Actual finance blog

A new report says a record number of shoppers made purchases online on the Monday after the Thanksgiving holiday weekend, pushing sales up 33 percent.

The report from IBM Benchmark says the average order rose 2.6 percent to $193.24 on the day known as “Cyber Monday,” when retailers amp up online promotions. The data says about 80 percent of retailers offered online deals.

It says traffic peaked at 2:05 p.m. Eastern.

About 6.6 percent used a mobile device to shop, up from 2.3 percent in 2010. The Cyber Monday numbers point to Americans’ growing comfort with using their personal computers, tablets and smartphones to shop.

A clearer picture of how holiday sales are shaping up will come on Thursday, when major retailers report November sales.

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China’s sovereign wealth fund wants to invest in improving neglected U.S. and European roads and other infrastructure to spur global growth, the fund’s chairman said in comments published Monday.

The announcement reflects a shift in strategy for the $410 billion fund, which was created in 2007. Until now, it has limited its investments mostly to small stakes in publicly traded companies to avoid stirring political opposition overseas.

China Investment Corp. wants to begin in Britain by teaming up with fund managers or investing directly in infrastructure projects, Lou Jiwei said in a commentary in London’s Financial Times newspaper.

“China is keen to get involved” in improving U.S. and European infrastructure, which “badly needs more investment,” Lou wrote. He cited energy, water, transport, digital communications and waste disposal but gave no indication of possible projects or the size of Chinese investment.

Some commentators in both Europe and China have suggested Beijing might use its $3.2 trillion in foreign reserves to gain leverage on political or trade issues at a time when other governments urgently want investment.

CIC was created to invest abroad in hopes of earning a better return on China’s foreign reserves, the bulk of which are in U.S. and European government bonds. It says investments are made on commercial rather than political grounds.

The move into infrastructure probably reflects CIC’s commercial views, rather than those of the government, said Citigroup economist Minggao Shen. He said it could help CIC earn a more stable profit and reduce Beijing’s exposure to U.S. and European government bonds amid volatile markets.

Some Chinese commentators have called for Beijing to reduce its exposure to the financial woes of Western governments by buying fewer bonds. China is Washington’s biggest foreign bondholder, with $1.15 trillion in Treasury debt as of September.

“There is a general thought that maybe China should not invest in U.S. Treasurys or European sovereign bonds. Instead, why can’t we hold direct assets in the economy?” Shen said.

By investing in individual projects, he said, “you don’t have to depend on government guarantees and it should be affected less by the sovereign debt crisis.”

CIC faced criticism over the performance of investments made just as the financial crisis was developing. But its results have improved and the fund reported an 11.7 percent return on assets last year.

Lou stressed that CIC is a commercial investor and wants to make a profit.

“CIC believes that such an investment, guided by commercial principles, offers the chance of a win-win solution for all,” he wrote.

Lou gave no indication in which other countries the CIC might invest but cited an estimate that the United States needs to spend at least $2.2 trillion in infrastructure repairs or rebuilding.

“Free of the inflationary pressure that afflicts many emerging economies, the U.S. and Europe should make substantial investment,” he said. “We cannot count on developing countries to deliver a stable economic recovery on their own.”

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Asian stock markets were mostly lower Friday as the results of a meeting among leaders of Europe’s biggest economies disappointed investors and Portugal’s credit rating was lowered to junk.

Japan’s Nikkei 225 index fell marginally to 8,161.87 while South Korea’s Kospi lost 0.9 percent at 1,779.93. Hong Kong’s Hang Seng dropped 0.8 percent to 17,790.54 and Australia’s S&P/ASX 200 shed 1.4 percent at 3,989.

Investment sentiment continued to wane after a meeting Thursday in Strasbourg, France of the leaders of the three biggest euro economies: Italian Premier Mario Monti, French President Nicolas Sarkozy and German Chancellor Angela Merkel.

The three leaders pledged to push for changes to European Union treaties to bring the fiscal policies of countries using the euro common currency more in line with each other.

Many investors were hoping Merkel might drop her steadfast opposition to a greater role for the European Central Bank or the creation of a eurobond that would pool the debts of all countries in the currency union. Some experts believe the ECB is the only institution capable of getting Europe past its debt crisis.

Piled onto the disappointment from the Strasbourg summit was a debt demotion for Portugal cash advance flexible payments.

Fitch Ratings, citing Portugal’s large fiscal imbalances, its high indebtedness across all sectors and an adverse macroeconomic outlook, reduced the country’s credit rating to BB+. That means Portugal is considered non-investment grade by Fitch, making it even more difficult for the struggling country to return to the bond markets.

In the U.S., markets were closed for the Thanksgiving on Thursday. A crucial test comes on so-called Black Friday _ the day that kicks off the holiday shopping season.

How well retailers do during the biggest shopping season of the year will have consequences for the still-fragile U.S. economic recovery.

The spending of consumers, which accounts for about 70 percent of U.S. economic activity, can impact stores’ expansion plans and inventory decisions into the new year. That trickles through the rest of the economy, from suppliers to jobs.

The November-December period accounts for 25-40 percent of annual sales. About a quarter of jobs in the U.S. are directly or indirectly supported by the retail industry.

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With winter fast approaching, the bailiffs of Budapest are in a race against the clock.

They have only days before temperatures plummet and evictions are frozen by law. Demand for their services is soaring, and in the last seven weeks at least three people in the capital have committed suicide over the prospect of losing their homes.

Ani Beres, a 58-year-old woman whose family farming business went bankrupt, sat on her bed and spoke of hurling herself out of the window as the debt men knocked on the door of her 9th floor apartment this week. Her last line of defense was a throng of angry family members and activists trying to get in their way.

Hungary’s eviction crisis has its roots in 2005, when hundreds of thousands of Hungarian families began taking out mortgages and other loans in foreign currencies _ overwhelmingly in Swiss francs _ to take advantage of lower interest rates and a strong Hungarian forint.

But the Hungarian currency has plummeted over the past two years as the economy, highly dependent on exports, spiraled downward in the global economic crisis.

Today, the currency is falling further as the economy teeters on the verge of recession. Hungary’s credit rating is threatened with downgrade to junk status. Investors are spooked by the government’s unorthodox economic policies. And exports to Western Europe are being buffeted by the eurozone’s own debt crisis.

In a sign of the depth of the currency shock, authorities said Thursday that state security services will investigate possible speculative attacks on the forint after it plunged to an all-time low against the euro this month.

While a Swiss franc was worth 150 forints in 2008, it has now risen to around 250 forints and the Beres family’s 8-million-forint loan ($34,500, euro25,700) has ballooned to at least 12 million forints ($69,000, euro51,400).

The family depends on welfare payments of 48,000 forints ($208, euro155), not enough to live on, much less to repay their loan.

“We get food from the neighbors to survive,” Beres said. “You can ask them!”

A bailiff backed by several police officers had come to evict her family, whose home was bought at auction by real estate investors after she was unable to repay a foreign-currency bank loan.

“We took out the loan to invest in our vegetable-growing business … but we went bankrupt and had to sell everything,” Beres said, as her husband, Laszlo, screamed at the bailiff in the stairwell and had to be restrained from attacking him.

“I’m hopeful we can sort things out. But I’ll do it, I’ll jump out right here in front of everyone!” she said. “How many people need to die in this country until a solution is found?”

Hungary was a favored destination for international investors during the years after the first post-communist elections in 1990. But in the 2008 global recession, it became the first EU country to receive a bailout from the International Monetary Fund to avoid defaulting on its loans.

Last year, Prime Minister Viktor Orban’s government decided to forgo IMF support so it could apply its unconventional economic policies, including allowing people to pay back foreign currency loans at exchange rates much lower than current market rates, with banks forced to absorb the difference.

Last week, however, the government announced it would seek a “safety net” from the IMF and the EU but denied that the financial assistance would take the shape of a new loan, thereby giving the IMF undeniable say in Hungary’s economic policy.

Despite Orban’s intention of keeping a “free hand” in economic matters, analysts are skeptical lenders will be so considerate.

“The government would like to preserve its total independence … but it’s unlikely that the IMF would provide money without having some say,” said Zoltan Arokszallasi, a macroeconomic analyst at Erste Bank in Budapest.

A government ban on evictions in place during the first half of the year will return Dec. 1 because of the freezing weather, so the number of forced expulsions has risen greatly during the past weeks as lenders or the new owners attempt to take possession of their properties.

There have been at least three suicides during recent evictions in Budapest.

On Oct. 6, Eva Stiaszni, a 49-year-old subway conductor slammed the door when authorities came to throw her out, sent a farewell text message on her cell phone to her 21-year-old daughter and jumped to her death from her apartment window on the 9th floor of a low-cost housing estate.

“My daughter never asked for my help or anyone else’s,” said her 77-year-old mother, Ica Stiaszni. “How did she end up in a such a state that she was driven to her death?”

At the Beres home _ after much shouting, pleading and threats _ the bailiff agreed to the family’s request for a three-month stay of eviction.

But their problems are far from over.

“We’ve been looking for an emergency home for months and have not found anything,” Beres said. “We have no place to go.”

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Asian stocks fell Wednesday after the U.S. government revised its economic growth estimate downward and climbing yields on Spanish bonds magnified worries over Europe’s debt load.

Hong Kong’s Hang Seng index fell 1.7 percent to 17,941.62. South Korea’s Kospi lost 1.7 percent to 1,795.81 and Australia’s S&P ASX 200 index lost 1.2 percent to 4,082.40.

Japanese stock markets were closed for a public holiday.

Stocks on Wall Street slipped Tuesday after a government report showed the U.S. economy grew at a 2 percent annual rate from July through September, down from an initial estimate of 2.5 percent. Economists had expected the figure to remain the same.

The Dow Jones industrial average lost 0.5 percent to close at 11,493.72. The Standard & Poor’s 500 fell 0.4 percent to 1,188.04. The Nasdaq composite fell 0.1 percent to 2,521.28.

Higher borrowing costs for Spain, meanwhile, renewed worries about Europe’s debt crisis. The higher rates suggest that investors are still skeptical that the country will get its budget under control despite a new government coming to power this week.

Investors have been worried that Spain could become the next country to need financial support from its European neighbors if its borrowing rates climb to unsustainable levels.

Greece was forced to seek relief from its lenders after its long-term borrowing rates rose above 7 percent on the bond market. The rate on Spain’s own benchmark 10-year bond is dangerously close to that level, 6.58 percent.

But fears of the debt crisis spreading elsewhere in Europe were allayed somewhat after the International Monetary Fund announced a plan to provide quick cash on flexible terms to countries facing sudden financial stress.

Concerns remain that Europe’s debt crisis is pushing the region toward recession, which would slow industrial activity in Europe and in countries around the world that export to Europe.

Benchmark oil for January delivery fell 65 cents to $97.36 per barrel on the New York Mercantile Exchange. The contract rose $1.09 to finish at $98.01 per barrel on the Nymex on Tuesday.

In currency trading, the euro fell to $1.3466 from $1.3509 late Tuesday in New York. The dollar rose slightly to 76.99 yen from 76.97 yen.

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President Barack Obama has signed legislation giving tax breaks to companies that hire unemployed veterans, telling businesses “if you are hiring, hire a veteran.”

Obama says Monday that the legislation will help about 850,000 veterans who are currently unemployed and tens of thousands who will be returning from Iraq and Afghanistan in the coming months.

The bill passed Congress last week with rare bipartisan support.

The brief moment of unity was overshadowed by the apparent failure of lawmakers from both parties on a special panel to reach an agreement on $1.2 trillion in savings ahead of a Wednesday deadline low fee payday advance.

The legislation signed by Obama creates tax breaks for companies that hire jobless veterans and helps provide vets with job training and counseling. It also repeals a 2006 law that would require the federal, state and local governments to withhold 3 percent of their payments to contractors.

The veterans’ legislation is the first proposal included in Obama’s $447 billion bill to win congressional approval.

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Egyptian riot police firing tear gas and rubber bullets stormed into Cairo’s Tahrir Square Saturday to dismantle a protest tent camp, setting off clashes that killed one protester, injured hundreds and raised tension days before the first elections since Hosni Mubarak’s ouster.

The scenes of protesters fighting with black-clad police forces were reminiscent of the 18-day uprising that forced an end to Mubarak’s rule in February. Hundreds of protesters fought back, hurling stones and setting an armored police vehicle ablaze.

The violence raised fears of new unrest surrounding the parliamentary elections that are due to begin on Nov. 28. Public anger has risen over the slow pace of reforms and apparent attempts by Egypt’s ruling generals to retain power over a future civilian government payday advance lenders.

Witnesses said the clashes began when police dismantled a tent camp commemorating the hundreds of protesters killed in the uprising and attacked about 200 demonstrators who had camped in the square overnight in an attempt to restart a long-term sit-in there.

Police fired rubber bullets, tear gas and beat protesters with batons. A 23-year-old protester died from a gunshot, said Health Ministry official Mohammed el-Sherbeni. At least 676 people were injured, he said.

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Stock futures are rising as borrowing costs for Italy and Spain decline, a signal that the European debt crisis might be easing.

Spain and Italy have had to pay high interest rates because bondholders fear that that they will default. Holders of Greek bonds have had to take steep losses.

The Conference Board reports at 10 a.m. on its index of leading economic indicators. Economists expect the index to rise 0.4 percent after September’s 0.2 percent gain.

H payday loans no faxing.J. Heinz Co. slipped in premarket trading after its second-quarter net income fell almost 6 percent.

S&P 500 futures are up 11 points, or 0.9 percent, at 1,225 at 8 a.m. Dow futures are up 84, or 0.7 percent, at 1,823. Nasdaq 100 futures are up 14, or 0.6 percent, at 2,282.

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U.S. manufacturing is recovering from a slump, and inflation may be peaking. The latest government reports suggest businesses and consumers may be seeing some relief after the economy stumbled earlier this year.

Industrial production rose in October at the fastest pace in three months. Factories made more trucks, electronics and business equipment.

At the same time, Americans paid less for gas, cars and computers last month as overall prices fell for the first time since June.

The data follow a strong report on retail sales in October and point to an economy that is growing at a solid pace in the October-December quarter. Still, the resurgence in the price of oil and a possible recession in Europe threaten to drain the economy’s momentum.

“The continued resilience of manufacturing is encouraging, since this should be the sector most exposed to the global economic slowdown,” said Paul Ashworth, chief U.S. economist with Capital Economics.

Output at the nation’s factories, utilities and mines rose 0.7 percent last month, the Federal Reserve said Wednesday.

Factory output, the largest component of industrial production, increased a solid 0.5 percent. It was the fourth straight monthly gain.

Production of autos and auto parts surged. Business equipment rose for the sixth straight month. Electrical equipment, appliances and transportation equipment all climbed.

Manufacturers “are benefiting from the strong growth in emerging markets, and domestic businesses are confident enough in the future to continue expanding purchases of capital equipment,” said Daniel Meckstroth, chief economist for the Manufacturers Alliance/MAPI, a trade group.

Production was dragged down this spring after the Japanese earthquake and tsunami disrupted key supply chains for automakers and other manufacturers. Rising food and gas costs and shaky financial markets caused consumers to cut back on big purchases.

The auto industry has rebounded to drive most of the growth in factory output. Many U.S. auto plants, which depend upon parts from Japan to produce various models, are seeing supply chains flow more freely.

Higher output at auto plants has allowed dealers to stock popular models that were in demand this spring. As a result, October sales were 7 percent higher than the same month last year. Light trucks were the biggest contributor.

A steep drop in gas prices was a key reason the Consumer Price Index dropped 0.1 percent in October, the Labor Department said. Food prices did rise, but at the slowest pace this year.

Excluding volatile food and energy costs, so-called “core” prices rose 0.1 percent.

Slower inflation could give the Federal Reserve more leeway to lower long-term interest rates to help the economy.

Still, oil prices have been climbing in recent weeks and hit $100 a barrel Wednesday for the first time in four months. They have been rising as the economy improves while tensions rise in countries that hold some of the world’s major sources of crude.

If those prices translate into higher gas prices, consumers could pull back on spending and slow economic growth.

Strong consumer spending helped the economy grow at an annual rate of 2.5 percent in the July-September quarter. The October gain in retail sales suggests similar growth in the final three months of the year.

Instability in Europe might also hurt the U.S. economy. A shaky euro would likely strengthen the dollar, making U.S. goods appear more expensive to overseas buyers. And exports to Europe already account for about one-fourth of U.S. corporate revenue, analysts say.

Europe’s economy is barely growing, and sharp government spending cuts might tip it back into recession. If that happens, slowing output by U.S. manufacturers could hinder the broader economic recovery.

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The International Monetary Fund says China’s banks face growing risks due to a credit boom and it urged Beijing to reduce the government role in lending decisions.

The report Tuesday adds to warnings by industry analysts that China’s banks face a possible rise in bad loans and other problems after a flood of lending helped it rebound quickly from the 2008 global crisis.

The IMF cited possible risks from a fall in soaring real estate prices, a rise in bad loans due to crisis-related lending and growing imbalances in an economy that relies heavily on exports and investment direct payday lenders.

The IMF urged Beijing to move further toward using interest rates instead of direct orders to regulate lending.

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