LONDON (AFP) -- Banking titan Deutsche Bank reported a historic loss on Thursday highlighting shocks from the financial crisis as Britain cut its key rate to a record low and US senators prepared to vote on a huge stimulus plan.

Deutsche Bank, the biggest bank in Germany, reported a record loss of 3.9 billion euros (5.0 billion dollars) last year.

And the biggest Spanish bank Santander saw profits slide 22 percent in the last quarter.

Deutsche Bank chairman Josef Ackermann said "operating conditions in the (fourth) quarter were completely unprecedented and exposed some weaknesses in our business model" but assured that there were no "dramatic" risks for the bank.

Adding to the recession fallout in Germany, Europe's biggest economy and the world's largest exporter, data released on Thursday showed that German industrial orders plunged by 25.1 percent last year.

Banking losses contributed to a slide in European stock markets in early afternoon trading, with the CAC 40 index in Paris falling 0.73 percent, the Frankfurt Dax down 0.65 percent and London's FTSE 100 dipping 0.27 percent.

Markets were also muted ahead of the interest rate cut in Britain, where the Bank of England slashed its key lending rate by half a percentage point to a fresh historic low of 1.0 percent in an attempt to fight off recession.
[b]
The British central bank cut interest rates last month to 1.5 percent -- the lowest point since it was established in 1694. The US Federal Reserve and the Bank of Japan have already lowered their main interest rates to virtually zero.

At its meeting on Thursday, the European Central Bank was expected to hold borrowing costs at 2.0 percent after record cuts since October.[/b]

Amid the economic gloom, however, there were some glimmers of hope.

British house prices rose unexpectedly in January, snapping a 10-month losing streak, a survey by home loans provider Halifax showed on Thursday.

And fresh US service sector data released on Wednesday suggested the pace of the slowdown may be easing in the world's largest economy.

But in Russia, the economic crisis has prompted a halt to cutbacks in the police force amid fears of a rise in crime because of rising unemployment and social unrest, according to a report in the Nezavisimaya Gazeta daily.

"They are waiting to see how the crisis develops... There may be some unforeseen circumstances," said Gennady Gudkov, deputy head of the Russian parliament's security committee from the pro-Kremlin A Just Russia party.

The crisis also bit deeper into the Russian economy with Rusal, the world's largest aluminium producer, announcing it would cut production of aluminium by 11 percent and of alumina by 30 percent as part of a cost-cutting programme.

In France, President Nicolas Sarkozy was to address the nation by means of a televised interview on measures to counter the crisis, following a protest last week when more than a million people took to the streets across the country.

In the United States, senators headed towards a vote later on Thursday on a stimulus plan worth more than 900 billion dollars (699 billion euro) after diluting a "Buy American" clause that angered key US trade allies.

President Barack Obama pressed for the swift passage of the plan over Republican objections, as Senate Majority Leader Harry Reid indicated a final vote could come as early as Thursday, according to The New York Times.

Meanwhile in Australia approval of the government's 27-billion-dollar economic package was delayed amid controversy over its scale, as opposition leader Malcolm Turnbull said: "It's too much money, too much debt."

In more business news, the world's biggest reinsurer Swiss Re said it expected to post net losses of 860 million dollars (672 million euros) in 2008, turning to Warren Buffett's Berkshire Hathaway for fresh capital.

More evidence also emerged of the financial turmoil's deepening impact on Asia's airlines, which have seen profits plummet.

Struggling flagship carrier Japan Airlines (JAL), Asia's biggest airline, is reportedly considering asking for an emergency public loan to restore its finances as it is hit by a sharp decrease in business and holiday travellers.

JAL and rival All Nippon Airways (ANA) are suspending or reducing flights and switching to smaller planes in their efforts to ride out the crisis.

Shanghai Airlines meanwhile became the latest Chinese carrier to reveal it is in talks for an emergency government capital injection.

US unemployment rate reaches 7.6%

The US unemployment rate rose to 7.6% in January, up from 7.2% in December, according to official figures.

The rise puts the unemployment rate at the highest level since 1992.

According to the US Labor Department, the economy lost 598,000 non-farm jobs for the month, and it also revised upwards the job losses for December.

In the United States, senators headed towards a vote later on Thursday on a stimulus plan worth more than 900 billion dollars (699 billion euro) after diluting a "Buy American" clause that angered key US trade allies.

President Barack Obama pressed for the swift passage of the plan over Republican objections, as Senate Majority Leader Harry Reid indicated a final vote could come as early as Thursday, according to The New York Times.

aznyron wrote:so I say before you start throwing knives at his
ideas sit & wait & see

Toyota triples year loss forecast

The world's biggest carmaker, Toyota, has widened its predicted loss for 2008 after demand for its cars slumped.

In December, Toyota predicted it would make a full year operating loss of 150bn yen ($1.65bn; £1.13bn).

The Japanese car giant has now tripled that figure and expects to make a 450bn yen operating loss, the first annual loss at the firm in 70 years.

Although it has not suffered as badly as its US rivals, Toyota has still been hit by falling demand in the downturn.

The strengthening yen has also hit its profitability, by depreciating its overseas earnings.

In expanding its loss prediction for the year, Toyota also said it made a loss of 164.7bn yen in the three months from October to December.

Production cut

Toyota has also lowered its forecast for vehicle sales for the whole group for the 2008/09 financial year to 7.32 million from 7.54 million.

It had sold 8.913 million vehicles in the year to the end of March 2008.

In December, Toyota boss Katsuaki Watanabe said the current downturn was of a size that comes only: "once in a hundred years".

Toyota is cutting work to a single shift on 17 production lines lines out of its 75 around the world at different times in January and February.

It is also closing all Japanese factories for a total of 14 days between January and March.

German industrial output has seen a record fall after a sharp contraction in manufacturing activity.

Output plunged by 4.6% in December from the previous month, figures from the Economy Ministry showed.

It was the steepest decline since May 1989 and was much worse than the 2.5% fall expected by analysts.

Industrial output was likely to remain weak for the next few months, given the slump in demand for manufactured goods, the Economy Ministry said.

'Horrific' data

Year-on-year output dropped by 12% in Europe's largest economy, which confirmed it was in recession in November.

Jennifer McKeown, European economist at Capital Economics, described the data as "horrific" and said the decline had happened faster than expected.

Manufacturing output was down by 5.3%, with Germany's motor industry affected by a slump in global demand for cars.

Energy output was also down by 1%.

However, there was an increase in construction output, which rose by 1.4%.

PM Abhisit: Fiscal reserves sufficient for needs
BANGKOK, Feb 8 (TNA) -- Prime Minister Abhisit Vejjajiva said Sunday the country's financial reserves are sufficient for current needs, despite expressed concern from some quarters, and that the government's budget for Fiscal 2010 expenditure, starting October 1, could be within two weeks.

Speaking during his weekly Sunday morning television address, Mr. Abhisit said his government will introduce tax measures to support his government's budget in order to prevent public debt from exceeding the legal ceiling.

He said the government needed to increase the budget because payment obligations totaled more than two-thirds of the entire budget while loans being sought internationally are meant to stimulate Thailand's economy and not because of the shortage of fiscal reserves as feared by some portion of the public.

The prime minister gave assurances that the government's economic stimulus programmes including pension fund for aging people could be implemented in March or April.

The Cabinet, he said, had assigned the Ministry of Finance to begin negotiating loans from overseas but "actual borrowing has not yet started."

There is a need to explore for foreign loans because economic directions during the second quarter and the second half of this year are still unknown, Mr. Abhisit said.

If the economic situation deteriorates and the government's economic stimulus programmes are still insufficient, then the government will spend funds borrowed from abroad, Mr. Abhisit said.

Earlier this week, Pongpanu Savetarun, director-general of the Public Debt Management Office, said Thailand's public debt now stands at about Bt3.4 trillion, or equivalent to 37 per cent of gross domestic product (GDP).

Public debt at the end of Fiscal 2009, which ends on September 30, is estimated to rise to Bt3.9 trillion following the planned borrowing which is still lower than 41 per cent of GDP, said Mr. Pongpanu. (TNA)

Thailand to urge ASEAN to spend savings to bolster economy
BANGKOK, Feb 7 (TNA) -- Thailand will ask its fellow members in the Association of Southeast Asian Nations (ASEAN) who have large reserves to spend more with an aim to boost the economies within in the regional grouping, Finance Minister Korn Chatikavanij has said.

Mr. Korn said the request will be made during the Thailand-hosted ASEAN summit February 27-March 1 at Hua Hin beach resort in Prachuap Khiri Kan.

It is quite impossible to depend on consumption from other regions even though economies of the US and Europe could recover, the Thai financed minister said, but their consumption capacity will not be as strong as before.

The Thai government wants to rely on local consumption, aimed at boosting purchasing power, by diverting budget through several programmes including offering Bt2,000 to each jobless people and paying pension fund to aged people, said Mr. Korn.

On the domestic front, he said Thailand -- which is now experiencing an economic downturn -- should focus on investing in basic infrastructure projects, including a dual track rail transport network and improving the water supply system nationwide.

Prime Minister Abhisit Vejjajiva, now officially visiting Tokyo, could request capital funding for investment in Thailand's infrastructure from his Japanese counterpart Taro Aso.

Investment has been lacking in Thailand in the past as the country has depended heavily on exports by as much as 70 per cent of gross domestic product, Mr. Korn said.

It is appropriate now to focus on investment because oil prices are low which would also bring down operational costs, he said. (TNA)

Business News : Last Update : 11:54:42 7 February 2009 (GMT+7:00)

Japan approves 63-billion-yen loan to Thailand for mass transit rail system
TOKYO, Feb 7 (TNA) -- The Japanese government has given the green light on providing 63-billion-yen loan to Thailand to help finance constructing a mass transit rail system designed to improve urban communication and ease traffic congestion in the Thai capital, Prime Minister Abhisit Vejjajiva said on Saturday.

Mr. Abhisit, who is now on a three-day official visit to Thailand aimed at encouraging Japanese businessmen to invest more in Thailand and boosting trade between the two countries, said the approval was made during his talks with his Japanese counterpart Taro Aso on Friday.

The loan will be used for financing the long-delayed construction of the 66.8-kilometre 'Red Route' from Rangsit in Pathum Thani province, passing through Bang Sue and Hua Lampong to Mahachai in Samut Sakhon province.

Mr. Abhisit said he had also discussed bilateral relations wwith Mr. Aso, while the Japanese leader expressed his wish to see countries in the Asian region respond to deal with the global economic meltdown as Japan also wanted the Association of Southeast Asian Nations (ASEAN) to support it in playing a significant role in the Greater Mekong Subregion (GMS) project.

Cambodia, China, Laos, Myanmar, Thailand, and Vietnam are members of the GMS development project which involves comprehensive cooperation in many areas – trade, tourism, telecomnunications, transportation, energy, and the environment.

Mr. Abhisit said Thailand and Japan will again cooperate on battling the world economic slump as they did before during the 1997 Asian financial crisis, which originated from Thailand.

Touching on Thailand's political changes, Mr. Aso told Mr. Abhisit that he expected Thailand could overcome political obstacles and the problem would not become a hindrance to cooperation between the two countries. (TNA)

Phuket hotel strike hits tourists
By: BangkokPost.com and Agencies
Published: 9/02/2009 at 04:10 AM
Workers at Phuket hotels have ended a three-day strike that blocked roads and shut six hotels, again disrupting holidays for hundreds of foreign tourists.

The strikers blocked all roads to the sprawling resort complex of the Laguna Group after the hotel cut employee bonuses and ruled out a wage increase this year, according to reports in the Phuket Gazette.

Tourists staying at the Laguna complex were moved to other hotels on the island, which has seen a sharp drop in visitors since the seizure of Bangkok's main airports late last year.

"The hotel did not negotiate. They told the protesters they cannot increase wages this year because they will struggle with losses," Phuket police officer Pharidon Ghaniama told the newspaper.

The company had no official comment on the strike, but hotel staff said four of the six Laguna hotels remained closed on Sunday.

Thailand may see its lowest number of tourist arrivals in four years in 2009 after anti-government protesters blockaded Bangkok's airports and stranded thousands of holidaymakers.

Tourism directly employs 1.8 million people and contributes an estimated six per cent of gross domestic product (GDP).