Microsoft Sets Rival to Google Apps

With a new package of online applications called Office 365 launching Tuesday, Microsoft Corp. is courting customers who have resisted running some of the company's most lucrative products: small- and medium-sized businesses.

If the Redmond, Wash., software maker succeeds with its online applications among those customers, it could tap into a new wave of growth for the venerable Office franchise, which is already used by more than one billion people world-wide, according to Microsoft.

The company also faces competitive issues: Google Inc. has won more converts to a rival set of online applications called Google Apps among small and mid-sized businesses than among large companies, according to analysts.

Office 365 includes the latest versions of Microsoft's familiar suite of productivity applications—Word, Outlook, Excel and others—combined with online versions of related software for server systems that most people never see. That includes Exchange for messaging, SharePoint for collaboration and Lync for conferencing and communication.

For roughly $6 per user a month, Office 365 customers will get the traditional Office applications, either accessing them through a Web browser or by installing them on their PCs. Microsoft will run all of the servers that manage the Office applications in its own data centers.

Even if they run the Office productivity applications, the targeted customers—which usually have 500 or fewer employees—have been especially reluctant to install and run Microsoft's Office server programs, in large part because of the costs associated with maintaining technology support staff and purchasing hardware.

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Innovation key to IBM's next 100 years

The company that invented and found applications for countless technologies is celebrating its first century.

IN a row of hospital incubators in Canada, a technological revolution -- some might call it a tiny miracle -- is being born. Using advanced stream computing software developed by IBM, doctors are developing an early warning system that will alert healthcare staff in advance when premature babies in intensive care are at risk of developing life-threatening complications.

The system is one example of the ways in which IBM, which celebrates its centenary today, is reinventing itself in an economy increasingly dominated by "big data".

During its 100 years IBM has played many roles, from manufacturer of coffee grinders and weighing scales to computer pioneer, inventor of the barcode and global business consultant. Although very different on the surface, these roles have one thing in common: goods and services that make businesses more efficient.

It's a guiding principle that is particularly apt to IBM's work with premature babies. Working with Carolyn McGregor at the University of Ontario Institute of Technology, IBM is developing software to analyse a constant stream of biomedical data (heart rate, respiration, temperature etc) gathered from hospital monitoring equipment.

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http://www.theaustralian.com.au/business/news/innovation-key-to-ibms-next-100-years/story-e6frg90o-1226076161568

Asia Stocks Gain as Yen, Dollar Slide on Stimulus

Asian stocks rose, with the region’s benchmark index set for its biggest two-day rally in a month, as Citigroup Inc. raised global profit estimates and Japan’s shrinking economy lifted chances for more stimulus. The yen and dollar fell against the euro for a fourth day. Silver rallied.

The MSCI Asia Pacific Index added 0.4 percent at 12:33 p.m. in Tokyo, extending yesterday’s 0.9 percent jump. Standard & Poor’s 500 Index futures advanced 0.1 percent. Japan’s currency fell to 116.57 per euro from 116.37 yesterday, while the Dollar Index lost 0.3 percent. The Singapore dollar and Malaysian ringgit both advanced 0.5 percent versus the greenback. S&P’s GSCI Index of 24 raw materials gained 0.2 percent, with silver surging 1.2 percent and oil climbing 0.3 percent in New York.

The Bank of Japan may face increased pressure to add stimulus after the economy shrank more than estimated following the March 11 temblor, while Federal Reserve Bank of St. Louis President James Bullard said the U.S. central bank may keep its monetary-policy unchanged until late this year. Singapore raised its growth forecast for 2011, while Citigroup predicted global per-share earnings may rise 18 percent this year.

“People are increasingly reassured that there’s plenty of liquidity to support markets,” John Praveen, the Newark, New Jersey-based chief investment strategist at Prudential International Investments Advisors, said in a Bloomberg Television interview. “The U.S. economy is going to rebound in the second quarter and interest rates are going to remain low. Reconstruction is going to be funded by public spending and the Bank of Japan’s additional stimulus.”

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http://preview.bloomberg.com/news/2011-05-19/yen-dollar-slide-on-record-stimulus-outlook-asia-stocks-silver-advance.html

Microsoft to buy Skype for $8.5 billion

It could be the most expensive call Microsoft Corp. has ever made.

In acquiring Internet phone service Skype for $8.5 billion, the technology giant is seeking new ways to make money as its core computer software business faces a growing threat from a new generation of powerful mobile devices.

But some analysts believe the Skype deal, Microsoft's largest ever, could become a multibillion-dollar dud, as it once was for EBay Inc. The online auction site acquired Skype for $3.1 billion in 2005 but then sold most of its stake in the phone service after failing to wring a profit from it.

"The question is, what's the point here?" said James E. Schrager, a professor of entrepreneurship at the University of Chicago Booth School of Business. "They seem to be buying an interesting company to which Microsoft doesn't really add anything."

In explaining the purchase, Microsoft said it would weave Skype's Internet and video calling services into its Windows smartphone, Xbox gaming console, and Office e-mail and document software, allowing users to more easily call their friends and colleagues. Microsoft said it hopes to extract more revenue from Skype by showing users colorful advertising as they make calls.

Wall Street investors were not convinced, however, and Microsoft's stock lost about 1% in regular trading, falling to $25.67. The stock is down 8% so far this year, while the technology market overall is sharply higher.

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http://www.latimes.com/business/la-fi-microsoft-skype-20110511,0,5652246.story

Microsoft Near Deal to Acquire Skype

Microsoft Corp. is close to a deal to buy Internet phone company Skype Technologies SA for between $7 billion and $8 billion—the most aggressive move yet by Microsoft to play in the increasingly-converged worlds of communication, information and entertainment.

A deal could be announced as early as Tuesday, people familiar with the matter said, though they cautioned that negotiations aren't yet final and a deal could still fall apart. Including Skype's long-term debt, the total value of the deal is about $8.5 billion.

Representatives for Microsoft and Skype declined to comment.

Buying Skype—a service that connects millions of users around the world via Internet-based telephony and video— would give Microsoft a recognized brand name on the Internet at a time when it is struggling to get more traction in the consumer market.

Microsoft has invested heavily in marketing and improving the technology of its Bing search engine. While it has made some market share gains over the past year, Google Inc. still dominates the search market with more than 65% of U.S. searches going through its site.

At a value close to $8 billion, the Skype deal would rank as the biggest acquisition in the 36-year history of Microsoft, a company that traditionally has shied away from large deals. In 2007, Microsoft paid approximately $6 billion to acquire online advertising firm aQuantive Inc. Many current and former Microsoft executives believe Microsoft significantly overpaid for that deal. But they are also relieved that Microsoft gave up on an unsolicited $48 billion offer for Yahoo Inc. nearly three years ago. Yahoo is valued at half that sum today.


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Google's $700 million entry into air fare search gets green light

Google's entry into the online travel sector was cleared for takeoff on Friday as the US Justice Department gave the green light to its $US700 million purchase of flight data company ITA Software.

The Justice Department's anti-trust division, however, extracted a number of concessions from Google and imposed conditions on the Internet search giant to allow the controversial acquisition to go ahead.

The proposed legal settlement, which will need the approval of a US District Court, requires Google to notably develop and license ITA's travel software to other companies.


Several online travel sites, including Expedia, Kayak and Travelocity, had sought to block the Google-ITA deal, claiming it would give Google too much control over the lucrative online travel market and lead to higher prices.

The Justice Department agreed that unless modified, the acquisition "would have substantially lessened competition among providers of comparative flight search websites in the United States."

But US deputy assistant attorney general Joseph Wayland said the proposed settlement "promotes robust competition for airfare websites by ensuring those websites will continue to have access to ITA's pricing and shopping software.

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http://www.smh.com.au/travel/travel-news/googles-700-million-entry-into-air-fare-search-gets-green-light-20110411-1da0j.html

Ford leads sales in March with fuel-efficient lineup

LOS ANGELES — March was another strong month for auto sales.

Ford sales jumped 19.2 percent to 212,777 from the same month a year earlier, pushing the automaker past General Motors to become the top seller in the U.S. auto market in March. Ford was helped by strong sales of its core Ford brand — up more than 28 percent.

Ford said its efforts to retool the company to produce more fuel-efficient passenger cars has paid off as gas prices have risen in recent months.

"Consumers are placing a high priority on fuel efficiency in every size and kind of vehicle," said Ken Czubay, Ford's sales chief.

In March, GM's sales rose 9.6 percent, to 206,621 vehicles, compared with March 2010. GM slashed its incentives and discounts during the month and that hurt its results.

Nissan said its March sales rose 26.9 percent to 121,141, the most it has ever sold in any month in America.

Chrysler reported U.S. sales of 121,730, a 31 percent increase compared with March 2010. It was Chrysler's highest sales for any month since May 2008. The company's passenger-car sales increased 46 percent.

Toyota attributed its 6 percent sales drop in March to reduced rebates. Auto-information company TrueCar.com said Toyota's incentives fell 23 percent from March 2010 and 11 percent from February.

Toyota officials tried to reassure customers that it will have adequate supplies of the Prius, which saw sales jump 52 percent in March. Production has resumed in Japan and shipments will be arriving soon, they said.

Other automakers reporting sales Friday included:

• Kia, with a 44 percent increase from March of last year. Sales of the new Optima midsize car were up 90 percent.

• Honda said sales jumped 23 percent. The subcompact Fit, which is made in Japan, led the way with a 49 percent increase.

• Hyundai reported a 32 percent sales jump and said sales of the Elantra compact more than doubled.

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http://seattletimes.nwsource.com/html/businesstechnology/2014663485_autosales02.html

$5 a gallon? Get ready, oil experts say

If gasoline prices approaching $4 a gallon are draining your wallet, brace yourself. Oil industry experts say gas prices could hit $5 a gallon — possibly before summer.

Blame the war in Libya and continuing unrest in other parts of the Middle East and North Africa, experts say.

The region produces 27 percent of the world’s oil.

Libya, which sits on the largest oil reserves in Africa, has almost totally stopped petroleum shipments as rebels battle troops loyal to Col. Moammar Gadhafi. The addition of international forces, including the U.S., could mean that the country will be embroiled in a protracted conflict that could keep oil fields offline much longer than previously expected, energy experts said.

In Yemen, embattled President Ali Abdullah Saleh pledged to step down more than a year early, but his refusal to leave immediately infuriated tens of thousands of demonstrators. Yemen is an important transfer point for global oil supplies.

“It’s creating a situation where we could see the price of oil go up to $150 a barrel and gasoline toward $5 a barrel,” said Phil Flynn, an oil industry analyst with Chicago-based PFGBest.

Prices are likely to be steeper in the city than other regions, Flynn said.

“In Chicago, the odds are higher because the summertime blends of gasoline are more expensive,’’ he said. “Our taxes are higher. So it is more likely that it’s going to happen here before it happens in other parts of the country.”

“Expect $5 a gallon gas by Memorial Day,” said Bob van der Valk, fuel price analyst with 4Refuel Inc., a Canadian fuel management firm.

When you also factor in the earthquake and tsunami in Japan, you have “the perfect storm” that will push prices up, he said.

The average price of unleaded regular gasoline in Chicago was $3.75 a gallon Tuesday, up 69 cents from a year earlier, according to AAA, Wight Express and the Oil Price Information Service. It’s 38 cents a gallon higher than a month ago. At some locations in the city, prices already are above $4 a gallon, according to Gasbuddy.com.

Nationally, the average price is $3.55 a gallon — and rising.

“It’s going to be $4, the average price, within the next two weeks with everything that’s going on in Libya,” van der Valk said.

U.S. pump prices will eventually hit record highs, he predicted.

According to AAA, $4 gas prices haven’t been seen since 2008. Alaska holds the record for an average high of $4.69 reached July 24, 2008, according to the auto club.

Oil prices, which have spiked in the last month, pushed as high as $105.18 a barrel Tuesday. At the close of the day, crude settled at $104.97 a barrel, up $1.88.

Van der Valk noted that crude is up about $6 a barrel from Friday. For every $1 increase in the price of crude oil, drivers can expect a 2œ- cent increase in the price of gasoline and diesel fuel, he said. The increases in crude oil prices over the past weekend have not yet been passed along to consumers at the pump, he said.

The spike in oil prices is making it more costly to travel by air. United and Continental airlines are raising fares on many U.S. routes $10 per round trip, a spokesman for the airlines confirmed Monday.

U.S. airlines have raised fares at least six times this year as they try to offset rising jet fuel costs. The last attempt failed when other airlines decided not to follow American Airlines when it raised prices earlier this month, also by $10 per round trip. Cheap seats will be harder to find this year, said Rick Seaney, chief executive officer of travel website FareCompare.com.

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http://www.suntimes.com/business/4457988-460/5-a-gallon-get-ready-oil-experts-say.html

Queensland offers million dollar holiday in new competition

A humble Aussie butcher shop has as much chance of bagging a million dollar holiday package to the sunshine state as a global multinational, Tourism Queensland says.

The tourism body is dangling the million dollar trip for one business or company anywhere in the world to rekindle tourism in the state.

The contest could be dubbed the digital version of "in 25 words or less" as business have to submit a 60 second (or less) video on why they should receive the prize.

Premier Anna Bligh said companies or workplaces with as few as three people were eligible to enter Million Dollar Memo to win the luxury Queensland holiday package, which targets global incentive travel for employees.

"The incentive travel market is a multibillion dollar market internationally and it is also a growing market, particularly in major developed countries where high-skilled people are increasing demand and companies are competing all the time to keep the best people," she told reporters on the Gold Coast on Friday.

"Tourism Queensland currently attracts some $380 million from that market but we think we can do considerably better.

"When employers all around the planet are thinking how can I best reward my staff, we want Queensland to be one of the destinations on the top of their list, not just now but forever."

Ms Bligh said a small company with just a handful of employees has just as much chance of winning the million dollar package as a huge global corporation that can sink tens of thousands of dollars into a slick video production.

"I think when you go to things like YouTube, the things that capture global imagination are often those that are the most amateur because they capture something very human," she said.

"When you're looking for the X-factor, anybody can have it anywhere, so big slick productions won't necessarily capture what we're looking for."

The competition is now open to any company or workplace with three or more employees in Australia and right around the world, with entries being taken online at www.milliondollarmemo.com.

Tourism Queensland boss Anthony Hayes said he had no idea how many entries might be attracted to the competition, which has been 18 months in planning and follows The Best Job in The World.

"We ended up with 35,000 video entries for The Best Job in The World, but this is different ... so we really have no idea," he said.

"We have a very large bank of staff lined up ready to dedicate the next month or two of their lives to watching one minute videos."

The Million Dollar Memo competition closes on May 1.

The contest then enters three phases with a top 50 short-list which will be culled to a final 20 companies.

The top 20 will send a representative to Queensland to compete in an incentive challenge in unique locations throughout the state from August 23.

Website visitors can also vote for their favorite entries to be given a wildcard spot in the final and the overall winner will be announced on August 31.

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http://www.smh.com.au/travel/travel-news/queensland-offers-million-dollar-holiday-in-new-competition-20110318-1bzu9.html

World briefs

SUICIDE ATTACK KILLS 33: A suicide attacker blew himself up Monday in an army recruiting center in the northern Afghanistan province of Kunduz, killing 33 and injuring 40 others, officials said. The bombing — aimed at young men who were seeking to join the army — was the latest in a wave of insurgent attacks in Kunduz, where Afghan security forces are scheduled to assume responsibility for security later this month. Among the dead were three army officers; the rest were civilians, including four street children, he said.

POLITICAL CHANGE: Chinese Premier Wen Jiabao on Monday endorsed political change as a worthwhile goal — as long as it doesn’t happen too soon and is closely supervised by the Chinese Communist Party. The comments immediately set off conjecture about whether Wen was stepping back from what was widely interpreted as support for reform last year in an interview he gave to CNN. But knowing whether Wen’s comments signaled an actual change in his approach — or, even whether he had been truly advocating reform last year — was all but impossible to tell. The Chinese government reveals almost nothing of its deliberations.

HAITI CANDIDATES UNFAZED: Haiti’s two presidential candidates on Monday dismissed concerns that the apparently imminent return of exiled former President Jean-Bertrand Aristide would disrupt the election, despite a U.S. State Department warning he could be a destabilizing presence. Candidate Michel Martelly, a singer, said Aristide should postpone his arrival until after the election. Mirlande Manigat, a university administrator and former first lady, expressed no misgivings.

RENAULT AGENT ARRESTED: A security agent for Renault has been charged with fraud and accused of inventing industrial espionage claims that led the French carmaker to wrongly suspect — and suspend — three executives, the state prosecutor said Monday. The company quickly sent a deep apology to the wrongly accused employees and said it would return them to their jobs or provide an indemnity.

ABBAS CONDEMNS KILLING: The Palestinian president, Mahmoud Abbas, expressed abhorrence Monday about the killing of five members of a family in a Jewish settlement in the West Bank. The emphatic condemnation, delivered over Israel’s public radio, came after Israel criticized the Palestinian leadership for what it considered to be an initially mealy-mouthed response. “This act was abominable, inhuman and immoral,” Abbas said in a rare interview with Israel Radio, conducted in Arabic.

ATTACKS ON TOURISTS CRITICIZED: A robbery and assault on three gay American tourists at their vacation cottage has St. Lucia officials scrambling to assure visitors that the southern Caribbean island is safe and welcoming for gay people. Tourism Minister Allen Chastanet issued an apology Monday to three men from Atlanta after masked bandits broke into their mountain rental home in Soufriere. One victim said the gunmen made slurs against gays, white people and Americans during the March 3 assault.

JOURNALISTS DEPORT: Armed Yemeni security forces raided an apartment shared by four Western journalists Monday and deported them because of their coverage of a growing uprising against the country’s longtime ruler, one of the reporters said. The journalists, two Americans and two Britons in their 20s, contribute to the Wall Street Journal, the Los Angeles Times and others.

FLOODING IN BRAZIL: Floods in southern and southeastern Brazil have forced about 31,000 people to leave their homes, authorities said Monday. Three people have died in landslides triggered by the rains. One person remained missing.

RUSSIA POSTPONES FLIGHT: Russian officials have postponed the March 30 launch of a rocket carrying a U.S. and Russian crew to the international space station because of a communication problem found during testing. The new launch will probably be in April.

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U.S. millionaires say $7 mln not enough to be rich

A million dollars ain't what it used to be.

More than four out of ten American millionaires say they do not feel rich. Indeed many would need to have at least $7.5 million in order to feel they were truly rich, according to a Fidelity Investments survey.

Some 42 percent of the more than 1,000 millionaires surveyed by Fidelity said they did not feel wealthy. Respondents had at least $1 million in investable assets, excluding any real estate or retirement accounts.

"Every person in the survey is wealthy," said Sanjiv Mirchandani, president of National Financial, a unit of Fidelity. "But they are still worried about outliving their assets."

The average age of respondents was 56 years old with a mean of $3.5 million of investable assets. The threshold for "rich" rose with age.

"They compare themselves to their peer group ... and they are also thinking about the long period they will have in retirement and want more assets" to fund their lifestyle, said Michael Durbin, president of Fidelity Institutional Wealth Services.

Still, millionaires are slightly more optimistic now than they were in 2009, when 46 percent did not feel wealthy.

Respondents were also more optimistic about the U.S. economy. While they thought the current U.S. economy remained very weak, they think it will improve by the end of this year.

Fidelity noted the wealthiest 5 percent of Americans hold more than 55 percent of the nation's wealth.

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http://www.reuters.com/article/2011/03/14/uk-fidelity-survey-idUSLNE72D03820110314

Bank of Japan injects record $182 bn on quake fears

TOKYO: Japan's central bank injected a record 15 trillion yen ($182 billion) into the short-term money market Monday, in an attempt to build confidence after a devastating earthquake and tsunami.

"We will take every possible measure, including providing liquidity, to ensure the stability of financial markets and smooth settlements (of business deals)," a bank spokesman said. The bank will provide an additional 3 trillion yen Wednesday.

The priority of the central bank is to ensure financial institutions in disaster-hit regions do not run out of funds. Over the weekend it provided them with 55 billion yen to ease the pressure.

Monday's move was the first time since May, when European sovereign-debt fears pushed up the yen steeply and weighed on Tokyo shares, that the central bank injected same-day funds to boost confidence.

The BoJ said it stands by to do whatever necessary to keep stability in the markets and financial system.

Its two-day policy board meeting previously scheduled for Monday and Tuesday would now be cut short and conclude on Monday, seen as a sign it may quickly implement further measures.

Prime Minister Naoto Kan has warned that Japan is ready to take firm action against speculative trade, signalling his authorities may intervene in currency markets to bolster the yen if needed.

The yen briefly touched a four-month high before easing against the dollar on the massive liquidity injection Monday as markets responded to the natural disaster.

It briefly surged to 80.60 against the dollar, the highest since November 9, before retreating to 82.15 and held relatively steady despite a fresh explosion at the Fukushima nuclear plant Monday.

The government expects a "considerable" economic impact from the huge earthquake and devastating tsunami that plunged the nation into what Kan called its worst crisis since the Second World War.

It faces a huge challenge in financing the mammoth rebuilding task that will be required in the aftermath of a disaster whose economic impact is widely expected to be at least as bad as that from the 1995 Kobe earthquake.

Japan's public debt is the industrialised world's biggest at around 200 percent of GDP, and the nation's credit rating was recently downgraded on concerns that not enough is being done to address it.

Yet the disaster is seen to place yet more pressure on the debt-pile.

Stocks saw a post-quake sell-off with carmakers, banks and electronics firms taking a hit on fears for the economy as power shortages prompted rolling blackouts and plants remained closed in quake hit areas, hitting production.

Engineers are battling against the risk of meltdown at a stricken nuclear power station, while the death toll from the quake and the resulting wall of water that tore into parts of the northeastern seaboard is expected to surpass 10,000.

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http://economictimes.indiatimes.com/markets/global-markets/bank-of-japan-injects-record-182-bn-on-quake-fears/articleshow/7698998.cms

Facebook Could ‘Become a Credible Threat to Netflix,’ Says Goldman Sachs

NEW YORK - Facebook's decision to test digital movie rentals and purchases with Warner Bros. is no immediate threat to Netflix's streaming service, but creates a new potential longer-term online video competitor, Goldman Sachs analyst Ingrid Chung said Tuesday.

"Facebook’s foray into pay-per-view does not impact our Netflix estimates," she said in a report. "However, Facebook represents a new potential entrant that few in the investment community were concerned with prior to this announcement, so we believe it does indeed represent an incremental negative for Netflix shares."

She added that Facebook "could some day become a credible threat to Netflix."

For now, Facebook seems to position itself as a pay-per-view platform, "which is more of a threat to other forms of VOD (such as iTunes or Amazon)," Chung said. She added that the social networking site "lacks content, does not have wide distribution across devices that connect to the living room TV, has few people on the payments platform and does not have an incumbent business that is under threat from increasing online video viewership."

Longer-term, it could become a challenger and concern for Netflix, she argued, citing Facebook's more than 500 million active users, compared with Netflix’s 20 million subscribers.

"The “wisdom of friends” could be a bigger driver of movie viewership than the “wisdom of crowds"," Chung also said. Plus: "We believe that many of the issues outlined above could be fixed over time, including the gap to the living room TV."

Netflix shares had opened lower on Tuesday following the Facebook-Warner Bros. news.

Goldman earlier this year invested $450 million in Facebook.

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http://www.hollywoodreporter.com/news/facebook-could-become-a-credible-165335

China promises sweeping economic change

China is promising an economic overhaul that would raise the status of consumers and entrepreneurs. But it has given no sign how it will tackle its politically volatile reforms.

Premier Wen Jiabao says Beijing wants to nurture self-sustaining growth driven by consumption and service industries. He made the comments in a weekend speech outlining this year's goals.

Achieving those goals will require cutting subsidies for state companies and other changes that might trigger a backlash within the Communist Party.

The changes could drive China's evolution from low-cost factory into a major consumer market. That might help to narrow a yawning wealth gap and ease tensions over China's trade surplus by boosting consumer demand for imports.

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http://www.businessweek.com/ap/financialnews/D9LPK5KO0.htm

Aussie home prices world's most-overpriced: survey

Australian house prices remain the most overvalued in the world, according to the latest quarterly ranking of global house prices by The Economist magazine.

Based on a historical gauge of home prices to rents between 1975-2010, the magazine estimates that Australian residences are 56 per cent over-valued, exceeding the 54 per cent over-priced rate in Hong Kong and 48 per cent in France.

“There may be good reasons for Australian prices to have risen so far, but people made similar, and ultimately incorrect, arguments for the run-up in prices in the West,” The Economist said in a statement accompanying the survey's release.

The report may stoke debate on whether Australia's property market is a bubble waiting to pop.

The Economist's survey of 20 countries follows recent house price data released earlier this week which shows capital city value fell nationally by 1.6 per cent in January, a result of higher interest rates and floods in Queensland and Victoria deterring buyers.

Australia's city home values fell 1.6 per cent, seasonally adjusted, to $465,000 after rising 0.2 per cent in December, according to RP Data-Rismark figures. Outside of the major cities, they fell by 1.2 per cent in the month.

Countering the concerns over a bubble, however, is the on-going weakness in housing construction. Figures out yesterday showed new building approvals slumped in January by the most in more than eight years, although much of the drop may reflect disruption caused by widespread flooding in the month.

Setting the pace

The Economist also noted that while Australia's economy had outperformed most in the developed world in recent years, the recent surge in house prices may be hard to justify.

“In the years before the financial crisis, Australia's economy set a hard, fast pace for the rest of the Anglo-Saxon world,” the article in The Economist said.

“Its house prices rose faster than Britain's or America's (although Ireland's outstripped them all) and its current-account deficit gaped wider for longer. But its economy proved strong-livered."

"(Australian) house prices fell from March 2008 to March 2009 (as measured by the weighted average of the eight state capitals), then resumed their rise," the magazine said. "In the year to the first quarter of 2010, they jumped by 18.8 per cent!”

The Economist suggests the best way to limit the damage from a property bust is for regulators to exercise direct control over the amount of debt available to property owners and developers.

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http://www.smh.com.au/business/aussie-home-prices-worlds-mostoverpriced-survey-20110304-1bhhy.html?from=smh_sb

Oil moves back above $100 a barrel

Production at Libya's Brega oil complex has dropped by almost 90 percent amid the country's crisis because many employees have fled and few ships are coming to offload the product.

SYDNEY – Oil futures again broke through the $100 a barrel mark in electronic trading on Wednesday, as violence in Libya and the surrounding region sparked fears that unrest will spread.

Benchmark Nymex light sweet crude oil futures rose 72 cents or 0.7% to $100.25 a barrel.

Oil prices climbed nearly 3% in regular New York trading on Tuesday amid ongoing political uncertainty in the Middle East and North Africa.

“As Libyan oil supplies and exports remain severely disrupted, market sentiment remains on a precarious edge, as fears of contagion remain widespread,” analysts at Barclays Capital said.

Protests in Oman and fears about the exit of foreign oil-producers, as well as a recent reported attack on a major Iraqi refinery, are also expected to worry investors.

“While Oman is not a large oil producer, the involvement of foreign oil companies is substantial and on the rise. Any severe outbreak of violence may lead to a similar exit of the international oil companies as witnessed in Libya, thereby threatening the long-term production profile of Oman,” analysts at Barclays Capital said.

“Iraq is also facing increasing domestic violence, with the attack on the Baiji refinery likely to curtail domestic product supplies for some time,” they added.

The analysts also pointed to potential longer-term implications for the region from the recent turmoil.

“We see the unrest in this region as being particularly negative for foreign investment in the longer term, which could effectively result in the loss of incremental volumes and a slowdown in exploration drilling,” the Barclays Capital analysts said.

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http://www.marketwatch.com/story/oil-moves-back-above-100-a-barrel-2011-03-01

Asia stocks tumble on Mid East tensions, oil up

(Reuters) - Oil prices jumped a dollar and Asian stocks slipped on Monday as spreading tensions in Libya and other oil-producing regions encouraged some profit taking after last week's solid gains.

Brent crude oil futures and U.S. crude futures both vaulted around $1/bbl to $103.50 and $87.31 per barrel respectively, while gold prices inched higher, adding to last week's gains of nearly 3 percent.

Anti-government protesters rallied in Tripoli's streets at the weekend, tribal leaders spoke out against leader Muammar Gaddafi, and army units defected to the opposition as oil exporter Libya endured one of the bloodiest revolts to convulse the Arab world.

Beijing's latest move to tighten policy in the form of banks' required reserve increases saw Shanghai .SSEC and Hong Kong .HSI stocks take a tumble with lenders leading declines.

The MSCI's index of Asia Pacific shares outside Japan .MIAPJ0000PUS eased by 0.3 percent after advancing 2.5 percent last week, its best weekly performance in two months.

"There are few buying or selling cues in the domestic market. Investors will likely stay alert to geopolitical news that could affect markets across the world," said Hikaru Sato, a senior technical analyst at Daiwa Securities Capital Market.

"The Middle East continues to be a focus, while there are concerns about China."

While some stock markets across the region have somewhat recovered after a sharp selloff in the opening weeks of 2011, analysts say selling pressure may intensify if tensions in the Middle East escalate further.

Asia-ex Japan equity funds saw the biggest weekly outflows in the second week of February since the first quarter of 2008, data from fund tracker EPFR Global showed.

Moreover, concerns that a breathtaking rally in U.S. stocks in recent weeks, which has boosted the region's developed markets such as Australia .AXJO and Tokyo .N225 may be nearing a close, also weighed on sentiment.

U.S. markets are shut on Monday for a public holiday.

China's benchmark short-term money market rate soared more than 300 basis points on Monday after Beijing on Friday raised required reserves for banks by 50 basis points to a record 19.5 percent.

FX VIEW BRIGHTENS

The foggy outlook for equities in the near term is in sharp contrast to the view emerging in the region's currency markets, where analysts are calling for more gains.

Barring the baht, yen and the rupee, all other Asian currencies have posted substantial gains so far this year, indicating authorities are allowing more currency strength to tackle inflation.

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http://www.reuters.com/article/2011/02/21/us-markets-global-idUSTRE71H0EB20110221

Japan eclipsed by China as world's second economy

TOKYO — Japan surrendered its 42-year ranking as the world's second-biggest economy to China in 2010, after data Monday showed a fourth-quarter contraction caused by weaker consumer spending and a strong yen.

While Japan was expected to fall behind a surging China in the year, the data underlined the weak state of a Japanese economy burdened by deflation, soft domestic demand and pressured by the industrialised world's biggest debt.

"It is difficult for the deflation-plagued Japanese economy to achieve self-sustained growth," said Naoki Murakami, chief economist at Monex Securities.

While China's leap forward reflects a shift in economic power as the country transforms itself from poverty-hit communist state to global heavyweight, it highlights the need for Japan to re-energise its economy, analysts said.

Its post-war "economic miracle" put it at number two behind the United States for 42 years, but stagnation after its property bubble burst in the 1990s helped put booming China on course to supplant it this year.

However, Japan remains around 10 times richer on a per-capita basis, according to the International Monetary Fund.

Japan's real gross domestic product slipped by an annualised 1.1 percent in the October-December quarter as the expiration of auto subsidies hit car sales, a new tobacco tax sapped cigarette demand and a strong yen hurt exports.

While the first contraction in five quarters was not as severe as analyst expectations of a 2.4 percent slide, according to a Dow Jones Newswires poll of economists, Japanese GDP data is subject to constant revision.

The economy grew 3.9 percent in 2010, government data showed -- its first annual growth in three years. But this was not enough to keep it ahead of surging China.

Nominal GDP of $5.474 trillion in 2010 put it behind China's $5.879 trillion, the data showed.

Despite Japan crawling out of a severe year-long recession in 2009, its recovery remains fragile with deflation, high public debt, weak domestic demand and a strong yen all concerns for policymakers.

Last month Standard & Poor's cut Japan's credit rating one notch to "AA-" from "AA", saying the government lacked a "coherent strategy" to ease a debt running near 200 percent of GDP, the highest of any developed nation.

Nearly a third of government spending is being swallowed up by a social security system catering to a rapidly greying society, Standard & Poor's warned, with that ratio set to rise without reforms as Japan continues to age.

Prime Minister Naoto Kan's centre-left government has prioritised social security reform and a tax system overhaul, but has seen his approval ratings tumble and the opposition has so far refused to begin talks on the issue.

Private consumption, accounting for about 60 percent of Japan's GDP, slid by 0.7 percent on-quarter in Oct-Dec as subsidies for green car purchases expired and as cigarette sales were dented by Japan's biggest ever tobacco tax hike.

Exports slipped in the quarter as the Japanese yen surged to 15-year highs against the dollar, making Japanese goods more expensive overseas and eroding repatriated profits.

But many analysts expect the economy to rebound in the January-March quarter as the rising tide of global recovery lifts Japan, amid a recent pick up in corporate spending and exports.

"The contraction will not last long," said Murakami. "Companies' manufacturing activities are recovering rapidly in January-March this year from their bottom in October 2010."

The government said Japan's economy would be helped by recovery elsewhere and could reap the benefits of its huge neighbour China, the world's number-one export market.

"We welcome, as a neighboring nation, that China's economy is advancing rapidly," said Kaoru Yosano, minister for fiscal policy.


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Ecclestone backs Williams F1 flotation

Patrick Head talks to Frank Williams during a grand prix practice session. The pair co-founded the team, which is due to be listed on the Frankfurt stock exchange, in 1977.

Formula One supremo Bernie Ecclestone has thrown his support behind the Williams team’s plans to float on the stock market.

Williams F1 announced on Wednesday that it had launched an initial public offering (IPO) of almost 30% of its shares on the Frankfurt Stock Exchange. The company is offering the majority of co-founder Patrick Head's stake at a price of between £20 and £24 per share, valuing Williams Grand Prix Holdings at approximately £225 million.

Williams F1 is the first Formula One team to list on a stock exchange, but co-founder Sir Frank Williams will retain his position as majority shareholder and team principal.

“I have known Frank Williams for more than 40 years,” Ecclestone told Autosport. “He has always run a very efficient organisation. He has never wanted to be taken over by either a car manufacturer or a large company.”

Ecclestone added: “He has supported Formula One in many ways most of his life, as has Patrick Head. We want more Franks and Patricks. If I could buy shares in the company I would.”

Team chairman Adam Parr said: “We have spent the past few years working to ensure a long-term future for the sport. Having accomplished this, the time is now right to assure Williams' own future as an independent constructor, in this rapidly evolving industry.”

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http://www.sportbusiness.com/news/183008/ecclestone-backs-williams-f1-flotation

Tightest Corn Stocks in 15 Years Good for Prices

The corn futures market got a big boost yesterday morning when the USDA released supply and demand estimates indicating lower U.S. corn ending stocks for 2010/11 and higher usage of the commodity. Ending stocks are projected 70 million bushels lower this month with higher expected food, seed, and industrial use of corn, and corn used for ethanol is projected at 50 million bushels higher.

After a 23 cent jump in March corn futures to just 2 cents shy of $7 a bushel, market analyst Jim Riley from Riley Trading in Brookston, Indiana told HAT there could be follow through strength in the corn market another one or two days.

Riley says there is one caveat though. “We might not get that because we’re in new territory by closing with higher markets on corn across the board. When you get in new territory on price charts you haven’t got anything to shoot at.”

The corn carryout number is the tightest in about 15 years. That very tight stocks situation coupled with good export and ethanol demand, and already recording those new contract highs, means a strong corn market throughout the coming weeks is quite likely.

“We are in a very tight situation,” Riley explained, and “the only thing that can make this look different is a very good early planting season and a lot more acres of corn. We definitely need at least 6 million more acres of corn. Whether we’ll get it or not, or what they’ll tell us we’re going to get is the question. But I do feel like soybeans and wheat are going to be cheated on acres.”

Soybean carryout in the February report stayed the same. Riley said some analysts were shocked by that.

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http://www.hoosieragtoday.com/wire/news/00086_rileycornfeb_222953.php