It took two months, but the bond market called Henry Paulson’s bluff. Now the Treasury Secretary is expected Sunday to announce a plan to take Fannie Mae and Freddie Mac under government control.
The mortgage giants are expected to be placed under a "conservatorship" of their new regulator, the Federal Housing Finance Agency. The agency would likely temporarily run Fannie and Freddie and continue to implicitly back any liabilities until the two companies’ financial standing was strengthened. A Treasury official confirmed that regulators were working out details of an intervention plan on Saturday.
In July, Paulson attempted to calm financial markets by pledging government support for Fannie (FNM, Fortune 500) and Freddie (FRE, Fortune 500), which were under siege by investors because of fears about their weak balance sheets.
Paulson asked Congress for the right to use taxpayer funds to intervene - but hoped the pledge alone would be sufficient. "If you have a bazooka in your pocket and people know it, you probably won’t have to use it,” he said at a July 15 Senate Banking Committee hearing.
But now Paulson is readying the bazooka, because the markets didn’t respond as hoped. Shares in the companies bounced back from multiyear lows in recent weeks, but bond markets have not regained confidence in Fannie and Freddie.
The amount the companies pay to borrow in the bond market has risen sharply during the past year.
Fannie and Freddie rely heavily on their ability to borrow money at good rates, which they use to buy mortgages from lenders - they now own or guarantee some $5 trillion in home loans.
Investors began shunning debt issued by Fannie and Freddie in favor of U.S. Treasury bonds. On Friday, yields on the 10-year Treasury note hit a five-month low at 3.55%, down a full percentage point from a year ago. This reflects greater demand for the perceived safety in Treasuries.
Foreign central banks, particularly China’s, have in recent years been among the biggest buyers of "agency" bonds, those issued by Fannie, Freddie and other government entities. But they’ve been backing away. Brad Setser, an economist at the Council on Foreign Relations, noted last month that Federal Reserve data showed foreign central banks were, for the first time in four years, net sellers of agency bonds.
A statement Saturday from the office of Barney Frank, D-Mass., confirmed that Paulson said he plans to use "the powers that Congress provided it" in a housing bill passed in July. Those powers include the Treasury lending money to Fannie and Freddie, as well as the option to buy stock. Frank added that he does know the details of the intervention.
If the banks that write mortgages to regular homebuyers can’t count on Fannie and Freddie to buy their loans, they have to charge higher interest rates, tighten credit standards and demand higher downpayments - all of which is already happening and slowing a recovery in housing markets.
Even as the Fed has slashed short-term interest rates by more than 3 percentage points over the past year, rates for 30-year fixed-rate mortgages have remained stubbornly high pay day loans. They were at 6.35% last week, Freddie Mac reported, down just a sliver from 6.46% last year.
Home prices fell 7.6% in the second quarter, the National Association of Realtors reported last month.
Any move to take Fannie and Freddie under explicit government control thus amounts to another effort to restore investor confidence at the companies, and in the housing market they support.
It’s unclear what the long-term role of a conservatorship would be. The government would likely temporarily run Fannie and Freddie to ensure they don’t take extreme risks to right themselves. The government would gradually add funds to the entities so they can continue to buy loans. And it would continue to implicitly back their liabilities.
The $5 trillion on Fannie’s and Freddie’s books would not be the cost to taxpayers because the vast majority of the loans would not default. Instead, the cost of the bailout would likely run into the tens of billions - but the range of potential losses is wide.
Few think the government wants to get in the business of running Fannie and Freddie for the long-term. Most think the institutions would need to be restructured so they are no longer both public and private entities: encouraged to take big risks so shareholders can profit while having an implicit government backing if their bets go horribly south. In short, they should not be "too big to fail."
While putting taxpayer money at risk to aid publicly owned companies is never desirable, many say the cost of not aiding the companies - given their central role in the mortgage market - could be worse.
News reports indicate that the boards of directors and top executives at the companies - Daniel Mudd at Fannie and Richard Syron at Freddie Mac - will depart. Both executives have come under heavy fire over the past year as losses have mounted at their companies.
A CEO change at Fannie would come just a week after the board stood behind Mudd in a shakeup of the company’s finance department, which saw the departure of finance chief Stephen Swad and two other high-ranking officers. Fannie Chairman Stephen Ashley said Aug. 27 that the board "is firmly committed to Dan Mudd."
Syron, who like Mudd has been criticized for his multimillion-dollar paychecks as his company’s stock lost 90% of its value, has been looking for a successor since onetime President Eugene McQuade declined the CEO job last May. Syron has suggested at times that he wouldn’t be averse to spending more time with his family.
"If I had better foresight, maybe I could have improved things a little bit," he said last month in response to a New York Times report on his handling of risks tied to the housing bust. "But frankly, if I had perfect foresight, I would never have taken this job in the first place."
Shares in Asian banks soared on Monday after the U.S. government took over Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz), reassuring investors worried about exposure to the mortgage giants’ bonds and the value of other risky debt assets.
The takeover plan makes it more explicit that debt issued by Fannie and Freddie will be backed by the U.S. government and curbed worries about possible losses among financial institutions and investors that hold such paper, analysts said.
While the bailout plan was set to leave common shareholders in Fannie and Freddie last in line for any claims, that would have little negative impact on Asian banks.
“There is hardly any equity exposure of Asian bank ex-Japan in Freddie and Fannie,” said Todd Dunivant, head of regional banks research with HSBC in Hong Kong.
“But investors were concerned about the mark-to-market losses in debt and MBS (mortgage-backed securities).”
MSCI’s index of financial stocks in the Asia-Pacific region outside of Japan jumped 5.1 percent, its biggest one day move since March, while Japan’s largest banks rose more than 10 percent.
Industry leader Mitsubishi UFJ Financial Group (8306.T: Quote, Profile, Research, Stock Buzz) rose 12 percent while No payday advance. 2 lender, Mizuho Financial Group (8411.T: Quote, Profile, Research, Stock Buzz), and third-ranked Sumitomo Mitsui Financial Group (8316.T: Quote, Profile, Research, Stock Buzz) both climbed 11 percent.
RISK PROFILE IMPROVES
Blackstone Group LP and Kohlberg Kravis Roberts & Co are each looking to buy parts of Lehman’s real estate and asset management units, sources familiar with the situation said on Friday, sparking a broad rebound in financial stocks.
The real estate unit of Lehman Brothers Holdings Inc, which includes property and some asset-backed securities, could be worth about $5 billion, the sources said.
Lehman shares jumped 5.3 percent after the Reuters report. That helped lift the S&P financial index, which had slipped earlier on Friday, by 1.8 percent.
“Lehman has been so shredded in terms of confidence that anything like this is something that can ignite a upward movement at any point,” said Michael Holland, founder of money manager Holland & Co LLC.
Blackstone, KKR, and Lehman all declined to comment.
Lehman, the fourth-biggest U.S instant payday loan. investment bank, is under pressure to raise capital ahead of its earnings announcement this month. It has racked up crippling losses and still bears more than $60 billion of mortgage and commercial real estate exposure.
It has explored shedding assets, spinning off its money management arm and selling a significant stake to outside investors.
State-controlled Korea Development Bank (KDB) is in talks to acquire or invest in Lehman, but any deal was thrown into doubt amid financial market turmoil this week in South Korea. KDB has not given any details on the negotiations.
Oil prices extended their decline Wednesday, to a nearly 5-month low, as the dollar strengthened against major currencies and traders waited for Gustav damage reports.
The crude futures contract for October delivery fell 36 cents to settle at $109.35 a barrel, the lowest close since the $109.09 finish on April 7. Oil had traded as low as $107.22 and hovered around $108 for most of the session.
On Tuesday, oil prices fell $5.75 a barrel to settle at $109.71.
Oil prices have fallen sharply from the record high price of $147.27 a barrel, set July 11, as a sagging U.S. economy has cut into energy demand.
Stronger dollar: Crude oil is traded in dollars around the globe, so a stronger dollar pushes the price lower, said Tom Orr, director of research at Weeden & Co., a financial services firm.
The dollar reached a 7-month high against the euro on Wednesday. "When we had an incredibly structurally weak dollar, people went to the commodity trade," said Orr, as "a hedge against inflation, as a place to park money."
But now that the dollar has started to recover, investors are looking to other, more profitable places to keep their funds, Orr said.
Slumping demand: Because Gustav did not hit with as much force as anticipated, and the damage to oil production facilities appeared to be less than was feared, the oil market returned its focus to slumping global demand for energy.
"The market is starting to realize that demand for oil is much weaker today than it was a year ago," said Phil Flynn, senior market analyst at Alaron Trading.
Because demand for oil has fallen off since last year as the economy has suffered, Flynn said the supply disruption that Gustav caused has not been as massive a concern as when Hurricane Katrina hit the Gulf region in 2005.
Gustav: In advance of Monday’s storm, oil companies shut down 100% of production facilities in the Gulf. Those facilities remain shut down, according to a report released Wednesday by the U.S. Department of Energy. Oil companies were beginning to send workers out to the offshore infrastructure, but machines will not be fully operable until safety standards are met.
In addition, capacity at 23 refineries was still either shut down or reduced and 95.4% of natural gas production was still shut down, according to the U.S. Department of Energy damage update on Wednesday.
"There is still a lot of focus on Gustav and what has or hasn’t happened" to production rigs and refineries in the Gulf region, said Andrew Lebow, an energy analyst at MF Global in New York payday loans.
Another analyst, however, disagreed. According to Orr, as soon as initial reports showed that Gustav did not do major damage to production rigs and refineries, oil traders stopped focusing on the storm.
While there have not been reports of major structural damage, analysts were concerned about power getting back to refineries. "It is becoming more and more apparent as we have been talking about it that some of this refinery capacity is not coming up so quickly because of power issues," said Lebow.
Flynn also said that it takes a while to get refineries back up and running. "Turning the refineries on isn’t like flipping a switch - it takes time to bring them back online."
Production facilities in the Gulf will remain shut until there has been a full inspection of rigs and refineries to determine the level of damage, according to a report by the U.S. Department of Interior’s Mineral Management Service agency.
SPR: Late Tuesday, the Department of Energy decided to loan 250,000 barrels of oil from the Strategic Petroleum Reserve to Citgo’s Lake Charles, La., refinery, according to a statement from the government. The reserve is an emergency repository of 700 million barrels of oil that the government controls.
"Demand for oil is 1.2 million barrels a day less than it was a year ago, so a release from the SPR can very easily make up for the lost supply," said Flynn.
Hurricane Gustav closed Louisiana’s Calcasieu channel which disrupted Citgo crude oil supplies, according to the government’s statement.
Storms: Three other tropical storms - Hanna, Ike and Josephine - have formed in the Atlantic, but currently are not expected to track toward the Gulf of Mexico.
"Of course there are a couple of other storms out there and the market is looking at those as well," said Lebow. "It was advertised as an active hurricane season and it has been."
Tropical Storm Hanna was near Haiti on Wednesday morning and could become a hurricane by Thursday, according to the a public advisory by the National Hurricane Center. The east coast of Florida could start seeing rain from Hanna as early as Friday, according to the advisory.
– CNNMoney.com’s David Goldman contributed to this report.
The world financial system is near a dangerous tipping point of uncertainty and chaos as economic and geopolitical power shifts away from the United States, according to a new book.
In “The World Is Curved: Hidden Dangers to the Global Economy” (Portfolio, $26.25), author David Smick argues that today’s vast pools of global liquidity mean financiers and political leaders are losing the ability to see financial risk ahead.
“A small village in Arctic Norway can see its entire financial future destroyed because its financial managers invested heavily in a Citigroup product called a collaterized debt obligation,” Smick said. “We are being forced to travel down an endless, dangerously twisting road of volatility.”
According to Smick, the signs for this breakdown in the world of international finance have been appearing in the global economic landscape for several years now. But the terrain has changed, and in this newly “curved” world it is harder to spot the bends and the risks in the road ahead.
“The message is not very optimistic, not only because it has become more difficult to spot imbalances, but also because the effectiveness of government solutions for such problems is more limited.
He cites the case of UBS, Switzerland’s largest bank, with major links to the United States, as an example fast cash. UBS’s total financial exposure is more than four times the size of Switzerland’s GDP. Result: In a crisis, the government wouldn’t be able to bail out the bank even if it wanted to.
And for Smick, the founder and chairman of a strategic market advisory firm in Washington, the U.S. mortgage and credit crisis is just the beginning and could become worse if policymakers aren’t careful.
He also argues the world is now moving away from the last quarter century’s model of globalization and free-flowing capital markets toward something more reminiscent of 19th century mercantilism — with backroom rivalries, dealmaking, ambitious national political agendas, and capital flows and commodities increasingly controlled by governments.
Google is releasing its own Web browser in a long-anticipated move aimed at countering the dominance of Microsoft’s Internet Explorer and ensuring easy access to its Internet-leading search engine.
The Mountain View-based company took the unusual step of announcing its latest product on the Labor Day holiday after it prematurely sent out a comic book drawn up to herald the new browser’s arrival.
The free browser, called "Chrome," is supposed to be available in more than 100 countries for computers running on Microsoft’s Windows operating system. Google (GOOG, Fortune 500) said it’s still working on versions compatible with Apple’s (AAPL, Fortune 500) Mac and the Linux operating system.
Although Google is using a cartoonish approach to promote Chrome, the new browser underscores the gravity of Google’s rivalry with Microsoft (MSFT, Fortune 500), whose Internet Explorer is used by about 75 percent of Web surfers.
Google for several years has been trying to take advantage of its search engine’s popularity to loosen Microsoft’s grip on how most people interact with personal computers.
The assault so far has been focused on a bundle of computer programs, including word processing and spreadsheet applications, that Google offers as an alternative to one of Microsoft’s biggest money makers, its Office suite of products no fax payday loan.
Google has tried to make its alternatives more appealing and accessible by hosting them for free over Internet connections instead of requiring users to pay a licensing fee to install them on individual computers
Meanwhile, Microsoft has been trying to thwart Google by investing billions in the development of its own search engine and making an unsuccessful attempt to buy Yahoo (YHOO, Fortune 500) for $47.5 billion.
The tensions between Microsoft and Google now seem likely to escalate with Google’s foray into Web browsing.
In a Monday blog posting, Google touted Chrome as a more sophisticated Web browser better suited for displaying the more dynamic and interactive content blossoming on the Web as people migrate from television, radio and newspapers.
"The Web gets better with more options and innovation," Sundar Pichai, Google’s vice president of product management, and Linus Upson, Google’s engineering director, wrote in the posting. "Google Chrome is another option, and we hope it contributes to making the Web even better."
Microsoft didn’t immediately respond to a request for comment.
The Bank of Canada will likely keep borrowing costs unchanged today as inflation stays above its upper limit, and may express greater concern about an economy that just missed contracting for a second straight quarter.
Governor Mark Carney and his five deputies will leave the target rate on overnight loans between commercial banks at 3 percent for a third straight meeting, according to 27 of 28 economists surveyed by Bloomberg.
Carney and his counterparts from the Group of Seven industrialized nations are struggling to sustain growth as high energy costs fuel inflation and curb demand. Canada's economy grew at a 0.3 percent annualized pace in the second quarter, avoiding what most economists would have dubbed the first recession since 1991. Inflation quickened to 3.4 percent in July, outside the bank's 1 percent to 3 percent target.
“Inflation has to start coming down,'' said Michael Gregory, senior economist at BMO Capital Markets in Toronto. “Until you get a sense of how things are playing out, the best strategy is to keep the powder dry.''
Still, today's statement may include stronger language that highlights the risks to growth. Deputy Governor David Longworth said Aug. 26 that growth and inflation this year will both be slower than expected in July, when policy makers said they saw “balanced'' risks.
The decision in Ottawa is scheduled for 9 a.m. New York time. The bank may cut rates in the first quarter of next year, according to the weighted average of eight economists surveyed by Bloomberg.
`Downside' Risk?
“Instead of saying the risks are balanced, they could say `roughly balanced with a risk to the downside,''' said Eric Lascelles, chief economist with TD Securities Inc. in Toronto. Should the bank move rates this year, before most economists expect, Lascelles said it's more likely to be a reduction than an increase, because “the Canadian economy is going slowly.''
There's little sign slumping exports to the U.S. will rebound. Sales to Canada's main trading partner were behind Carney's assertion in July that the economy will grow just 1 percent this year, the slowest since 1992.
The U.S. economy grew at a 0.2 percent annualized pace in the second quarter excluding trade, indicating there's been little growth in American domestic demand as that country recovers from the subprime mortgage meltdown.
Canada's total shipments abroad fell 1.5 percent in the second quarter, the fourth straight three-month period that saw a decline. Exporters were also hurt by the Canadian dollar's appreciation to a record last year.
Ontario `Challenges'
“We are still in a fairly good economy, but we're seeing some slowdown,'' Luc Vanneste, chief financial officer at Bank of Nova Scotia, Canada's third-biggest lender, said in an interview in Toronto. Vanneste cited “challenges in Ontario,'' Canada's biggest province and factory heartland.
Canadian factories laid off 32,300 people in July, mostly in Ontario, where the struggling automotive industry is based. Total Canadian employment fell by a net 55,200 workers, the biggest decline in 17 years.
The layoffs, coupled with high gasoline prices, are crimping the spending Carney and Conservative Party Prime Minister Stephen Harper need to sustain growth.
Harper, 49, may call elections this week because he says Canada's minority-led Parliament isn't working. Liberal Party Leader Stephane Dion, head of the biggest opposition bloc, says Harper wants a vote now to try and win a fresh mandate before the economy worsens.
Household Spending
Already, growth in spending by households slowed for a second straight quarter from April to June to 0.6 percent on lower car and truck purchases, Statistics Canada said Aug. 29.
Rona Inc., Canada's biggest home-improvement retailer, said Aug. 12 that profit dropped for the third straight quarter as consumers reined in spending on renovation projects.
“The Bank of Canada is accepting the fact that growth is going to be pretty awful,'' BMO's Gregory said.
To be sure, slow growth doesn't change the bank's mandate of keeping inflation at 2 percent as often as possible and always between 1 percent and 3 percent. July's rate was the fastest since 2003, and the central bank says inflation will peak at 4.3 percent in the first quarter of 2009 before returning to 2 percent later that year.
Retail gasoline prices though have waned from a peak of C$1.39 ($1.30) per liter in mid-July to C$1.28 last week. Crude oil fell to a five-month low yesterday as energy firms prepared to resume production after Hurricane Gustav caused less damage than anticipated.
Inflation could slow faster than forecast, such as in 2003 when energy pushed the rate above 4 percent and it slowed to the bank's target within six months.
Team Financial Inc. CEO Robert Weatherbie resigned, effective Monday.
Weatherbie resigned from all positions with the company and its subsidiaries, Paola-based Team Financial (Nasdaq: TFIN) said in a release Tuesday.
“We extend our gratitude to Bob for his contributions to the company and the communities we serve,” Chairwoman Connie Hart in the release. “Bob was instrumental in growing the company from a small, local bank into a regional, publicly traded institution.”
Weatherbie joined TeamBank in 1973. He became a director and chairman of Team Financial in 1986 and its CEO in 1995. He was appointed president and CEO of TeamBank in 2004.
“I am proud to have been associated with this organization for over 35 years,” Weatherbie said in the release. “I have many fond memories of the customers and employees and wish them the very best.”
Weatherbie’s resignation comes in the wake of a recent examination by the Office of the Comptroller of Currency that declared Team Financial’s banks to be in troubled condition cash advance loans. The OCC determined that the banks had deficiencies in credit administration practices, loan-risk rating systems, loan-loss allowance methods and levels of classified assets.
The situation led Team Financial to add $4.7 million of goodwill impairment to $4 million in its provision for credit losses. The company then reported a $7 million loss in the second quarter, which ended June 30.
Team Financial has more than $807 million in assets.
Officials with Team Financial couldn’t immediately be reached for comment Tuesday.
South Korea will take “stern action'' to stem the won's decline and fears that the nation is facing a financial crisis are “groundless,'' Vice Finance Minister Kim Dong Soo said.
The won fell 0.2 percent against the dollar to the weakest since 2004 today, while the stock index rose from a 17-month low. Moody's Investors Service said South Korea won't face a repeat of 1997, when the nation was forced to turn to the International Monetary Fund for a $57 billion bailout and the currency lost about half of its value.
South Korea's currency has plunged 16 percent this year, Asia's worst performer, as price increases and a slowing economy prompted bond and stock funds to move money out of the country. Authorities have spent billions of dollars in reserves attempting to shore up the won after its drop stoked the fastest inflation in 10 years, threatening the economy's expansion.
“Korea is considered as a global, cyclical economy and as the world economies are teetering towards a recession scenario, that causes concern for investors,'' said Khiem Do, who helps oversee about $11 billion of Asian equities at Baring Asset Management (Asia) Ltd. in Hong Kong. “We have been underweight Korea in our regional funds. If it gets cheap enough, we'll be attracted to go back in again.''
The won weakened to 1,118.80 versus the dollar at 11:52 a.m. in Seoul. The Kospi index rose 0.4 percent to 1,420.69 after plunging 4.1 percent yesterday.
`Deeply Worried'
“The government is deeply worried about the won's drop, which has moved beyond fundamental reasons,'' said Kim, who chaired an emergency meeting on markets in Gwacheon today. “Investors should have no doubt about our ability to counter the movement.''
Pictet Asset Management Ltd. and Aberdeen Asset Management Plc are betting authorities will lose the battle to stem the won's drop. The nation's foreign-exchange reserves fell for a fifth month in August to $243.2 billion.
The slump in reserves “weakens the hand'' of the central bank, said Wee-Ming Ting, head of Asian fixed income in Singapore for Pictet, part of Switzerland's largest privately held bank for the wealthy. “We are short the won,'' he said, referring to positions that profit from further declines.
The nation's currency declined more than 7 percent in August, the biggest monthly drop since the Asian financial crisis a decade ago drove the nation to the brink of default.
“The rumor about a crisis is groundless, but we plan to strengthen monitoring in case external conditions deteriorate quickly,'' Vice Minister Kim said easy payday loans.
1997 Crisis
Reserves plunged to $7.3 billion in November 1997 as the government made an unsuccessful attempt to prop up the won after an exodus of foreign investors triggered by the collapse in the Thai baht. The government was forced to turn to the IMF for loans to help businesses repay overseas debt.
South Korea has amassed foreign currency since the region's crisis and is now the world's sixth-largest holder of reserves.
“Korean corporations and banks are much healthier than they were before the 1997 crisis,'' said Thomas Byrne, who helps determine Moody's sovereign credit ratings for Asia and the Middle East.
Still, a surge in South Korea's overseas borrowings and “heavy dependence of Korean banks on funding from the global capital market posed some degree of vulnerability,'' Byrne said.
External borrowings that mature in a year almost tripled to $175.65 billion as of June 30 from $65.9 billion at the end of 2005, official figures show. Of the total, $6.7 billion in government bonds held by foreigners is set to mature this month.
Overseas Investors
Foreigners turned to net sellers of Korean bonds in June and July for the first time this year, raising concern of further capital outflows as more government debt matures.
“We have already acquired money to pay for the government bonds that mature in September so there's no need for an increase in government bond sales for the repayment,'' Deputy Finance Minister Shin Je Yoon told reporters. “We forecast some of the foreign investment that matures will be reinvested.''
The $970 billion economy grew 4.8 percent in the second quarter from a year earlier, the weakest pace in more than a year. South Korea posted the largest current-account deficit in six months in July as the nation's imports increased.
“The market is likely to stay volatile for a while,'' said Lee Keon Hak, who manages the equivalent of $450 million at CJ Asset Management Co. in Seoul. “Concerns about slowing corporate profits and a potential credit squeeze are growing, and stock and currency markets are reflecting that.''
Offshore investors sold a record 25 trillion won ($22 billion) more Korean shares than they bought this year, stock exchange data shows.
A sudden slowdown in car sales in China and India is threatening to shrink the global auto market this year, promising tougher times for an industry leaning on the two most populous countries to pick up the slack in the West.
Early this year, industry executives had been optimistic that demand in the world’s second- and 11th-largest car markets would charge ahead, despite fallout spreading from the U.S. credit crisis.
But inflation, led by soaring fuel costs, and other economic problems have caught up with car consumption much faster than expected. In July, car sales in China rose 6.8 percent from the year before, the slowest pace in two years, while sales in India fell for the first time in about three years.
And while booming fuel and commodities prices have powered a faster-than-expected sales surge in resources-rich Russia, Brazil and the Middle East, that hasn’t been enough to make up for struggling demand almost everywhere else credit reports.
“China is almost three times the size of the Russian car market so for every 1 percent reduction in Chinese sales you need a Russian rise of 3 percent to offset that,” said Adam Jonas, auto analyst at Morgan Stanley.
“For now, Brazil and Russia are helping to soften the blow but we have still revised down our global growth forecasts throughout the year.”
Morgan Stanley now expects global car sales to decline 0.3 percent this year to 58.1 million vehicles after forecasting an expansion of 3.5 percent at the beginning of the year.
China will still account for much of the sales increase as its economy heads for a sixth straight year of double-digit growth, but with so much resting on that market, competition is set to intensify just as fast.
Powered by WordPress -- XHTML 1.0