The US job creation data, having come far weaker than expected, energy, metals and stocks are on a massive selloff mode
Dow futures are down by 200 points in premarket trade as global markets have entered a crash mode. The markets have been gripped by the fear of severe slowdown ahead. This is reflected in the commodity markets as well. Crude oil has crashed by 6% today which follows a huge down move in late April and early May. Natural gas has crashed by about 7%. Copper, Nickel, Lead and Zinc are all down by about 3%.
The global markets have been weak for the last couple of months now, but the crash today has come about because of extremely poor jobs data released today. According to the government data, the economy created far fewer jobs than expected.During May, payrolls expanded by only 69,000 as against projected growth of 150,000. Even April’s employment gain was revised sharply down to just 77,000.
Google's new product discovery experience will be called Google Shopping and its transition in the US would be on purely commercial model built on Product Listing Ads
New York: Google's free 'product search' would soon be a paid service in the US under which merchants and retailers will have to pay for listings of products, reports PTI.
"We are starting to transition Google Product Search in the US to a purely commercial model built on Product Listing Ads. This new product discovery experience will be called Google Shopping and the transition will be complete this fall," Google Shopping Vice President (Product Management) Sameer Samat said in his blog yesterday.
The new initiative seen as a step to boost company's revenue will in addition provide the customers a higher quality shopping experience.
"... Shoppers can easily research purchases, compare different products, their features and prices, and then connect directly with merchants to make their purchase," Samat said.
The service will be based on bid price and relevance giving the merchants and retailers a greater control over where their products appear on Google Shopping. Over a period of time they will also have the opportunity to market special offers.
The internet company has begun experimenting with some new commercial formats on Google.Com that will make it easier for users to find and compare different products.
These include larger product images that give shoppers a better sense of what is available and also the ability to refine a search by brand or product type.
These new formats would be labeled "sponsored," and take space currently occupied by AdWords. Users maybe able to view details regarding a product in one place and make a decision on the product and merchant of their choice.
"Google Shopping will empower businesses of all sizes to compete effectively, and it will help shoppers turn their intentions into actions lightning fast. The changes are a first step toward providing technology, tools and traffic to help power the retail ecosystem," Sampat said.
Team Anna says it has no faith in the CBI as the investigative agency is directly controlled by the prime minister and hence would not properly investigate its own boss
Even as the Central Bureau of Investigation (CBI) has started verifying the allegations of irregularities in the allocation of coal blocks to private companies between 2006 and 2009 and their misuse by them, Team Anna has said that this is mere eyewash and in the end, the prime minister would be given a clean chit.
"We have no faith in CBI investigating the Coalgate scam because the agency reports to the PM and is directly controlled by him. So by no stretch of imagination one can assume that CBI will be able to do a fair investigation against its boss. The outcome of such an investigation is already known-The PM will be given a clean chit at the end of the investigation," Team Anna said in a release.
"If PM is really honest why is he scared of independent investigation? Why does he want himself to be investigated by an agency directly controlled by him? These questions raise serious doubts in the mind of the people. We have been demanding setting up of a Special Investigation Team (SIT) independent of the government," it said.
Here is the Team Anna's rebuttal to PMO's clarification…
Allegations of corruption were made by Team Anna in the allotment of coal blocks especially during the period 2006-09 when the PM was handling the charge of coal ministry. The PMO has issued a seven-point clarification in this regard. It is unfortunate that this clarification is misleading and seeks to hide many critical facts.
It is being said that the government decided to introduce the concept of competitive bidding in 2005. However, according to the government, it is the consensus building for the proposed legislative amendments required to achieve that is what took so much of time.
This argument of the PMO is misleading as:
Between 2004 and 2006 there was a series of communication that happened between the ministry of coal (MoC) and the Department of Legal Affairs (DLA). The MoC wanted DLA's views on the way in which competitive bidding can be introduced as the mechanism for allocation of coal blocks. The law secretary repeatedly opined in July 2004, July 2006 and again in August 2006 that amendment to any existing Act (CMN or MMDR) is not a prerequisite to introduce competitive bidding for allocation of coal blocks. Therefore, introduction of competitive bidding was legally feasible for MoC. Despite this the MoC employed a screening committee route to allocate coal blocks till 2009. Why? Moreover, why did it take six years to build consensus on the amendment to the Act and pass it. So many Acts have been passed in days. In fact, it was the PMO which shot down the proposal for issuing an ordinance saying that there was no urgency.
PMO has given the following arguments for not opting for auction or competitive bidding:
a. It is being said that "Coal blocks were never looked upon as a potential source for generating revenue for the central government… Hence the question of maximizing revenue does not arise at all".
i. This appears to be the most specious argument presented by the PMO. It was not ordinary revenue that the government was foregoing. It is possible for different agencies to estimate this loss differently. However, CAG has estimated this loss as Rs1.8 lakh crore which certainly is not ordinary. Who took this decision to forego this revenue? The coal secretary kept on opposing allocation of coal blocks through the screening committee method. He wanted auctions. His opinion was repeatedly rejected by the PMO. Therefore the coal secretary was not a party to the decision to forego this revenue. So was this decision taken by PMO or the PM himself? Who in the PMO took this decision to forego revenue of this order? Does the PMO or PM have the power to take this decision? Is this decision recorded somewhere and can the minutes of this meeting be made public?
ii. The same argument was given by A Raja in 2G spectrum. This argument has already been rejected by the honourable Supreme Court.
iii. One fails to understand the internal contradiction in PMO's clarification. On one hand they say that it was decided to introduce competitive bidding in 2005 and the consultation process was started accordingly. Obviously the method of competitive bidding would have led to increase in revenue. So, in principle, they decided to maximize revenue. However, in practice they started allocating mines in an arbitrary manner foregoing revenues. So there seems to be an apparent contradiction in the policy decision and its implementation.
b. The demand for coal was increasing substantially, legislative changes would have taken a long time and therefore the Screening Committee was adopted.
This logic is far from truth. While up to 2005 total 75 coal blocks were allocated, this number went up to 145 from 2006 to 2009. Surprisingly, only one coal block has been allocated since 2010.
Is the PMO saying that the demand for coal was limited before 2005, increased suddenly between 2006 and 2010 and again came down to negligible after that. What are the factors that can explain such a trend in the economy?
According to the PMO-"Since the blocks are allocated to private companies only for captive purposes for the specified end use, the question of linking the blocks to the market price/CIL price of coal does not arise at all."
This argument is also misleading and factually incorrect. Earlier the policy of government was that coal blocks were given only to those companies which had captive requirements and only for their captive use. This policy was changed and it was decided to allocate coal blocks to even mining companies who would be required to have legal binding and enforceable supply contracts with subsequent end users. This clearly shows that these middlemen mining companies would make all the windfall gains. The government allocates coal blocks at a very cheap price with the hope that the benefit will go to the consumers. However, the mining companies don't do that. The mining company obtains coal blocks at throwaway prices from the government and provides coal to the end-user at market price thus making windfall gains. So it is not the consumer but the middleman mining company that benefits.
It is learnt that several companies which had no experience in steel, cement, power or mining were allocated coal blocks. Most of these coal blocks are yet to start production. In fact some of those companies which did not start coal production after receiving the blocks were subsequently again given more coal blocks despite their earlier violation.
How would the PM explain all these wrongdoings?
In this connection, pointed attention is brought to the following two extracts from the CAG report:
1. Audit observed that the procedure followed for allocation of coal blocks lacked transparency and it failed to arrive at the optimal price at which allocation of blocks should have been made. MoC had recognized (June 2004) that there was substantial difference between the price of coal supplied by CIL and the cost of coal produced through coal blocks allocated for captive mining and as such there was a windfall gains to the allottees.
2. The concept of competitive bidding was first made public by the government in June 2004 but was yet to be given effect to (Nov 2011). Competitive bidding would not only bring about 'objectivity' and 'transparency' in allocation procedure, but would also bring in revenue for the Government as part of the substantial windfall gains accruing to the allottees of captive coal blocks was to be tapped through competitive bidding.