Capping a late-year upswing, manufacturing grew at its fastest pace in six months in December but a European slump and rising oil prices posed threats to the U.S. economy in 2012.

The Institute for Supply Management’s index of national factory activity hit its highest level since June and came in above forecasts at 53.9, more evidence that the U.S. economy picked up steam in the fourth quarter.

“It’s a pretty decent report overall,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets in New York. “We’re not roaring ahead here, but it’s also not collapsing. That’s consistent with our overall view of the economy in 2012.”

Tags: factory activity, oil prices, RBC Capital

The idea of cities, towns, and tourist attractions that generally recruit a celebrity to switch on their Christmas lights has changed for this year’s festive decorations for The Holburne Museum in Bath.

Acclaimed lighting expert Bruce Munro has came up with the idea of stunning Field of Lights is the work that will be seen by the public for the first time.

The seed for inspiration of Bruce Munro to create this artwork was planted nearly 20 years ago while travelling in Australia.

‘I hope the Holburne’s visitors and Christmas shoppers in Bath will enjoy Field of Light,’ said Munro.

Tags: Bruce Munro, Christmas lights, Christmas shoppers, festive decorations, Holburne Museum, lighting expert

Investors are ditching whatever hopes they once had for a conclusive solution to the debt crisis after another week of confusion and turmoil in Europe.

Doubts rose about whether Greece would back 130 billion-euro bailout just weeks after it seemed leaders had drafted a master plan to solve the crisis.

From news.yahoo.com:

Disaster may have been averted when Greece, under fierce EU pressure, agreed over the weekend to form a new government that would approve the deal and stave off bankruptcy.

But that did little to calm investors, who were already looking ahead to the next problem: Italy. Italian bond yields hit a euro-era high of 6.4 percent Friday, raising fears the country may soon need a Greece-style emergency bailout.

The Greek agreement “may spark a brief relief rally,” said Alan Ruskin, head of global G10 currency strategy at Deutsche Bank. “But it won’t last and we will soon go back to focusing on Italy.”

“At the end of the day, it does seem like a grand plan is elusive at best,” said David Ader, head of government bond strategy at CRT Capital Group in Stamford, Connecticut.

Tags: bailout, currency strategy, debt crisis

The foreign exchange (forex) reserves of India dropped by $1.22 billion at $311.48 billion for the week ended September 30 to register a sharp decline for the second straight week largely due to revaluation of non-dollar assets, official data showed.

During the week ended September 23, the forex reserves had slumped by $4.05 billion.

From in.finance.yahoo.com:

The country’s foreign exchange reserves kitty has shrunk by $9.30 billion in the last four weeks after swelling to an all-time high of $320.78 billion for the week ended Sep 2.

Foreign currency assets, the biggest component of the forex reserves kitty, fell by $1.23 billion to $275.69 billion during the week under review, according to the weekly statistical supplement of the Reserve Bank of India (RBI), the country’s central bank.

The foreign currency assets expressed in US dollar terms include the effect of appreciation or depreciation of non-US currencies such as the pound sterling, euro and yen held in reserve.

The value of gold reserves, however, rose by $348 million to a record high of $28.66 billion.

Tags: Foreign currency, foreign exchange, foreign exchange reserves, forex

The rich should be taxed more, according to Indian Union Home Minister P. Chidambaram.

The minister, who was earlier the Finance Minister of the country between May 2004 and November 2008, however, said that many people would not like this.

From in.news.yahoo.com:

Addressing a function of the All India Management Association here, Chidambaram said: “We must raise the tax revenue to defend (the expected aggregate decline of resources). I know many people won’t like this. But I think, I can summon the courage to make the statement.”

“I am (was) the Finance Minister who slashed your tax rates. Therefore … you must be prepared to pay higher tax rates, especially the rich must be prepared to pay higher tax,” he added.

Chidambaram, who as Finance Minister of the country was credited with presenting a ‘dream budget’ in the initial years of his tenure, further in Europe rich people were getting together to say: “Please tax us more.”

Chidambaram also said that poverty must decline rapidly and at a higher rate than the current one percent, if the country has to achieve inclusive growth in the future.

“Poverty must decline. The rate at which poverty declined in the first years of liberalisation was about 0.8 percent a year. We believe it’s now declining at about one percent a year. Poverty must decline at a higher rate,” said Chidambaram.

Tags: finance, tax rates, tax revenue

Projection of total deficits over the next decade after the recent deficit-reduction deal between President Obama and Congress were sharply reduced by the Congressional Budget Office.

The Budget Office, however, warned that the extension of Bush-era tax rates and other policies would more than offset those savings.

From NYTimes.com:

The report from the nonpartisan budget office underscores the high stakes for a special 12-member Congressional committee created to figure out by December how to achieve up to $1.5 trillion of the $2.4 trillion in maximum 10-year savings promised by the deal.

It comes as Mr. Obama and Democrats, like many economists, are calling for a mix of larger long-term deficit reduction measures with immediate additional job creation measures. While the latter would add to deficits in the short term, proponents argue that they would prevent another recession and avoid the associated costs in lost revenues and safety-net spending. But Republicans oppose any stimulus measures or long-term increases in tax revenues.

Douglas Elmendorf, director of the budget office, wrote on its Web site that such projections “understate the budgetary challenges facing the federal government in the coming years.”

Tags: job creation, tax rates