After the Clunker Party, an Auto Sales Hangover

Car companies said on Sept. 1 that their August sales soared to an annualized selling rate of about 14 million, thanks to the government’s clunkers program, which gave $3,500 to $4,500 to consumers trading in an old gas guzzler for something more efficient. The accelerated sales rate was a boon for carmakers, especially Ford (F), Toyota (TM), Honda (HMC), and Hyundai.

But the industry appears to be giving those gains back as the annualized rate has fallen to 8 million vehicles since Aug. 25, when the program stopped. “August was the best month of the year, but it’s possible that it could be followed by the worst month this year,” predicts Jeremy Anwyl, chief executive officer of Edmunds.com.

Source: BusinessWeek

World Economy Signals Improvement

Manufacturing gains in the U.S., Europe and Asia suggest the world economy will grow faster than expected. In the U.S. a purchasing managers’ index showed factory output grew for the first time since Jan. 2008 and China, France, and Australia also saw manufacturing expand in August. The International Monetary fund is now set to revise its 2010 global growth estimate upwards to just under 3%.

Source: Wall Street Journal

Chinese Workers Protest Before National Day Celebrations

China’s plans to celebrate its 60th anniversary on October 1 are being marred by massive worker protests against pollution and job losses. Over 10,000 villagers protested industrial pollution in Fujian province on Aug. 31 while last week 5,000 coal workers struck as their state-run company prepared to privatize. “There is serious concern about stability on the eve of the 60th anniversary,” said Brookings Institution scholar Cheng Li.

Source: Bloomberg

Labor Groups Target Wal-Mart

Labor groups led by the United Food and Commercial Workers union have launched a new campaign against Wal-Mart, pressuring the world’s largest retailer to improve wages, health care and environmental and labor policy. A key issue is Wal-Mart’s continuing opposition to the Employee Free Choice Act, a bill that would allow workers to more easily form unions.

Source: Washington Post

Khosla Raises $1.1 Billion for Green Energy

Silicon Valley venture capital firm Khosla Ventures has raised $1.1 billion to develop renewable energy technologies. This follows a disappointing first half of the year where green tech investment fell to $513 million, or just over one quarter of the $2 billion raised in the first six months of 2008, says PricewaterhouseCoopers.

Source: Los Angeles Times

Wells Fargo to Repay TARP Funds

Wells Fargo announced Tuesday it plans to repay TARP, or Troubled Asset Relief Program funds. Wells Fargo will be able to return the funds without raising new equity capital and diluting current investors, the San Francisco, Ca.-based bank said.

Source: Market Watch, Bloomberg

EBay’s Skype Sale Looks Like a Win-Win

In a deal announced Sept. 1, eBay will sell a controlling share of the Internet-calling service to a group of investors led by private equity firm Silver Lake for $1.9 billion in cash and $125 million in short-term debt. The sale values Skype at $2.75 billion, not far below the price eBay paid for the business in 2005, and higher than the value recently placed on Skype by some Wall Street analysts. At the same time, eBay retains a 35% stake in the high-growth business.

Source: BusinessWeek

Murky Media Advertising Outlook

The outlook for the $500 billion global advertising market is murky with ad executives and analysts divided on the possibility of a recovery. While a recent UBS report predicts a rebound in the beleaguered sector next year, others are less sanguine. “People feel better about life,” said WPP Group chief executive Martin Sorrell, “but that hasn’t extended, as we said at the end of the first quarter, to the checkbook or investment in branding.”

Source: New York Times

Australian Economy Shows Strength

Australia’s economy grew a better-than-expected 0.6% in the second quarter over the previous three months. Government fiscal stimulus plus consumer and business spending helped boost growth and kept Australia’s recent record as one of the best performing developed economies during the global economic downturn.

Source: Financial Times