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Movie night and restaurant meals are out for Vinod Kumar. As prices for sugar, onions, and other staples surge after poor monsoon rains damaged harvests, Kumar has been forced to cut back to keep food on the table for his family of four.

“It’s never been so bad in my working life,” the 35-year- old mechanic says in the Feb. 15 issue of Bloomberg BusinessWeek magazine as he shops at Bangalore’s Johnson Market, a century- old tangle of food stalls.

Inflation in India is at a decade high, with consumer prices rising faster than in any other major economy. Industrial output in January increased the most in 17 months, pushing up prices for raw materials. Cotton has jumped up by 13 percent since October, and the benchmark wholesale price index, up 7.3 percent in December, could hit 10 percent within two months, predicts brokerage CLSA Asia-Pacific Markets.

India’s central bank governor, Duvvuri Subbarao, is trying to cool things down. To lower the amount of capital available for lending, the Reserve Bank of India on Jan. 29 increased the cash reserve ratio for banks — the minimum they have to keep on hand — by 0.75 point, to 5.75 percent. Higher interest rates may be next. The bank has moved from “managing the crisis to managing the recovery,” Subbarao told reporters on Jan. 29.

China Comparison

As he tries to tame inflation without snuffing out the economic recovery, Subbarao has a tougher challenge than most of his Asian counterparts. In China, inflation was 1.9 percent in December, and the central bank remains focused on nurturing an economic rebound: People’s Bank of China Deputy Governor Zhu Min said Jan. 30 at the World Economic Forum in Davos, Switzerland, that officials will “continue with current accommodative fiscal and monetary policy.”

Even with India’s thriving technology industry, it remains beholden to the vagaries of the monsoon. Less than half of India’s fields have irrigation, so a drought last summer led to food shortfalls in several states. Underdeveloped railroads and highways make it tougher to transport food, leading to shortages and higher prices in many cities.

“You don’t have enough roads, you don’t have enough railroads, you don’t have enough ports,” says Nikhilesh Bhattacharyya, an economist with Moody’s Economy.com. “That amplifies any price shock.”

Challenge for Singh

Rising prices are a headache for Prime Minister Manmohan Singh. In the past 15 years, Indians have ousted two national governments after inflation eroded spending power. Higher interest rates will make it harder for companies to expand, and a 16-year high budget deficit threatens to limit increases in spending on roads and ports.

Indian companies are expressing concern at higher labor costs.

“The rise in food prices will have a cascading effect,” says M.S. Unnikrishnan, managing director of Thermax, a Pune- based maker of heating and cooling equipment. “We can’t keep paying people the same amount if their cost of living is increasing.”

Even as inflation concern escalates, India’s economic outlook is brightening. The International Monetary Fund last week boosted its 2010 gross domestic product growth projection for India to 7.7 percent from 6.4 percent in October, compared with a 5.6 percent pace for last year. Some investors are counting on that trend to continue.

“In the next decade, India is going to grow a lot more than China,” says Justin Leverenz, who has invested in India $2.5 billion of the $15 billion emerging markets fund he manages at OppenheimerFunds. That’s his largest country allocation.

Investor optimism won’t do much to help Kumar, the mechanic in Bangalore. No matter how hard Subbarao and the Reserve Bank of India try, structural problems almost guarantee that India will suffer more wild swings in food prices in the years ahead. The RBI is on the case now, says Singapore-based economist Rajeev Malik of Macquarie Group Ltd., but it’s still at the mercy of India’s weather, infrastructure, and politicians.

“There’s little,” Malik says, “that the RBI can do to fix that.”

-With assistance from Natalie Obiko Pearson in Mumbai. Editor: Chris Anstey

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Telecoms gear maker UTStarcom Inc. will change CEOs and move its head office to Beijing after getting a $48.5 million investment.

The Alameda company (NASDAQ: UTSI) will get $25 million from Beijing E-town International Investment and Development Co., a firm set up by the city of Beijing, and $23.5 million from two unrelated funds — Ram Max Group Ltd. and Shah Capital Management. UTStarcom expects the deal to close by the end of March.

When the deal closes, Baichuan Du, a former deputy chief engineer of China’s state administration of radio, film and television, will take a seat on UTStarcom’s board of directors. Xiaoping Li of Beijing E-town and William Wong of Yellowstone Capital, which advised the three investors, will also take seats on the board. Allen Lenzmeier and Jeff Clarke will quit UTStarcom’s board at that time.

Jack Lu will replace current CEO Peter Blackmore as president and CEO by June 30 or three months after the deal closes, whichever is later. He’ll be chief operations officer from the time the deal closes until he becomes CEO. His most recent job was co-chief operating officer and general manager, China, at Source Photonics.

UTStarcom will move its head office to Beijing as part of a deal with the Beijing Development Area, from which it hopes to get tax incentives and other financial help. It will keep its factories in Hangzhou and Shenzhen.

Thomas Toy is chairman of the board at UTStarcom.

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A massive venture capital fund that pumps money into Great Lakes businesses is crucial for the economy of the region to move beyond its Rust Belt status, says a white paper released Friday by the Brookings Institution public policy think tank.

The report, Turning up the Heat: How Venture Capital Can Help Fuel the Economic Transformation of the Great Lakes Region, calls for the creation of a $1 billion to $2 billion venture capital fund that would feed smaller funds investing in businesses and startups across the Great Lakes states, including Ohio.

The fund, which could be underwritten by a mix of public- and private-sector donors and individuals, would be able to help the region transition from a primarily manufacturing-based economy to a knowledge-based one, the Brookings Institution paper suggests.

“Venture capital investing is typically focused on the technologies, products, workforces and companies of the future,” the report says, noting that information technology, bioscience and clean-tech companies tend to be the winners.

All three are areas are focused on by Ohio’s $1.6 billion Third Frontier development program, which the report by the Washingston, D.C.-based think tank identified as a regional leader.

The report also makes the case that a massive regional fund increasing venture capital outlays in Ohio and other Great Lakes states would send a message to investors and business executives about the area’s potential. It would rebrand the region’s communities “as innovative and creative talent centers, rather than industrial backwaters,” the white paper said.

While the region has historically lacked enough deals to support significant venture capital activities, the report said that shouldn’t be the case. The region’s assets include being a research-and-development powerhouse, as well as consistently graduating more than a third of the nation’s university science and engineering graduates.

To build a greater source of venture capital in the region, the report suggests:

• Stakeholders working in concert with each other, not independently.

• Combining smaller venture capital initiatives to create greater scale.

• Effectively guaranteeing that any venture capital activity yields competitive returns.

“What is needed is more work, not more thinking and planning, not finding a previously unappreciated ‘right’ answer,” the report says. “More work is needed by investors and entrepreneurs to identify and do deals, the essential work that only venture capitalists and the executives of their portfolio companies can do and that will earn them the returns that they and their investors expect.”

The report itself can be found at www.brookings.edu.

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Apple Inc. earned $3.38 billion on revenue of $15.68 billion in the first quarter ended Dec. 26.

A year earlier, the Cupertino maker of computers, iPhones and iPods (NASDAQ: AAPL) earned $2.26 billion on revenue of $11.88 billion.

The company’s sales of its Macintosh computers rose by a third over the first quarter a year earlier, and it doubled sales of iPhones, selling 8.7 million of them in the most-recent quarter. Sales of iPods slipped 8 percent to 21 million online payday loans.

Peter Oppenheimer, Apple’s chief financial officer, said the company generated $5.8 billion in cash during the first quarter.

Apple has been building hype for a new product to be unveiled this week, and Oppenheimer made sure to mention it in his press statement.

Apple had $7.6 billion in cash and near money at quarter’s end.

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The unemployment rate in the Wichita area dropped 0.4 percent to 7.6 percent in December, according to new data from the Kansas Department of Labor.

The state estimates that 15,773 people in Sedgwick, Harvey, Butler and Sumner counties are jobless, out of 321,695 people in the civilian work force.

Wichita’s unemployment rate remains the highest in the state. Kansas City’s rate is 6.9 percent, followed by Topeka at 6 percent, Lawrence at 4.6 and Manhattan at 4.5.

The Wichita unemployment rate in December 2008 was 4.9 percent.

Of the 1,512,406 Kansans in the civilian work force, 95,126 are out of work, for a statewide unemployment rate of 6 us fast cash.3 percent.

The Kansas Department of Labor estimates the state lost 60,000 jobs in 2009. Manufacturing lost 26,100 jobs, professional and business services lost 15,600, and trade, transportation and utilities lost 10,300 jobs during the year.

There were 30,422 initial claims for unemployment benefits in December.

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Fewer people were hired to work in Hawaii stores at the start of the holiday season, but the people who worked put in more hours.

Retail employment in Hawaii fell about 5.5 percent in November 2009 to 65,400, down from 69,200 in November 2008, according to the latest Bureau of Labor Statistics data.

It was the lowest level of local retail employment since 2003. Anecdotally, local retailers have said the holiday shopping season was flat or somewhat worse than in 2008, when sales were already down because of the onset of the recession.

Clothing and specialty shops had about 1,000 fewer people working in them, according to the BLS data.

The numbers suggest that businesses spread their staffs thinner with employees putting in 31.3 hours per week, up from 29.9 the previous November.

But those extra hours paid off: Retail workers made an average $447.28 a week, up from $418.90 the previous year.

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General Motors confirmed Wednesday that it put an end to an agreement with Tiger Woods that allowed the golfer to drive its vehicles for free.

GM and Woods ended the golfer’s endorsement contract with Buick in 2008, but continued a deal that allowed Woods to keep several GM loaner cars, including the the Cadillac Escalade he was driving in the car crash that ultimately revealed the athlete’s marital infidelity.

The arrangement ended Dec. 31. A GM spokesperson confirmed that the termination date had been previously scheduled.

Several of Woods’ major sponsors, including AT&T (T, Fortune 500) and Accenture (ACN), ended their business relationships with Woods following the Nov short term personal loans. 27 crash and the exposure of his marriage troubles.

But other companies, like Nike (NKE, Fortune 500) and Pepsi’s (PEP, Fortune 500) Gatorade continue to sponsor Woods, who has taken a break from his professional golfing career. Procter & Gamble’s (PG, Fortune 500) Gillette said it would stop airing commercials featuring the golfer for a while. 

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The Federal Reserve asked a U.S. appeals court to block a ruling that for the first time would force the central bank to reveal secret identities of financial firms that might have collapsed without the largest government bailout in U.S. history.

The U.S. Court of Appeals in Manhattan will decide whether the Fed must release records of the unprecedented $2 trillion U.S. loan program launched primarily after the 2008 collapse of Lehman Brothers Holdings Inc. In August, a federal judge ordered that the information be released, responding to a request by Bloomberg LP, the parent of Bloomberg News.

“This case is about the identity of the borrower,” said Matthew Collette, a lawyer for the government, in oral arguments yesterday. “This is the equivalent of saying ‘I want all the loan applications that were submitted.’”

Bloomberg argued that the public has the right to know basic information about the “unprecedented and highly controversial use” of public money. Banks and the Fed warn that bailed-out lenders may be hurt if the documents are made public, causing a run or a sell-off by investors. Disclosure may hamstring the Fed’s ability to deal with another crisis, they also argued. The lower court agreed with Bloomberg.

‘Right to Know’

“The question is at what point does the government get so involved in the life of the institution that the public has a right to know?” said Charles Davis, executive director of the National Freedom of Information Coalition at the University of Missouri in Columbia. Davis isn’t involved in the lawsuit.

The ruling by the three-judge appeals panel may not come for months and is unlikely to be the final word. The loser may seek a rehearing or appeal to the full appeals court and eventually petition the U.S. Supreme Court, said Anne Weismann, chief lawyer for Citizens for Responsibility and Ethics, a Washington advocacy group that supports Bloomberg’s lawsuit.

New York-based Bloomberg, majority-owned by Mayor Michael Bloomberg, sued in November 2008 after the Fed refused to name the firms it lent to or disclose the amounts or assets used as collateral under its lending programs. Most were put in place in response to the deepest financial crisis since the Great Depression.

“Bloomberg has been trying for almost two years to break down a brick wall of secrecy in order to vindicate the public’s right to learn basic information,” Thomas Golden, an attorney for the company with Willkie Farr & Gallagher LLP, wrote in court filings. He said the Fed may be trying “to draw out the proceedings long enough so that the information Bloomberg seeks is no longer of interest.”

FOIA Case

The lawsuit, brought under the U.S. Freedom of Information Act, or FOIA, came as President Barack Obama criticized the previous administration’s handling of the $700 billion Troubled Asset Relief Program passed by Congress in October 2008. Obama has said funds were spent by the administration of former President George W. Bush with little accountability or transparency.

FOIA requires federal agencies to make government documents available to the press and public.

In arguments yesterday, Golden disputed the Fed’s contention that it doesn’t have to reveal the information because it hasn’t since its inception.

“The rules changed since 1913 with FOIA’s enactment,” he said.

Much of the debate centered on the potential harm to banks if it was revealed that they borrowed from the Fed’s so-called discount window. Collette, the government lawyer, said banks don’t do that unless they have liquidity problems.

Discount Window

Yvonne Mizusawa, a lawyer for the Fed, said that if banks stopped using the discount window because of a perceived stigma, it may affect the Fed’s ability to set monetary policy.

“This would make it much more difficult to control short- term interest rates,” Mizusawa said, citing an expert for the central bank. “The stigma results from the fact that the Federal Reserve is a backup source of liquidity.”

Golden denied that revealing the loan information will hurt banks. He said that the central bank and the Clearing House Association LLC, an industry-owned group that joined the Fed in its bid to overturn the lower court order, came up with only two examples of meltdown-related bank runs: Citigroup Inc.’s offices in Asia and Northern Rock in the U.K.

‘Wasn’t a Run’

“It’s interesting that there wasn’t a run in the U.S.,” he said. “The board has the burden at all times to prove that that competitive injury would result.”

During yesterday’s hearing, the appeals court judges asked about the “staleness” of the information Bloomberg seeks. Golden said the information would concern banks that got help from the Fed from about November 2007 to May 2008.

“This court has nothing in the record to say whether this information is stale now or not,” said Robert J. Giuffra Jr., a lawyer for the Clearing House at Sullivan & Cromwell LLP in New York. “Banks will not use the discount window if they know the information will be available in, say, 20 days.”

The Fed’s balance sheet debt doubled after lending standards were relaxed following Lehman’s failure on Sept. 15, 2008. That year, the Fed began extending credit directly to companies that weren’t banks for the first time since the 1930s. Total central bank lending exceeded $2 trillion for the first time on Nov. 6, 2008, reaching $2.14 trillion on Sept. 23, 2009.

Loan Records

In her Aug. 24 ruling, U.S. District Judge Loretta Preska in New York said loan records are covered by FOIA and rejected the Fed’s claim that their disclosure might harm banks and shareholders. An exception to the statute that protects trade secrets and privileged or confidential financial data didn’t apply because there’s no proof banks would suffer, she said.

In its appeal, the Board of Governors of the Federal Reserve System argued that disclosure of “highly sensitive” documents, including 231 pages of daily lending reports, threatens to stigmatize lenders and cause them “severe and irreparable competitive injury.”

Historically, the type of government documents sought in the case has been protected from public disclosure because they might reveal competitive trade secrets, Davis said. Laws governing such disclosures may be due for a change, he said, following the far-reaching U.S. bailout.

“If you are in need of a bailout and turn to the federal government and say, ‘help,’ with that comes some requirements in terms of transparency,” Davis said.

Joined in Bid

In court papers, New York-based Clearing House, which processes payments between banks, assailed the judge’s decision for what it said were legal errors, such as applying the wrong standard in weighing the exception to FOIA.

The group includes ABN Amro Bank NV, a unit of Royal Bank of Scotland Plc, Bank of America Corp., The Bank of New York Mellon Corp., Citigroup Inc., Deutsche Bank AG, HSBC Holdings Plc, JPMorgan Chase & Co., US Bancorp and Wells Fargo & Co.

More than a dozen other groups or companies filed amicus, or friend-of-the-court, briefs, including the American Society of News Editors and individual news organizations.

The judge postponed the application of her ruling to allow the appeals court to consider the case.

Also yesterday, the same appeals panel heard arguments in a lawsuit brought by News Corp. unit Fox News Network seeking similar documents. U.S. District Judge Alvin Hellerstein in New York sided with the Fed in that case and refused to order the agency to release the documents.

“The press is looking for facts so that the public can make informed decisions,” Steven Mintz, a lawyer for Fox at Mintz & Gold LLP in New York, told the panel.

Giuffra, the lawyer for the Clearing House, told the judges that he knows of no other central bank that discloses the information the media companies are seeking.

“Very few countries around the world have a Freedom of Information Act,” Dennis Jacobs, chief judge of the appeals court, responded.

The other two judges on the panel were Pierre Leval and Peter Hall.

The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 09-04083, U.S. Court of Appeals for the Second Circuit (New York).

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Canwest Communications Inc. is hoping to fetch at least $1 billion to $1.5 billion for its national chain of big city daily newspapers, including the National Post, sources close to the deal say.

That’s roughly half what the company paid for the publications, which includes the Montreal Gazette, Ottawa Citizen and Calgary Herald.

The Winnipeg-based media company put the debt-laden papers up for sale today as part of a court-sanctioned filing for bankruptcy protection from creditors.

Likely buyers for the assets include media companies and financial firms, said Chris Diceman, senior vice-president with Dominion Bond Rating Services. Diceman values the assets at between $1 billion and $1.5 billion, based on its most recent earnings.

The company declined to confirm the figure but a source said it was in the ballpark.

The secured creditors on Canwest Limited Partners, the group that owns the papers, have offered to make a bid if no other buyer comes forward, the company said in a statement this morning.

Referred to as a "floor bid," the offer sets a minimum price the company would accept for the publications.

Canwest today placed its cross-Canada newspaper chain under creditor protection and will put it up for sale next week, with a group of lenders led by the country’s biggest banks ready to kick off the bidding.

The Winnipeg-based broadcaster and publisher said Friday it had reached a restructuring agreement with its creditors, mainly the company’s bankers.

"We have almost half of the secured lenders that are not only supporting a consensual financial restructuring, but that same group… is also prepared to put an offering in to purchase the full integrated publishing group," Canwest spokesman John Douglas said in an interview.

Like many North American media companies, Canwest was forced to seek protection from creditors last fall when the recession squeezed advertising revenues at its newspapers and TV stations. As well, $4 billion in debts piled up from earlier acquisitions produced mounting losses and made it impossible for Canwest to stay out of the red.

Canwest said the creditor protection filing Friday does not include the assets of the National Post, which escaped from CCAA last fall when courts allowed Canwest to shift the national daily into the larger newspaper division. However, the Post will be included in the sale.

Rumoured bidders for Canwest’s newspaper group have included investment company Onex Corp., as well as some of Canada’s largest pension funds and leveraged buyout firms.

In their own statement, the lenders including Canada’s five largest banks and unidentified international financiers, said their bid will at least ensure Canwest’s newspaper division continues as a going concern easy online payday loans.

"After due diligence, it was determined there is value in acquiring the whole of Canwest LP’s business, given the operating synergies that can be realized from a national chain of newspapers and online businesses," the lenders said, adding they would ensure a majority of the company’s voting shares remain in Canadian hands while it goes through the auction process.

Douglas said that the company is already aware of some prospective buyers, though he declined to say how many might take part in the auction process.

"There has been interest, but no, we’re not going to talk about it," he said.

Canwest has also arranged up to $25 million in financing from its senior lenders.

Canwest’s Global Television operation was put under court protection several months ago, as was the National Post newspaper. Canwest later got permission to move the National Post as a separate legal entity to the larger newspaper division – amid a widespread expectation that all the publications would be sold.

Until Friday, Canwest’s main newspaper division, and some other parts of its business, had been operating outside of creditor protection while the company and its major creditors worked on a deal to cope with billions of dollars of debt.

Canwest said putting the newspaper business under court protection was in the best interests of the company and the 5,300 employees at its publishing operations and will address the division’s existing debts and protect its brands.

Besides the Post, Canwest owns major dailies such as the Montreal Gazette, Ottawa Citizen, Calgary Herald, Edmonton Journal, Victoria Times-Colonist and two Vancouver dailies, the Sun and Province.

Canwest’s latest filing in an Ontario bankruptcy court also includes various community newspapers and a batch of news websites such as the Canada.com portal.

As with other media companies, Canwest has been affected by the recession’s impact on sales of newspaper and television advertising, its main source of revenue. It was been nearly buried under a mountain of debt amassed over the past decade as it expanded beyond the original Global Television business by purchasing much of Hollinger Inc.’s Canadian newspaper business.

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Spanish registered unemployment rose to the highest in more than a decade in December, capping a year that saw the nation’s jobless rate soar to double the euro- region average.

The number of people registering for unemployment benefits increased by 54,657, or 1.41 percent, from November to 3.92 million, the most since at least 1997, the earliest year for which comparable data are available. From a year earlier, unemployment climbed by 25 percent, the Labor Ministry in Madrid said today.

Spain’s jobless rate has jumped to 19.3 percent, according to European Union data, and the International Monetary Fund forecasts that it will rise above 20 percent this year. While the euro-area economy will probably expand in 2010, Spain’s government expects a full-year contraction as the real-estate market works through an excess of at least 1 million unsold homes and households pay down debt.

Government stimulus measures that helped to create more than 400,000 jobs were due to wind down at the end of last year business card. A project to spend 8 billion euros ($11.6 billion) on public infrastructure projects will be replaced this year by a fund half that size.

Unemployment in Spain compares with a euro-area average of 9.8 percent in October, according to the most recent EU data. Youth unemployment is more than 40 percent.

The increase in joblessness is eroding support for Prime Minister Jose Luis Rodriguez Zapatero’s Socialist Party. The opposition People’s Party would win 43.6 percent of the vote if elections were held now, compared with 38.5 percent for the Socialists, according to a poll by Sigma Dos published by El Mundo newspaper on Jan. 2.

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