Court ruling: Federal Reserve asked to disclose details of emergency loans

Manhattan Chief US District Judge Loretta Preska has ruled that the Federal Reserve must disclose details of the emergency loan program.

The judge said the central bank “improperly withheld agency records” by
“conducting an inadequate search” after Bloomberg News reporters filed a request
under the information act. She gave the Fed five days to turn over documents it
told the reporters it located, including 231 pages of reports, and said it must
look for more at the Federal Reserve Bank of New York, which runs most of the
loan programs.

Bloomberg

The Fed had earlier refused to reveal the identity of the financial firms it lent to or disclose the amounts or the assets under collateral during the deepest financial crisis since Great Depression.


Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, had sued on 7 November on behalf of its Bloomberg News unit under the relevant provisions of the Freedom of Information Act.

Stock holding restrictions imposed on bulk consumers of sugar

The government has taken a string of measures to moderate the prices of sugar in the open market - like permitting import of raw sugar / white (refined) sugar at zero duty under different categories and restrictions.

Central Government has issued an order on 22.08.2009 imposing stockholding limit on consumers, whose average consumption of sugar are in excess of 10 quintals per month, that they shall not keep in stock, at any manner, sugar exceeding fifteen days of such use or consumption, for a period of six months.

This restriction does not apply to to any institution belonging to the Central Government or the State Government or an Union Territory administration or a local body or run by a registered charitable trust, hospital, hostel for working men and women and hostel of any educational institution.

The step was taken after reports the some bulk consumers who use sugar as a raw material were stocking up in anticipation of further rise in sugar prices. This stock piling by the bulk consumers had resulted in effectively obstructing availability of sugar to actual consumers.

Rice output to fall by 10 million tonnes this monsoon

Rice production in India is likely to decline by 1 crore (10 million) tonnes due to failed monsoon. Sharad said this while addressing the State Food Ministeres in New Delhi, today (Wednesday 19-Aug-2009).

The cummulative rainfall this monsoon season is 29% below average.

"This shortfall in monsoon may result in shortfall in area coverage of paddy by about 5.7 million hectares compared to last year and production of rice may be reduced by 10 million tonnes."

Sharad Pawar
Minister of Food and
Agriculture

The minister said that some shortfall is also expected in the production of oilseeds and sugarcane.

Bloomberg reports that toxic loans could take 150 banks to point of no-return

A report by Bloomberg indicates that toxic loans 150 banks in US headed towards the point of no-return due to toxic loans...

More than 150 publicly traded U.S. lenders own nonperforming loans that equal 5 percent or more of their holdings, a level that former regulators say can wipe out a bank’s equity and threaten its survival.

Bloomberg

The report is based on Bloomberg data and has excluded the 72 banks have already already gone under this year due to missed payments by consumers, builders and small businesses. It has also excluded the 19 banks that had failed the stress test of May.

Special Drawing Rights approved by International Monetary Fund

Special Drawing Rights (SDR) of $250 billion have been approved for the member nations to help them meet the monetary requirements to tackle the international recession.

The Board of Governors of the International Monetary Fund (IMF) has approved on August 7, 2009 a general allocation of Special Drawing Rights (SDRs) equivalent to US$250 billion to provide liquidity to the global economic system by supplementing Fund’s member countries’ foreign exchange reserves.

IMF

The general SDR allocation will be made on August 28, 2009 to IMF members that are participants in the Special Drawing Rights Department (currently all 186 members) in proportion to their existing quotas in the Fund, which are based broadly on their relative size in the global economy.

India's share of the SDR is expected to be $4.78 billion

Production and consumption of steel rises

The increase in consumption of steel is being seen as a positive indicator for the economy.

Riding on good demand from the automobile and consumer durable sectors the country witnessed an increase in the production and consumption of steel during the first four months (April to July) of the current fiscal year.

According to the provisional figures released by Ministry of Steel production during the 4 month period was 18.77 million tonnes up by 3.8% while consumption was 17.31 million tonnes showing an increase of 5.8% over the same period last year.

Everyone hopes this positive trend continues in the months to come.

Rate of Unemployement slows down in the US

The world's biggest economy lost jobs at the rate of 9.4% in July compared to 9.5% in June.

It had been projected by analysts that US would lose non-farm jobs by about 3.2 lakh taking the jobless rate to 9.6% but the rate reported by the Department of Labor on Friday for the month of July was less at 9.4%.

The markets starting from US on Friday evening and Asia on Monday morning are buoyant over this decline in rate of unemployment in July as compared to June. It is being viewed positively by some experts as an indication that recession is ending.

Do we have reason for celebration?

It certainly seems so - the world is definitely on a positive bias.

The overnight American Indices broke significant levels, giving every indication the markets were happy. The S&P Index crossed 1000 - first time since November 2008 and the Nasdaq went over 2000 - first time since October 2008.

English FTSE, French CAC and the German DAX registered healthy agains yesterday. Our own Sensex and Nifty back home were up.

Commodities too went up. Crude oil crossed the $70 per barrel mark once again while copper too was trading high.

The general consensus is that the positive sentiment is due to better than expected manufacturing numbers and solid earning results. Hope the boost in sentiment continues as more and more economic numbers come out - hopefully positive.

June Exports fell by 27.7% in dollar value and 19.4% in rupee value

The provisional figures released by the government for the quarter of April-June 2009 and the month of June 2009 indicate a year on year decline.

Exports during June, 2009 were valued at US $ 12815 million (Rs. 61217 crore) which was 27.7 per cent lower in dollar terms (minus 19.4 per cent in Rupee terms) than the level of US$ 17732 million (Rs. 75930 crore) during June, 2008. Cumulative value of exports for the period April- June, 2009 was US$ 35432 million (Rs. 172762 crore) as against US $ 51545 million (Rs. 214808 crore) registering a negative growth of 31.3 per cent in Dollar terms and 19.6 per cent in Rupee terms over the same period last year.

Dept. of Commerce

There was a decrease in the trade balance which was at Rs. 29440 crores compared to 39065 crores for the same period last year.

Fiscal Deficit for First Quarter at 31% for Year's Forecast

Deficit for the first quarter is 31% of the government's forecast for the full financial year of 2009-10.

Indian Government has reported a fiscal deficit of over Rs. 1,24,302 crores for the quarter of the 2009-10 fiscal year.

According to the figures released by the Controller General of Accounts on Friday, for the first three month (April - June) of 2009...tax collections stood at Rs. 63,341 crores while expenditure was 1,97,000 crore

Earlier this month, the Central Government in Delhi had forecasted that the fiscal deficit for the period from April 2010 to March 2009 would be at Rs. 4,01,000 crores. At 1,24,302 crores for the first quarter it is already 31%.

Private Airlines announce one-day strike

The International Air Transport Association (IATA) announced international scheduled traffic results for June

...showing passenger demand declining 7.2% compared to the same month in the previous year while freight demand was down 16.5%. International passenger load factors stood at 75.3%, down from 77.6% recorded in June 2008.

IATA

This private airlines have called for a one day strike.

...they will suspend domestic operations for on 18 August 2009 to press for their demand of the government relief.
...
The airline industry has witnessed a dip in passenger traffic for the last. This dip coulpled with low fares and high fuel costs is taking its toll on the health of airline industry as a whole.

MeraBsp

The private operators want the government to intervene and come up with some relief measures. It may be noted that the government owned Air India is already in trouble due to its huge losses.

Notes on Indian Economy

I start this blog today to compile my notes on the state of the Indian economy. The blog will items related to all aspects of the economy - Government, Administration, Industry, Business, Economy, Rural, Urban etc.

Constructive comments and suggestions for improving this blog are always welcome.

Gajendra