Chinese gold output surpassed SA in '07 After more than a century on the throne, South Africa has been deposed as the world's biggest producer of gold, with its estimated 2007 output, of 272 t, falling just short of the 276 t of the yellow metal produced by the new number one, China. South Africa had held the accolade of the biggest gold producer since 1905, but its ouput has been in steady decline since a peak of 1 000 t in 1970, GFMS chairperson Philip Klapwijk said. GFMS partly attributed the sharper-than-expected decline in South African ouput to safety-related mine closures, and the one-day industry-wide strike, held by the country's biggest mining union in December, which had knocked almost a ton of output off the country's total yearly production. According to GFMS estimates, global mine production contracted by about 1% in 2007, to 2 444 t.
When governments print money, buy gold "If you don't trust gold, do you trust the logic of taking a pine tree, worth $4,000-$5,000, cutting it up, turning it into pulp, putting some ink on it and then calling it one billion dollars?" The price of gold tells us a lot about ourselves. It holds up a mirror to the way we are governed, our economy and its prospects. It reflects not only the physical dangers of floods, famine, terrorism and war, but also the financial perils of systemic addiction to debt and budgetary incontinence. "The modern mind dislikes gold," said Joseph Schumpeter, "because it blurts out unpleasant truths." With gold trading at about $900 an ounce - more than 200 per cent higher than it was at the turn of the millennium - today's message from the bullion market is not comforting.
Bernanke endorses quick, temporary fiscal stimulus Congress could help steer the economy away from recession if it adopted a quick, efficient and temporary fiscal stimulus plan, Federal Reserve Chairman Ben Bernanke told Congress on Thursday. Bernanke made it clear he wasn't forecasting a recession, but said action by Congress, along with more interest-rate cuts from the Fed, could help prevent one. "Fiscal action could be helpful in principle, as fiscal and monetary stimulus together may provide broader support for the economy than monetary policies alone," he said in prepared testimony to the House Budget Committee. Quick action would be necessary. "You know central bankers are concerned about the economy when they condone stimulative fiscal policy,"
MBIA, Ambac Bond Default Risk Exceeds 70%, Swaps Show MBIA Inc. and Ambac Financial Group Inc., the two biggest bond insurers, have a more than 70 percent chance of going bankrupt, credit-default swaps show. Prices for contracts that pay investors if Armonk, New York- based MBIA or New York-based Ambac can't meet their debt obligations imply a 73 percent chance the companies will default in the next five years, according to a JPMorgan Chase & Co. valuation model. Ambac shares plunged 52 percent yesterday and rose 11 percent today to $6.94 in early trading on news the company was scrapping a plan to raise equity. MBIA dropped 31 percent yesterday and rose 0.9 percent in early trading today to $9.30. Credit-default swaps on the companies, which rise as confidence erodes, are trading at record highs.
Wall St execs collect $US33b bonuses The Wall Street gurus who presided over the subprime mortgage crisis currently shredding global sharemarkets have awarded themselves bonuses totalling $US33.2 billion ($38 billion). In a concession to the crisis - which has forced America's largest banks to write off billions in bad investments and raise billions more to shore up their capital reserves - the bonuses were down nearly 5 per cent on the previous year. The average bonus of $US180,420 ($206,088) in 2007 dipped 4.7 per cent from the previous year, New York state Comptroller Thomas DiNapoli said in a statement today. The securities industry rewarded $US33.2 billion in bonuses to its New York City employees, two per cent less than the record $US33.9 billion ($38.7 billion) in 2006, he said.
Sprint Nextel to cut 4,000 jobs Sprint Nextel Corp. on Friday said it would eliminate 4,000 jobs and close 8% of company-owned retail stores amid the loss of more key customers to rivals. The store closings and 6.7% reduction in Sprint's workforce represent the first major moves by new Chief Executive Dan Hesse, who was hired last month. The company has been hurt by a reliance on credit-risky subscribers mediocre customer service and a less attractive roster of handsets compared to competitors such as AT&T Inc., the exclusive provider of the iPhone. In the fourth quarter, Sprint said it lost 683,000 postpaid customers - even larger than Wall Street analysts expected. Postpaid customers sign up for annual plans and pay at the end of each month. They are considered the most valuable in the industry.
Zimbabwe bank to issue $10m bill Zimbabwe's central bank is to introduce new higher-denomination banknotes in an effort to ease the critical shortage of cash in the country. Zimbabwe has been in economic decline for the past eight years, with annual inflation widely thought to be in excess of 50,000%. The highest value note that will go into circulation on Friday is worth 10m Zimbabwean dollars. But that is worth less than US$3.90 (£2; 2.60 euros) on the black market. The introduction of the new banknotes, or "bearer cheques" as they are officially called, is a further attempt to stabilise the Zimbabwean economy. There have been long queues every day at banks as people have struggled to withdraw cash.
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