Hillary Clinton promises to 'strongly support' Obama

Hillary Clinton will declare her strong support for Barack Obama’s White House bid and rally supporters around him, she said in a letter on Thursday, drawing the curtain on a gruelling 16-month nominating fight that badly split the Democratic Party.

Clinton will publicly back Obama on Saturday and pledge to work for party unity in the general-election race against Republican John McCain.

"On Saturday, I will extend my congratulations to Senator Obama and my support for his candidacy," the New York senator and former first lady said in a letter to her backers released early on Thursday morning.

"I have said throughout the campaign that I would strongly support Senator Obama if he were the Democratic Party’s nominee, and I intend to deliver on that promise."

Clinton confirmed she would hold an event in Washington on Saturday to thank everyone who had backed her campaign. The event was originally planned for Friday but the day was switched to allow more supporters to attend.

"This has been a long and hard-fought campaign, but as I have always said, my differences with Senator Obama are small compared to the differences we have with Senator McCain and the Republicans," she said in the letter.

"I will be speaking on Saturday about how together we can rally the party behind Senator Obama. The stakes are too high and the task before us too important to do otherwise."

Clinton has not decided whether to officially close the campaign or suspend it, allowing her to keep control of her delegates to the nominating convention, aides said.

Clinton spent much of Wednesday talking to supporters, many of whom urged her to halt her bid now that Obama has clinched the nomination. Obama attended two fund-raising events in New York City on Wednesday night and acknowledged her decision.

"Your junior senator from New York engaged in an extraordinary campaign," he told attendees at one fund-raiser.

"Now that the interfamily squabble is done, all of us can focus on what needs to be done in November."

Indian Railways not to hike freight rates - Lalu

State-run monopoly Indian Railways will not raise passenger and freight rates despite a steep increase in government-set fuel prices, Railway Minister Lalu Prasad Yadav said on Thursday.

The railways transport the bulk of ore, coal and petroleum products in the country, and any hike in rates would bump up prices and add to inflation that is currently running at 3-½ year highs.

It transported 795 million tonnes of freight in the year to March 2008.

The fuel price increase will cost the railways 5.6 billion rupees for the remaining ten months of the fiscal year to March 2009, the minister said in a statement."Railways have decided to absorb the diesel price hike by improving its productivity, efficiency and volumes," Yadav said.

The government-set retail price of diesel, the fuel used in trains, was hiked by 9.5 percent, or 3 rupees a litre, on Wednesday. The railways consume 2.27 billion litres of diesel annually, Yadav said.The railways would look at reducing freight rates further to compete against trucks and boost earnings by gaining more traffic, Yadav added.

Transporters raise rates to pass on fuel price hike

Transporters are raising freight rates to pass on the fuel price hike, but with inflation looming, operational efficiencies need to kick in, officials said on Thursday.The government raised petrol and diesel prices the second time this year by about 10 percent to curb losses at its state-run refiners. The move sent the BSE benchmark index to its lowest close in two months on accelerated inflation concerns.

Crude oil prices have risen over 30 percent this year to break a crucial $130-a-barrel level two weeks ago, bumping up Asian jet-fuel prices by more than half."Fuel constitutes 50-60 percent of the total cost, therefore, this time it will be difficult for logistics companies to absorb the hike," Vineet Agarwal, executive director of Transport Corp of India Ltd, said.

Transport Corp will raise freight costs by 3-4 percent immediately due to the lean season for the business, but will eventually raise rates by 5 percent, Agarwal said."As 70-75 percent of our customers operate on a contractual basis, the hike will be passed on to them immediately."

"The freight rate will go up like anything because of the increase. It will impact every commodity," said S.M. Jalan, managing director of trucking and warehousing services firm, TCI Hi-Ways.Elbee Express, movers of high value goods by road and air, has also raised prices by an average 35-40 percent, said Nikhil Shah, executive director.

Blue Dart Express, Gati and DTDC Courier & Cargo, in which Reliance Capital owns about 40 percent, also operate in the express delivery space."We are improving efficiencies and trying to drive down our dependency on fuel through route management and fuel efficient vehicles," Elbee’s Shah, said.

Container transporters are trying to decrease their dependency on road transport and move cargo via trains and coastal shipping.

"Trucking will be used as the last mile connectivity," Sudhir Rangnekar, managing director of Sical Logistics, said.

"This will give a fillip to other transportation means."

Will inflation soar as cash supply swell by 16%/year

"Inflation is purely and exclusively a monetary phenomenon," reports the Mogambo Guru for The Daily Reckoning.

By itself, that doesn’t mean all that much. But it becomes much more horrifying when Hamilton adds that Money of Zero Maturity in the United States has been zooming skywards.

In case you were wondering, Money of Zero Maturity (MZM) is considered to be a reasonable proxy for watching the movement of M3, which is the broadest measure of the money supply, which is important because inflation in the money supply means that inflation in consumer prices is coming our way.

More money equals higher prices. Simple.

Now that we have the academic stuff out of the way, the truly horrifying part of it all is when Mr. Hamilton says, "Absolute annual MZM growth peaked at a staggering 16.7% in March 2008", and that "Bernanke’s Fed has been ramping money-supply growth so fast that actual MZM is starting to look parabolic even on a short-term chart.

"In just over 2 years under him, MZM has ballooned 25.1% unchecked!"

Apparently, Hamilton mistook the look of sheer, paralyzing horror on my face at this revelation of such a massive expansion of the money supply (because it will lead directly to inflation in consumer prices) to be mere confusion on my part. Helpfully, he reiterated for my benefit:

"You read that right. There were 16.7% more US Dollars available for spending this March than last! Sooner or later all this excess money will eventually bid up prices. Some of this inflation will be perceived as good, primarily the part that flows into stocks. But the part bidding up scarce food and energy is not going to make Americans very happy."

Hamilton goes on to say that these rates of growth in the money supply "defy the imagination. At 12% growth compounded annually, it only takes 6 years for something to double. At 16%, this drops to well under 5 years. If the Fed doesn’t stop this madness, there could be twice as many dollars floating around in 5 or 6 years as there are today.

"Even with modest economic growth, this means general price levels would probably almost double."

Prices that double in five years? Yow!

"And," he adds, "this inflation is totally above and beyond all the supply-and-demand-driven global commodities bulls’ increases!"

And it is all because of – as I never seem to tire of saying – the over-creation of money by the Federal Reserve. But Martin Hutchinson of The Bear’s Lair figures that I am too narrow and provincial, and writes that apparently I am too stupid to realize that there is monetary insanity everywhere, and that "other countries have also been expanding their money supplies excessively, too.

"The European Central bank has allowed Euro M3 to expand by 11.1% in the three months to March 2008, following an increase of 11.5% during 2007. As in the United States, this increase is much faster than that of nominal GDP, and it had been continuing for several years, with annual growth rates of 7.4% in 2005 and 10.0% in 2006.

"Of the major emerging markets, China and India have both been operating expansionary monetary policies and now have considerable inflation problems. Vietnam, too, has been surprised in spite of its rapid growth by inflation surging towards 25%."

Yikes!

Even more bad news is that "the Reuters CRB commodity price index is up 24% since September 18th last year," which means that prices are rising alarmingly, while this is at the same time as incomes are falling, as evidenced by "earnings in the financial sector, representing more than 40% of total US earnings before the crisis hit, have essentially disappeared in the last two quarters."

Yikes!

I know firsthand what it means to have income disappear, mostly as a result of my pathetic "cry for help" of stupidly cashing my paycheck and somehow spending it all on drinking and gambling during one short weekend that is now mostly a big blank in my mind.

When I got home and discovered that we had no food or money to buy any, the crap I had to take from my family over the next few months – and occasionally reminisced about to this day – was memorable, to say the least, and so I can only imagine the screaming and yelling and crying when "40% of total US earnings" disappears! Yow!

And I can only imagine the screaming, yelling and crying in the retirement sector, as all retirement funds take huge, huge freaking whacks and people learn, once again for the zillionth time in history, that investing in the stock market over the long-term is, at best, a loser for the majority of investors, and a loser for everybody at the worst, and all because of inflation in the money supply and the inflation in prices, which is the reason for my crying.

Mr. Hutchinson ignores my crying and blubbering about the horror of inflation – now starting to devour us – and callously increases my horror by saying, "In the United States, the producer price index increased 6.9% in the year to March, while that for crude goods increased more than 30%.

"Like a bowling ball swallowed by a python, that inflation will move through the economic system and eventually be reflected in consumer prices. Indeed, it may already be showing up there; the seasonally unadjusted consumer price index for March was up 0.9% (an annual rate of around 11%) and only a heroic seasonal adjustment of 0.6%, double the next largest seasonal adjustment for any month in the last ten years, brought the figure down to an acceptable 0.3%."

If Oil rises to $200, how will we cope with it?

The Union Government has at last announced the inevitable, a hike in diesel and petrol prices by Rs 3 per litre and Rs 5 per litre respectively. This is the second hike in a span of four months. On February 14, 2008 the price of petrol were hiked by Rs 2 and that of diesel by Re 1 a litre.

The move was necessitated to bail out the public sector oil companies that are suffering huge losses on account of selling fuel below cost.

The crucial issue to be debated is not whether the government is justified in increasing the price at this stage which Prime Minister Manmohan Singh is going to do tonight for the first time.

The most important issue is whether the nation can meet its fuel requirements at reasonable prices if crude oil prices move to $200 levels per barrel as predicted by some experts. What would be the resultant impact of such a price rise on several other commodities and the economy as a whole?

Speculation apart, demand-supply fundamentals don’t support lower prices of crude oil from the present levels.

This means that the nation should find an alternative to heavily subsidizing the fuel prices that would lead to large budgetary deficits.

The high cost of crude should make the policy makers think of other alternatives, for example increasing the content of ethanol by even higher levels rather than depend too much on fossil fuels.

The rising prices of crude is a reminder that the nation should look at investment in research and development (R&D) on alternative fuels or more oil exploration within the country’s reserves.

Both the industry, research institutions and scientistic community should garner their resources to invest in alternative options of energy.

Prime Minister Manmohan Singh indeed had a point when he said that high subsidies on oil cannot continue. The prospect of oil moving to $200 is more frightening than the recent hikes in petrol and diesel prices announced by the government.

Search for the blazing-hot new commodity

If you thought the big money in commodities had run its course, think again. Right now, a desperate search is underway to locate supplies of the world’s newest commodity.

It’s so scarce that dealers won’t reveal to anyone where they score their supplies. But thanks to my inside contact, I’ve discovered the inside scoop. Now it’s your turn to get there first and easily triple your money!

I’ve recently identified this unique “black market” commodity situation, and if you are one of the first to jump on this opportunity you could see your investment grow exponentially. Allow me to explain…

You see, the blazing-hot commodity I’ve uncovered is in a brand-new part of the raw materials sector is desperate to get a hold of… but simply can’t find a healthy enough supply.

The little-known commodity is vital to many multibillion-dollar corporations’ bottom lines. Names like BHP, La Forge and Rio Tinto all stand to lose billions of dollars each month if they can’t replenish their supply NOW!

The Commodity Crisis You Won’t Hear About on CNBC

You’ve heard about skyrocketing oil prices, and $2,000 gold predictions. In short, we are in the middle of a massive global commodity boom.

But this new crisis is one few have heard about. This precious information has been kept under wraps by these companies because of the fierce competition for their dwindling supplies. In fact, the shortage of this commodity is getting so critical, industry insiders fear a dangerous black market is looming.

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Secret Location Revealed!

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The fantastic news is that the company I just uncovered is set to make a killing and could deliver early investors a 127% gain in the next few months.There’s just one catch: My contact made me promise that this sensitive information only be shared with my loyal readers. I just put the finishing touches on a confidential profit report that details this highly lucrative special commodity situation.

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This won’t be the first time a commodities stock has delivered huge gains. In fact, commodities stocks have been on fire for the past two years:

Consol Energy (CNX:NYSE), the No. 1 play on coal mining, skyrocketed 140% since the beginning of 2006!
Freeport McMoRan Copper & Gold (FCX:NYSE) shot up 119% since 2006!
Kaiser Aluminum Corp. (KALU:NASDAQ) jumped 65% since 2006!
Randgold Resources Ltd. (GOLD:NASDAQ) exploded returning a hefty 200% since 2006!
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Your Last Chance to Receive This Urgent Information

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Some domain names are risky

When surfing the internet for safe websites, not all domains are equal. Companies that assign addresses for websites appear to be cutting corners on security more when they assign names in certain domains than in others, according to a report to be released on Wednesday by antivirus software vendor McAfee Inc.

McAfee found the most dangerous domains to navigate to are ".hk" (Hong Kong), ".cn" (China) and ".info" (information).
Of all ".hk" sites McAfee tested, it flagged 19.2% as dangerous or potentially dangerous to visitors; it flagged 11.8% of ".cn" sites and 11.7% of ".info" sites that way. A little more than 5% of the sites under the ".com" domain - the world’s most popular - were identified as dangerous.

More spammers, malicious code writers and other cybercriminals can establish an online presence when domain name registry businesses cut requirements for registering a site in order to boost their profit and profile.

The report doesn’t identify domain name registration companies McAfee believes are responsible for those lapses.

Hundreds, perhaps thousands, of companies are in the business of registering domain names; some are large and well known, while others are small and less reputable, offering their services on the cheap and with flimsy or no background checks to lure in more customers.

The fact that internet scam artists gravitate to domain name services with lower fees and fewer requirements isn’t new. What McAfee’s ’Mapping the Mal Web’ report, now in its second year, tries to do is identify the domains that are populated with the highest concentration of risky sites.

The servers for ".hk" and ".cn" websites don’t have to be in China; website operators can register sites from anywhere to target different geographies.

New cure to prevent HIV-AIDS

Topical oestrogen can stop the spread of HIV by preventing the virus from infecting men when applied to the penis, a new study has claimed. Researchers at Melbourne University have found that the application of oestrogen to the human penis increased the thickness of the natural keratin layer on the skin, which can prevent HIV infection in men, the PLoS journal reported.

According to them, the epithelium of the human penis is richly supplied with oestrogen receptors, which suggests it could respond to topical oestrogen.

"We have found a new avenue to possibly prevent HIV infection of the penis. Keratin on our skin acts as a barrier to viral infection. We hope to enhance this protection with the use of a naturally, occurring weak oestrogen," Prof Roger Short, who led the study, said.

The Melbourne University team analysed tissue samples from 12 foreskins to make the discovery. Topical oestrogen was applied to the human foreskin for a two-week trial, the result being a rapid and substantial increase in keratin thickness.

"Our study suggested that oestrogen could induce a thickening of the keratin layer of the foreskin epidermis in the same way as it acts in the vagina," said co-researcher

Prof Andrew Pask.

According to Prof Short, HIV is on the rise particularly in countries where males are not circumcised. "In countries where circumcision is not religiously or culturally accepted, oestrogen treatments to the penis could be very effective in reducing the spread of the disease," he said.

Crude tremor may send inflation over 9% mark

Fuel price hike may push inflation close to double digit. With sharp increase in prices of petroleum products, economists say inflation is bound to cross a 13-year high of 9%, from the current level of 8.1%.

"It could cross 9% in the near-term owing to the hike in petrol and diesel prices," HDFC Bank chief economist Abheek Barua said. Besides, the base effect is also not favourable as the inflation is being calculated at the lower base, he added. The base effect relates to inflation in the corresponding period of the previous year, when it remained almost flat.

Petrol price was on Wednesday hiked by Rs 5 per litre, diesel by Rs 3 a litre and cooking gas by Rs 50 a cylinder. Petroleum secretary M S Srinivasan said that the hike could lead to about 0.5-0.6% rise in inflation rate. Petrol and diesel prices, which have gone up by 11% and 8.5% respectively, will increase the inflation rate by about 0.3%, while LPG cylinder would add 0.2-0.3% to the rate.

Besides, there would be cascading effect of diesel price rise on commodities in due course of time by way of higher transportation cost, resulting in further pressure on inflationary expectations.

According to Crisil’s principal economist D K Joshi, headline inflation could definitely cross 9% in the week to come when data would capture the oil price hike.

Echoing the view, Lehman Brothers India economist Sonal Varma said "we expect inflation to cross 9% in the coming weeks". Referring to cascading effect of diesel price hike, Barua said that in the next three to four months the second round of impact would be visible, which could increase the rate of inflation by another 0.3%.

"It would be in the form of rise in freight charges, leading to increase in prices of many commodities like automobile, FMCG, fruits and vegetables, iron and steel," he said.

Last week, FM P Chidambaram had said that any increase in administered prices of petrol would have moderate inflationary impact in the short term, but its effect on prices in the long term could not be predicted as there would be a cut in expenditure under some heads as well. Petrol has a weight of 0.88%, while diesel has a weightage of over 2% in the Wholesale Price Index, on the basis of which inflation is calculated.

Inflation figures are released with a lag of around two weeks. As such, the impact of petroleum price hike would be reflected in the official data to be announced on June 20

Indian teacher in maths big league

Original research in mathematics is rare in India but a schoolteacher inspired by the legendary Srinivasa Ramanujam has won accolades for extending two complex theorems of geometry by his sheer grit and genius.

Shri Ram Gupta’s contribution is now being appreciated not only by NCERT, HRD ministry and Limca Book of Records but also by the American Mathematical Society.

Otherwise, Gupta, 59, had been happily teaching at a Kendriya Vidyalaya in Jhansi for over three decades. The teacher’s works on Menelaus’ theorem and cyclic polygons theorem have led to their extension to bring about approximate generalizations. A theorem is good when its applicability is universal and he always felt there was something amiss in both postulates.

"For 10 years or so, I’d think about these theorems day and night. I felt there was something amiss. This doubt prompted me to keep exploring. I was successful in generalizing them for higher geometric shapes," Gupta told TOI after he had made a presentation of his second theorem at NCERT on Tuesday.

Submitted to the American Mathematical Society on July 24 last year, the work was acknowledged by it as "extension" of Menelaus’ and cyclic quadrilateral theorems. The citation by Limca Book says that Gupta "developed original theorems and registered them with the ministry of HRD on April 12, 2005".

For his second theorem, the teacher even coined a new phrase — "interior alternate angles" — in place of "apposite angles" because by using interior alternate angles, the theorem has been proved and generalized for any even-sided cyclic polygon.

Gupta was interested in the study of Menelaus’ theorem (named after the Greek mathematician) from the beginning and he was intrigued by the fact that the nature of all rectilinear figures was approximately the same. This led him to develop his postulate. Rectilinear figures refer to triangles and other geometric shapes containing any number of sides. The second theorem, however, came to Gupta more as "random thought" about the symmetric nature of cyclic hexagons (a geometric figure with six sides).

In mathematical parlance, the work done by Gupta can be classified as a major achievement because of their "generalization strength", a crucial aspect of establishing a postulate. His work, which can be used by architects in planning projects, is also the first ever copyright in geometry.

"Mathematical research is languishing in India. Most young people now go for job-oriented courses and basic science suffers. I wish more attention was paid to basic research. This would also help establish the hidden Indian talent on the international stage," Gupta said.

Children 'happier with grandparents'

Bringing up a kid is no child’s play. But if you want your offsprings to grow up happier, get your mom and dad to raise them, for a study has revealed that children grow up happier under care of grandparents.

Researchers in Britain have found that grandparents can help young children because they often have more time to spend with them than working parents, and they are also good at solving their problems and discussing their future plans.

In addition, grandparents can help keep children calm during crises such as their parents’ divorce, the study found.

The researchers from Oxford University and Institute of Education, London, came to the conclusion after analysing a survey of 1,500 kids in Britain, The Daily Telegraph reported.

"What was especially interesting was the link between involved grandparents and adolescent well-being. Closeness was not enough: only grandparents who got stuck had this positive impact on their grandchildren," lead researcher Ann Buchanan of Oxford University was quoted as saying.

Can Gold counter inflation & currency fluctuations?

The real value of gold is not that it provides a quick, speculative fix, but that it can provide a sure and steady means of protecting wealth and enhance the consistency of returns.

With gold’s role as a portfolio diversifier, a hedge against inflation and exposure to the dollar, there are several compelling arguments for investing a portion of one’s portfolio in the yellow metal.

Most investment portfolios are invested primarily in traditional financial assets such as stocks and bonds. The reason for holding diverse investments is to protect the portfolio against fluctuations in the value of any single asset class. Portfolios that contain gold are generally more robust and better able to cope with market uncertainties than those that don’t.

Adding gold to a portfolio introduces an entirely different class of asset. Gold is unusual because it is both a commodity and a monetary asset and is an effective diversifier because its performance tends to move independently of other investments.

Independent studies have shown that traditional diversifiers such as bonds often fail during times of market stress or instability. Even a small allocation of gold has been shown to significantly improve the consistency of portfolio performance during both stable and unstable financial periods. Gold can improve the stability and predictability of returns. The performance of gold is not correlated with other assets because the gold price is not driven by the same factors that drive the performance of other assets.

Gold is often cited as being an effective hedge against fluctuations in the US dollar, the world’s main trading currency. If the dollar appreciates, the dollar gold price falls and similarly a fall in the dollar relative to the other main currencies produces a rise in the gold price.

In a recent study by leading metals consultancy GFMS Ltd, the strength of the link between twenty-two commodities and the US dollar was examined. The results clearly suggested that not only is gold a more potent hedge against the dollar than other commodities, but also that protection is provided when most needed (when the dollar is losing value), with relatively little upside foregone during a period of dollar appreciation.

Like all physical commodities, gold is an asset that bears no credit risk. Holding assets in the yellow metal involves no counterparty and is no one’s liability. In addition to that, the physical properties of the metal make it an excellent alternative to money.

Gold is durable. Unlike many of the other commodities examined, other things remaining equal (i.e. assuming no changes in price), there is no depreciation in the value of gold, other than any storage costs that might apply. Gold is fungible. It is, at least in theory, infinitely divisible with virtually no losses (other than any operational costs the process might incur).

Furthermore, gold has a high value to volume ratio, which makes it easily transferable, with low transport and storage costs. Moreover, gold is one of the deepest commodity markets with the highest levels of liquidity, second only to oil.

The purchasing power of gold has not diminished since Biblical times. According to the Old Testament, during the reign of King Nebuchadnezzar, an ounce of gold bought 350 loaves of bread. Today, an ounce of gold still buys 350 loaves.

The value of gold therefore, in terms of real goods and services that it can buy, has remained remarkably stable. In contrast, the purchasing power of many currencies has generally declined. There is a growing body of research to bolster gold’s reputation as a protector of wealth against the ravages of inflation. Market cycles come and go, but gold has maintained its long term value.
So gold is often bought to counter the effects of inflation and currency fluctuations. In fact extensive research from a range of economists has consistently shown that, in spite of price fluctuations, gold has consistently reverted to its historic purchasing power parity; and during periods of financial, economic and social turmoil, gold has been a safe refuge when the value of other assets was all but destroyed.

In volatile and uncertain times, we often witness a ‘flight to quality’, as investors seek to protect their capital by moving it into assets considered to be safer stores of value.

Gold is among only a handful of financial assets that is not matched by a liability. It can provide insurance against extreme movements on the value of traditional asset classes that can happen in unsettled times.

Some recent examples of the refuge afforded by gold include:

In 1997/98 the Government of South Korea asked its citizens to allow it to buy their gold holdings in exchange for local currency debt instruments. The Government raised over five million ounces of gold in this way which it sold for hard currency. As a result it was able to service its external debt.

Fearful of the implications of the forecast electronic and communications disaster surrounding Y2K, there was a flight to gold in 1999.

The first quarter of 2002 saw a flight to gold by Japanese investors as they awaited the withdrawal of government guarantees on bank deposits.

Gold’s liquidity is one of its critical investment attributes. Gold can be traded around the clock in larger size, at narrower spreads and more rapidly than many competing diversifiers or mainstream investments.

Sensex closes at 15, 769, up 255 pts

Bombay Stock Exchange benchmark index Sensex finally closed Thursday in the green by closing at 15769.72, breaking a three day losing streak.

Earlier, the 30-share benchmark index opened at 15,479.65 points and touched a high of 15,814.80 before closing at 15,769.72 points. It went up by 254.93 points or 1.64 percent compared to its closing figure Wednesday.

The S&P Nifty index of the National Stock Exchange, which opened at 4,586.95 points, closed at 4,676.95. It went up by 91.35 points or 1.99 percent from its previous close.

The markets started on a firm note tracking mixed Asian markets and stayed just about in the positive zone until early afternoon. Then a spurt by punters during late trade saw the markets close with a substantial gain.

The BSE Midcap index, which closed at 6,400.29 points, went up by 2.92 points or 0.05 percent.The BSE Smallcap index, which closed at 7,735.59 points, went up by 15.33 points or 0.20 percent.

Oil price burden: PM asks ministers to cut expenses

Rising oil prices and inflation rate have prompoted India’s Prime Minister Manmohan Singh to ask his ministerial colleagues to curtail their official spending and embrace austerity.

Prime Minister Singh’s letter to his ministers on Thursday came after the government decision to hike the fuel prices created a political opposition in the country.

In the letter, the prime minister asked the minister to be "aware of the huge burden imposed on our financial resources due to the continuously rising trend in global oil prices and our dependence on import of crude."

"As we initiate steps to meet this resource crunch, it is inevitable that some of the burden would have to be borne by the public. We need to explain to the people the constraints and reasons that have compelled the Government to introduce these measures," he said.

Simultaneously, he said, it is equally necessary for us to introduce the utmost economy in our own administrations and establishments. It cannot be denied that there is substantial scope to reduce expenditure on travel and administration.

"As we ask the people to bear some of the financial burden of our oil imports, it is not only necessary from the resource conservation point of view but also as a moral duty to cut out all wasteful expenditure in our own establishments," the prime minister told ministers.

"I am, therefore, writing to ask you to severely curtail expenditure on air travel, particularly foreign travel, except in cases where it is deemed to be absolutely necessary. This economy may be made applicable immediately for your own self and also for all senior functionaries in your Ministry," he added.

Indian shares see-saw on inflation concerns

Indian shares see-sawed on Thursday as attempts to claw back after falling more than 5 percent this week faced headwinds, with investors worried high inflation would invite monetary tightening.

"The bulls appear to be cornered from all fronts," brokerage India Infoline said.

"The fiscal situation is also likely to worsen. Inflation is soon expected to hit double-digits," it said adding that any minor pull-back should be used to lighten positions.

At 11:46 a.m., the benchmark 30-share index was up 0.53 percent, or 81.46 points, at 15,596.25. The index opened 0.2 percent down, and fluctuated between losses of 0.4 percent and gains of 0.7 percent.

In the broader market, losers led gainers 1,376 to 917 on volume of 99.2 million shares.

On Wednesday, the government raised state-set petrol and diesel prices by about 10 percent, the biggest increase in 12 years, to curb losses at its state-owned refiners.

Analysts expect the move could lift India’s annual inflation to 13-year highs above 9 percent in early June, a Reuters poll showed, crimping consumer spend and delaying vehicle purchases.

The fuel price rise and inflation worries drove the index down 2.81 percent on Wednesday to its lowest close in two months, and took losses in 2008 to more than 23 percent.

Software stocks that get more than half their revenue from the United States rose in morning trade as the rupee weakened against the dollar, raising expectations for better earnings.

Bellwether Infosys Technologies was up 2 percent at 1,907.15 rupees, while No. 4 Satyam gained 2.8 percent to 499.05 rupees.

Top explorer Oil & Natural Gas Corp, which rose 5.3 percent on Wednesday, raced 3.9 percent to 921.80 rupees as the fuel price increase would lower the discount the state-run firm is forced to give state refiners.

Citigroup said it expects about 60 percent upside in ONGC’s earnings in fiscal year 2009.

Indian state-run oil retailers are partly compensated for selling fuel at low prices through government bonds and discounts by ONGC.

Analysts said the share of the compensation package for refiners by oil producers such as ONGC would come down to 18 percent from 33 percent.

Financial and property stocks fell in anticipation of tighter monetary policy, which would hurt their growth. No. 2 lender ICICI Bank dropped 0.7 percent to 752.50 rupees and smaller rival HDFC Bank fell 2.2 percent to 1,188.80.

Top listed real-estate firm DLF Ltd fell 3.4 percent to 536.40 rupees.

The broader 50-issue NSE index was up 0.69 percent at 4,617.25.

Elsewhere in the region, Karachi’s 100-share index was down 0.21 percent at 13,061.92, but Colombo’s All-share index gained 0.79 percent to 2,511.47.

STOCKS ON THE MOVE

* Top utility vehicle and tractor maker Mahindra & Mahindra was down 1.1 percent at 562 rupees, with higher fuel prices expected to crimp demand in the near term. The company said on Thursday it had agreed to buy Italy’s Engines Engineering SpA.

* Tanla Solutions Ltd was up 4.4 percent at 270 rupees after it said its unit had bought a Finland firm for $18.6 million.

TOP THREE BY VOLUME

* IFCI Ltd on 4.4 million shares

* Anu’s Laboratories on 3.8 million shares

* Gokul Refoils on 3.5 million shares

India, Malaysia Risk Inflation, Protests, With Fuel Price Rise

Asian governments are falling behind in their battle against record oil prices, risking public protests, higher interest rates and slower growth.

Indian Prime Minister Manmohan Singh and his Malaysian counterpart, Abdullah Ahmad Badawi, relaxed fuel price controls yesterday, joining Indonesia, Taiwan, Pakistan and Sri Lanka in boosting costs for business and consumers. The moves will drive India’s inflation to 8.5 percent, a 13-year high, said Lehman Brothers Holdings. Malaysia’s consumer-price growth may double to more than 7 percent by June, said Goldman Sachs Group.

The country’s central banks may also follow Pakistan in raising rates, as policy makers lose bets that a global slowdown would temper price increases. Higher gasoline, diesel and cooking-gas charges are ``inevitable’’ as India can’t afford to shield its 1.2 billion people forever, Singh said in a televised address. His allies, India’s four communist parties, have scheduled a week of protests starting today.

``The current phase of high energy prices has huge political implications,’’ said N. Bhaskara Rao, chairman of the Centre for Media Studies, a New Delhi-based political policy group. ``Governments simply can’t do anything about it.’’

Abdullah and Singh are risking a political backlash after losing ground in elections in the past year. Abdullah’s coalition lost its two-thirds majority in parliament and ceded control of five states to the opposition in the March 8 general elections.

Topple Government

Opposition leader Anwar Ibrahim, freed from prison in 2004, said May 29 he’ll ``immediately’’ contest a parliamentary seat once he confirms his eligibility, in a bid to topple the government by mid-September.

The Indian National Congress party has had nine electoral setbacks in 11 provincial polls since January 2007. Singh’s parliamentary majority hinges on support from the communists, who pledged to block rail and road routes during the demonstrations.

The main opposition Bharatiya Janata Party says Singh’s government has run out of ideas to tackle the oil crisis.

If an increase in fuel prices ``is inevitable, then the exit of the prime minister and his government is inevitable as well,’’ party spokesman Rajiv Pratap Rudy said.

There is a precedent for higher prices to force out governments in Asia. Indonesia’s attempt to increase fuel costs in 1998 sparked protests that led to the ouster of President Suharto after almost 32 years in power.

Rising Prices

India, which imports 70 percent of its oil, increased prices for gasoline by 11 percent, diesel by 9 percent and cooking gas by 17 percent after oil reached a record $135.09 a barrel in New York on May 22. India previously raised fuel prices in February, the first time since June 2006. Cooking-gas prices had been capped since April 2005.

India also cut customs duties on gasoline and diesel by two thirds to 2.5 percent and scrapped a 5 percent import tax on crude oil to reduce revenue losses at government-run refiners that have reached an unprecedented $1 billion a week, constraining their ability to import oil.

In Malaysia, the price of 97-RON grade gasoline will now be adjusted monthly to track global prices. Tenaga Nasional Bhd., the government-controlled power producer, will be allowed to raise electricity prices in peninsular Malaysia starting July, as it will have to pay higher prices for gas, Abdullah said.

``Because crude-oil prices and commodities at the international market have gone up drastically, the government needed to restructure the subsidy system,’’ he said.

Similar Tactic

Malaysia and India are using the same tactic as some of their neighbors. Indonesia raised fuel prices by an average 29 percent on May 24, the first increase in three years, to cut subsidy costs. Ceylon Petroleum Corp., Sri Lanka’s government oil company, increased fuel prices for the second time this year on May 25 to trim losses. Lanka IOC Ltd., the Sri Lankan unit of India’s biggest refiner, Indian Oil, boosted diesel prices three times and gasoline once this year.

Reserve Bank of India Governor Yaga Venugopal Reddy has called inflation ``totally unacceptable,’’ as it gives little room to spur an economy that’s growing at the slowest pace since 2005.

The bank has held interest rates at 7.75 percent, near a six-year high, since March 2007. It has relied on telling banks to set aside more cash against deposits to tackle inflation; it increased the cash ratio twice in the past two months to the highest level in seven years.

Malaysia has also avoided raising interest rates, relying on price controls and subsidies until now to keep inflation contained. Its central bank has kept borrowing costs unchanged at 3.5 percent since April 2006.

``The countries in Asia, which are dependent on imports, will have to live with the specter of accelerating inflation and slowing economic growth this year,’’ said Kaushik Das, an economist with Mumbai-based Kotak Mahindra Bank Ltd. ``The situation may reverse only if there is a sharp decline in global crude-oil prices.’’

This Environment Day, let's kick the CO2 habit

Climate change has been designated as the single biggest threat to nature and humanity. It’s a change that’s happening too rapidly for our comfort and action has to be taken immediately before the situation worsens.

It is unfortunate that despite progress in different spheres, India has landed itself in an ecological crisis. We have lost half our forests, polluted our water and air, and degraded major chunks of our cultivable lands. Three of our cities – Kolkata, Delhi and Mumbai – are among the 15 most-polluted cities in the world. Several of our plant and animal species have gone extinct or are on the verge of dying.

While the per capita emission is still relatively low as compared to developed nations, it is expected to grow by an average of 3% per year until 2025. India’s oil consumption is expected to increase to 2.8 million barrels a day by 2010, from 2.65 million barrels a day in 2004. The alarm bells on national carbon release have clearly started ringing.

Every World Environment Day on June 5, the UN has been advising nations, peoples and communities on devising ways to create environment awareness and enhance political action in a sphere that has been considered an intangible fringe.

This year’s slogan is – ’CO2, Kick the Habit! Towards a Low Carbon Economy.’ In short, the focus is on reducing greenhouse gas emissions.

That some presence of carbon dioxide in the atmosphere is inevitable, we all know. All of us exhale it; and it is essential for plant growth. And so we urgently need to do our bit to curtail its emission further. In our own simple ways, we need to slash carbon economies and modify lifestyles to give longevity to nature.

We must also send a clear message to our governments that we want quick and effective transformational changes to put green economies in place around the globe and urge them to ensure collective action is taken at the personal, corporate and political levels to "Kick the C02 Habit".

Global warming is a menace the world is unable to stop in its tracks, and it is getting its biggest fillip due to government inaction in curbing environment-unfriendly modes of growth.

Recognising that climate change is becoming the defining issue of our era, the UNEP has asked countries, companies and communities to focus on reducing greenhouse gas emissions.

World Environment Day will highlight resources and initiatives that promote low carbon economies and lifestyles, such as improved energy efficiency, alternative energy sources, forest conservation and eco-friendly consumption.

The theme is enough indication that carbon dioxide is one of the major greenhouse gases triggering increased global warming and that it is high time that its use is drastically curtailed before the situation goes beyond repair.

How petrol price is calculated in India

The ’fuel fire’ created by the hike in petroleum prices announced by Manmohan Singh government on Wednesday continues. The Left parties and the Bharatiya Janata Party are holding strikes across the country to protest the fuel price hike.

Do you know how the fuel price is calculated in India?

Suppose if the petrol price per litre in Chennai is Rs 56.90, here the break-up of cost calculated by the government:

Basic Price = Rs 26.93
Excise duty = Rs 14.35
Education Tax = Rs 0.43
Dealer commission = Rs 1.05
VAT = Rs 5.5
Crude Oil Custom duty = Rs 1.1
Petrol Custom = Rs 1.54
Transportation Charge = Rs 6.00
Total price = Rs 56.90

So for a Rs 22 litre petrol at pumps, consumers in India pay Rs 28 tax extra.

India's fuel price hike divides rich and poor

Indians were divided on Wednesday over the biggest hike in fuel prices in 12 years, with the poor saying it would hit their pockets hard, while the more comfortable shrugged it off as inevitable given global trends.

On the streets of the capital, New Delhi, Balaram, an office driver earning a little over $100 a month, and businessman B. Hans were in opposite corners.

While Balaram worried how to afford now more expensive cooking gas from his tight household budget, Hans, who drives a Mercedes, was more relaxed but said a lower rate of increase would have been good for those less well off.

"Already milk, vegetables, wheat -- the price of everything has gone up so much," Balaram said.

"And now gas and petrol. With my salary, after paying my rent and my expenses, what will I send home? How will I feed my family and what will I save?"

India raised prices of petrol and diesel by about 10 percent and a cylinder of cooking gas by 17 percent after its state-run oil companies said they were on the verge of bankruptcy, hammered by crude oil’s race to record highs while having to sell fuels at heavily discounted prices.

The government spared kerosene, used by many of India’s 1.1 billion people for cooking and lighting. A litre of diesel, the popular auto fuel, will now cost 34.5 rupees ($0.8) in Delhi.

"Well, what can I say? We have to pay, you see, even if we don’t like to," Hans, whose monthly fuel bill is more than Balaram’s salary, said.

Salaried families, hit in recent weeks by fast rising food prices which have pushed inflation above 8 percent, said they were looking to cut corners to absorb the fuel price hike.

"We have to cut down on other expenses such as eating out and things for yourself because it’s not in your budget anymore," Bina Chadha, a government worker, said.

"I suppose we’d have to think twice about taking a long-distance trip with the car," said Joaquim Johnson, a 38-year-old trainee counsellor.

MINEFIELD

The increases could prove a political minefield for the ruling coalition ahead of a general election next year.

Add to that inflation already running at a 3-½ year high and the opposition seem to have an upper hand if Kolkata housewife Tapasi Bose is to be believed.

"It will become very difficult for us to make both ends meet," Bose told Reuters. "The price rise will affect the fortunes of the rulers in the next elections."

But some understand the government’s compulsion. "It’s inflation. You can’t blame the government," said Suresh Rathod, a 33-year-old auditor at a law firm.

"We are helpless. Another government would have not made any difference," Subrata Roy, an IT executive in Kolkata, said.

Will Congress pay for fuel price hike?

The government finally showed the guts on Wednesday to raise fuel prices against the wishes of its own communist allies, but may struggle to sell the decision to an increasingly unhappy electorate.

Whether that will cost the centre-left Congress party power in national elections due next year remains to be seen, but rising inflation has left the opposition in the driving seat, political analysts said.

In truth, economic compulsions left the government with little choice on Wednesday but to bite the bullet on retail fuel prices, with oil Companies on the verge of bankruptcy and the oil ministry pressing for an even bigger hike.

But the decision to raise petrol and diesel prices by around 10 percent was braver than most analysts had expected from a Congress-led coalition government with a reputation for avoiding tough decisions.

"The time had come when the Congress party had to show they were a leader of the coalition and not a puppet in the hands of their allies," said V.B. Singh, a political analyst at New Delhi’s Centre for the Study of Developing Societies. "They have not succumbed to the allies as everyone thought.”

And the predictable backlash has already begun. Both the government’s own communist allies and its chief rival, the Hindu-nationalist Bharatiya Janata Party (BJP), condemned the decision to raise heavily subsidized fuel prices, and called for street protests and strikes starting Thursday.

Many private sector economists meanwhile were unimpressed, and said more should have been done to prevent an ominous rise in government borrowing.

But some political analysts were a little more forgiving. "This is a courageous move and shows they have some degree of confidence they can take on the storm of protests which will follow," said Mahesh Rangarajan, a political analyst and history professor at Delhi University.

Inflation, already running at a 3-½ year high of 8.1 percent, is likely to rise further, especially as higher diesel prices feed through into transport costs.

Signs Of Hope

But Rangarajan said signs of strong economic growth and good harvests in key crops like rice and wheat seemed to have given the government some hope of weathering the storm.

"Obviously they have confidence this economic upturn will tide them through," he said. A year is a long time in Politics. Although Congress has lost a string of state elections to the BJP in the past year, it has not given up hope of regaining the initiative.

The problem, though, is that the party seems to lack the leadership either to inspire the electorate or explain away tough decisions like the fuel price hike, political analysts said.

"I don’t see any spark, any mettle from the people supposed to be at the helm of affairs," said N. Bhaskara Rao, a political analyst at the Centre for Media Studies.

"When they take hard decisions, they are not able to convince people, they don’t have anyone equipped for it."

Prime Minister Manmohan Singh is expected to address the nation later on Wednesday to try and do just that, but he lacks the conviction of previous leaders like Indira Gandhi, some analysts said.

On the streets of New Delhi and Mumbai, anger at rising prices was tinged with the realisation the government’s hands were largely tied.

"This government’s job is done by announcing the increase, it is the poor people who suffer," said Ali Ahmed, a three-wheel taxi driver in Delhi, who nevertheless was not sure the move would affect the government’s electoral prospects.

"People vote for a candidate for many reasons -- some vote in exchange for a bottle of alcohol, some for money," he said.

Red wine 'can prevent ageing'

Red wine not only complements meal but is also known to protecting heart and prolonging life. Now add one more benefit to the list -- a glass of the drink daily can help you stay young.

Researchers have found that resveratrol, a compound present in the skin of red grapes used to make wine, curbs the effects of ageing. The natural compound is already known to having anti-cancer as well as anti-inflammatory properties.

"Resveratrol is active in much lower doses than previously thought and mimics a significant fraction of the profile of calorific restriction at gene expression level," lead researcher Tomas Prolla was quoted by the Daily Mail .

Their finding is based on a study on laboratory mice.

They investigated the influence of resveratrol by looking for changes in gene expression, or activity, in heart, muscle and brain tissues in the rodents.

As the animals age, gene activity in different parts of their bodies change as genes are switched on and off.

In the mice heart, there are at least 1,029 genes whose functions alter with age, leading to impaired function. When the rodents are fed a restricted diet, 90 per cent of this age-related change is prevented, the study found.

The study also revealed that low doses of resveratrol blocked harmful changes in 92 per cent of the heart genes. At the same time, declines in heart function associated with ageing were also prevented.

A glass of red wine, or food supplements containing even small doses of resveratrol, were likely to represent a "robust intervention in the retardation of cardiac ageing, according to the researchers at Wisconsin-Madison University.

"There must be a few master biochemical pathways activated in response to caloric restriction, which in turn activate many other pathways. And resveratrol seems to activate some of these master pathways as well," Prolla said.

The results of the study have been published in the latest edition of the PLoS ONE journal.

Airlines may treat people like bags

Imagine two scales at the airline ticket counter, one for your bags and one for you. The price of a ticket depends upon the weight of both. That may not be so far-fetched.

"You listen to the airline CEOs, and nothing is beyond their imagination," said David Castelveter, a spokesman for the Air Transport Association, a Washington, DC-based trade group. "They have already begun to think exotically. Nothing is not under the microscope." He declined to discuss what any individual airline might be contemplating, including charging passengers based on weight.

With fuel costs almost tripling since 2000, now accounting for as much as 40% of operating expenses at some carriers, according to the ATA, airlines are cutting costs and raising revenue in ways that once were unthinkable. US Airways Group Inc. has eliminated snacks. Delta Air Lines Inc. is charging $25 for telephone reservations. AMR Corp’s American Airlines last month became the first US company to charge $15 for one checked bag.

Even a cold drink may be harder to come by aloft. Singapore Airlines Ltd, whose shares have fallen 8.9% this year, is "trying to eliminate unnecessary quantities of extra water" to save weight, chief executive officer Chew Choon Seng said in an interview.

"When you hear some people talking about putting showers on their planes, that strikes me as counterintuitive," he said.

After US airlines reported combined first-quarter losses of $1.7 billion and crude oil jumped to a record $133.17 a barrel on May 21, almost double from a year earlier, fares based on a passenger’s weight may be a logical step, said Robert Mann, head of R W Mann & Co, an aviation consultant based in Port Washington, New York.

"If you look at the air-freight business, that’s the way they’ve always done it," he said. "We’re getting treated like air freight when we travel by airlines, anyway."

"Laughter aside, the airlines are just in a desperate situation," said David Swierenga, president of consulting firm Aeroecon in Round Rock, Texas, who dismissed weight-based ticket sales and steep price increases as unrealistic.

Airlines have also taken shorter-term steps even if they have stopped short of weighing passengers. Japan Airlines Corp is using crockery in first-class and business-class cabins that is 20% lighter than the service items they replaced.

Southwest Airlines Co is flying slower - by 72 seconds, for example, on Houston-Los Angeles flights, which now take 3 hours 14 minutes.

That saves 8.7 gallons of fuel for each of the airline’s four daily nonstops on the 1,387-mile route. Southwest comes closest to charging for weight, asking passengers to buy a second seat if their girth prevents the armrest from lowering.