Signs of global downturn

Indian Bank System Cut to Negative by Moody’s

Bloomberg

9 November, 20111

The outlook for India’s banking system was downgraded to negative by Moody’s Investors Service, citing concerns that global economic turmoil and a domestic slowdown may trigger more defaults and curb profitability.

“India’s economic momentum is slowing because of high inflation, monetary tightening, and rapidly rising interest rates,” said Vineet Gupta, a senior analyst at Moody’s in Singapore. “At the same time, concerns have emerged over the sustainability of the recovery in the U.S. and Europe, and the rise in the borrowing program of the Indian government, which could drain funds away from the private credit market.”

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Australia Mining Towns Boom While Cities Sag

Bloomberg,

9 November, 2011

Australian developers are stepping up projects in remote mining towns to profit from A$430 billion ($446 billion) of investment in natural resources as home prices in the biggest cities fall the most in two years.

Billionaire Lang Walker’s Sydney-based Walker Corp. is building a community of 919 homes in Gladstone, home to more than A$30 billion of coal-seam gas projects 530 kilometers (329 miles) north of Queensland capital Brisbane. Finbar Group Ltd. (FRI), based in Perth, is constructing a 293-unit complex in Karratha, one of the world’s remotest locales in Western Australia.

Demand for workers is outstripping the supply of housing in mining areas, pushing median prices in towns such as Karratha to more than double New York City’s. That contrasts with Australia’s eight capital cities, where prices fell 1.2 percent in the three months to Sept. 30, highlighting the dilemma of a two-speed economy where mining and related businesses boom while other industries lag behind.

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Maersk Sees Losses as Freight Rates Plunge

Bloomberg, 

9 November, 2011

A.P. Moeller-Maersk A/S said its container shipping line, the world’s biggest, will lose money this year, lowering a previous forecast of a “modest” profit as freight rates plunged.

Maersk Line posted a third-quarter net loss of 1.58 billion kroner ($293 million) compared with a profit of 5.9 billion kroner a year earlier, the Copenhagen-based company said today. Its parent, which also owns the Nordic region’s second-largest oil company, reported a profit that missed analyst estimates.

Freight rates are falling because the container shipping industry has added too many ships in anticipation of an economic recovery, spurring overcapacity. Maersk Line, which transports about 16 percent of the world’s manufactured goods by sea, said today that higher global container demand has not been able to offset oversupply.

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New ‘poverty standards’ enrage Indians