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Virtually slamming chief minister B S Yeddyurappa, governor HR Bhardwaj has rejected the nomination of ‘defector’ V Somanna to the Legislative Council.
Typically, central banks drain money from the system by raising benchmark interest rates and selling securities, but the scope of the crisis makes the latter difficult, analysts said.Once it completes its asset purchase plans, Bank of America-Merrill Lynch estimates the Fed will hold $1.25 trillion in Treasury, agency and private mortgage-backed debt.Letting maturing bonds run off would take a long time to shrink the Fed's balance sheet. There are plenty of smart guys there now, but they were there when the economy and markets fell apart, too."PITFALLS APLENTYThe first issue is timing -- when does inflation become enough of a concern and U.S. growth look sustainable enough to warrant the start of the Fed's exit strategy."Because there is no clear model or indicator on what tools to exit with, that is where the fuzziness is," said Rudy Narvas, senior analyst with 4Cast Ltd in New York. Bernanke told Congress on Tuesday that unemployment was likely to remain high into 2011, keeping consumer spending weak and economic recovery slow.He implied that means the Fed will keep interest rates at zero for some time yet and continue to inject money into the economy through purchases of government and mortgage debt.These unorthodox policies have ballooned the Fed's balance sheet and left the United States looking at a record $1.8 trillion deficit for the current fiscal year.INFLAITON OR DEFLATION?Alan Ruskin, international strategist at RBS Securities, said Bernanke's confidence likely stems from his belief that inflation is not a threat, at least for the next year or two."The debate is: are we facing a deflationary threat or an inflationary threat. "Even getting all the Fed members to agree at what point the economy is finally on a sustainable path to recovery will be very difficult."For now, that's not a problem.
Small Business | Crisis in Credit | EconomyBut even as they cheered his words, which triggered a bond market rally, investors still harbor doubts that Bernanke can quickly drain the trillions of dollars pumped into the economy during the crisis once a recovery finally takes hold."It will be incredibly difficult for the Fed to agree when an exit strategy is necessary," said Lena Komileva, head of G7 market economics at Tullett Prebon in London. (Reporting by Saqib Iqbal Ahmed in Bangalore; Editing byDeepak Kannan) Stocks. NEW YORK (Reuters) - Federal Reserve Chairman Ben Bernanke told the market just what it wanted to hear on Tuesday when he promised the central bank has the will and the tools to guide the economy out of recession without spurring inflation. "Similar to the first quarter, businesses continue to behesitant to release capital," Sinisgalli said. "As a result, wehad no million-dollar contracts in either the first quarter orsecond quarter of the year." Shares of the Atlanta, Georgia-based company closed at$16.50 Tuesday on Nasdaq.
Analysts on an average were expecting earnings of 10 centsa share, excluding items, on revenue of $58 million, accordingto Reuters Estimates. Excluding items, Manhattan Associates, which has beencutting jobs to reduce costs, earned 14 cents a share.Manhattan Associates, which counts Build-A-Bear WorkshopInc (BBW.N) and Urban Outfitters Inc (URBN.O) among itscustomers in the retail industry, said revenue dropped 35percent to $58.4 million Software license revenue slumped 79 percent to $4.1million Total costs fell 24 percent to $58.8 million. "Given our challenges forecasting license revenue in thefirst half of 2009 and the ongoing turbulence in the globaleconomy, we have suspended our earnings guidance for theremainder of the year," Chief Executive Pete Sinisgalli said ina statement. Net loss for the second quarter was $556,000, or 2 cents ashare, compared with net income of $9.1 million, or 37 cents,last year.
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