News and Finance

Let the smartphone smackdown begin.

In the blue corner, wearing black, weighing in at 4.8 ounces, the 31-month champion of the touch screen phones: Apple’s iPhone!

In the red corner is the challenger, appearing on every carrier, a new entrant to the heavy-weight battle: Google’s Android!

It doesn’t take Michael Buffer’s "let’s get ready to rumble" introduction to know that Apple and Google are squaring off for what looks to be an epic battle of the smartphone platforms. Apple made that loud and clear on Tuesday when it announced it would sue HTC, the maker of the Nexus One "Google phone," over 20 alleged patent violations.

Experts say Apple is an aging champion that is feeling threatened by the momentum surrounding new-to-the-game Google’s Android platform.

"Apple set the bar and now it’s being toppled," said Will Stofega, program director of mobile device technology and trends at IDC. "Apple is playing defense, and Google is playing offense."

Although it may seem that Google (GOOG, Fortune 500) and Apple (AAPL, Fortune 500) are the only contenders battling it out in the U.S. smartphone market, that’s simply not true. In fact, neither is even the largest.

That "biggest" award goes to BlackBerry maker Research In Motion (RIMM), which commands 41.6% of the market, according to technology data tracker comScore. Apple’s iPhone OS is is second place with 25.3%, and phones that run Google’s Android operating system are in fifth with 5.2% of the market.

Battle for the data belt

But there is an all-important metric that sets Android and iPhone OS apart from the competition: data. Heaps and heaps of data.

The iPhone, iPod Touch and the handful of smartphones that run Android accounted for a whopping 86% of the data downloads from U.S. smartphones in January, according to a recent study by Web advertising company AdMob. IPhone OS downloads accounted for 47% of the data requests across the nation, and Android accounted for 39%.

That’s important for consumers, because it means they’re getting more functionality out of iPhones and Android-based phones, which is, after all, the point of getting a smartphone. Those phones give users a seamless, computer-like browsing experience, and they offer by far the most apps.

The iPhone App Store has more than 100,000 apps. Google’s Android Market has 20,000. The next biggest competitor is RIM with several thousand and Palm’s (PALM) WebOS just crossed the 1,000-app threshold.

It’s not just size that counts, it’s how you use it: iPhone and Android users download an average of just under 9 apps per month, according to AdMob. The next largest contingent is Palm, which sees an average of 5.7 apps per month downloaded.

"People are more engaged with their iPhones and Android phones due to the browsing experience," said Soumen Ganguly, principal at tech consultancy Altman Vilandrie & Co. "That’s where BlackBerry generally lags by quite a bit."

Data usage also gives Google and Apple an edge over the competition, because more data usage means more revenue. Apple takes a 30% cut from the apps that it sells, and Google makes money when people search on Google or visit Web sites that feature ads supported by Google.

It may be too soon to count out any of the smartphone players just yet, given how quickly new technologies develop. RIM recently said that it planned to improve its browser functionality and Microsoft (MSFT, Fortune 500) wowed spectators with its Windows Phone 7, which is set to be unveiled this fall.

But some say it’s Android and iPhone OS, more than any other smartphone platform, that are making the greatest strides in the race to be market leader.

"Looking to the future, it is primarily between Google and Apple to shape the future of the mobile industry," said Jagdish Rebello, principal analyst of communication systems at iSuppli Corp. "When you look at what Google and Apple are doing with applications and creating an ecosystem … others are just playing catch-up."

Blow by blow

Google and Apple have taken very different approaches to the battle. Here’s a look at how that bout is playing out:

Apps: Apple is winning the app war now, with about five times more apps than Google. But app developers have to get their products cleared by Apple’s standards police (remember the 6,000 sexy apps that got purged last week?) before they can appear in the App store. That’s a process that can take months.

Google has taken the opposite approach, opening its platform to developers. IDC’s Stofega says that developers are embracing Google’s approach, and as Android adoption grows, more developers are writing Android apps. That could bring some of the higher-quality apps to Google’s side. Google has a lot of ground to cover, but app war may just be beginning.

Devices and prices: IPhone OS runs on three devices: the iPhone 3G S, the iPhone 3G and the iPod Touch, with prices ranging from $99 to $299 with a new contract.

Android is currently available thorugh three carriers on on 10 smartphones in the U.S., with prices ranging between $79 to $199 with a new contract. It also runs on a number of other devices, including several netbooks and the Barnes & Noble Nook e-reader.

ISuppli’s Rebello said Google’s strategy of offering Android on more phones, with more carriers and varying price points was the same winning strategy for RIM’s BlackBerry devices.

"Apple has a confrontational ‘our way or the highway’ strategy, but it’s the Google model that’s winning over carriers," he said.

Availability: The iPhone is available exclusively on AT&T (T, Fortune 500) in the United States, and there have been well-documented problems with how that partnership has negatively impacted many customers’ experiences.

Google is carrier agnostic and, unlike Apple, allows wireless companies to take a cut in the app revenues. As a result, wireless companies are embracing Android. The only major U.S. carrier without an Android phone is currently AT&T, but the wireless company just announced it will begin to sell five Android phones by June.

"Google’s strategy isn’t about keeping one carrier happy but about enabling mobility, hardware and software to a variety of different tiers," said Stofega. "There are advantages to serving a number of different masters, and that’s where Apple has some problems." 

Source

Get free instant insurance rates for universal, whole, variable and term life insurance from the nation's leading Insurance companies.

Toyota’s U.S. arm is again looking to 0% financing to pull it out of a sales slump.

The last time Toyota rolled out a nationwide incentive plan like this was in late 2008, as the entire U.S. auto industry was getting crushed by tight credit and a collapsing economy.

This time, it’s Toyota’s own missteps that have caused the crisis. With its public image dented by massive high-profile recalls, the Japanese automaker’s sales were down 9% last month compared to a year ago, even as Ford sales were up 43% and General Motors were up 12%.

The Japanese automaker estimates it lost about 18,000 sales last month due to the recalls, said Bob Carter, group vice president of Toyota Motor Sales, USA’s Toyota division.

Toyota called the incentive program, which begins immediately and runs though April 5, "the company’s most far-reaching sales program in its history," in a corporate announcement.

Toyota is offering 0% financing for as long 60 months on eight of the automakers’ most popular models. They are the Avalon full-size car, Camry mid-size car, Corolla and Matrix compact cars, Yaris subcompact, Highlander and Rav4 crossover SUVs, and the Tundra truck.

Taken together, Carter said, these vehicles account for about 80% of Toyota’s sales in the United States.

As an alternative, customers are also being offered low-payment lease deals on these models. For example, customers could lease a Corolla for $179 a month, a Camry for $199 a month or a Prius for $239. Lease offers will vary by region, a Toyota Motor Credit spokesman said.

Zero-percent financing is available for customers with at least a "good" credit rating, Toyota Motor Credit spokesman Justin Leach said, but their credit doesn’t necessarily have to be spotless.

"We evaluate every deal on a number of factors beyond just the credit score," he said free credit report and score.

Customers who already own a Toyota product are also being offered free scheduled maintenance for two years or 24,000 miles.

A print and TV marketing campaign featuring actual recent Toyota buyers, most of them repeat customers, was being rolled out beginning Tuesday night to let people know about the incentive deals, Carter said.

Toyota typically focuses its incentives on reduced interest rates rather than cash incentives, said Jesse Toprak,, an analyst for the auto pricing Web site Truecar.com. That’s because cash incentives tend to damage a car’s resale value, something that’s traditionally been a strong point for Toyota.

What’s striking, Toprak said, is the scope of this offering. Other automakers often announce big incentive plans, while Toyota rarely announces a nationwide program like this.

"It’s not that what what Toyota’s offering is unusual," he said. "It’s just that it’s unusual for them."

General Motors, for instance, announced its own incentive plan for March at about the same time as Toyota. GM is offering 0% financing on many of its most popular models including the Chevrolet Malibu, Impala and Cobalt cars.

Chrysler Group also announced its own incentive plan featuring 0% financing offers on most Chrysler, Dodge and Jeep models.

Low interest rate financing plans makes sense now, Toprak said, because customers are more focused on their personal bottom line and anything that reduces a monthly payment will be attractive.

"Right now, customers are much more concerned wit monthly cash flow issues," he said. 

Source

Get instant health insurance quotes, compare medical insurance plans, and find affordable health insurance to fit your health care coverage needs.

AIG reported a substantial fourth-quarter loss Friday, largely due to costs associated with selling off large stakes in its insurance businesses to reduce the debt it owes to taxpayers.

The insurance giant said it lost $8.9 billion, or $65.51 per share, during the three-month period ended Dec. 31. A year earlier, AIG lost $61.7 billion, the largest quarterly loss in history.

The announcement on Friday underscores the still-tenuous condition of AIG, which was on the verge of collapse when it was bailed out by the government in 2008.

AIG has received up to $131.9 billion in loans and direct payments from the Federal Reserve and the Treasury Department, and is in the middle of a high-stakes turnaround plan whose fate will determine how much taxpayers get paid back.

The fourth-quarter loss includes billions AIG set aside to increase its cash cushion and spent for layoffs and other expenses after selling assets. The company says that the transactions, while hurting its financial position in the near term, will eventually help it pay back the roughly $70 billion dollars it owes the U.S. government.

The insurer has also made a strong push to stabilize its insurance units — another key step toward paying back its government loans. While those core businesses showed signs of improvement, AIG collected fewer premiums. Disappointed investors sent shares of AIG (AIG, Fortune 500) down 8% on Friday.

"While a tremendous amount of work remains to be done, and there are no guarantees in life, we believe we are on our way to regaining our stature as one of the world’s largest and most successful property casualty insurance operations," Chief Executive Robert Benmosche on a recorded message posted on AIG’s Web site.

The majority of AIG’s fourth-quarter loss came from its December sale of large stakes in Alico and AIA, two giant foreign life insurance businesses, to the U.S. government. In exchange for those transactions, the Fed reduced the amount AIG has to repay taxpayers by $25 billion. AIG said it took a $5.2 billion charge for that sale last quarter.

The company also took a $2.8 billion loss after selling off Hong Kong-based life insurance company Nan Shan, its largest asset sale since its bailout. Since 2009, AIG has collected $5.6 billion from its asset sales, which it plans to use to pay back taxpayers quick payday loan.

"I think it’s fair to say that we made substantial progress in refocusing our businesses on growth and profitability, and we set in place the framework for repaying the U.S. taxpayers for their support of our company during its darkest days," Benmosche said.

Slow improvement

Revenue totaled $24.4 billion in the fourth quarter and $96 billion for the year, up from just $6.9 billion for all of 2008.

The insurer also continued to wind down its controversial derivatives portfolio in its Financial Products unit, which plummeted in value when the housing market bottomed and nearly caused the company to collapse. AIG reduced the size of the portfolio by 41% in 2009 to $940 billion from $1.6 trillion at the end of 2008.

Last week, AIG said it would keep approximately $300 billion worth of the derivatives in its portfolio — money it plans to use to pay back taxpayers.

AIG also said it is increasingly confident in its ability to sell off non-core assets of the company, which is the primary means the company is using to pay down its debt to the government.

As the markets continue to improve and AIG is getting better value for its asset sales, the company no longer plans to use cash flows from life insurance policies help pay down its debt, according to a report Friday in The Wall Street Journal. AIG had planned to sell life insurance securities to the Fed to reduce its debt by $8.5 million, but it is now reportedly confident that it will be able to pay down the rest of its debt by selling off assets.

As reported by other news operations, AIG said in a separate filing with the Securities and Exchange Commission that it would need more funding from taxpayers if the financial markets took a turn for the worse.

"Should certain of these risks emerge, AIG may need additional support from the U.S. government," the company said in the 10-K filing.

But that exact same language appeared in the company’s previous 10-K. A spokeswoman for AIG confirmed that the company’s potential need for more government assistance if financial conditions worsen was "not new." 

Source

A online cash advance is a service provided by most credit card and charge card issuers.

Tuition at many public colleges and universities is skyrocketing, thanks to state budget deficits that have choked off funding for higher education.

The University of California, for instance, estimates a 30% increase in the 2010-2011 year. "California’s $20 billion deficit will make it hard for the [state’s] legislature to provide funding to the schools," said Patrick Lenz, UC Berkeley’s budget administrator.

Next year’s tuition numbers aren’t final, since many states are still hashing out their budgets. But one thing is certain: Rates are going up, and the schools that will be hit the hardest are in the states that have seen the worst of the economic downturn.

For example, the Universities of Nevada, Florida, and Washington, each estimate that their tuitions will jump 10% to 15% next year.

University of Washington’s Associate Vice Provost, Gary Quarfoth said the school expects to raise rates by 14% to help make up for a $21 million cut in funding from Washington state.

The UC system has endured massive cuts in recent years. The state of California slashed $637 million from the UC school system in 2009-2010, and another $814 million in the 2008-2009 school year.

The school doesn’t yet know how much funding it will receive for next year, but it estimates that even with the 30% tuition hike it will still be in the red by $237 million, according to UC spokesman Steve Montiel.

But the good news for public college and university students is that this is an election year, notes Pat Callan, president of the National Center for Public Policy and Higher Education, which may make legislators reluctant to vote for more budget cuts cash advance.

And regardless of any rate hikes, public schools are still a steal compared to private schools. The average sticker price for four-year public colleges and universities this year was relatively low, at $7,020. The average annual cost of attendance at a four-year private college is $26,273; some schools cost as much as $50,000 a year.

Of course, most students don’t pay a public or private school’s list price; after financial aid is factored in, the actual cost of college is often much lower. The College Board estimates that aid in the form of grants and tax benefits averaged about $5,400 at public four-year colleges in 2009-2010, putting the net cost at about $1,620.

The bad news is that there is no end in sight to year after year tuition hikes, for the simple reason that the cost of college hasn’t hurt school enrollment levels. Demand continues to outstrip supply.

"Even universities charging $50,000 a year will be able to fill their seats because there are enough wealthy people out there willing to pay this price," said Chris Miller, executive director at The Education Advisory Board, a higher education consultancy.

"Price sensitivity hasn’t manifested itself yet in empty seats."  

Source

Payday loan online - Quick application results in seconds.

In the old days, it used to mean something when a person made a long-distance call. It meant they were paying through the nose for it.

That was before federal telecommunication reforms in the past two decades changed the way companies charged one another for carrying calls across their networks. It was before all-you-can-eat calling plans gave us large chunks of minutes at lower prices. And before cell phones changed the calling equation.

Nobody gives much thought these days to where a call starts and where it ends. Unless, that is, you are one of the large phone companies — AT&T and Sprint, for example — doing business within the state of Missouri. A quirky feature of the state’s telecommunications system has those companies paying hefty fees every time one of their Missouri customers makes a long-distance call that stays within the state’s borders.

It’s a system that could change soon if legislative efforts in Jefferson City are successful this year.

"This is the old way of doing things. It’s the last remaining dinosaur," said Sen. John Griesheimer, R-Washington, author of one of three bills targeting the issue this session.

Under attack are the state’s intrastate access rates — the per-minute fees phone companies charge for carrying each other’s calls. Rates vary from company to company, but the basic equation is that larger companies pay higher rates, in effect subsidizing operations in less-profitable areas of the state. AT&T, for example, is allowed to charge about 3 cents a minute for carrying other companies’ calls. Some small carriers are allowed to charge 20 cents or more per minute, according to the Missouri Public Service Commission.

For companies such as AT&T — one of the forces behind the push for change — these fees add up to millions of dollars a year in payments made to smaller state carriers. It’s estimated that some $200 million is paid each year in intrastate access fees, though it’s unclear how much of that is paid by AT&T. Missouri’s rates are the third-highest in the nation, behind North and South Dakota.

It’s not the sort of thing most people ever notice, because few people pay for their long-distance calls by the minute. It might, however, be known to those who use pre-paid calling cards. AT&T’s cards, for example, point out that you get only one minute of talk time for every eight minutes you buy — for in-state long-distance calls.

"Our whole position is that those rates need to come down, just as they have in nearly every other state," said Kerry Hibbs, an AT&T spokesman.

There’s actually not a lot of disagreement about that. The question that’s causing a fair amount of heartburn for some rural communities is this: Who’s going to make up for all those millions of dollars AT&T and Sprint are paying to carriers serving areas where lack of population density makes it a challenge to provide service without assistance?

Through legislative exemptions, small carriers are being left out of the debate, but it’s still an issue for hundreds of communities served by two large, but highly fragmented carriers: CenturyLink and Windstream Missouri. CenturyLink, for example, offers service in 285 Missouri communities, many with fewer than 1,000 customers.

Without the money collected through access rates, CenturyLink says, it will be a challenge to maintain service, jobs and investments in its communities, where state law requires them to provide service to anyone who wants it.

"CenturyLink is not opposed to access reform, as long as it addresses both sides of the equation," said Doug Galloway, a spokesman for the Monroe, La.-based company.

At least for the moment, that’s not happening. This week, the Missouri House passed HB1750, calling for a reduction in access rates by 50 percent over 10 years. The measure, which has been sent to the Senate, offers no way for impacted rural carriers to recoup lost revenue. However, it did exempt dozens of tiny, independent carriers.

Debate over the bill, which passed 111-40, was generally divided along rural/urban lines, with legislators grappling over whether it would hurt small communities.

"In the long term, ending a subsidy which my constituents largely pay for, will eventually benefit everyone in Missouri," said the bill’s author, Rep. Timothy Jones, R-Eureka,

Others, however, disputed the notion that the legislation would spur new investment and competition.

"Not everyone is jumping on the bandwagon to come down to our part of the country and offer lower rates, because there simply aren’t customers down there," said J.C. Kuessner, D-Eminence.

In most states, whenever rates are lowered, there has been some sort of provision made for those carriers losing money. Often, that’s been in the form of special funds — supported through fees on all users — set up to subsidize service in high-cost areas.

The federal government used a similar approach when it forced a reduction in interstate access charges. It set up the Universal Service Fund to support weaker carriers.

A similar fund to offset Missouri’s access rate changes could be established by charging all phone users a fee of 25 cents to 60 cents a month, said Michael Balhoff, a Maryland-based telecommunications consultant who has done work for CenturyLink.

But to do nothing for rural carriers while still forcing them to offer service to everyone doesn’t make sense from a fairness perspective: "It’s like compelling McDonald’s to put a restaurant in the middle of wheat field," Balhoff said.

And there are those who say the ultimate losers in this fight will be the residents of those smaller communities, who could end up paying much higher costs for their phone service. And nobody’s phone rates will go down, said Mike Dandino, who recently retired as chief legal advisor for the Office of Public Counsel.

Dandino insisted that the movement to lower access rates should not be referred to as "reform," and that any money saved by AT&T and others would go straight to their bottom lines.

"Is it really reform if it’s going to increase the local users’ rates? It’s only reforming somebody’s profit and loss statement," Dandino said.

Juana Summers of the Post-Dispatch contributed to this report.

Source

Instant online cash advance with next-day cash direct deposit.

Arizona’s Medicaid program is getting nearly $45 million in financial relief from the federal government.

Health and Human Services Secretary Kathleen Sebelius announced Thursday that the Arizona Health Care Cost Containment System is getting a $45 million break on what it pays to the federal government to offset the cost of coverage for prescription drugs for residents eligible for both Medicare and Medicaid.

“This relief will help states continue to provide critical health care services to the nearly 60 million beneficiaries who depend upon it,” Sebelius said.

This temporary financial boost to Arizona and other states is made possible by the American Recovery and Reinvestment Act of 2009.

Without this financial relief from the federal government, Arizona would have owed $154 million in what are called “clawback payments,” the amount states pay to the federal government as required by the Medicare Prescription Drug Improvement and Modernization Act of 2003. It is intended to offset added expense to Medicare Part D for assuming drug costs for residents eligible for both programs.

Now, AHCCCS will pay $109 million for the period beginning Oct. 31, 2008, and ending Dec. 31, 2010.

Source

Get quick cash with no faxing required!

The real estate roller-coaster ride continued last year as the median price of U.S. single-family home plunged 11.9% to $173,200.

The housing situation had been looking up earlier in the year, with prices gaining ground in the first nine months. But the increases weren’t enough to push the median home price above 2008’s bar of $196,600, according to the National Association of Realtors.

And then, prices fell in the fourth quarter, dropping 2.9% compared to the previous three months and 4.1% compared to the last quarter of 2008.

Still, the quarter-over-quarter drop was encouraging to NAR, which tracks home prices and sales.

"This is the smallest price decline in over two years, with the most recent monthly data showing a broad stabilization in home prices," said Lawrence Yun, NAR’s chief economist. "Because buyers are taking on long-term fixed rate mortgages, avoiding adjustable-rate products, and trying to stay well within their budgets, the price recovery process appears durable."

Another sign of improvement is the increase in the number of homes sold. More than 6 million homes changed hands between October and December — a 27.2% increase from the same time period in 2008.

"The surge in home sales was driven by buyers responding strongly to the tax credit combined with record low mortgage interest rates," said Yun. "With inventory levels trending down over the past 18 months, we expect broadly balanced housing market conditions in much of the country by late spring with more areas showing higher prices."

Michelle Meyer, Barclay Capital’s economist for new home construction, is predicting continued price declines through early 2010. By the second quarter, however, she expects an upturn.

She thinks that as the homebuyer tax credit expires at the end of April, it will add volatility to the market during the second quarter. People will rush to get in under the wire, boosting volume and shoring up prices.

After that, markets will moderate, with few showing any substantial increases business card.

On the other hand, David Crowe, chief economist with the National Association of Home Builders, said he expects home prices "will moderate and stay where they are" for a long stretch.

Volume up nearly all across the board

Sales volume increased in all but two states; 32 states recorded double-digit homes sales gains. Foreclosure sales continued to drive these increases; distressed properties, which includes foreclosures and short sales, accounted for 32% of sales during the quarter.

Mike Larson, a real estate analyst for Weiss Research, attributed the pop in volume to low prices. "People are simply finding that houses are cheap again," he said.

Crowe said the increase in sales volume was no surprise even though job losses continued to mount during the quarter.

"It’s not unusual for housing to pick up before unemployment does," he said. "That’s the normal pattern coming out of a recession. Mortgage rates are low; home prices are low and have stopped dropping. There’s three years of pent-up demand and people who are working are buying homes."

More than a third of the 151 metropolitan areas covered in the report recorded year-over-year home price increases for the quarter, led by Saginaw, Mich., where prices grew 53.5% to $67,400.

The Midwest, which boasts the lowest average home prices of any of the four U.S. regions, was the only area that recorded a price rise over the previous quarter — a mere 1.1%. The Northeast (-5.6%), South (-2.4%) and West (-8.9%) all suffered losses.

The biggest price drop was in Ocala, Fla, where home value plunged 23.4% to $93,200. In Las Vegas, where foreclosure has hit harder than anywhere else, prices dropped 23.3%. 

Source

Compare and purchase low cost car insurance rates from multiple auto insurance companies immediately online.

Colorado tax revenues for the first month of 2010 looked a lot like the revenues from much of 2009, showing a year-over-year decrease once again.

Total tax revenue for the state fell by 2.2 percent from January 2009 to January 2010, according to figures released Thursday by the Colorado Department of Revenue. Since the fiscal year began in July 2009, revenues are down 9.9 percent from the year before.

Sales taxes fell 8.9 percent year over year in January, and individual income tax receipts were down 5.8 percent. Corporate income taxes, which make up a far smaller percentage of the budget than the other two pots, fell 531 percent paydayloans.

Though sales-tax revenues continue to drop and under-perform — the January income was 4.3 percent below that forecasted by Gov. Bill Ritter’s Office of State Planning and Budgeting — it is unclear whether the state will have to make a third round of budget cuts to meet the declining income.

A new forecast is due out in mid-March, and the Legislature will determine after that estimate whether it will have to increase revenue or cut services once again.

Source

The team at Payday Loan Company is ready to tell anyone yes for a payday loans or cash advance for up to $1000 cash.

Asia is “relatively risk free” from contagion amid deteriorating confidence in Europe’s sovereign debt because its economies have stronger fiscal positions, CIMB Investment Bank Bhd. said.

Asian governments mainly use domestic markets to fund their deficits and debt levels are still manageable and within sustainable limits, CIMB economists, led by Lee Heng Guie, wrote in a report today. The recent increase in Asian credit-default swaps is temporary, said the analysts from Malaysia’s second- largest banking group.

Investors’ concern that Greece, Portugal and Spain are facing difficulty financing budget deficits pushed credit- default swaps on the debt of all three countries to record highs last week. Moody’s Investors Service Inc. said Feb. 2 the U.S. government’s bond rating will come under pressure unless additional measures are taken to reduce its budget deficits.

“Fears of sovereign-debt contagion spreading to Asia are buffered by Asia’s strong economic and financial fundamentals,” CIMB said. “Given Asia’s well managed financial prudence as well as sound macroeconomic management, we do not expect international rating agencies to flash their concerns on potential sovereign debt risk in the region.”

Budget deficits in Greece, Ireland and Spain widened to more than 12 percent of gross domestic product last year, compared with 2.5 percent in Indonesia, 4.1 percent in Thailand, 7.4 percent in Malaysia and 7.6 percent in India, CIMB said, citing International Monetary Fund, World Bank and its own estimates.

Credit-Default Swaps

The cost of protecting Asia Pacific corporate and sovereign bonds from default declined today, according to traders of credit-default swaps. Credit-default swap indexes are benchmarks for protecting bonds against default and traders use them to speculate on credit quality. An increase suggests deteriorating perceptions of creditworthiness and a drop shows improvement.

The Markit iTraxx Asia index of 50 investment-grade borrowers outside Japan dropped 2.5 basis points to 126.5 basis points as of 9:13 a.m. in Singapore, according to Citigroup Inc. The index surged to 127.1 basis points on Feb. 5, the highest since the new series started trading on Sept. 21, 2009, according to CMA DataVision prices in New York.

The sovereign debt ratings of countries in the Asia-Pacific region are unlikely to be cut this year as rebounding global demand for exports and fiscal stimulus spur domestic growth, Moody’s said in a report last month. The region’s “robust” growth potential means most countries, excluding Japan, have begun or will start winding down expansionary monetary and fiscal policies, it said.

Current Accounts

In Southeast Asia, the proportion of public debt to GDP for Malaysia, Thailand, Indonesia and the Philippines are manageable and not approaching their debt sustainability limits, CIMB said.

“These economies still enjoy healthy current-account surpluses while their budget deficits are projected to narrow in the medium term,” the analysts wrote. “Other fiscal and external stability indicators such as foreign reserves, domestic savings, external debt and net interest payments to revenue also support the underlying sustainability of fiscal debt management.”

The Philippines will likely proceed with its plan to sell about $500 million worth of 10-year, yen-denominated bonds later this month and the plan is unaffected by concern over Greece’s sovereign debt, Treasurer Roberto Tan said today.

Heed Warning

Rising credit-default swaps show Greece is struggling to persuade financial markets it can restrain the European Union’s largest budget shortfall without outside assistance. Moody’s, Standard & Poor’s and Fitch Ratings cut the country’s credit grade in December. Borrowing costs are also rising for Portugal and Spain.

Japan’s government must heed the warning on soaring debt loads stemming from the turmoil of Greece’s credit-rating downgrade, and concerns about the credit quality of some European countries shouldn’t be regarded as “a burning house on the other side of the river,” Bank of Japan board member Seiji Nakamura said Feb. 4.

Source

India can gradually start raising interest rates as Asia’s third-largest economy is among the first to recover after the global financial crisis, the International Monetary Fund said.

“The conditions are ripe for a progressive normalization of the monetary stance,” the IMF said in a report on its Web site yesterday. “India’s economy is one of the first in the world to recover” and the central bank should take “a gradual approach to ensure the recovery reaches its full potential.”

The steepest interest-rate cuts in eight years between October 2008 and April 2009 and stimulus worth 12 percent of gross domestic product helped the $1.2 trillion economy weather last year’s global recession. Central bank Governor Duvvuri Subbarao on Jan. 29 told lenders to set aside more cash as reserves, signaling tighter credit, as growth accelerated and inflation raced to a 13-month high.

The IMF forecasts India’s GDP will increase 8 percent in the year starting April 1, from 6.75 percent, and cautioned a widening budget deficit “could put breaks on the recovery.” Fitch Ratings this week said it would be “encouraged” to downgrade should there be any further slippage in targets and maintained India’s foreign- and local-currency rating at BBB-, its lowest investment grade.

Rising Demand

India’s economy expanded 7.9 percent in the three months to Sept. 30, the fastest pace in 18 months and in line with China among the major emerging economies. Finance Minister Pranab Mukherjee in December forecast growth of about 8 percent for the current financial year.

“As growth picks up and becomes more broad-based, we do believe that it’s time to unwind” fiscal stimulus measures, Kalpana Kochhar, a Washington-based deputy director at the IMF, said in a conference call yesterday.

Recent data indicate that demand is gaining traction as companies including Bajaj Auto Ltd., the nation’s second-largest motorcycle maker, and Tata Motors Ltd., the country’s biggest maker of trucks and buses, reported sales growth of more than 70 percent in January.

India’s manufacturing output as measured by an index compiled by HSBC Holdings Plc and Markit Economics’ rose to 57.6 last month, the highest in 17 months and overseas sales of goods rose for the second straight month after a yearlong decline.

“Prompt fiscal and monetary easing, combined with the fiscal stimulus already in the pipeline and the return of risk appetite in financial markets, have brought growth close to pre- crisis-level,” the fund said in the report.

Bright Prospects

India’s medium-term growth prospects remain bright, mainly reliant on domestic drivers, the IMF said. “India’s rapid recovery has brought fiscal and monetary policy trade-offs to a head earlier than in other countries,” it said.

The Reserve Bank of India on Jan. 29 raised the cash reserve ratio, the proportion of deposits banks are required to set aside as reserves, by 0.75 percentage points to 5.75 and said the recent data confirms “the assessment that the economy is steadily gaining momentum.”

“Given the long transmission lags and the low policy rates,” the Reserve Bank should adopt a “timely start of the withdrawal of monetary stimulus, which would help anchor inflation expectations and soften the impact on long-term interest rates,” the IMF said.

Food inflation accelerated for a second week to a near 11- year high. An index measuring wholesale prices of lentils, rice, vegetables and other food articles compiled by the commerce ministry increased 17.56 percent in the week to Jan. 23 from a year earlier, a separate government report showed yesterday.

The rupee can be used “with caution” as a tool to stem inflation, the IMF said.

“We believe that the economy is in a fast recovery mode and that the RBI will need to start lifting policy rates toward normalized levels,” as inflation surges, said Chetan Ahya, a Singapore-based economist at Morgan Stanley, which yesterday revised its economic growth estimate for the year starting April 1 to 8.5 percent from an earlier forecast of 8 percent.

Source