Tuesday January 15, 2008

Citigroup to cut 20000 jobs and slash dividend : WSJ

bloomberg.com :

Citigroup plans to eliminate more than 20,000 jobs, slash its quarterly dividend and collect at least $10 billion in cash from outside investors to shore up capital eroded by subprime losses, the Wall Street Journal reported, citing unidentified people familiar with the matter. About 6,500 of the more than 20,000 job cuts will be in the investment bank, the Journal said.

If the firm cuts more than 20,000 jobs, it would be the largest program of cuts announced by a bank or brokerage since a surge in subprime mortgage defaults led financial institutions to write down about $100 billion from the value of securities backed by home loans. Financial institutions eliminated more than 153,000 jobs last year, with about 86,000 related to the mortgage business, according to data compiled by Challenger Gray. That was more than triple the 50,300 jobs eliminated by the industry in 2006, the firm said.

Citigroup's most recent quarterly dividend was 54 cents a share and the payout hasn't been cut or suspended since the firm was created in the 1998 merger of Travelers Group Inc. and Citicorp. The bank's $2.16 annual dividend is equal to 7.4% of its stock price, more than twice the 3.6% yield of the average financial stock in the Standard & Poor's 500 Index. A cut in the dividend would reverse a Nov. 4 statement by Citigroup that it had "no plans to reduce its current dividend level." Charles O. Prince stepped down as CEO after the bank warned of bigger-than-expected writedowns on subprime mortgages and related securities.

- They were saying they were going to cut 15,000 jobs earlier and then the figure was 17,000. And now they are saying over 20,000. That's a lot of people.

See also :

1. Citigroup may cut 15000 jobs, take $1 billion charge
2. Citigroup to slash 17000 jobs

(2008-01-15 19:58:01 SGT) [Biz] Permalink

Gold reaches record, breaching $900, on US interest rates

bloomberg.com :

Gold rose to a record in London, breaching $900 an ounce, on speculation U.S. interest rates will decline and the dollar will weaken, increasing the appeal of the precious metal as an alternative investment. Silver reached its highest since 1980.

HSBC Securities USA and Morgan Stanley predicted the Federal Reserve will reduce its benchmark rate by half a percentage point this month. The Standard & Poor's 500 Index has fallen for three weeks and has lost 4.6% this year, the worst start since 1982. You've got the U.S. dollar falling out of bed'' and increasing concern over inflation, Peter McGuire, managing director of Commodity Warrants Australia Ltd., said by telephone from Sydney. "People are looking at precious metals as principally a safe haven while they ride out a correction in equity markets."

- I am awaiting the establishment of $100 oil and $1000 gold. They make for nice, round numbers, don't you think?

See also :

1. Gold breaks 28-year record to hit $859 per ounce
2. Gold hits record $876 on crude oil, dollar

(2008-01-15 19:53:03 SGT) [Biz] Permalink

Japan has huge 'urban mines' of recyclable metals : report

bloomberg.com :

Japan has accumulations of recyclable metals, such as gold and indium, equivalent to the reserves of some of the world's most resource-rich countries, according to a report by the National Institute for Materials Science. Japan has 6,800 tons of gold, equal to 16% of the world's reserves, and 60,000 tons of silver, accounting for 22% of world deposits, said the Ibaraki prefecture-based institute in its report dated 11 Jan 2008. They are locked up in so-called urban mines of discarded and in-use mobile phones, home appliances and batteries.

High-quality metals from recycled sources can be used and exported just as raw minerals gathered from mining, the report said. In terms of world deposits, Japan also has 61% of indium, a metallic element used in the production of mirrors and transistors, as well 11% of tin and 10% of tantalum. Tantalum's applications range from light-bulb filaments to nuclear-reactor parts and surgical instruments.

- This is becoming an emerging trend of recognizing the world's garbage dumps as rich resources of metals and minerals. There is a big potential for recycling there. What is required is lots of effort - and lots of energy.

See also :

1. Digital waste worth more than gold, copper ore
2. Peak Gold?
3. Peak Copper
4. Earth's limited supply of metals raises concern

(2008-01-15 19:47:51 SGT) [Env] Permalink

Lockheed Martin signs agreement with EEStor for energy storage solutions

gm-volt.com, greencarcongress.com :

Lockheed Martin has signed an exclusive international rights agreement to integrate and market Electrical Energy Storage Units (EESU) from EEStor, Inc., for military and homeland security applications. The EESU is a new high-power-density ceramic ultracapacitor that EESTOR says could provide 10 times the energy density of lead acid batteries at 1/10th the weight and volume. As envisioned, EESUs will be half the price per stored watt-hour than traditional battery technologies.

Excerpted from an interview transcript :

Lockheed Martin builds fighter jets and military equipment?

And missiles, rockets, ground equipment, vehicles, and systems sensors. Obviously everything that requires power to operate. Power is becoming a sticking point or burden to the warfighter and that's one of the things were focused on is coming up with solutions that make the warfighter's job easier and more efficient.

Are you looking to develop portable energy storage for the battlefield?

Yes there are opportunities not only to help in the area of relieving some of the dependence on fuel as energy. Also to increase the value of some of the renewable energy initiatives that are going on right now. Energy storage increase the value of these types of power generation technologies. EEStor's technology can help in that area.

(2008-01-15 19:40:33 SGT) [Energy] Permalink

Singapore : Inflation rate could push past 6% in Q1 2008

This article belongs to the Singapore inflation watch story arc.

businesstimes.com.sg :

Singapore's inflation rate could soar past 6% in the current quarter, beating previous estimates, as an upward revision of the value of public housing kicks in this month and food and oil prices continue to climb. 'We were previously looking at 3.9 per cent for this year, but I think it will be much higher,' United Overseas Bank economist Ho Woei Chen said. 'The revision (of annual values) will be quite significant, and we underestimated the extent of the taxi fare increase, the food price increase, oil price increase.'

The Inland Revenue Authority of Singapore has raised its assessment of values across all flat types by 18-25% cent from Jan 1. Housing value has a significant weight in the consumer price index (CPI). '(Inflation for the year) can potentially exceed the Monetary Authority of Singapore's forecast of 3.5 to 4.5 per cent for 2008,' Ms Ho said.

- First they said 4%, then they said 5%, and then now they are forecasting a 6% inflation rate. And that is just referring to the official CPI figures. Many actual street prices are, of course, going up much faster and further than that.

As I have said earlier, inflation is taking off and it is going exponential. We have got gold breaking through a 28-year record high like it was a piece of paper, which incidentally is what fiat currencies are mostly made of. There is no more "Maginot Line" - we have seen resistance levels like $650, $700, $800 and finally the legendary $850 fall by the wayside.

I am starting to hear of companies which say they have not changed prices for 10, 15 years start to charge higher prices and start to pass on these price increases to consumers, because they have no other choice in this highly inflationary environment. This inflation thing is spreading like wildfire.

See also :

1. Singapore CPI inflation hits 25-year high of 4.2% in November
2. NTUC chief urges Singaporeans to be prepared to live with higher fuel, food prices

Updated :

1. Singapore CPI inflation rate for May 2008 continues at 26-year high of 7.5%
2. Singapore inflation rate hits new 26-year high of 7.5% in Apr 2008
3. Singapore CPI inflation rate hits 6.7% for Mar 2008, fastest in 26 years

(2008-01-15 19:35:30 SGT) [Biz] Permalink

Lockheed to sell F-16's to India (and also to Pakistan)

bloomberg.com :

Lockheed Martin, the world's largest defense company, started a unit today [9 Jan 2007] in India, ahead of the government's plan to purchase $11 billion of fighter jets. The Indian unit will offer F-16 multi-role fighter aircraft, P-3 maritime surveillance aircraft, C-130J transport planes, MH-60R helicopters and air and missile-defense systems, Bethesda, Maryland-based Lockheed Martin said in a statement. Lockheed, Raytheon and Boeing are trying to win military contracts for the first time in India as political relations improve between the U.S. and the South Asian nation.

India, which operates Russian MiG and Sukhoi planes in its air force, in June invited bids for 126 fighter jets, the biggest order for combat planes in 15 years. The nation is strengthening defense forces as China develops its own fighter planes and Pakistan buys aircraft from the U.S. Lockheed also plans to supply F-16 fighter jets to Pakistan. India is among the top growth markets for Lockheed, the New York Times reported in August, citing Richard G. Kirkland, the defense contractor's South Asia president.

- This fits in well with the fiscal stimulus and dollar-exit theme. If the consumers can't cut it, then the governments will.

See also :

1. US Air Force grounds entire F-15 fighter-bomber fleet on safety concerns
2. Twice the jet fighters

(2008-01-15 19:15:39 SGT) [Biz] Permalink

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