keep in mind to do so, consumers will need proper motivation and a proper budget so as to be best equipped to handle any further debts that may try to come their way.

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