| Reserve paves way for another rate rise
THE Reserve Bank has revealed a significant deterioration in its outlook for inflation, suggesting the Federal Government might have to defend itself over another interest rate rise before the election. The bank expects underlying inflation to hit 3 per cent - the upper limit of its comfort zone - by the end of the year. It is expected to hover in the top end of the 2 to 3 per cent target band until well into 2009. The bank shrugged off fears that the crisis in the US subprime market would slow global growth, a factor that would argue against further interest rate rises. "At this stage … the evidence continues to point to strong growth in the global economy overall," it said. Economists were surprised by the strength of the bank's outlook and said another interest rate rise - the sixth since the Government promised to keep interest rates low - looked all but certain.
WORLD MARKETS
After four years of excellent returns, it was inevitable that equity markets would take a breather. Earnings expectations can increase only so often. But the topping out of the bull market has been hit by a number of bearish surprises. Now investors are worried
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Duke Energy Reports Second-Quarter 2007 Results
CHARLOTTE, N.C., Aug. 7 /PRNewswire-FirstCall/ -- Duke Energy (Nachrichten) today reported ongoing diluted earnings per share (EPS) of 25 cents for second-quarter 2007, which excludes special items and discontinued operations, versus 24 cents in second-quarter 2006.
(Logo: http://www.newscom.com/cgi-bin/prnh/20040414/DUKEENERGYLOGO )
The 24 cents excludes the results of the natural gas businesses, spun off as Spectra Energy in January 2007, the results of which are now reported in Discontinued Operations.
The higher ongoing results reflect improved results at U.S. Franchised Electric and Gas and Commercial Power, primarily due to favorable weather, as well as improved results at Duke Energy International. These segments had combined higher earnings of 7 cents in diluted EPS on an ongoing basis and 11 cents on a reported basis.
Central banks' easy virtue, easy money
There's an old story about the late British statesman Winston Churchill at a party. Probably on one of those many nights where never in the field of human excess had so much cognac, brandy and scotch been consumed by a person who historians now say was not an alcoholic, he staggered up to a socialite matron and posed a question:
Churchill: "Madam, would you sleep with me for 5 million pounds?" (In the 1930s, when the British pound was worth more than twice as much to the US dollar than it is now, this was a
particularly impressive sum over which to surrender one's virtue.)
Woman: "My goodness, Mr Churchill ... Well, I suppose ... we would have to discuss terms, of course."
Churchill: "Would you sleep with me for 5 pounds?"
Woman: "Mr Churchill, what kind of woman do you think I am?!"
Churchill: "Madam, we've already established that.
Federal Reserve leaves interest rates unaltered
WASHINGTON Wall Street turbulence, Main Street credit problems and a nationwide housing slump pose increasing risks to the economy, the Federal Reserve said Tuesday, even as it left interest rates unchanged.
Although Federal Reserve Chairman Ben Bernanke and his central bank colleagues acknowledged challenges that have intensified since their last meeting in late June, they expressed hope that the economy will safely make its way.
The policy makers maintained that the biggest danger to the economy is that inflation won't recede.
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How do I grab some of this ‘excess’ liquidity?
Whenever I hear the words ‘excess liquidity', I begin to worry. It usually means that I somehow end up having to pay more interest on my loans, or getting less interest for my deposits — because the economy and the banking system have trouble dealing with all that extra cash sloshing around in the system. That is apparently why the Reserve Bank of India stepped in a couple of days ago and hiked the amount of cash banks will have to keep locked up with it. The banking regulator doesn't want too many rupees being injected into the economy at this point of time, which will have the potential of pushing the inflation rate up. Good on them, I say. As a consumer, I am all for moderate inflation rates. Especially since the private sector has long buried the concept of an inflation index-linked ‘dearness allowance', which was supposed to automatically prevent your real disposable income from eroding.
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