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U.S. deficit to swell The Obama administration forecasts its federal deficit will surge this year to $1.65-trillion (U.S.), yet another sign of the growing debt troubles faced by the United States. The proposed budget being released today includes spending of $3.73-trillion. The Wall Street Journal notes the deficit would be the equivalent of 10.9 per cent of GDP, the heftiest since the Second World War, though the Republicans, wanting more in spending cuts, will probably change that.
President Barack Obama's plan is to cut the deficit by more than $1-trillion over the next 10 years. That includes a freeze on programs that aren't related to national security for five years.
Nonetheless, deficits through the government's 2021 fiscal year would add $7.2-trillion to the government's debt.
The administration is pointing to the fact that its plan lays out more fiscal prudence going forward, though, yesterday, House Speaker John Boehner said in a television interview that "we're broke."
China roars, Japan stumbles Don't let the noise over China surpassing Japan obscure some key data: Japan's economy contracted in the fourth quarter, by 0.3 per cent, as consumer spending fell off. Along with that is the fact that both exports from and imports to China are surging.
Official 2010 numbers today cemented China's standing as the world's second-largest economy, taking that silver medal from Japan. Japan's GDP was almost $5.5-trillion (U.S.), while China's surged to almost $5.9-trillion.
The contraction in Japan's GDP, while the first in more than a year, was still a better showing than economists had projected, and, noted Scotia Capital, the result of fading stimulus measures and weaker exports, which could prove temporary.
China's numbers, in turn, play into hopes for the global rebound, given that it is the engine of the world recovery and has a voracious appetite for commodities.
Growth in exports and imports doubled in January from December. And while some of that is seen as traditional volatility in advance of Chinese New Year - the February holiday is believed to have pulled some trade forward - it also showed "confidence among manufacturers about the prospects for global demand," said Mark Williams, senior China economist at Capital Economics in London.
Mr. Williams cited three factors:
- China is paying more for imports now, particularly commodities.
- There has been a surge in ireon ore imports after controls on steel production were lifted late last year.
- Helping to drive imports was an increase in demand for the processing trade, a leading indicator for exports.
"Imports for domestic use are still growing rapidly - implying that demand remains strong," Mr. Williams said. "But last month's acceleration in imports seems to owe more to manufacturers' perception that global demand is picking up than to developments at home."
British panel studies director quotas A British panel is studying the possibility of setting quotas for the number of women on corporate boards.
The committee, which Reuters reports is meeting today to discuss its final recommendations, is looking at proposing a two-year timeline for major companies to boost their levels, or else face quotas. Other proposals, according to the report, include voluntary targets.
Batista strikes Ventana deal With a higher bid, Brazil's Eike Batista has now struck a friendly deal to acquire Ventana Gold Corp..
Ventana and the company that is Mr. Batista's acquisition vehicle, AUX Canada Acquisition Inc., said they reached an agreement that calls for a higher offer of $13.06 a share, for a total of about $1.4-billion.
Ventana, based in Vancouver, holds assets in Colombia's booming mining market.
Apple said to plan smaller iPhone Reports today suggest Apple Inc. is working on a smaller, cheaper version of the iPhone, which the tech world has dubbed the iPhone Nano.
A new version of the smart phone, according to The Wall Street Journal, would be about half the size of the iPhone 4. It would also be about half the price, meaning it would be much cheaper for wireless carriers to subsidize what would be a mass-market cost. One of its code names, the newspaper said, is N97.
Apple is also studying expanding its MobileMe online storage program, the Journal said.
The newspaper quoted one person who had seen a prototype of the smaller iPhone model, which it said would be sold alongside existing models.
In Personal Finance today Before you buy in to the next trendy location, do your homework.
The Web is full of free tools and cheap software to keep questionable content off your computer.
Canada Revenue Agency compounded confusion about popular tax shelter, study finds.
From today's Report on Business