Posted by: Andy Reinhardt on December 31
As a tumultuous 2008 draws to a close, the world’s stock exchanges have notched their worst year in history. Despite a small rally Dec. 30, the Dow Jones Industrial Average is off nearly 35% for the year, while London’s FTSE 100 is down 32% and Japan’s Nikkei fell more than 42%. The broader S&P 500 index in the U.S. is down more than 39%, its worst run since 1931.
The damage is far worse in emerging economies: China’s Shanghai Composite is down 65% and Russia’s RTS has plummeted an astonishing 72%, the worst performance of any major exchange in the world. A flight to safety has helped lift returns on U.S. Treasuries by 14.5%.
Source: The Guardian, Financial Times
As investors said good riddance to the financial meltdown of 2008, the sobering fact remains that 2009 won’t offer near-term respite. Continued grim economic reports, including a record decline in U.S. home prices reported Dec. 30, signal that a turnaround spurred by government bailouts won’t likely kick in until late 2009, if then.
With a $6 billion rescue in place for its finance subsidiary GMAC, General Motors is turning its attention to selling more cars. GMAC says it will offer cash rebates on some models and financing as low as zero percent to spur sales.
Source: Washington Post
The U.S. Securities and Exchange Commission has rejected a push by the banking industry to rescind the requirement that balance sheet assets must be valued at their current market price. Some blame this so-called mark-to-market rule for accelerating the 2008 financial crisis, but advocates say it boosts transparency.
Source: AP/New York Times
A 1992 probe by the agency should have raised red flags when new tips came in about investment manager Bernard Madoff, now accused of operating an alleged ponzi scheme. Critics question the agency’s ability to act as a watchdog.
Nintendo’s hot-selling Wii videogame console and Amazon.com’s Kindle e-book reader were in short supply or even unavailable during the holiday shopping period, making them among the few bona fide hits of the season. Also on the list: sheepskin Ugg boots.
Source: Los Angeles Times
The troubled maker of mobile phones and other electronic products said in a regulatory filing that it will cut 400 more positions in addition to 1,500 already announced, as a hoped-for turnaround fails to materialize.
Starbucks’ legal wrangles with a union that wants to organize its baristas is tarnishing the coffee chain’s branded reputation for social responsibility.
Private sector professionals are flocking to once-unfashionable public service jobs perceived to offer status and security during the economic downturn. Growing numbers of commercial sector employees are considering working in teaching, charities, and the civil service.
Source: The Guardian
Undoubtedly one of the tech sensations of 2008, the micro-blogging service known as Twitter, which limits senders to messages just 140 characters in length, now is being adopted by companies hoping to deliver punchy messages to potential consumers.
Source: Financial Times
Long gone are the days when a Web site in English was enough to reach the online universe. By 2012, there will be three times as many Internet users in Asia as in North America, and companies are scrambling to translate their sites into local tongues.
Source: New York Times
Reader Hugo van Randwyck writes: “Peace will help with prosperity and confidence. Let’s hear all the voices. The economies of Israel, West Bank, and Gaza could benefit from more sensible peace negotiations.”
The business of running a store; small business, department store, and chains. Reader Brian Caperton and others are sharing their insights.
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