Friday, December 28, 2007

Greenspan says euro could replace U.S. dollar as reserve currency of choice

The Associated Press

Former U.S. Federal Reserve chairman Alan Greenspan said it is possible that the euro could replace the U.S. dollar as the reserve currency of choice.

According to an advance copy of an interview to be published in Thursday's edition of the German magazine Stern, Greenspan said that the dollar is still slightly ahead in its use as a reserve currency, but added that "it doesn't have all that much of an advantage" anymore.

The euro has been soaring against the U.S. currency in recent weeks, hitting all-time high of US$1.3927 last week as the dollar has fallen on turbulent market conditions stemming from the ongoing U.S. subprime crisis. The Fed meets this week and is expected to lower its benchmark interest rate from the current 5.25 percent.

Greenspan said that at the end of 2006, some 25 percent of all currency reserves held by central banks were held in euros, compared to 66 percent for the U.S. dollar.

In terms of being used as a payment for cross-border transactions, the euro is trailing the dollar only slightly with 39 percent to 43 percent.

Greenspan said the European Central Bank has become "a serious factor in the global economy."
He said the increased usage of the euro as a reserve currency has led, like in the case of the U.S. dollar, to a lowering of interest rates in the euro zone, which has "without any doubt contributed to the current economic growth."


Source: www.iht.com

Wednesday, December 26, 2007

Apple Shares Trade at $200 for 1st Time, Bolstered by Investor Confidence in IPod Maker

NEW YORK (AP) -- Shares of Apple Inc. hit the $200 mark for the first time Wednesday, as investor confidence in the company continued rising near the end of what has been a strong year for the iPod and computer maker.

In afternoon trading, shares rose $1.17 to $199.97. They earlier peaked at $200.

Apple shares have traded between $76.77 and $199.33 in the past year, rising steadily since January as investors anticipated and then cheered the release of the company's hybrid cell phone, multimedia player and wireless Internet device, the iPhone. The product went on sale at the end of June.

Apple released a refreshed line of iPods during the year, updating its flash-based Nano model to one that can play videos, and introducing a device called the iPod Touch which is much like an iPhone without cellular calling capabilities.

The company also refreshed its notebook computers during the year.

In a phone interview Wednesday, Caris & Co. analyst Shebly Seyrafi said he wasn't surprised that Apple hit the $200 mark.

"Apple has a lot of momentum right now," he said, noting the company is riding several new product cycles.

Seyrafi, who rates the stock "Buy" with a $225 price target, said sales of the iPod Touch and video-enabled Nanos are helping Apple's margins. Apple's component costs are benefiting from declines in NAND flash memory prices, he added.

"Looks like their business is strong even though retail sales growth in general appears to be weaker than in prior years," Seyrafi said.

Source: http://biz.yahoo.com/

S&P: U.S. Home Prices Fall Record 6.7 Percent in October; 23rd Straight Month of Deceleration

NEW YORK (AP) -- U.S. home prices fell in October for the 10th consecutive month, posting their biggest monthly decline since early 1991, according to the Standard & Poor's/Case-Shiller home price index.

The record 6.7 percent drop marked the 23rd consecutive month of price deceleration.
"No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim," said Robert Shiller, who helped create the index, in a statement Wednesday.

The previous record decline was a drop of 6.3 percent, recorded in April 1991.

The S&P/Case-Shiller home price index tracks prices of existing single-family homes in 10 metropolitan areas compared with a year earlier. A broader index of 20 metropolitan areas fell 6.1 percent. Among the 20 metropolitan areas used in the broader index, 11 posted record monthly declines.

Miami posted the largest decline among the 20 markets reviewed. Home prices in the Miami metropolitan area fell 12.4 percent in October compared with the same month last year, surpassing Tampa, Fla. as the worst-performing city. Tampa posted a year-over-year loss of 11.8 percent.

Besides those two cities, Detroit, Las Vegas, Phoenix and San Diego also posted double-digit year-over-year declines.

Atlanta and Dallas, which had previously been posting price appreciation, fell in October compared with a year earlier. Prices fell 0.7 percent in Atlanta and 0.1 percent in Dallas.

Only three areas -- Charlotte, N.C., Portland, Ore. and Seattle -- posted year-over-year home price appreciation in October, with Charlotte posting the largest gains at 4.3 percent.

All 20 cities in the broader index posted month-over-month declines, with San Diego posting the largest decline of 2.6 percent.

Source: http://biz.yahoo.com

Buffett's Berkshire Hathaway to Pay $4.5B for Controlling Stake in Marmon Holdings

CHICAGO (AP) -- Warren Buffett's investment company announced Tuesday it will pay $4.5 billion for 60 percent of Marmon Holdings Inc., a private company of more than 125 manufacturing and service businesses.

Berkshire Hathaway Inc., based in Omaha, Neb., said it plans to acquire the remaining 40 percent of Marmon over the next five to six years depending on future earnings of Marmon, according to a statement released Tuesday by both companies.

Marmon is owned by trusts for the benefits of the Pritzker family of Chicago, the family that developed the Hyatt Hotel chain.

The deal is expected to close in the first quarter of 2008. Before the closing, Marmon said it will make a "substantial distribution of cash and certain assets to the selling shareholders," according to the statement.

  


Brothers Jay and Robert Pritzker acquired Marmon in 1953 when it was a small manufacturing operation in Ohio, according to the release. In 2002, Jay's son Tom Pritzker took over as chairman.

"Our transaction was done just the way Jay would have liked it to be done -- no consultants or studies," Buffett said in the statement. "I am pleased that over the next five to six years, we will be partnering and working ... in continuing to build Marmon."

Billionaire investor Buffett is CEO and chairman of Berkshire Hathaway, which has more than 60 subsidiaries.

Berkshire Hathaway Inc.: http://www.berkshirehathaway.com/
Marmon Holdings Inc.: http://www.marmon.com/
Source: http://biz.yahoo.com/