Nothing can be off-limits in budget, says Obama

President Barack Obama said Saturday that 'nothing can be off-limits' in the budget debate — even though Republicans have said tax increases are.

The president said every tax break and federal programme must come under scrutiny.

With an August 2 deadline looming to raise the government borrowing limit, the president used his weekly radio and internet address to call on Congress to make a deal.

He also renewed his call for Congress to eliminate some tax breaks for the well-off as part of any agreement. Republicans want deep spending cuts without any tax increases while Obama and Democrats call for what they term a 'balanced' approach. That means one that also includes new revenue in the form of higher taxes for some, though Democrats steer clear of using phrases like 'tax increases' or 'higher taxes.'

'Now, it would be nice if we could keep every tax break, but we can't afford them,' Obama said. 'Because if we choose to keep those tax breaks for millionaires and billionaires, or for hedge fund managers and corporate jet owners, or for oil and gas companies pulling in huge profits without our help - then we'll have to make even deeper cuts somewhere else.'

'Nothing can be off-limits, including spending in the tax code, particularly the loopholes that benefit very few individuals and corporations,' the president said.

Lawmakers and the administration are seeking deficit cuts in the range of $2.4 trillion over the coming decade to balance a similar increase in the debt limit - one that's large enough to keep the government afloat past the November 2012 election. Currently the debt limit is $14.3 trillion, and treasury secretary Timothy Geithner says it must be raised by Aug. 2 to avoid defaulting on the government's financial obligations for the first time in the nation's history.

With both sides dug into their positions, it's not clear how compromise will be reached, though the Senate cancelled its plans to take a July Fourth recess next week in order to stay in Washington and work on the problem.

Obama expressed confidence a deal could be made and instead of singling out Republicans as the barriers to agreement, he directed his message to Democrats and Republicans alike.

'We've got to cut the deficit, but we can do that while making investments in education, research and technology that actually create jobs,' the president said. 'We can live within our means while still investing in our future. That's what we have to do. And I'm confident that the Democrats and Republicans in Congress can find a way to give some ground, make some hard choices, and put their shoulders to wheel to get this done.'

Republicans used their weekly address to criticize Obama on the economy and renew their opposition to tax increases.

'The president and Democrats in Congress must recognize that their game plan is not working. It's time to acknowledge that more government and higher taxes is not the answer to our problem,' said Sen Dan Coats, R-Ind. 'It's time for bold action and a new plan to address our current crisis.'

Coats said that it was time for the government to 'stop spending money we don't have and to enact policies that will grow our economy and get Americans back to work.'

Source : New Age

Facebook set for $1 billion in social-gaming revenue

Facebook Inc is on course to generate $1 billion in revenue this year from social gaming, according to Kevin Ryan, a leading Internet entrepreneur and former chief executive of online advertising giant DoubleClick.

Most of that revenue will come from advertising, Ryan estimated in an interview with Reuters this week.

The $1 billion forecast also includes revenue from Facebook Credits, which allow users to buy items for games and other activities on the social network, he added.

Ryan is now chief executive of luxury flash-sales company Gilt Groupe, but he invests in other Internet businesses including news website The Business Insider and 10gen, which runs MongoDB, a database that's popular with start-ups.

Ryan's brother, Sean Ryan, became director of gaming partnerships at Facebook in early 2011.

Facebook's more than 500 million active users are attracting a lot more ad dollars as companies step up online marketing. Research firm eMarketer estimated in January that ad spending on Facebook would exceed $4 billion this year. That's more than double levels of 2010.

A big chunk of that ad revenue comes from social games that are played on Facebook's platform.

'Assuming Facebook is on track to produce $4 billion in ad revenue this year, $1 billion of that coming from social gaming is not outlandish,' said Paul Verna, a senior analyst at eMarketer.

Facebook is a private company and doesn't disclose financial information. A Facebook spokesman declined to comment on Friday.

Zynga Inc, the dominant developer of social games played on Facebook, filed for a $1 billion initial public offering on Friday.

Zynga disclosed that it generated $235 million in revenue during the first quarter of 2011, more than double the same period a year earlier. That level of sales and the growth rate suggest Zynga is on course to generate more than $1 billion in revenue this year.

'We generate substantially all of our revenue and players through the Facebook platform and expect to continue to do so for the foreseeable future,' Zynga said in its IPO filing on Friday.

Source : New Age

Jamuna Bank re-appoints MD

Md Motior Rahman has been re-appointed as managing director of Jamuna Bank.

He joined the bank on September 15, 2005 as deputy managing director. He was promoted to the position of additional managing director in the bank in April 2007. Subsequently he was appointed managing director of the bank on February 01, 2009, said a news release.

Before joining Jamuna Bank he was senior executive vice-president and head of credit of Prime Bank.

Rahman obtained his post-graduation in accounting from Dhaka University in 1971. He started his banking career with Pubali Bank in 1973 as a senior officer.

Source : New Age

Spain to help struggling mortgage holders

Spain's government approved measures Friday to help the soaring number of homeowners, many jobless, who cannot pay their mortgages.

The government has since mid-May faced demonstrations across the country from 'indignant' protesters who have won broad public support in decrying the state of the economy and corruption.

Among their demands are changes to Spain's strict mortgage foreclosure laws.

Under Spanish law, banks have the right to auction houses in a foreclosure. If no buyers appear, as is often the case, the bank can take ownership of the house for 50 per cent of its value.

Deputy prime minister Alfredo Perez Rubalcaba said this percentage would be raised to 60 per cent, which will leave a defaulter with a smaller debt to pay off.

'Nobody will be able to take hold of the house of anyone for less than 60 per cent of its value,' he told a news conference after a weekly cabinet meeting where the measure was approved.

The government will also raise the amount of a borrower's monthly income that can not be seized by a bank in case of default on a home loan to 961 euros ($1,390) from 641 euros, Rubalcaba said.

If the defaulter has dependents, a further 30 per cent per family member will remain untouchable.

'These are measures aimed essentially at protecting those who can not continue to pay their mortgages,' said Rubalcaba.

The number of foreclosed properties in Spain has climbed 10-fold over the past three years, according to Idealista.com, the country's largest property website.

During the first quarter of the year there were nearly 22,000 foreclosures in Spain, according to government statistics. There were 93,000 during all of last year.

Source : New Age

European stocks close higher

European stock markets closed higher Friday, extending gains on the back of better-than-expected US economic data and relief that the Greek debt crisis seems to be under control.

Dealers said early trade was tentative as investors consolidated the strong advance made as the Greek parliament approved a make-or-break austerity package to win fresh debt funding from the EU and IMF on Wednesday and Thursday.

They said early trade Friday was tentative, however, after subdued manufacturing data in Britain, China and the eurozone but it then picked up after US figures surprised on the upside, sending Wall Street sharply higher.

In London, the benchmark FTSE 100 index of top shares closed up 0.74 per cent at 5,989.76 points. In Frankfurt, the DAX rose 0.59 per cent 7,419.44 points and in Paris the CAC 40 added 0.63 per cent to 4,007.35 points.

Other European markets posted similar gains.

Growth in private sector manufacturing across the eurozone hit a one-and-a-half-year low in June, hit by the impact of budget cuts and weaker exports, according to data from London-based research group Markit.

That, combined with weak numbers for Britain and China, reinforced the view that the global economy is slipping as the United States struggles to keep activity going in the face of a moribund housing market.

'It is notable that the further slowdown in UK manufacturing activity in June was replicated across Europe and also in several other countries,' an economist said.

Source : New Age

Best Wall St week in two years stalls US bears

Wall Street polished off its best week in two years with a strong performance Friday, shrugging off the spectre of a slow economy, high oil prices and the Greek crisis.

Eight bearish weeks were put to end with a stellar five-day performance.

The Dow Jones Industrial Average jumped 5.4 per cent in the week, ending at 12,582.77, in the index's best weekly show since July 2009.

The broader S&P 500 did better, rising 5.6 per cent to 1,339.67. And the tech-heavy Nasdaq outdid them both, picking up 6.2 per cent to 2,816.03.

The markets brushed off middling a negative US economic data all week.

On Friday a hesitantly positive show on the ISM manufacturing index for June was grasped as a big positive, while reports on falling consumer sentiment report and slowing activity in the construction sector were ignored.

'We got some good news finally after a couple of months of persistently negative news,' said Gina Martin of Wells Fargo Securities.

'We finally got a little reprieve from the negative news out of Greece, and then you couple that with some nice data releases over the last couple of days.'

Two months of declining share values had overshot fundamentals, according to Hugh Johnson of Hugh Johnson Advisors.

'Optimism was very low and the market was undervalued — you had the conditions for a spirited rally,' he said.

The rally was broad-based, reaching across nearly all sectors of the markets.

But it still was not enough to recover all the ground lost through most of the second quarter—the Dow had given up 7 per cent in the eight week bear market.

The S&P was still lower than the 1,363.31 year's peak of April 29.

And the Nasdaq was well lower than its April 29 acme of 2,873.54.

Martin said the data on the economy and doubts about the strength of Greece's bailout deal would still guide trade.

'There is still a lot of negative sentiment out there regarding the sustainability of the European debt issue,' she said.

'It's pretty clear that we need a contribution of the consumer, and the consumer spending depends in large part of unemployment condition,' she added.

'We will have to see a steady improvement in unemployment coming back into the second half of the year to sustain any market advance.'

Next week's trade will be shortened by the July 4 holiday, and trading could be light.

Traders will be focused, foremost, on the job creation numbers and unemployment rate for June, to be released on Friday, July 8.

Before that there will be the data on how the service sector did in June, in the ISM non-manufacturing index, on Wednesday.

'The ISM manufacturing survey ... was better than expected, so the companion report on the services sector will be watched to see if it suggests that the economy is pulling out of its soft patch. We expect a mediocre report,' said economists at IHS Global Insight on Friday.

IHS said the jobs report 'is expected to be lacklustre but not as weak as in May.'

'It will be a very good indication of whether this is a soft patch which is transitory or not,' said Johnson.

Also looming is the potential debacle if the White House and Republican lawmakers cannot break their deadlock over raising the country's $14.29 trillion debt ceiling before August 2.

If they cannot forge a deal — which would be a package of longer-term policies to reign in the fiscal deficit — the real threat of a US sovereign debt default looms for that date.

The International Monetary Fund warned this week that that could wreak havoc with the US domestic economy and the global financial system.

Source : New Age

US automakers post big sales gains in June

US automakers posted big sales gains in June amid strong demand for their more fuel-efficient vehicles, with Chrysler sales jumping 30 per cent, Ford up 14 per cent and General Motors up 10 per cent.

Chrysler marked its 15th consecutive month of year-over-year sales gains and its best June since 2007 with sales of 120,394 vehicles. That helped boost its results for the first half of the year by 21 per cent to 639,932 vehicles.

'This business is all about product and consumers are rapidly discovering everything we now have,' Reid Bigland, Chrysler's sales chief, said in a statement.

'Each Chrysler Group brand is contributing to our success and driving our 46 per cent retail sales growth.'

Chrysler, which got back in the black in the first quarter of this year for the first time since emerging from bankruptcy in 2009, has completely revamped its product offerings and was one of the only big carmakers to post a sales gain last month.

Auto sales have taken a hit from supply shortages caused by Japan's devastating March 11 earthquake and tsunami, but production has been ramping up rapidly and automakers said they expect sales to resume their recovery from the deep economic downturn.

'We believe that the recovery will go back on track,' Don Johnson, GM vice-president for US sales, said in a conference call.

'We are not cutting our forecast.'

GM's sales for the first six months of the year were up 16.8 per cent at nearly 1.3 million vehicles after June sales rose to 215,358 units.

Source : New Age

Russia launches biggest bank bailout

The bank founded by Moscow's deposed city chief received the largest bailout package in Russia's history on Friday following its takeover by the state-controlled lender VTB.

The 395-billion-ruble ($14.2-billion) cash injection for the Bank of Moscow followed a review of its books by its new owners and a decision by the government to keep the country's fifth-largest banking group afloat.

Analysts said the size of the package was much larger than expected and a sign of the state's desire to help VTB — Russia's second-largest financial institution — in taking over a weakened company.

The Bank of Moscow became the heart of a vast city property empire that unravelled shortly after mayor Yury Luzhkov's abrupt removal by the Kremlin last year.

VTB bought a 46.48 per cent stake in the bank in a hostile takeover that was criticised by some analysts at the time for its haste and lack of due diligence, reflecting the political backdrop to the deal.

The head of one of the state agencies involved in the rescue package revealed on Friday that about two-thirds of the Moscow bank's loans were either unsecured or issued to offshore organisations.

The Central Bank said 295 billion rubles in taxpayer money will be issued directly by the Deposit Insurance Agency at just 0.51 per cent — well below the rate of inflation.

The remaining money will be put up by VTB investors. The Central Bank said the cash infusion would help 'remove conditions causing insecurity in the Bank of Moscow's financial position.'

The Bank of Moscow was initially hit by political scandal when its former head Alexei Borodin was accused by prosecutors of approving a $435 million loan backed by city money for a real estate company run by the mayor's wife.

Borodin fled to London when investigators pressed charges against him while the mayor's wife was last reported to be in Austria.

The fugitive banker has branded all the charges against him part of a broader political vendetta and expressed outrage Friday at suggestions that the Bank of Moscow was mismanaged under his rule.

'I am, like everyone else, shocked at the size of the $14 billion bailout that the Central Bank has just announced,' Borodin said in a statement released on his official website.

Borodin insisted that 'the principal motivation behind the change of control of Bank of Moscow was political' and noted that the Central Bank never outlined where specifically the missing money went.

VTB for its part said in a statement that the Bank of Moscow had 'huge potential' and promised to incorporate it into its international banking service.

Analysts said the Bank of Moscow's main attraction lay in its vast banking network and integral role in the Russian capital's utilities payment system.

Its electricity and telephone bills have guaranteed the bank vast cash flows that continued through recent years of economic crisis and other shocks.

Moscow's Alfa Bank said the terms of the low-interest loan will see the Bank of Moscow save 242 billion rubles ($8.7 billion) over 10 years.

'We understand that with this scheme the government is effectively taking care of the Bank of Moscow's losses in such a way that they have no negative impact on VTB's capital,' Renaissance Capital bank said in a research note.

But the government flatly dismissed accusations that it was picking favourites in Russia's banking wars.

Source : New Age

Vodafone takes full control of Indian mobile group

British mobile phone giant Vodafone is taking full control of its Indian joint venture by buying out its local partner Essar Group, a statement said Saturday, ending a troubled relationship.

Vodafone, which has sought to make India a crown jewel in its expanding emerging markets portfolio, said it will pay Essar Group companies $5.46 billion for the one-third holding in Indian mobile-phone services provider Vodafone-Essar.

'The settlement marks the end of a four-year partnership between Vodafone and Essar in India, during which Vodafone Essar has grown to reach almost 140 million subscribers,' the British firm said in the statement.

Vodafone had announced plans for the buyout in March after friction between Vodafone and the Essar Group, founded by billionaires Shashi and Ravi Ruia, became more public over the valuation of Essar's minority stake.

The deal caps a process which began when Vodafone bought a 67 per cent stake in Hutchison Essar Ltd from Hong Kong-based Hutchison Whampoa for $11.1 billion in 2007, marking its first foray into India.

The company, which was renamed Vodafone Essar, now is the third-largest mobile operator in India's fiercely competitive market.

Vodafone's pact with Essar gave the Indian conglomerate an option to sell its stake in Vodafone Essar to the British firm for $5 billion.

The figure of $5.46 billion to be paid to the Essar Group is higher than the $5 billion initially announced and reflects tax on the transaction.

However, Vodafone has insisted it doesn't have to pay tax on the initial 2007 deal with Hutchison Whampoa that gave it control of Vodafone-Essar.

It argues the deal was between two companies based outside India while Indian authorities counter that tax must be paid on the transaction because it involved an asset based in India.

India's Supreme Court is slated to hear the dispute over the Vodafone-Hutchison transaction on July 19.

The tax department is seeking $2.6 billion in tax from Vodafone, plus up to the same amount in penalties, on the $11.1 billion Vodafone-Hutchison deal. Vodafone's purchase of Essar's stake pushes the British firm slightly above the 74 per cent foreign companies are allowed by law to hold in Indian telecom firms.

Source : New Age

Sri Lanka economy grows by 7.9pc

Sri Lanka's economy expanded by 7.9 per cent for the first quarter of this year on an annual basis, lifted by strong growth in industries and services, official data showed on Friday.

The economy expanded by 7.1 per cent during the same quarter in 2010, the Census and Statistics Department said in a statement.

Official figures showed the industry sector expanded by 11.1 per cent and services by 9.5 per cent while agriculture contracted by 5.1 per cent due to excessive rains.

The island's $50 billion economy is tipped to grow at a record 8.5 per cent this year, up from a 32-year high of 8.0 per cent posted in 2010, according to the Central Bank of Sri Lanka.

Sri Lanka's economic fortunes have improved since the island ended a decades-long ethnic conflict with Tamil Tiger rebels in May 2009.

Source : New Age