AIG's third rescue passes test

Major credit-rating companies have signed off on the latest revamp af American International Group inc.'s $ 150 billion resue package, people familiar with the matter say, removing the most immediate threat to the plan's implementation.

Both Standard & Poor's and Moody's Investors Services have quietly endorsed the terms of the revised bailout, which was negotiated over a period of months between AIG and US government offials, the people said.


Without the support of the credit tating firms, AIG would have faced crippling cuts to its ratings. The downgrades would likely have forced it to post billions n collateral on an array of financial contracts.

AIG sought the latest revision of the terms on the government aid after its plan to repay as much as $ 100 billion in assistance through asset sales failed. The company has blamed the financial critis-it fourth quarter loss in expected to exceed $60 billion-has also weakened its negotiation position with sutors.

American economy's fall is the deepest since 1982

The uS economy deteriorated far more than priviously thought in the fourth quarter, according to new revisions of government data, casting fresh doubt about the cances of a recover this year.


With falloffs in consumer spending and exports, gross domestic product declined ad a 6.2 % annual rat in the forth quarter of 2008 , according to a Commerce Department report . The agency's first estimate for GDP, reported in January, was for a 3.8 % decline

Besids the revised GDP, economic indicators for the first two months of the year point to a deepening recession-and the prospect of a dismal first quarter, too Every week in February , more than 600,000 people filed new claims for unemployment insurance, and the unemployment rate rose to 7.6 % in January, from 7.2 % in December.

India GDP grows 5.3% in quarter, slowest in years

India's economy grew at the slowest rate in almost six years, 5.3% in quarter ended dec. 31, signaling the global sownturn's impact even in a nation less dependent on exports than others in Asia.

The figures cast some doubt on predictions that India would escape relatively unscathed compared with market such as China and Singapore. Gross domestic product grew 8.9% in the same period the year before and 7.6% year-on-year in the previous quarter, the Central Statistical Organization said.

Recessions in key expot markets such as the US and Europe have prompted Indian exporters to cut production and lay off workers. Manufacturing output dropped 0.2% compared with rise of 8.6% in the year-earlier period. Capital in flows which played a big role in fueling local demand in recent years, have all but dried up as risk-averse investors shun emerging markets.

CHINA'S STIMULUS CHALLENGE

BEIJING-The annual meeting of China's parliament, which begins thursday, will reveal how far Beijing will go the support families hit by the economic downturn and to boost the nation's consumer spending.

The policier rolled out at the National People's congress session will be watched by the US and other countries that want China to help the global economy by awakening the spending power of its vast population. To do that, economists say, Beijing needs to invest more in health care education and social welfare, so people have the confidence to spend-instead of adding to savings.

China, the world's third_largest economy after the US and Japan, has seen its growth slow sharply in the past year, but its trade surplus remains high. China's trading parner hop the country will import more.

Despite the limited power of the legislature, its annual session is China's political event of the year, where major policies are discussed and announced. Expectations are high that Premier Wen Jia Bao and othe officials will make substantial new commitment to social programs.

Dream cars defy economic gloom in Geneva

A woman leans on a Frazer-Nash sports car


Geneva - Despite the crisis, automakers have not given up on selling dreams at the Geneva Motor Show, which opened this week with an array of eye-catching cars that are always shinier, faster, and ever more expensive

Geneva has always been a bit special, somewhere between the provincial and the chic," said Carlos da Silva, analyst at Global Insight.

Garish colours help to highlight the array of concept, sports and luxury vehicles, which are still one of the principal attractions for the 700,000 visitors expected during the show until March 15.

As the doors opened to the public, overcrowded trains were spilling visitors from around Europe into Geneva while roads to the exhibition hall were jammed.

Sports cars with prices above 100,000 euros (125,000 dollars), such as the new Lamborghini Murcielago LP 670-4 Super Veloce, inevitably capture minds in search of escape from economic gloom.

Crowds already pressed around the low slung, yellow sports car during the press preview, trying to imagine the effect of being slung by 670 horsepower to 100 kilometres per hour (62 mph) in 3.2 seconds.

The Murcielago is "more extreme and more exclusive than any other car," Lamborghini's chief executive, Stephan Winkelmann, claimed.

Not to be outdone, Aston Martin unveiled the One-77 sports car with a price tag of 1.0 million pounds (1.2 million euros, 1.4 million dollars).

Only 77 will be built and the company claims to have received queries from about 250 potential customers.

Aston Martin also revived the luxury Lagonda name with a brash four wheel drive vehicle on show in Geneva, to try to appeal to new markets in the Middle East, India and China.

"The Lagonda is the luxury car of the future," said Aston Martin Chief Executive Ulrich Bez. It might not be available for another five years.

Porsche claimed that its new 911 GT3 -- displayed in an evocative bright red -- is "more powerful" and "more efficient", while Ferrari sought some of the thunder with ever more sporting engines.

iMeanwhile, young men with feather dusters toured the stands to ensure the cars never lose their shine and wipe off finger marks, while "hostesses" handed out brochures or simply posed by the cars.

"They make us dream," said Marcello, a young Swiss visitor whose gaze was fixed intently on the vehicles.

Amid the dominant theme of fuel economy and environmentalism, the carmakers freely admit that they are trying to stir emotions as well.

"Cars are very important part of the human psyche, because they are symbols of pleasure and prestige," explained Simon Rochefort, the sales manager of US newcomer Tesla.

The Californian company was presenting its electric-powered convertible sports car in Europe for the first time, trying to combine the zero emissions of an electric motor with the thrill of a Lamborghini or Porsche -- and a 99,000 euro (124,000 dollar) price tag.

During a crisis "it's even more important to dream," said Frank Rinderknecht, owner of specialised Swiss firm Rinspeed, which presents a new and generally more outrageous concept car every year.

But this year Rinderknecht also sought to capture the mood of the moment by showcasing an array of environmental technology.

Even the elite end of the market is tentatively reaching out to the "ecologically correct".

Bentley is trying out biofuels, which pollute less but are controversial because of their impact on crops, food prices and the amount of energy it takes to produce them.

Bentley's chief executive, Franz-Josef Paefgen, admitted that the dreams might have reached their limits.

"It is a crisis that affects luxury cars as much as it affects other sectors," he remarked.

Asian budget airlines launch price war

Singapore - Asian low-cost airlines are offering dirt-cheap tickets to perk up travel during the summer holidays amid the global economic downturn.

Singapore-based Tiger Airways, which flies to destinations in Southeast Asia, Australia and China, announced Tuesday it would launch summer fares starting at about 16 US dollars, including taxes.

The carrier, which is 49 percent owned by Singapore Airlines, said in a statement it would offer its "biggest ever network of seats" and was adding new destinations for its summer schedule from March 29 to October 24.

"Tiger Airways is bucking the global aviation trend," the airline said, referring to declining passenger numbers for full-service carriers worldwide.

Rosalynn Tay, managing director for Tiger Airways Singapore, said the airline would "demonstrate that we will continue to grow our business even in these difficult trading conditions."

Jetstar Asia, another Singapore-based budget airline, said it had extended until August 16 a promotion to beat the cheapest price offered by rivals.

Under the promotion, should a traveller find another published online fare cheaper than the lowest available on www.jetstar.com, the airline will beat the price by 10 percent if the customer makes an instant reservation by phone.

"The current economy makes it a tough operating environment where competition will be intense and fares will be under pressure," Jetstar Asia's commercial head Leslie Ng said in a statement.

"People are going for cheaper fares as they become more cost conscious and want to get value for money deals."

Malaysian budget airline AirAsia also has its "take me away" promotion.

Among its offers is a one-way flight from Singapore to Bangkok starting from 43 dollars, inclusive of taxes, for travel from March 23 to September 11, according to its website.

Comparatively, a return flight to Bangkok on Singapore Airlines costs 337 dollars, inclusive of taxes.

AirAsia is also offering a number of tickets starting from 26 cents for travel within Malaysia.

Indonesia's Lion Air is selling a one-way trip from Singapore to Bali for as low as 5.80 dollars for travel from June 1 to September 30, according to its website.

Thailand's Nok Air is offering one-way fares for as low as 25 cents, excluding taxes and fees, for domestic flights for those travelling from May 15 to September 30, its website showed.

Info: AFP/Bangkokpost

Japanese workers demand pay rise

A trade union member holding a banner during a pro-workers' rally


Tokyo - Thousands of workers rallied at a Tokyo park on Saturday, demanding companies keep jobs and increase salaries to stimulate recovery from a deepening recession.

"Secure regular pay rises! Have serious talks with management about rises in consumer prices," Tsuyoshi Takagi, president of the Japan Trade Union Confederation, said in an address to kick-start the rally.

"If we accept their argument that there are no rises in prices, our work conditions will face big trouble ahead," he said.

Labour unions have argued salaries should be increased in accordance with price rises, on top of seniority-based annual pay rises.

Takagi said it was "nothing but outrageous" that some big companies were now considering skipping annual pay rises based on the length of service.

The confederation, better known as Rengo, is an umbrella organisation grouping trade unions across the nation with a membership of more than six million.

The workers who got together at the park in central Tokyo then marched in the capital with banners reading "Pay rise is the strongest economic stimulus" and "Never let workers get fired!".

Labour unions are in the middle of negotiations with management over salary scales for the fiscal year starting on April 1.

Japanese companies are struggling amid the worst recession in more than three decades and there is little hope that Rengo's demands will be met.

Firms have announced massive job cuts, shattering Japan's job-for-life myth.