World week ahead: heading for a cliff
As investors return to their screens
in anticipation of the Federal Reserve's final meeting of the year, time is
running short on a budget deal in the US.On Friday, Wall Street received a
boost from better-than-expected jobs data, which more than offset even more
doom and gloom from House Republican leader John Boehner on the prospects of
reaching a tax and spending accord.Employment in the US advanced by a better
than expected 146,000 in November, the Labor
Department said. The unemployment rate dropped to 7.7%, the lowest in four
years, as some people stopped looking for work. Economists had braced for a
tougher report in the wake of Superstorm Sandy's late October
devastation.But there wasn't good news everywhere. Consumer confidence went
south, according to the Thomson University of Michigan preliminary index,
also released on Friday. Sentiment for December dropped more than expected to
74.5 from 82.7 the previous month.Sideways appeared to be the best description
of where the US budget talks stood heading into the weekend. Boehner said on Friday
that the White House had "wasted another week".Investors will be
eyeing a two-day meeting by Fed policy makers starting on Tuesday for fresh
guidance on the outlook for the world's biggest economy and its stimulus
efforts.Operation Twist, in which the Fed buys longer-dated Treasuries and
sells some of its shorter-dated ones in an effort to stimulate the economy by
lowering longer-term borrowing costs, is scheduled to end this month."The
real question is whether the November jobs data changes the Fed's attitude
toward more stimulus. It doesn't remove the need for stimulus but might
convince the Fed to opt for a smaller program," Kathy Lien, managing
director of BK Asset Management in New York.Some believe that if Republicans
and Democrats fail to reach a budget deal in the coming days, the odds of
triggering about US$600 billion in automatic tax increases and spending cuts on
January 1 are significantly higher. The result: shares are in line for a
hit."After the FOMC meeting, I think it's going to be downhill from there
as worries about the fiscal cliff really take centre stage and prospects of a
deal become less and less likely," said Mohannad Aama, managing director of
Beam Capital Management in New York."I think we are likely to see an
escalation in profit-taking ahead of tax rates going up next year." Meanwhile,
the US Treasury is scheduled to auction US$66 billion in Treasuries in the
coming days. It is offering US$32 billion in three-year notes, US$21 billion in
10-year debt and US$13 billion in 30-year bonds. Additional clues on the US
economy will arrive in reports on international trade, retail sales as well as
the producer price index and the consumer price index.In the past five days,
the Dow Jones Industrial Average climbed 1%, while the Standard & Poor's
500 Index eked out a 0.1% gain. The Nasdaq Composite Index, however, shed 0.4%
for the week, dragged lower by a drop of almost 9% in Apple's shares.In Europe,
the Stoxx 600 Index rose 1.2% in the past five days.The US needs a
balanced, comprehensive approach to tackle its fiscal woes that should include
a mix of spending cuts and revenue increases, said International Monetary
Fund managing director Christine Langarde.My view, personally, is that the best
way to go forward is to have a balanced approach that takes into account both
increasing the revenue, which means, you know, either raising taxes or creating
new sources of revenue, and cutting spending," she said.America is more
vulnerable to its own domestic troubles than to anything else happening in the
Eurozone or China, she said.
Skycrapers go green, slash energy costs
Chicago's skyline is
going green, as property managers install energy efficient tools like motion-detectors
on office lights, in a project officials hope will inspire changes across the
United States.At the riverside Sheraton hotel, chief engineer Ryan Egan cannot
get over what his new thermostats can do or the $136 000 a year in savings they are producing.First off, they're tied into the
booking management system, which means he can let the room temperature drift
beyond standard comfort levels until the moment a guest checks in.An infrared
sensor means the savings don't stop there. Once the guest leaves the room, the
temperature starts to drift again, giving the heating or cooling system a break
until it's needed again.It's not a random drift the thermostat is programmed to
only allow the room to warm up or cool down to the point where it can get back
to the pre-set temperature within 12 minutes of the guest's return."The
brains behind how much it can drift is really interesting," Egan said.
"If you're on the shady side (in the summer) it'll drift more because it
knows it can recover faster."The Sheraton is one of 14 major commercial
buildings that signed onto the Retrofit Chicago challenge to cut energy use by
20% over the next five years, for savings estimated at more than $5m a year.If
they succeed, it will be like taking 8 000 cars off the road."The fact
that this is the city that built the first skyscraper, we love that we're
trying to green the skyline," Karen Weigert, chief sustainability officer
for the city of Chicago, told AFP.Some 70% of greenhouse gas emissions in the
Windy City come from the electricity and gas used to heat, cool and power
homes, businesses, schools and other government buildings.In addition to the
greening in commercial buildings, the city plans to cut energy use by 20% in
hundreds of municipal buildings, for an estimated monetary saving of $20m a
year and emissions savings equivalent to taking about 30 000 vehicles off the
road.It has also launched a program to help retrofit residential properties and
expects more big commercial buildings to join the challenge."Fighting climate
change can take all sorts of forms. This one happens to also save building
owners a lot of money," said Rebecca Stanfield, a senior energy advocate
for the Natural Resources Defense Council."We're excited about the
potential for big property owners who are in the Chicago initiative to use
what they learn here in buildings across the country."A similar program is
being promoted by the Department of Energy, which has racked up commitments
from schools, cities and businesses to reduce energy use by 20% in 2 billion
square feet."They used to run heating and cooling all year"AT&T,
the first company to sign up for Chicago's challenge, is testing out a host of
new energy efficiency technologies at its downtown office tower.It's just one
test kitchen for the telecom giant, as it searches for best practices in its
quest to cut emissions company-wide by 20% by 2020.The results so far have been
impressive.They've swapped out ceiling lights with more efficient bulbs and set
up motion detectors so the lights aren't burning when technicians and sales
staff are away from their desks.They've put insulated shutters on the air
intake system to keep the chill out in winter and the heat out in
summer.They've installed regulators on the big fans that push heated or cooled
air through the 1960's era building so they only operate when needed instead of
running all day and most of the night.They've even swapped out the belts on the
fan's motors to cut down on energy-sucking slippage. "There's no question
we've identified enough opportunities to save 20%," said John Schinter,
AT&T's executive director for energy.All the improvements tested in Chicago
will pay for themselves in three years or less, and most will be rolled out to
the 1 000 corporate and 500 retail buildings that AT&T is targeting in its
sustainability plan, Schinter said."If a project doesn't have scalability
for an enterprise as large as ours, we don't spend much corporate time on
it," he said in an interview.Jim Javillet is amazed at how attitudes have
changed in the 43 years he's been managing buildings like the AT&T tower. "In
the 60s and 70s they used to run (both) heating and cooling all year why
not," he recalled.Another big advance came when buildings installed
systems to turn most overhead lights off at a set time so they didn't burn all
night.Now, even in the middle of the day, he can see who's away from their
desks by the dark spots in the room. And when he walks down an empty hall, he
creates a tunnel of light.These types of innovations are common in countries
like Spain and Japan, where energy is more costly and governments have been
more aggressive in pushing energy efficient building codes.But Americans are
ready to accept change, said Dan Tishman, whose realty company owns the
Sheraton Chicago and nine other major US hotels."Consumers in this country
are comfortable with motion detectors on lights and other technologies that
save energy, like low flush toilets or green roofs, and they appreciate
it," said Tishman, who is also chairman of the National Resource Defense
Council and heads a leading construction firm."I do think that when we
implement the changes we are planning, we will be successful and other large
hotel properties will follow suit."
China's factory output jumps to new high
Growth in China's factory
output and retail sales jumped to eight-month highs in November as consumer
inflation bounced off 33-month lows in the latest sign that its economy is
snapping out of a protracted slump.Analysts said Sunday's data showed China is
enjoying an enviable mix of benign inflation and rebounding economic growth
that allows Beijing to stand still on monetary and fiscal policies, or switch
to an easier stance if needed. "The Chinese economy is now in a sweet spot
and can stay in the sweet spot through the first half of 2013," said Ting
Lu, an economist at Bank of America-Merrill Lynch. "Beijing will be happy to
sustain the current policy stance."Data from the National Bureau of
Statistics showed output from Chinese factories beat forecasts to climb 10.1%
in November from a year ago, its best performance since March.Annual growth in
retail sales also surprised by jumping 14.9% in November, while fixed asset
investment rose 20.7% in the first 11 months of the year, a shade below
forecasts.The batch of activity data came after an inflation report out earlier
on Sunday showed China's consumer price index rose 2% in November from a year
ago just under forecasts for a 2.1% gain as vegetable prices soared.But
economists said the rise in consumer prices from near three-year lows was far
from worrying, especially since it is well under Beijing's annual 4% inflation
target."We expect consumer inflation to not see a big rebound until the
first quarter of next year," said Jiang Chao, an analyst at Guotai Junan Securities
in Shanghai."Therefore, the central bank may stick to its current policy
stance and we see little chance of further (policy) loosening towards the year
end.""Durable recovery"China's economy has slowed
for seven consecutive quarters, hurt by wilting export growth and lackluster
domestic demand. Growth hit a low of 7.4% between July and September and is
poised this year for its weakest annual showing since 1999.But things are
looking up, due in part to policy easing by the central bank.The People's Bank
of China cut interest rates twice in June and July and lowered banks' reserve
requirement ratio (RRR) three times since late 2011, freeing an estimated 1.2
trillion yuan ($193bn) for lending."We expect such (economic) recovery to
be durable and will at least extend into the first half of next year, though
the pace of recovery will remain mild," said Sun Junwei, an economist at
HSBC in Beijing.As growth revives, the central bank is keeping an eagle eye on
inflation, its policy priority in normal times.It has not cut interest rates or
RRR since July and has instead added short-term cash to the banking system
through open market operations, a move analysts say underlines its worries
about consumer and property price inflation.As China's economy breaks away from
central planning and as wages rise on average at least 10% each year, the
central bank has warned inflation will be the biggest long-term risk, a point
reiterated by Governor Zhou Xiaochuan last month.Indeed, November's data showed
price momentum was gathering even in factories.Factory-gate prices fell 2.2% in
November from a year earlier, its ninth straight month of declines but easing
from October's 2.8% annual drop, boding well for firms struggling with falling
profits.
Libya eyes olive oil
Libya is turning to
olive oil the green gold of the Mediterranean - to compete with its North
Africa neighbours, conquer European markets and diversify its
hydrocarbon-dependent economy."Libya has decided to promote the quality of
its olive production to make its olive oil more competitive and increase
exports to Europe," an official of the export promotion centre in Tripoli told AFP."The
centre's new strategy involves all stakeholders in the production chain of the
olive tree, particularly the private sector to boost its productivity and
conquer foreign markets," said Taher al-Zweibek.Libya ranks as the world's
12th largest olive oil producer, accounting for 0.25% of global production,
according to the UN Food and Agriculture Organisation (FAO).The North African
nation lags well behind the world's top producer Spain (43%) and its regional
neighbours Morocco (4th, 10.6%), Tunisia (6th, 4.4%) and Algeria (8th, 1.7%).It
has 8 million olive trees and produces 160 000 tons of olives for 32 000 tons
of oil, according to figures provided by the country's agriculture
ministry.Libya, a desert country with an area of 1.76 million square kilometres
(680 000 sq miles), has 3.6 million hectares (8.9 million acres) of arable
land, just two percent of the total area of the country.But the olive tree, a
traditional crop of the Mediterranean region which easily tolerates spells of
drought, is a perfect fit for the arid Libyan climate.The North African nation
is currently experimenting with a new kind of olive imported from Spain, the
Arbequina, which is famous for its highly aromatic fruit, said agriculture
ministry official Saad al-Kunni.Introduced in Europe during the 17th century, this
variety is mostly grown in Spanish Catalonia. "After an
experiment that yielded encouraging results, some 1 900 hectares were planted with this variety in two agricultural projects,"
added Kunni.Libya, which relies exclusively on the export of hydrocarbons for
its revenues, has failed to diversify its economy despite sectors with enormous
potential for development such as tourism and fisheries.Both the former regime
of Moamer Kadhafi, who was toppled and killed last year, and the new
authorities have repeatedly expressed the desire to diversify Libya's revenues
without implementing specific strategies.Speaking on the sidelines of a Tripoli
exhibition of Libyan dates and olives, Zweibek noted that the new strategy also
focuses on improving the packaging of finished products to make them more
attractive."A national label will be created and used to identify Libyan
products in order to facilitate marketing while establishing a relationship of
trust with the consumer," he said.The new authorities, Zweibek added, are
trying to break away from the policies of the Kadhafi regime, during which
bureaucracy prevented the promotion of any exports other than
hydrocarbons.Until now, the exportation of olive oil was the initiative of a
few individual farmers and owners of olive presses.Zweibek stressed that the
state "will become more involved in assisting the whole production chain,
from making the choice of which variety to plant to the transformation of the
packaging process.""The centre will also conduct studies on the
European market and ensure the collection of data for the benefit of Libyan
exporters to help them conquer these markets," he said.
