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Japan auto production marks worst drop since 1967
Japan auto production marks worst drop since 1967 amid sapped global demand
TOKYO (AP) -- Japan's production of cars, trucks and buses marked its steepest drop in at least four decades in November, an industry group said Thursday, as the fallout from the U.S. slowdown crimped auto demand.
Vehicle production in Japan, home to Toyota Motor Corp. and other major automakers, plunged 20.4 percent in November compared to the same month a year ago to 854,171 vehicles, the Japan Automobile Manufacturers Association said.
That marked the second straight month of on-year declines and the percentage slide was the biggest since the group began compiling such data in 1967, it said.
Production of passenger cars in Japan decreased 20.3 percent in November from the previous year to 737,797 vehicles, while production of trucks here declined 20.9 percent for the month to 106,170.
Japanese automakers, which also include Honda Motor Co., Nissan Motor Co. and several other manufacturers, have been hammered by the dwindling of demand in the U.S., the world's biggest auto market.
But signs are growing the fallout is so serious domestic sales are getting drastically damaged as well.
Auto executives have expressed dismay at the fall in Japanese sales, which have worsened in the last two months.
Japanese plants are being idled to reduce production, and thousands of assembly line workers have lost their jobs in recent weeks.
"Even if we are doing our utmost, the global crisis is coming at us like a tidal wave," Teruyuki Minoura, president of Daihatsu Motor Co., a Toyota affiliate, told reporters Thursday.
Earlier this month, the Japan Automobile Manufacturers Association said it expected demand in Japan will dive next year to its lowest in about three decades.
Sales of new autos are expected to stand at 4.86 million in 2009, down 4.9 percent from what it's projecting for this year at 5.11 million, the group said.
New vehicle sales in Japan have never dipped below the 5 million mark since 1980. They reached 7.78 million in 1990, during this nation's heyday "bubble" economy.
Vehicle sales in Japan stood at about 5.02 million in 1980, and at 4.31 million in 1975.
Toyota Executive Vice President Akio Toyoda apologized for the public concern that Japan's top automaker has set off by forecasting its first operating loss in seven decades for the fiscal year ending March 2009.
"The overall world economy is said to be facing its worst crisis in 100 years," he told reporters.
But Toyoda brushed off questions about a recent Japanese media report that he may be promoted to president soon, and instead insisted on talking about a new car he said he hoped would appeal to women.
"This car is for housewives, moms and women. In hard times like these, it's best if women are full of life and happiness," he said.
http://finance.yahoo.com/news/Japan-auto-production-marks-apf-13916293.html

Russia braced for unrest
By Isabel Gorst in Moscow and Anuj Gangahar in New York
Published: December 26 2008 19:53 | Last updated: December 26 2008 19:53
Russia is bracing for further unrest as the rouble on Friday slid to a new low against the euro after a succession of moves to devalue its currency.
A cut on Friday extended six weeks of devaluations by Russia’s central bank designed to offset the impact of the global economic crisis and falling oil prices as the country’s main export commodity approached its lowest level since 2004.
Mikhail Gorbachev, the former Soviet leader, warned Russia faced “unprecedentedly difficult and dangerous circumstances” and could be “heading into a black hole”. “It is not clear what the fate of our rouble will be or if society has sufficient financial and moral resources,” he said.
After the depreciation, which was the eighth so far this month, the rouble declined as much as 1.2 per cent to Rbs29.06 versus the dollar on Friday, a four year low. The rouble has now lost nearly 20 per cent of its value against the US currency since August.
Analysts at Barclays Capital said the best case scenario would see Russian policymakers, facing the mounting evidence of a recession, allowing a one-off depreciation of 10 per cent or more.
The rouble’s slide comes as the government faces scrutiny over its policies. A demonstration earlier this month in the far eastern city of Vladivostok marked the first major challenge to the Kremlin since the onset of the global financial crisis.
Mikhail Sukhodolsky, a deputy interior minister, warned on Christmas Eve that there could be further protests. “The situation may be exacerbated by a growth in frustration of workers over the non-payment of wages or those threatened with dismissal,” he said.
His remarks coincided with criticism of the Kremlin’s rough handling of the protests in Vladivostok. Moscow-based Omon riot police detained about 61 people in the protests against car import duties designed to prop up domestic car producers, but making foreign vehicles prohibitively expensive for ordinary Russians.
Mikhail Kasyanov, the former prime minister who now leads the liberal People’s Democratic Union opposition movement, said that an unspoken social contract between the government and the people, swapping political freedoms for prosperity and consumer goods, had broken down.
“It was a deal,” he told the FT in an interview this week. “But it has fallen apart and that is why people are appearing on the streets. The process has started . . . Things could spin out of control when people wake up and realise their neighbours have lost their jobs and they are at risk of losing theirs.” He added that “the authorities had reacted “cynically and in a very nervous manner for nothing,” against a peaceful demonstration.
Boris Gryzlov, the pro-Kremlin speaker of parliament, on Friday accused the opposition of provoking the demonstration.
Moscow, which has pledged $200bn to mitigate the effects of the economic downturn, late on Thursday published a list of 295 strategic enterprises entitled to preferential government support.
mid suspicions that the money will not be distributed transparently, the government said the list published on its website was not complete and did not guarantee financial support for those on it.
http://www.ft.com/cms/s/0/fb228bfa-d385-11dd-989e-000077b07658.html

Iran to send aid ship to Gaza
ran's Red Crescent is sending a shipment of aid to the Gaza Strip in the face of a blockade of the Hamas-ruled territory by Islamic republic's archfoe Israel, the state broadcaster reported on Friday.
"Despite the Zionist regime's opposition... this consignment will leave Bandar Abbas for Palestine on Saturday and will arrive in 12 days," a provincial Red Crescent director, Ahmad Navvab, was quoted as saying.
"The cargo contains over 2,000 tonnes of food, medicine and appliances and it will be accompanied by 12 Iranian doctors and relief workers," he said.
Earlier this month, the Red Crescent said it aimed to send a 1,000-tonne shipment of grain, sugar, oil and medicine to the aid-dependent land, which has been subject to Israeli blockades and repeated raids since the Islamists of Hamas seized power in June 2007.
Violence in and around Gaza has flared since a six-month ceasefire ended on December 19 and there is widespread speculation Israeli forces are gearing up for large scale military action in the coastal strip.
Israel responded to violence that erupted around Gaza in early November by tightening its blockade of the territory and blocking deliveries of humanitarian aid and other basic supplies.
Tehran is a staunch supporter of Hamas but rejects allegations it is supplying arms to the movement, saying it only provides moral backing.
Iran does not recognise the Jewish state and President Mahmoud Ahmadinejad has repeatedly called for Israel to be wiped off the map and called the Jewish Holocaust a "myth."
http://www.breitbart.com/article.php?id=081226141017.mdy6nmnj&show_article=1

New threats to online security
By Richard Waters in San Francisco
Published: December 26 2008 17:20 | Last updated: December 26 2008 17:20
Internet security has deteriorated markedly this year as a new generation of invasive computer attacks, often masterminded by criminal gangs, has reached a heightened level of sophistication, according to the latest studies of online threats.
“It’s getting worse year after year,” warned Pat Peterson, chief security researcher at Cisco Systems, who blamed the deterioration on the fact that computer “hacking” is quickly turning into big business. “Capitalism is working against us,” he said.
“It’s a step back after things had gotten better,” added John Pescatore, a security analyst at Gartner.
In particular, computer security experts warn that so-called botnets, or networks of “slave” PCs whose owners do not know their machines have been infected, have become both more prevalent and sophisticated.
By planting a piece of software on an unguarded PC, criminals are able to assemble large networks of machines to carry out tasks for them, such as launching attacks on other internet users.
PCs that are part of botnets, some of which span 1m or more machines, have become harder to identify and root out in recent months as the rogue software has burrowed deeper into the machines, said Paul Wood, a senior analyst at MessageLabs.
Botnets have also become more dangerous as their controllers have learnt how to repurpose the slave networks to carry out different tasks, Mr Peterson said. One network that was originally used to steal users’ passwords and send out spam was given an overhaul this year so that it could attack legitimate websites, according to Cisco.
A second big new threat that has become notable this year has been the commandeering of legitimate websites and e-mail accounts to spread malicious software. Rogue software is used to scrutinise public websites and “inject” code into those that are found vulnerable, so that later visitors to the sites can be infected.
The setback for internet security follows several years in which the biggest online threats were successfully held at bay or, in some cases, pushed back. The use of the internet to exploit vulnerabilities in millions of PCs first emerged as a significant threat in 2001, after an outbreak of fast-spreading computer viruses and worms.
Those threats were largely thwarted after a concerted effort by Microsoft and other software makers to plug flaws in their code, and after anti-virus software became more widely used. A subsequent wave of spyware that emerged in the middle of this decade was also pushed back.
However, the prospect of making large amounts of money by stealing sensitive information from millions of users, such as their passwords or financial data, has led to a new and more insidious outbreak of mass internet attacks.
http://www.ft.com/cms/s/0/89690a7e-d36d-11dd-989e-000077b07658.html

U.S. debt approaches insolvency; Chinese currency reserves at risk
by Maurizio d'Orlando
In a few months, America's public debt has grown to more than 100% of GDP. Fear of a valuation crisis for the dollar, with tremendous consequences for Asian countries, major exporters to the United States.
Milan (AsiaNews) - In the United States, the danger of debt insolvency is growing, putting at risk the currency reserves of foreign countries, China chief among them. According to new figures published by Bloomberg in recent days (Nov. 25, 2008 [1]), the American government has employed a total of 8.549 trillion dollars to stop the financial crisis. This means a total of about 24-25.4 trillion dollars of direct or indirect public debt weighing on American taxpayers. The complete tally must also include the debt - about 5-6 trillion dollars - of Fannie Mae and Freddie Mac, which are now quasi-public companies, because 79.9% of their capital is controlled by a public entity, the Federal Housing Finance Agency, which manages them as a public conservatorship.
In 2007, public debt in the United States was 10.6 trillion dollars, compared to a GDP (gross domestic product) of 13.811 trillion dollars. Public debt in 2007 was therefore 76.75% of GDP. In just one year, direct and indirect public debt have grown to more than 100% of GDP, reaching 176.9% to 184.2%. These percentages exclude the debt guaranteed by policies underwritten by AIG, also nationalized, and liabilities for health spending (Medicaid and Medicare) and pensions (Social Security)[2]. By way of comparison, the Maastricht accords require member states of the European Union (EU) to reduce their public debt to no more than 60% of GDP. Again by way of comparison, in one of the EU countries with the largest public debt, Italy, public debt in 2007 was equal to 104% of GDP.
In 2007, 61.82% [3] of America's public debt was held by foreign investors, most of them Asian. So the U.S. public debt held by nonresident foreigners is equal to about 109.39% (113.86%) of GDP. According to a study by the International Monetary Fund, countries with more than 60% of their public debt held by nonresident foreigners run a high risk of currency crisis and insolvency, or debt default. On the historical level, there are no recent examples of countries with currencies valued at reserve status that have lapsed into public debt insolvency. There are also few or no precedents of such a vast and rapid expansion of public debt.
The United States also runs large deficits in its public balance sheet and balance of trade. Families and businesses are also deeply in debt: in 2007, American private debt was equal to a little more than 100% of GDP. At the moment, it is not clear how much of America's private debt has been "nationalized" with the recent bailouts.
In the early months of next year, when the official data are published, the United States will run a serious risk of insolvency. This would involve, in the first place, a valuation crisis for the dollar. After this, the United States could face a social crisis like that in Argentina in 2001. A crisis in U.S. public debt would likely have a severe impact on the Asian countries that are the main exporters to the United States, China first among them. Chinese monetary authorities, thanks to a steeply undervalued artificial exchange rate, by about 55%, have limited imports (including food) and have achieved an export surplus. This has allowed them to accumulate a large stockpile of dollar reserves. In a currency crisis, China risks losing much of the value of its accumulated currency reserves. At the same time, pressure on imports (wheat, other grains, and meat) have led to inflation in the prices of food, the most important expenditure for more than 900 million Chinese. This is nothing more than a small confirmation of the recent statements of the pope, in his message for the World Day for Peace, where the pontiff calls the current financial system and its methods "based upon very short-term thinking," without depth and breadth (nos. 10-12), preoccupied with creating wealth from nothing and leading the planet to its current disaster. [4]
[1] See Bloomberg, 2008, 11-25 16:35:48.130 GMT “U.S. Pledges Top $8.5 Trillion to Ease Frozen Credit (Table)”
[2] In this case, exluding AIG policies, one arrives at a total equal to 429.37 of GDP.
[3] Cf. Economic crisis: US, China and the coming monetary storm
[4] Cf. AsiaNews.it 11/2/2008 Message for Peace 2009: the poor, wealth of the world; Global
solidarity to fight poverty and build peace, says Pope

http://www.sprott.com/pdf/investorsdigest/digest.pdf