Recession likely: Greenspan
A recession in the US remains a probability, former Federal Reserve chairman Alan Greenspan said in an interview published yesterday. Speaking to the Financial Times from Washington, Greenspan said he believed “there is a greater than 50 percent probability of recession.” He noted, however, that “that probability has receded a little.” The likelihood of a severe recession had “come down markedly,” but it was too soon to tell whether the worst was already over, he said. Greenspan estimated that house prices in the US would drop by a further 10 percent from their levels in February — a 25 percent drop from their peak, the Financial Times reported. “Such house price declines imply a major contraction in the level of equity in owner-occupied homes, the ultimate collateral for mortgage-backed securities,” he said.
HSBC head urges rate hike
The chief executive of Europe’s biggest lender yesterday called on central bankers to raise interest rates in order to combat inflation. Michael Geoghegan, group chief executive at London-based HSBC Holdings, said central banks were not yet committed to taming inflation, and predicted US interest rates would rise after the US presidential election in November. “Inflation is a long-term problem because there is no long-term will to solve it,” Geoghegan said during a speech organized by the Asia Society in Hong Kong.
Vodafone reports profit
Mobile phone company Vodafone PLC yesterday announced a return to full-year net profit from a loss the previous year, and said chief executive Arun Sarin would step down at the end of July. Sarin has held the top job for five years and will be replaced by his deputy, Vittorio Colao. Vodafone said net profit for the year to March 31 was £6.7 billion (US$13.25 billion) from a net loss of £4.9 billion a year earlier. Revenues increased 14 percent to £35.5 billion pounds, from £31.1 billion pounds the year before.
LG mum on acquiring GE
LG Electronics CEO Nam Yong said yesterday that General Electric’s plans to sell or spin off its appliance business has the potential to shake up the industry. “This could greatly impact the entire appliance industry,” Nam told reporters. “This might reshape the digital appliance market globally so we are watching very closely.” He was responding to a question about whether LG itself might be interested in acquiring the business. Asked again later, he reiterated that his company was monitoring the situation and said he could not comment further. Fairfield, Connecticut-based GE said earlier this month that it plans to sell or spin off its iconic appliance business that has sold refrigerators, washing machines and dishwashers for a century, part of a restructuring plan.
Electrolux to shift plants
Swedish home appliance maker Electrolux said yesterday it will close one of its refrigerator plants in Italy to boost competitiveness, citing the results of an internal review. Production of refrigerators at Scandicci, southwest of Florence, will relocate to the group’s plant at Susegana, impacting some 450 employees, the group said. Electrolux said it planned to help find “solutions to reduce negative impact on affected employees,” noting possibilities like outplacement services. Meanwhile the group was to invest in the Susegana plant about 45km north of Venice.