Israel bombs Hamas power centres -GAZA CITY

Israel bombs Hamas power centres -GAZA CITY

Three-day death toll from retaliatory strikes mounts to at least 315

Israeli tanks massed at the border yesterday as warplanes continued pounding Hamas targets in the Gaza Strip, raising speculation about a possible ground offensive. — PHOTO: AGENCE FRANCE-PRESSE

GAZA CITY: - Israel’s air force obliterated symbols of Hamas power on the third day of its overwhelming Gaza assault yesterday, striking a house next to the Hamas premier’s home, devastating a security compound and flattening a five-storey building at a university closely linked to the Islamic group.
Defence Minister Ehud Barak said Israel had nothing against Gaza residents, but that its military was fighting a ‘war to the bitter end’ against Hamas.

MFA urges restraint
‘WE ARE deeply concerned about the situation in Gaza with mounting civilian casualties and the possibility of a humanitarian catastrophe. We urge all parties to exercise maximum restraint and work towards an early re-establishment of the ceasefire. Once this can be achieved, we hope that there will not be a repetition of the events that also resulted in the loss of many innocent lives and led to the current escalation of conflict.’ - Singapore’s Ministry of Foreign Affairs statement on the Gaza situation yesterday
Mr Barak said the massive operation was in defence against ongoing rocket fire from the Gaza Strip, which has been under Hamas rule since June last year.

The three-day death toll was at least 315, including seven children under the age of 15 who were killed in separate strikes, medics said.

Israel launched its campaign, the deadliest against Palestinians in decades, on Saturday in retaliation for rocket fire aimed at civilians in southern Israeli towns.

The strikes appear to have gravely damaged Hamas’ ability to launch rockets, but barrages continued. One medium-range rocket fired at the Israeli city of Ashkelon killed a construction worker there yesterday and wounded several others. He was the second Israeli killed since the beginning of the offensive, and the first person to be killed by a rocket in Ashkelon, a city of 120,000.

On Sunday, Hamas missiles struck for the first time near the city of Ashdod, twice as far from Gaza as Ashkelon and only 40km from Israel’s heart in Tel Aviv.

At first light yesterday, strong winds blew black smoke from the bombed sites in Gaza City over deserted streets. The air hummed with the buzz of pilotless drones and the roar of jets, punctuated by the explosions of new air strikes.

Most of those killed since Saturday were members of Hamas security forces, though the precise numbers remain unclear. The United Nations agency in charge of Palestinian refugees said at least 51 of the dead were civilians.

A rise in civilian casualties could intensify international pressure on Israel to abort the offensive.

Israel’s intense bombings - more than 300 air strikes since midday Saturday - wreaked unprecedented destruction, reducing buildings to rubble. The military said naval vessels also bombarded targets from the sea.

One strike destroyed a five-storey building in the women’s wing at Islamic University, one of the most prominent Hamas symbols in Gaza.

Other attacks ravaged a compound controlled by Preventive Security, one of the group’s chief security arms, and destroyed a house next to the residence of Hamas Prime Minister Ismail Haniyeh.

History teacher Abdel Hafez, 55, said he was not a Hamas supporter, but believed that the strikes would only increase support for the group.

‘Each strike, each drop of blood, is giving Hamas more fuel to continue,’ he said.

Mr Barak told a special session of Parliament that the goal was to deal Hamas a severe blow and that the operation would be ‘widened and deepened as needed’.

‘We will avoid as much as possible hitting civilians while the people of Hamas and other terrorists deliberately hide and operate within the civilian population,’ he said.

Foreign Minister Tzipi Livni said Israel wanted peace in Gaza, though that ‘doesn’t mean we will bow our heads to terror’.

Faced with an international outcry, Israel yesterday allowed humanitarian aid to enter the impoverished and overcrowded territory where most of the 1.5 million population depend on foreign aid.

Israeli tanks have massed near the border with Gaza Strip, raising speculation about a possible ground invasion.

ASSOCIATED PRESS, AGENCE FRANCE-PRESSE, BLOOMBERG

Conflict in Gaza
THE Gaza Strip is a narrow piece of land along the Mediterranean coast between Israel and Egypt with a troubled history.

June 1967: Israel seizes the Egyptian-controlled Gaza Strip during war. An Israeli census put the population there at 380,000 - at least half of whom were refugees from Israel. Today, the population is about 1.5 million.

December 1987: A clash in the Jebaliya refugee camp sets off a Palestinian uprising which lasted until 1993 and claimed the lives of over 2,000 Palestinians and 192 Israelis. Hamas is formed early in the uprising.

September 2005: Israel withdraws its troops and 8,500 Jewish settlers. It retains control of Gaza’s airspace, coastal waters and border crossings, leading the Palestinians and some Israeli legal experts to argue that Israel is still an occupier.

June 2007: Hamas violently seizes control of Gaza from Palestinian President Mahmoud Abbas’ Fatah.

June 2008: Hamas and Israel reach a truce to halt cross-border rocket attacks and end Israeli offensives against Hamas and its leaders.

November 2008: Palestinians resume rocket and mortar fire into Israel after Israeli incursion.

Dec 19, 2008: Hamas formally declares the truce over.

Dec 27, 2008: Israel launches a fierce air offensive.
ASSOCIATED PRESS

Source : Straits Times - 30 Dec 2008

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Thaksin supporters force PM Abhisit to call off policy speech THAILAND

Thaksin supporters force PM Abhisit to call off policy speech THAILAND

By Leslie Lopez, SOUTH-EAST ASIA CORRESPONDENT

Red-shirted protesters loyal to Thaksin flashing the thumbs-up sign as they blockaded the Parliament in Bangkok yesterday. Deputy Prime Minister Suthep Thaugsuban pledged that the government would not use force to disperse the protesters. — PHOTO: AGENCE FRANCE-PRESSE

THAILAND’S political gridlocked worsened yesterday when thousands of protesters blockaded Parliament, forcing newly installed Premier Abhisit Vejjajiva to call off his maiden policy speech that was to spell out his government’s agenda to tackle the country’s worsening economy.
The red-shirted demonstrators loyal to exiled former premier Thaksin Shinawatra declared that they would occupy the Parliament compound until Mr Abhisit, the country’s fourth premier since January, called for fresh elections.

The policy speech in Parliament is crucial because it is a constitutional requirement before the new government can begin administering the country, which has been trapped in a months-long political crisis that has polarised Thai society like never before.

‘The House Speaker has decided to postpone the session until tomorrow (Tuesday),’ Mr Abhisit told a press conference.

The speech was meant to start yesterday morning but had already been delayed twice.

‘We have negotiated all day and it was not successful, but we will continue our efforts. What has happened today will not affect the government’s plans,’ he said.

The 44-year-old Mr Abhisit secured the premiership two weeks ago after the ruling People Power Party was thrown into disarray when a court dissolved it for vote fraud.

The pro-Thaksin factions have denounced the court ruling as a power grab by Bangkok’s urban elite and middle class who feel threatened by the rising political clout of the country’s rural and urban poor whom they represent.

Thai police said about 9,000 red-clad protesters descended on Parliament overnight after some 20,000 Thaksin supporters gathered on Sunday night at a park several kilometres away.

Mr Chalerm Yoobamrung, a core leader of the pro-Thaksin Puea Thai party, said: ‘We call for the government to dissolve the House and return power to the people.’

The protesters earlier said they would allow Mr Abhisit and his Cabinet to walk into Parliament but not come by car. But the authorities said it was unsafe for legislators to do so.

Deputy Prime Minister Suthep Thaugsuban said Mr Abhisit could further postpone his speech to tomorrow if the protests continued, and pledged that the government would not use force to disperse the protesters.

This week’s street campaign by the pro-Thaksin forces represents a replay of the months-long political rallies waged against the previous government by yellow-clad demonstrators made up largely of Bangkok’s elite and urban middle class.

Called the People’s Alliance for Democracy (PAD), the movement received tacit backing from the country’s security agencies, which stood by when thousands of demonstrators took control of Bangkok’s two main airports late last month and severely damaged the country’s tourism sector. Mr Damrong, a red-clad 59-year-old lawyer, said he was angry that there had been no arrests over the airport seizures.

‘The Thai people want rule of law. This is not good for the country,’ he said outside Parliament.

Mr Abhisit said last week that his government would prosecute those responsible for the airport closure which cost the tourism industry 100 billion baht (S$4.1 billion) in lost revenue.

‘This doesn’t look good for Thailand,’ said Mr Korawut Leenabanchong, a fund manager at Bangkok-based UOB Asset Management (Thai) Ltd. ‘The country has been dogged by political risk for two years. It will continue to be the main factor going forward.’

The PAD is a well-funded group and their supporters received daily stipends and a steady supply of food which ensured the resilience of their campaign.

It remains unclear whether the ‘red-shirts’ campaign will display similar staying power.

‘The only source of funding will have to come from Thaksin, and he has a large chunk of his financial holdings frozen,’ said an European diplomat based in Bangkok.

Thaksin, who is living in self-imposed exile to avoid a jail sentence for corruption, had about US$1.5 billion (S$2.2 billion) of his financial holdings frozen by Thai authorities.

Additional information from wire agencies

——————————————————————————–

The red-shirted demonstrators declared that they would occupy the Parliament compound until Mr Abhisit called for fresh elections.

Source : Straits Times - 30 Dec 2008

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Wider variety of housing in the west

Wider variety of housing in the west

RESIDENTS in the west can look forward to having a wider variety of homes to choose from in the next few years.
The Urban Redevelopment Authority (URA) yesterday announced detailed plans to rejuvenate estates such as Teban and Pandan Gardens, and Faber Terrace and Faber Hills - part of a bigger makeover for the Jurong district.

As the existing International Business Park expands, infrastructure upgrading works will also be carried out at surrounding housing estates by national water agency PUB and the Housing Board.

Dredging works by the PUB to deepen Jurong Lake to allow for more recreational water activities, for example, have already begun.

Under its Active, Beautiful, Clean (ABC) Waters Programme which aims to convert canals and reservoirs into a scenic network of waterways, PUB plans to build a new waterfront promenade with boardwalks, bridges and wetlands at Jurong Lake.

At Teban and Pandan Gardens, the HDB has been rejuvenating these estates through various upgrading programmes and its Selective En-bloc Redevelopment Scheme (Sers). Sers involves the relocation of residents in public housing that is about 30 years old to newly developed high-density projects located nearby.

Road improvement works at Faber Terrace and Faber Hills will also allow more quality low- and medium-density housing fronting Sungei Ulu Pandan to be built to support the growth of the Jurong Lake District, said URA.

A 1.9ha private residential and commercial site next to Jurong East MRT was also put on URA’s reserve list last month.

Knight Frank’s director of research and consultancy Nicholas Mak does not expect the plans to have any immediate significant impact on the market.

But Colliers International’s research and advisory director Tay Huey Ying said the plans to enhance residential estates ‘will add variety to housing options…and help entice home purchasers’.

‘This can help to boost population in this area - a critical ingredient if the Jurong Gateway is to be a success.’

Source : Straits Times - 30 Dec 2008

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Singapore Jurong to get more business space

Singapore Jurong to get more business space

Expansion of business park will position Singapore for recovery

By Jessica Cheam

THE economic outlook is all gloom but the Government is already positioning Singapore for the next upturn by unveiling plans to beef up the supply of business park space in Jurong.
Its ambitious move comes even as demand in the property sector has fallen dramatically in recent months while office rents have dipped.

Industrial landlord JTC Corporation said yesterday it will develop 5ha south of the existing International Business Park. This will yield 125,000 sq m, or about 1.35 million sq ft, of rentable space.

The development will help JTC ’secure investments and anchor key companies’ in an effort to better place the economy for the next upturn, it said.

Site surveys will start next month and infrastructure work, including improvements to the park’s road networks, will begin in March. Two new road linkages to the Ayer Rajah Expressway and Pan-Island Expressway will be created.

Companies can lease space in the business park from 2011, said JTC.

Market watchers told The Straits Times that the Government is stimulating economic activity with the development while also seeking to avoid the kind of office space crunch that has hit businesses in recent years.

The economic boom that preceded the financial crisis saw prime office rents double to almost $19 per sq ft last year. This sparked a scramble to build more office space, including government moves to release transitional office sites to relieve pent-up demand.

While this has now led to concerns that Singapore could face an office space glut over the next two years, some analysts feel that early preparation of sites enables the market to respond faster when the economy does pick up.

Colliers International’s research and advisory director, Ms Tay Huey Ying, said she did not think there would be a glut, and that this ‘will help in ensuring a U-shape recovery instead of a V-shape one when the global economy recovers’.

CIMB-GK economist Song Seng Wun said government investment in public infrastructure like Jurong Island or Changi Airport during downturns has traditionally ‘worked well for Singapore’.

Even though the impact on economic output ‘will not be massive’, such work will benefit local firms, added Mr Song.

The International Business Park - 21 land parcels of about 25ha - is Singapore’s first such park. Established in 1992, it has drawn renowned tech firms such as Dell and Acer to set up shop.

JTC said a review of the park’s masterplan was timely as the Urban Redevelopment Authority had recently announced a dramatic makeover for Jurong in its 2008 Masterplan.

The industrial town is to be redeveloped into Jurong Lake District - a 360ha mini metropolis of homes, hotels, shops, eateries and offices linked to the MRT via walkways and waterways.

It will consist of Jurong Gateway, the up-and-coming commercial hub of the West, and Lakeside, which is being developed as a destination for young families, with tourist attractions and parks complemented by water activities.

JTC said ‘there is potential’ for synergy between the expanded business park and the rejuvenated Jurong Gateway.

Collier’s Ms Tay agreed that more business park space will add critical mass and ‘aid in the realisation of the Government’s vision for the Jurong Lake District’.

To complement the commercial developments, the surrounding housing estates will be rejuvenated by various statutory boards. This will mean upgrades to Teban and Pandan Gardens and the Faber Terrace areas in the next few years.

Source : Straits Times - 30 Dec 2008

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Rejuvenation for Singapore Jurong residential areas

Rejuvenation for Singapore Jurong residential areas

Better connectivity and more housing choices are on the cards

By EMILYN YAP

MORE residential areas in Jurong are to be rejuvenated as part of the Urban Redevelopment Authority’s (URA) 2008 Master Plan to develop commercial hubs outside the Central Business District.

Supporting the growth of the Jurong Lake District, Faber Terrace, Faber Hills, Teban Gardens and Pandan Gardens will soon enjoy better connectivity and more housing choices.

Various infrastructure plans in the region will proceed ‘notwithstanding the current economic downturn’, said URA in a release yesterday.

The government will be enhancing roads at Faber Terrace and Faber Hills. Not only will this improve the area’s traffic situation, it will also allow more low and medium-density housing fronting Sungei Ulu Pandan to be built in future, said URA.

Noting that traffic along the Ayer Rajah Expressway in the area can be heavy, DTZ’s executive director Ong Choon Fah agreed with the plans. ‘If you build up the Jurong Lake District, you will also need to find an accessible way to get there,’ she said.

This is a signal to potential developers and investors that there is still land around the Jurong Lake area available.

According to URA, new residences at Faber Terrace and Faber Hills will be private and could include landed property as well as low- and medium-density condominiums. The area could be suitable for cluster housing, said Cushman & Wakefield Singapore managing director Donald Han.

Teban and Pandan Gardens will also undergo rejuvenation. Two public housing sites at Teban Gardens are already under the selective en-bloc redevelopment scheme, and PUB’s ABC Waters programme for the Pandan Reservoir will further enhance waterfront living in the area.

There are also plans to improve Teban and Pandan Gardens’ connectivity with the Jurong Lake District.

The district - comprising a commercial centre at Jurong Gateway and a leisure hotspot at Lakeside - could attract more large and global companies and the redevelopment of the International Business Park would further support this. As JTC Corporation also said yesterday, it plans to add another five hectares of land and raise plot ratios for some areas in the park.

Knight Frank director of research and consultancy Nicholas Mak pointed out that multinational corporations do pay attention to where the workforce is when they pick a site for their headquarters or factories. ‘To know that (workers) are all living around is good, there is a ready pool of labour,’ he said.

The announcements are also ‘a signal to potential developers and investors that there is still land around the Jurong Lake area available,’ he added.

URA also provided more updates on the development of Jurong Lake District yesterday.

For instance, dredging works to deepen the Jurong Lake for more water-based activities are already underway.

Source : Business Times - 30 Dec 2008

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Invest in research to tackle economic crisis

Invest in research to tackle economic crisis

S’pore may introduce further innovative measures to nurture an innovative economy

By ABHIJIT GHOSH AND HO KAH CHUAN

THE current global credit crunch could adversely affect investment in research and development (R&D), and seriously delay the discovery of new products, processes or solutions.

Counting on technology: Motion-sensing fans at the recently held FusionWorld exhibit in Singapore, which showcased more than 60 diverse technologies drawn from A*Star. The pace of R&D and IP developmental efforts in the public and private sectors in Singapore should be continued or even stepped up, say the writers
In fact, if the global financial crisis drags on, businesses may consider investing in R&D activity to be a risky proposition.

While the R&D investment rate of Singapore-based businesses has grown over the years, it could be seriously affected by the current economic downturn. It would be unfortunate if the focus shifts towards layoffs and closing down research units.

Even though the global credit crunch has clouded Singapore’s economic outlook, investment in R&D and innovation is more important now than ever. Continued investment in innovation will not only help businesses to emerge stronger and faster from the recession, but can also help to jumpstart the overall economy.

Research dollars should not be curtailed because major challenges of the modern society, such as security of energy supply, food safety and climate change, will remain long after the resolution of this current crisis.

Over the past few years, government’s efforts to spur R&D and intellectual property (IP) management activities in Singapore have resulted in the development of a supportive fiscal and legal regime, building world-class infrastructure capabilities, attracting scientists and engineers from across the globe and nurturing highly scalable IP business models such as franchising and merchandising.

Instead of slowing down, the pace of R&D and IP developmental efforts in the public and private sectors in Singapore should be continued or even stepped up during the current economic crisis. In fact, to encourage more R&D investment, the Singapore government introduced a slew of R&D tax measures in the 2008 Budget.

Prime Minister Lee Hsien Loong also recently reiterated the government’s full commitment to investing in R&D to develop a key capability to keep the economy competitive. The government has taken the lead and it is up to businesses to react.

With Budget 2009 round the corner, what more can the Singapore government do to boost innovation amid the current economic gloom?

Under the current tax regime, new businesses can now get tax deductions for expenditure on R&D performed in-house and outsourced to an R&D organisation, with the possibility of qualifying for further deductions (ranging between 130 per cent and 150 per cent), if the R&D is carried out in Singapore.

However, no tax deductions are available at all for expenditure incurred for R&D outsourced overseas in relation to a new business. This seems to go against the grain of the government’s efforts to promote entrepreneurship and pervasive R&D. With Singapore’s R&D and IP industry still in its infancy, it is difficult to understand why the government should penalise Singapore enterprises if they outsource their R&D overseas, especially when the IP rights are owned and exploited from Singapore.

Perhaps there is a need to level the playing field and allow taxpayers to claim tax deductions for at least 100 per cent of these expenses if Singapore is to continue to grow its entrepreneurship R&D development in Singapore.

The government’s vision is to build Singapore as a compelling hub for businesses to create, protect and commercialise their IP assets. Over the past few years, it has focused very much on creating a conducive tax environment for IP creation and protection.

Tax concessions

For example, tax concessions were introduced to encourage IP creation, IP acquisition and patent registration. However, there are limited tax concessions to specifically encourage IP exploitation, which involves harnessing IP rights to develop and market goods or services, or earn royalties and franchise fees.

In this regard, the following two suggestions may be worth exploring:

First, a specific tax incentive programme should be introduced that offers a concessionary tax rate for income arising from specified IP management activities. Due to the inherent portability of IP, it is important to have a more competitive tax regime to attract and retain IP rights and related business activities in Singapore. Otherwise, the government’s R&D and IP developmental efforts may go to waste if IP assets created here are ultimately shifted out of Singapore and exploited from elsewhere.

Second, to complement the proposed IP tax incentive, the current foreign tax credit regime could be liberalised to introduce the concept of pooling and carry forward of foreign tax credits, which arise on account of foreign withholding tax suffered on royalties received from overseas.

Currently, claims for foreign tax credits are restricted to the lower of the foreign tax paid or Singapore tax payable on the net foreign-sourced royalty income. This significant disadvantage could be alleviated by pooling these foreign tax credits and offsetting them against tax payable on other sources of income, as well as allowing the excess foreign tax credits to be carried forward.

Singapore could differentiate itself by introducing further innovative measures to nurture an innovative economy. This will help the country to emerge as a stronger nation at the end of the present financial turmoil.

Budget 2009 will hopefully provide an opportunity to introduce additional fiscal policies to encourage IP exploitation and bolster the government’s vision and long-term commitment to support R&D and IP management activities in Singapore.

Abhijit Ghosh is a Partner and Ho Kah Chuan is Manager, Corporate Tax Advisory, PricewaterhouseCoopers Singapore

Source : Business Times - 30 Dec 2008

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No Carlos Slim bailout for Honda F1 team - MEXICO CITY

No Carlos Slim bailout for Honda F1 team - MEXICO CITY

Source at tycoon’s conglomerate denies report of a deal

(MEXICO CITY) Mexican billionaire Carlos Slim has not bought the Honda Formula One team and is not even in negotiations for the Japanese outfit, a source at the businessman’s industrial and financial empire said on Sunday.
 
Mr Slim: An Italian newspaper had called him the saviour of Honda 
‘There is no deal for the Honda team. There is neither agreement nor negotiations,’ the source told AFP on condition of anonymity.

Honda, with an annual racing budget of around US$400 million, pulled out of the Formula One world championship earlier this month and put up the team for sale with the Japanese manufacturer struggling in the current global economic slowdown.

Earlier on Sunday, Mr Slim’s son had also told the Mexican media that reports of a deal to save Honda were without foundation.

On Saturday, Italian newspaper La Stampa claimed that Mr Slim, who it described as the world’s second richest man, was poised to buy the Honda team.

‘The saviour has arrived at the last minute: Carlos Slim, 67 years old, the second richest man in the world,’ said the newspaper. ‘The news is not official as all the details have yet to be formalised. But two things are certain - the team has been saved and the drivers will be Jenson Button and rookie Bruno Senna in place of Rubens Barrichello.’

La Stampa, which did not identify the source of its report, added that Mr Senna, the nephew of former triple world champion Ayrton Senna, is sponsored by Embratel, part of Mr Slim’s Telmex group.

Honda first competed in F1 in 1964 and clocked up three Grand Prix wins, including Mr Button’s in Hungary in 2006.

Its engines were also behind dozens of victories by stars such as Nelson Piquet, Ayrton Senna and Alain Prost.

The team finished ninth in the constructors championship this season with 14 points. Veteran driver Rubens Barrichello achieved the team’s best result with a third-place finish at Silverstone.

Honda Motor also supplied engines and other technical support to Formula One team Super Aguri, which called it quits due to financial problems in May.

Motorsport in Japan had been particularly hit by the recession with Subaru and Suzuki pulling out of the world rally championship. — AFP

 
Source : Business Times - 30 Dec 2008

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e-REP service for permanent residents

e-REP service for permanent residents
PERMANENT residents with SingPass accounts will soon be able to renew and transfer their re-entry permits (REPs) online.
A new e-REP system that starts on Jan 2 means they will not have to go to the Immigration & Checkpoints Authority (ICA) in person or submit supporting documents. Instead, they will be able to renew their REP online at at www.ica.gov.sg.

A $50 fee for a five-year REP will be payable online once an application is approved. REP transfers will be free. REP cards or endorsements in passports will no longer be needed, ICA said yesterday.

Applicants without a SingPass or those with expired REPs will still require a personal visit to the ICA.

REP helps maintain a SPR’s status while they are abroad.

All current passport endorsements and REP cards issued before the new scheme will remain valid until their expiry date provided they are not cancelled or invalidated by the ICA. With e-REP, PRs and Singapore citizens will also be able to submit online applications for their spouses and children.

And from Jan 2, 2009, PRs who have registered for Singapore identity cards will be able to use the automated immigration clearance system at checkpoints with their machine-readable passports
Source : Business Times - 30 Dec 2008

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More woes await credit card firms: Barron’s -NEW YORK

More woes await credit card firms: Barron’s -NEW YORK

Industry may see a surge in number of late payments

(NEW YORK) Credit card companies face continued problems, as rising unemployment could send the number of late payments through the roof, giving investors reason to be wary despite the companies’ low stock valuations, Barron’s reported in its Dec 29 edition.
The industry’s leading companies include American Express , Bank of America , Citigroup , Capital One Financial Discover Financial Services and JP Morgan.

Compounding the sector’s problems are that its primary source of funding, the asset-backed securities market, froze in September, and the government recently limited some of the industry’s practices that boost revenue, Barron’s wrote.

Another risk is if the income retained by an issuer after accounting for credit losses falls too low, it could trigger a process by which cash is reserved to protect bondholders and potentially create ‘a liquidity event,’ Barron’s wrote.

With the asset-backed securities market essentially closed, credit card companies are increasingly relying on bank deposits, and will have a strong interest in acquiring banks. But betting on the takeover targets may prove a better choice than on the credit card companies, it wrote. — Reuters

Source : Business Times - 30 Dec 2008

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Obama’s plan will cost US$675-775b - WASHINGTON

Obama’s plan will cost US$675-775b - WASHINGTON

Aides say he will favour long-term infrastructure and job creation projects

(WASHINGTON) US President-elect Barack Obama’s economic stimulus plan may cost between US$675 billion and US$775 billion and will favour long-term infrastructure and job creation projects, top Obama aides said.

 
With the United States facing gloomy forecasts of up to 10 per cent unemployment and a deepening recession in 2009 - likely ‘the bleakest economic outlook since World War II’ - Lawrence Summers said creating three million new jobs was a ‘key pillar’ of Mr Obama’s plan.

Mr Obama’s senior adviser David Axelrod told CBS television on Sunday that US$675 billion and US$775 billion were ‘not fixed’ numbers. ‘In this crisis, doing too little poses a greater threat than doing too much,’ Mr Summers, tapped to head the White House National Economic Council, wrote in an editorial in The Washington Post.

‘Any sound economic strategy in the current context must be directed at both creating the jobs that Americans need and doing the work that our economy requires.’

Mr Summers, who served as Treasury secretary under former president Bill Clinton, signalled that Mr Obama would adopt a different approach than President George Bush.

 
‘Any sound economic strategy in the current context must be directed at both creating the jobs that Americans need and doing the work that our economy requires.’
 
- Mr Summers 
 
 
‘Some argue that instead of attempting to both create jobs and invest in our long-run growth, we should focus exclusively on short-term policies that generate consumer spending,’ he said. ‘But that approach led to some of the challenges we face today - and it is that approach that we must reject if we are going to strengthen our middle class and our economy over the long run.’

Mr Obama’s incoming administration and congressional leaders are ‘getting awful close’ to a general agreement on the huge stimulus package the Mr Obama’s team hopes to implement soon after the January 20 inauguration, vice president-elect Joseph Biden said last week.

‘I don’t think Americans can wait,’ Mr Axelrod said. ‘People are suffering, our economy is sliding and we need to act. So our message to Congress is to work on it with all deliberate speed.’

Mr Axelrod said that the economic downturn adds urgency to repealing Mr Bush’s tax cuts for wealthier Americans and will not prevent the future Obama administration from enacting its planned middle-class tax cuts.

Mr Bush’s tax cuts are ’something that we plainly can’t afford moving forward. And whether it expires or whether we repeal it a little bit early we’ll determine later, but it’s going to go. It has to go.’ he told NBC.

He argued that eliminating the Bush tax cuts did not mean that Mr Obama would raise taxes. Mr Obama’s economic stimulus plan ‘will amount to a net tax cut for the American people’, he said. ‘We feel it’s important that middle-class people get some relief now.’

In terms of job creation, ‘we’re talking about investing in alternative energy projects that will help us achieve energy independence. We’re talking about rebuilding the nation’s classrooms to bring them into the 21st century, and labs and libraries so our kids can compete,’ Mr Axelrod added.

Around 80 per cent of the three million new jobs Mr Obama aims to create will be ‘in the private sector, including emerging sectors such as environmental technology,’ Mr Summers said, calling it a ‘bold goal’.

‘Failure to create enough jobs in the short term would put the prospect of recovery at risk,’ Mr Summers added. ‘Failure to start undertaking necessary long-term investments would endanger the foundation of our recovery and, ultimately, our children’s prosperity.’

The Obama stimulus plan was originally intended to safeguard 2.5 million jobs in the next couple of years. But its scope was expanded to three million jobs this month.

Mr Biden reaffirmed that Mr Obama wants the new Democratic-led Congress to make the economic package its top priority when it convenes in early January. — AFP

 
Source : Business Times - 30 Dec 2008

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