Sell year-end rally; tough markets over next six months; expect index to correct to 14,500
India has been the worst-performing market this year, falling a third in US$ terms. Peaking inflation and a consequent pause in RBI rates are a positive which will likely help the traditional December rally. However, we continue to expect a tough market over the next six months and expect a correction of the Sensex to 14,500 as growth concerns take center-stage:
1. GDP growth to slow; downgrades likely:
We expect FY13 GDP to slow to 6.8% and consensus to cut GDP forecasts over the next few months. GDP growth in the next few quarters is likely to come even lower at around 6.5%. A slower GDP will be led by: (a) a slowing global economy, (b) impact of high rates and (c) slowing investment spend.
2. Earnings downgrades to continue:
We continue to expect earnings downgrades, led by slowing sales and sustained margin pressure from rising labor and interest costs. We expect the bottom-up Sensex EPS of Rs1,275 to be downgraded to Rs1,200 (growth of under 10% vs. expectations of nearly 15%).
3. Valuations will see slight de-rating:
Based on analysts' forecasts, markets at 13x one-year forward PE are at a slight discount to long-term averages. Slow down in GDP and earnings growth as well as falling RoEs will likely lead markets to trade lower.Secondly, on a relative basis, India trades at a 27% PE premium to GEM markets, higher than a 10-year average of 17%.
Markets stop panicking when policymakers start panicking; year-end index 19,000
The good news is that we could get some positive returns in 2012 if policymakers take steps to reverse the economic slowdown. like a) aggressive rate cuts by RBI: we expect rate cuts from April 2012 (though slow given stick inflation); markets typically rally 3-6 months after the rate-cut cycle starts, and (b) policy reform by the Government.
Sector overweights: Pharma, autos and banks
We play a mix of defensives (through pharma rather than staples) and consumer-related rate sensitives through autos and private sector banks.
Global - Economy and Market
Initial unemployment claims hit lowest rate since April 2008, Consumer confidence perks up, house prices sag
First-time jobless claims in the U.S. declined last week by 4,000, to 364,000, the Labor Department said. That's the smallest total since April 2008. Improving labor market conditions lifted U.S. consumer confidence to an eight month high in December, but persistently weak house prices remain an obstacle to faster economic growth.
Optimism about U.S. economy keeps oil futures elevated
Oil futures are priced near a two-week high as traders speculate that the U.S. recovery is gaining strength and growth will stimulate demand for energy. In electronic trading on the New York Mercantile Exchange, crude oil for February delivery was worth $99.53 a barrel Tuesday. Futures gained 6.6% last week
Brazil replaces U.K. as world's sixth-largest economy
Brazil's economy is the world's sixth biggest, replacing Britain, the Center for Economics and Business Research reported. The research organization confirmed a forecast by the International Monetary Fund.
Spain will suffer another recession, official says
Spain's economy is contracting this quarter and will shrink further in 2012, sending the nation into recession, Economy Minister Luis de Guindos said. The nation's gross domestic product, fourth largest in the eurozone, will fall 0.2% to 0.3% this quarter and about the same in the first quarter, he said.
Feisty Italy union chief stands between Monti and reform
ROME - A formidable battle is taking shape over the future of Italy's labour market between Prime Minister Mario Monti, a detached, professorial economist and Susana Camusso, the pugnacious, chain-smoking leader of the country's largest trade union.
China and Japan move to reduce dependence on U.S. dollar
China and Japan signed a deal to allow direct trading of their currencies. The arrangement is part of the nations' move to scale back exposure to the U.S. dollar. China and Japan are the world's second- and third-largest economies, respectively.
India - Economy and Market
Record foodgrains production in 2011 facilitates Food Security Bill
The agriculture sector performed exceedingly well in 2011, with record foodgrains production of over 240 million tonnes.
Nov infrastructure output up 6.8 pct y/y
NEW DELHI - India's infrastructure sector output grew 6.8 percent in November from a year earlier, sharply higher than the annual growth of 3.7 percent in November last year, government data showed on Monday.
Short on revenue, government may go for larger market borrowings
The government is finding it difficult to meet direct tax target due to industrial slowdown and may go in for larger market borrowings.
Import of sensitive items up 40 per cent in April-September
Led by edible oils, import of sensitive items shot up 39.9 per cent to Rs 48,274 crore in the April-September period of this fiscal.
Pulses imports result in Rs 1,201 crore loss to state firms: CAG
State-owned agencies - MMTC, STC, NAFED and PEC has suffered losses of Rs 1,201 crore on import and sale of pulses between 2006 and 2011.
European financial woes likely to cut apparel exports by 15%
Orders from Italy and Spain have almost become nil and could reduce India's total apparel exports by 15%
National Highways Authority of India set to roll out ETC system from next year
National Highways Authority of India (NHAI) plans to roll out the Electronic Toll Collection (ETC) system pan-India from next year.
NHAI to garner Rs 10,000 crore from market for projects ,NHAI to award Rs 15,000 crore order in FY13
NHAI plans to award construction orders worth up to 15,000 crore in the next fiscal, deviating from its strategy of awarding projects through PPP route.
The National Highways Authority of India will raise Rs 10k cr through public issue of "Tax Free Secured Reedeemable Non-Convertible Bonds"
India's roads sector seems headed for consolidation
India's roads sector seems headed for consolidation, with smaller and more aggressive bidders piling up orders that have run into viability issues.
Technology News –
Tata Communications bets big on cloud technology
Tata Communications is betting big on cloud technology to help clients increase productivity and cut costs on the back of solutions.
BT Group to exit from Tech Mahindra, directors resign
BT Group owns a little over 23% equity in Tech Mahindra and contributes 37% to company's revenue.
IT majors to see lower Q3 revenue growth, says brokerage
Brokerage firm Edelweiss Securities has revised it Q3 revenue growth forecast for the top four IT companies downwards to 2-3% from an expectation of 5% at the beginning of the quarter.
Snapdeal, the e-commerce site has broken growth records in 2011; What next?
There are key issues plaguing e-commerce & Snapdeal is no exception. How will it differentiate services from competitors?
E-governance project helps check grassroot pension fraud in Bangalore
A bank correspondent will now be sent to each pensioner's house with a card-reader where the pensioner would swipe his smart card.
Social media site Facebook tops search charts
Popular social media site Facebook was the most searched for word on the internet during 2011 for the third year running, according to a new research.
Online shopping jumps 16.4 pct on Christmas Day
A growing number of shoppers in the U.S. apparently need only the briefest of breaks before diving back in, especially if they can log in to shop.
Samsung eyes 15 per cent rise in handset sales next year: Report
South Korea's Samsung Electronics aims to raise its global handset sales by 15 percent next year by boosting its smartphone sales.
Samsung Electronics Co. buys out Sony's stake in LCD joint venture
Samsung will pay 1.08 trillion won ($935 million) in cash for Sony's stake in S-LCD Corp., a venture formed in 2004, the Suwon.
Intel prepares to launch smartphones powered by its chips
After decades at the bleeding edge of PC technology, Intel is in race to design the brains of a new crop of tablets and smartphones.
2011 Year of tech, tweets, tablets and telecom
Most of the action happened in telecom, with 3G and other milestones. IT crossed a landmark, too. Here are five top tech trends of 2011.
First-time jobless claims in the U.S. declined last week by 4,000, to 364,000, the Labor Department said. That's the smallest total since April 2008. Improving labor market conditions lifted U.S. consumer confidence to an eight month high in December, but persistently weak house prices remain an obstacle to faster economic growth.
Optimism about U.S. economy keeps oil futures elevated
Oil futures are priced near a two-week high as traders speculate that the U.S. recovery is gaining strength and growth will stimulate demand for energy. In electronic trading on the New York Mercantile Exchange, crude oil for February delivery was worth $99.53 a barrel Tuesday. Futures gained 6.6% last week
Brazil replaces U.K. as world's sixth-largest economy
Brazil's economy is the world's sixth biggest, replacing Britain, the Center for Economics and Business Research reported. The research organization confirmed a forecast by the International Monetary Fund.
Spain will suffer another recession, official says
Spain's economy is contracting this quarter and will shrink further in 2012, sending the nation into recession, Economy Minister Luis de Guindos said. The nation's gross domestic product, fourth largest in the eurozone, will fall 0.2% to 0.3% this quarter and about the same in the first quarter, he said.
Feisty Italy union chief stands between Monti and reform
ROME - A formidable battle is taking shape over the future of Italy's labour market between Prime Minister Mario Monti, a detached, professorial economist and Susana Camusso, the pugnacious, chain-smoking leader of the country's largest trade union.
China and Japan move to reduce dependence on U.S. dollar
China and Japan signed a deal to allow direct trading of their currencies. The arrangement is part of the nations' move to scale back exposure to the U.S. dollar. China and Japan are the world's second- and third-largest economies, respectively.
India - Economy and Market
Record foodgrains production in 2011 facilitates Food Security Bill
The agriculture sector performed exceedingly well in 2011, with record foodgrains production of over 240 million tonnes.
Nov infrastructure output up 6.8 pct y/y
NEW DELHI - India's infrastructure sector output grew 6.8 percent in November from a year earlier, sharply higher than the annual growth of 3.7 percent in November last year, government data showed on Monday.
Short on revenue, government may go for larger market borrowings
The government is finding it difficult to meet direct tax target due to industrial slowdown and may go in for larger market borrowings.
Import of sensitive items up 40 per cent in April-September
Led by edible oils, import of sensitive items shot up 39.9 per cent to Rs 48,274 crore in the April-September period of this fiscal.
Pulses imports result in Rs 1,201 crore loss to state firms: CAG
State-owned agencies - MMTC, STC, NAFED and PEC has suffered losses of Rs 1,201 crore on import and sale of pulses between 2006 and 2011.
European financial woes likely to cut apparel exports by 15%
Orders from Italy and Spain have almost become nil and could reduce India's total apparel exports by 15%
National Highways Authority of India set to roll out ETC system from next year
National Highways Authority of India (NHAI) plans to roll out the Electronic Toll Collection (ETC) system pan-India from next year.
NHAI to garner Rs 10,000 crore from market for projects ,NHAI to award Rs 15,000 crore order in FY13
NHAI plans to award construction orders worth up to 15,000 crore in the next fiscal, deviating from its strategy of awarding projects through PPP route.
The National Highways Authority of India will raise Rs 10k cr through public issue of "Tax Free Secured Reedeemable Non-Convertible Bonds"
India's roads sector seems headed for consolidation
India's roads sector seems headed for consolidation, with smaller and more aggressive bidders piling up orders that have run into viability issues.
Technology News –
Tata Communications bets big on cloud technology
Tata Communications is betting big on cloud technology to help clients increase productivity and cut costs on the back of solutions.
BT Group to exit from Tech Mahindra, directors resign
BT Group owns a little over 23% equity in Tech Mahindra and contributes 37% to company's revenue.
IT majors to see lower Q3 revenue growth, says brokerage
Brokerage firm Edelweiss Securities has revised it Q3 revenue growth forecast for the top four IT companies downwards to 2-3% from an expectation of 5% at the beginning of the quarter.
Snapdeal, the e-commerce site has broken growth records in 2011; What next?
There are key issues plaguing e-commerce & Snapdeal is no exception. How will it differentiate services from competitors?
E-governance project helps check grassroot pension fraud in Bangalore
A bank correspondent will now be sent to each pensioner's house with a card-reader where the pensioner would swipe his smart card.
Social media site Facebook tops search charts
Popular social media site Facebook was the most searched for word on the internet during 2011 for the third year running, according to a new research.
Online shopping jumps 16.4 pct on Christmas Day
A growing number of shoppers in the U.S. apparently need only the briefest of breaks before diving back in, especially if they can log in to shop.
Samsung eyes 15 per cent rise in handset sales next year: Report
South Korea's Samsung Electronics aims to raise its global handset sales by 15 percent next year by boosting its smartphone sales.
Samsung Electronics Co. buys out Sony's stake in LCD joint venture
Samsung will pay 1.08 trillion won ($935 million) in cash for Sony's stake in S-LCD Corp., a venture formed in 2004, the Suwon.
Intel prepares to launch smartphones powered by its chips
After decades at the bleeding edge of PC technology, Intel is in race to design the brains of a new crop of tablets and smartphones.
2011 Year of tech, tweets, tablets and telecom
Most of the action happened in telecom, with 3G and other milestones. IT crossed a landmark, too. Here are five top tech trends of 2011.
India will allow individual foreign investors direct access to its stock market from Jan. 15, the government said on Sunday, the latest step to liberalise Asia's third-largest economy after a year of big losses on the benchmark Sensex index.
An Indian stock broker watches his computer screen at brokerage company at the Mumbai Stock Exchange.
Previously, foreign nationals were limited to investing in India's equity market through indirect routes such as mutual funds, or through institutional vehicles.
"The central government has decided to allow qualified foreign investors to directly invest in (the) Indian equity market in order to widen the class of investors, attract more foreign funds, and reduce market volatility," the government said in a statement.
Analysts said the decision to allow foreign nationals to invest in Indian equities was a positive move but it was unlikely to result in an increased flow of overseas funds in the near-term due to weak market conditions.
"At a time when the foreign institutions are reducing their exposure to India, it would not be prudent to expect foreign individuals to start investing in our markets," said Jagannadham Thunuguntla, research head at brokerage SMC Global Securities.
"We can see some impact of this decision when the stock market conditions improve," he said.
In the past 20 years India has gradually opened its economy to foreign cash. The economy is now faltering after growing at an annual average of about 8 percent for several years.
The rupee shed 24 percent of its value against the dollar last year and the current account deficit is widening.
Many economists predict growth below seven percent for the fiscal year that ends on March 30.
Indian shares posted their first annual fall in three years in 2011 as a combination of near double-digit inflation, high interest rates, slowing domestic growth and policy inaction turned off investors already shaken by global headwinds.
Foreign fund inflows, a major driver of Indian stocks, dried up with net outflows of about $380 million as of Wednesday, a far cry from record inflows of more than $29 billion in 2010 that had powered a 17 percent rise in the benchmark index, following an 81 percent surge in 2009.
An Indian stock broker watches his computer screen at brokerage company at the Mumbai Stock Exchange.
Previously, foreign nationals were limited to investing in India's equity market through indirect routes such as mutual funds, or through institutional vehicles.
"The central government has decided to allow qualified foreign investors to directly invest in (the) Indian equity market in order to widen the class of investors, attract more foreign funds, and reduce market volatility," the government said in a statement.
Analysts said the decision to allow foreign nationals to invest in Indian equities was a positive move but it was unlikely to result in an increased flow of overseas funds in the near-term due to weak market conditions.
"At a time when the foreign institutions are reducing their exposure to India, it would not be prudent to expect foreign individuals to start investing in our markets," said Jagannadham Thunuguntla, research head at brokerage SMC Global Securities.
"We can see some impact of this decision when the stock market conditions improve," he said.
In the past 20 years India has gradually opened its economy to foreign cash. The economy is now faltering after growing at an annual average of about 8 percent for several years.
The rupee shed 24 percent of its value against the dollar last year and the current account deficit is widening.
Many economists predict growth below seven percent for the fiscal year that ends on March 30.
Indian shares posted their first annual fall in three years in 2011 as a combination of near double-digit inflation, high interest rates, slowing domestic growth and policy inaction turned off investors already shaken by global headwinds.
Foreign fund inflows, a major driver of Indian stocks, dried up with net outflows of about $380 million as of Wednesday, a far cry from record inflows of more than $29 billion in 2010 that had powered a 17 percent rise in the benchmark index, following an 81 percent surge in 2009.
Almost $6.3 trillion was erased from global stock markets this year as the euro zone financial crisis reverberated across the world in the latter half of 2011, calling into question the future of the world’s largest currency bloc.
Global stock market capitalization dropped 12.1 percent to $45.7 trillion according to Bloomberg data, while the euro ended the year as the worst performing major currency after finally starting to succumb to the continent’s financial and economic woes in December.
The euro had proved resilient for much of the year – burning hedge funds that bet on a steeper decline – but on Friday touched a 10-year low against the Japanese yen, and is near lows against the dollar last touched a year ago.
“Investors were more optimistic at the start of the year, but as the year progressed they were forced to come to grips with the debt levels in the western world,” said Navtej Nandra, the international head of Morgan Stanley’s asset management arm.
The S&P 500 is flat this year while the FTSE 100 has only dropped 5.5 percent. But the Eurofirst 300 gauge of blue-chip European companies has lost 11 percent, led by the French and Italian exchanges. The MSCI Emerging Markets index has shed a fifth of its value despite strong growth in China and other emerging markets.
Asian equity markets were hit particularly hard with Japan’s Nikkei index losing 17.3 percent this year, Hong Kong’s Hang Seng index 20 percent and the Shanghai Composite 22 percent.
Assets considered to be relative havens amid the turmoil have fared better. UK government yields hit a record low on Friday and gilts were the best performing major government bonds in 2011 – notching up 17 percent returns, compared with US Treasuries’ 9.8 percent returns and 10 percent for German Bunds.
Despite efforts by policymakers to shore up the euro zone, analysts and bankers expect next year to start on a glum note, as Europe continues to grapple with its debt crisis.
One of the biggest immediate tests will be the hundreds of billions of euros worth of government and bank debt that comes due in the first three months of the year.
Countries on Europe’s periphery, on the other hand, face funding costs that remain at near record highs, despite a series of summits that have unveiled various measures to restore investor confidence in the euro zone.
There is more than 457 billion euros of euro zone government debt due to be repaid in the first quarter of 2012, according to calculations by Citigroup. Italy has to repay almost 113 billion euros in the first three months of next year – at a time when its funding costs remain elevated.
“Markets would love to think that this will be solved swiftly, but dealing with all these problems will take time,” said Philip Poole of HSBC Asset Management. “Bond yields will remain high until it’s clear how deep the euro zone recession will be and austerity packages are more fully implemented.”
The European Central Bank lent 489 billion euros to more than 500 banks earlier this month to ease concerns over bank funding, but has so far fought pressures to more actively buy euro zone government bonds directly.
While the US economy is showing signs of recovery and most emerging market countries are still growing at a healthy clip, some investors fear that China’s economy could be facing a “hard landing” next year, posing yet another danger to the fragile global economy.
The real estate market in India is an ideal example of the subversion of demand-supply economics.
Everyone knows the real demand for both residential and commercial real estate is currently low. Inventories are piling up with builders and not even half of new launches are being sold in major cities. But prices still remain stubbornly high.
According to the makaan.com property index, prices have nationally dropped by around 1 percent last month, with cities like Mumbai, Ahmedabad, Bangalore and Hyderabad seeing bigger falls.
But one needs to follow the trend for a longer period to figure out if there is going to be any meaningful price correction where demand materialises. In all probability, it won’t happen.
On the one hand, consumers are not ready to buy at the given price and if prices fall, investors will likely default on their payments.
Samantak Das, research head at property firm Knight Frank, tells us why. “The basic reason is this: the real estate market is driven mainly by investors and not end-users or consumers.”
Investors comprise of 50-52 percent of total absorption. So when a builder is building 100 flats, he could sell 50 flats at one go to an investor at, say, Rs 5,000 per sq ft. Now even if his other flats are not getting a good response he cannot afford to bring prices below Rs 5,000, for it would mean negative returns for the investor, on whom his maximum sales depend.
And these investors are not generally you and me buying a second flat for investment, but non-resident Indians or even politicians channelising their black money into the sector. “Their lobby is so strong that negative returns on their investments by pulling down prices simply cannot be done,” says Pankaj Kapoor, managing director of property research firm Liases Foras.
Says Kapoor: “Indian realty is in a Catch-22 situation where, on the one hand, consumers are not ready to buy at the given price. And if prices fall, investors will likely default on their payments.”
So why have the prices risen so much in the first place? The answer mostly lies in foreign capital entering Indian markets. Foreigners are not directly allowed to buy land, but the foreign money entering the housing sector is used for nothing else but buying land.
Construction costs constitute just 10-20 percent of a property’s price, with land accounting for the major balance — depending on where the property is located. Now, in residential buildings, customers themselves pay in phases, funding their own construction, which means the initial investment by the builder or private equity fund goes into buying the land. Between the financial year 2008 and till September this around, more than Rs 43,000 crore of foreign investment has flown into the housing sector.
Such capital flows have pushed prices up, with the weighted average price of a flat in Mumbai now being more than Rs 1 crore. Liases Foras estimates that even if interest rates come down to 9 percent from the 14-15 percent at present, the realty market needs to undergo a 33 percent price correction to go back to 2009 levels.
When a developer calculates returns on a flat, he has a certain velocity of sales in mind, which means he estimates the flats will be sold in a given timeframe. When the private equity investor is roped in, their margins increase the prices. When prices are held high, the sales velocity is bound to go down. The return on equity for the private equity investor falls and the consumer is hurt because of high prices.
In fact, private equity funds worth $3 bn-$5 bn are expected to exit real estate investments in 2012, Jones Lang LaSalle says. But the returns could be really low, hovering around even 2-3 percent, says Kapoor. So if both consumers and funds are losing, who is pocketing the gains is a question that needs to be answered.
The second question: if so much money has been transferred to the sector, what is the asset creation? Liases Foras estimates suggest that incremental construction floor space has gone down over the last two years in all major cities except Pune. Kapoor explains: “This tells us that land has almost been treated as a derivative that is traded with. It changes hand from owner to builder to PE funds and rises in value through the process. But nothing is created. With all capital being lost, realty has become the mother of all scams.”
Third, there have been controversial deals for floor space index (FSI) where a higher number of floors has been allowed for a single apartments. In such cases, the cost per flat must come down as the cost of the land remains the same. But this benefit has not been passed on to the customer, thus inflating the total value of the land.
In all this, common people have lost out. In the last 10 years, the percentage of Mumbai population living in slums has gone up from 55 percent to 70 percent. If one looks at it closely, almost the whole of the incremental population has gone to slums because of unaffordable housing. Are not foreign funds and direct investments supposed to do exactly the opposite?
What we have today is a system only for investors, who can get full tax exemptions on interest if they rent the property out. But a first time buyer has exemption only up to Rs 1,50,000 on interest payments. A new regulator for the realty sector is welcome — which is now being promised by the Real Estate Regulation and Development Bill, which must bring under its purview all the stake holders in the realty story.
If the regulator turns out to be a toothless tiger who is hand-in-glove with politician and builder lobbies, no good will come of it. India needs structural changes in its opaque realty sector to give its people what should be a basic right: a roof over one’s head.
A typical day for 45-year-old Star includes walking the dog, straightening her 8-year-old son's room and running a load of laundry.
It also includes stepping into her home office to work as a phone sex operator.
"I look at what I do as a business," Star, a single mom, told "Good Morning America." "It happens to deal with sex."
Star, who asked that we not give her last name or hometown, is one of thousands of moms in the U.S. who work as phone sex operators, and the numbers are growing at dramatic rates.
In the last 18 months alone, the number of mothers of young children pursuing sex work has jumped 400 percent, according to ratracerebellion.com, an organization that helps mothers find work-at-home jobs of all kinds, ranging from writing assignments to telemarketing.
Chris Durst runs Ratracerebellion.com. Durst has tracked the working habits of moms for more than a decade, and, while she says there's always a spike in the number of moms pursuing phone sex work after Labor Day, the last two years have shown unprecedented levels of interest.
The reason, she says, is the dismal state of the economy.
"Most sound a little embarrassed," she told "Good Morning America" of the moms who reach out to her, in search of phone sex work." "They say, 'I've tried everything. It's come to the point my family is on food stamps. We can't make the rent and are facing foreclosure. This is the fastest way for me to get my family back on my feet again.'"
Phone sex lines used to be run out of call centers. But today, the calls are typically taken from women, working out of their homes. Phone sex lines take pains to ensure that callers have no idea where the women answering the phones are based, or what their real names are.
Many of the mothers working as phone sex operators told "GMA" that, while they would like to work outside of the sex industry, those jobs are not currently available.
"I've applied to probably 20 to 30 jobs at like Walmart or Subway or a fast-food place," one mother, Aubrey, who asked that her last name not be used, said. "I just haven't gotten picked up in my area."
Aubrey, 22, and the mother of a 3-year-old son, says working as a phone sex operator is difficult, and often disturbing.
"There was a lot of having to get used to just, you know, the weirdoes out there," she said. "There is basically anything you could think of. There's married men with children. There's divorced men. Sometimes, every once in a while, there's a couple that'll call," she said. "More recently, there's actually been a few women calling."
Aubrey said she at times feels disgusted speaking intimately with strangers while her son sleeps down the hall.
"This is nothing I'd ever thought I'd be doing, ever," she said.
Working as a phone actress is as far as the 22-year-old says she is willing to go in adult entertainment.
"I'd never want to take off my clothes for anyone, or actually, you know, fulfill these fantasies for anyone," she said.
Aubrey's goal is to save enough money to finish her schooling and get a job as a medical transcriptionist.
"I'm definitely doing it for my child," she said. "We need the extra money to make sure he has everything he needs."
Financial Incentives Lure Stay-at-Home Moms
The women are typically paid $10 to $50 per hour, but many can make much more.
Lynn, a mother of three who also asked that her last name not be used, told "GMA" that she often considers getting out of the phone sex business, but says the finances of leaving don't make sense.
"I make more money per hour that way than I would at another job," she said. "I've made over $1,000 in the course of a day."
Lynn says that the work can often prove draining. She, like many phone sex operators, plays five different characters on various phone lines, to satisfy the interests of callers with very different interests. But she notes the flexibility of her hours, which she can set, and the ability to work from her living room are big incentives to stay with the phone sex job.
The financial benefits of her work have not been lost on her husband, Mike, who has come to accept what she does for a living.
"That she has the ability to bring in a little extra each month, and sometimes a lot extra each month, and be able to not have to worry about how and where we're going to get food or if the electric bills are going to be shut off, that's a big deal," he said. "That overrides any sort of other worries I might have."
Society Remains Divided
Durst's organization, Ratracerebellion.com, reports that some of the phone sex companies that employ women like Lynn, Aubrey and Star, take better care of their employees than do traditional, brick-and-mortar companies.
According to the site, some of the companies offer the women benefits. Many pay their employees by direct deposit every week or every other week. For women who do not have bank accounts, some of the phone sex companies pay directly to a gift card. Many additionally offer free training.
But while a growing number of moms may be pursuing phone sex work, society, as a whole, seems to still have reservations when it comes to mothers of minors working in the business.
"I don't know that I would want to promote that to my children," said one New York City mom.
"It's probably not the most appropriate," said another, when asked by "GMA" whether she thought it was acceptable for the mother of a young child to get paid to speak intimately with strangers.
Star says she knows many people want to judge her for what she does. To them, she insists, her line of work does not make her a bad mom.
"I get to spend time with my son," she said. "I have to go into the office when I work, but the office is just one room away from my living room. I take calls for half-an-hour and I'm back to my son again."
Star says her 8-year-old son has only a vague idea of what her occupation entails. So far, she's only told him that she gets paid to talk on the phone. But she says that she is prepared to come clean when he eventually asks more detailed questions.
For now, she, Lynn and Aubrey say they'll continue to attend to their children and work as phone sex operators, all in an effort to keep their children clothed, fed and with a roof over their heads.
"Your priority as a mother is to financially and emotionally be there for your children," mom-of-three, Lynn, told "GMA." "Phone sex helps me provide financial support for them."
Global - Economy and Market
WASHINGTON - The number of Americans filing new claims for jobless benefits hit a 3-1/2 year
low last week, bolstering views the economy was gaining momentum, even though third-quarter growth was revised down.
U.S. existing-home sales rose 12% last month, Realtors report
Sales of existing homes in the U.S. increased 12% in November from November 2010, the National Association of Realtors said. The inventory of unsold homes fell from a nine-month supply in July to a seven-month supply last month, the trade group said.
Fitch again warns U.S. debt burden threatens AAA rating
NEW YORK - Fitch Ratings on Wednesday warned again that the United States' rising debt burden was not consistent with maintaining the country's top AAA credit rating, but said there would likely be no decision on whether to cut the rating before 2013.
ECB's 3-year loan offer draws record borrowing from banks
More than 500 European banks took €489 billion from the European Central Bank through its first three-year loan offering. The amount is enough to refinance most of the debt lenders have maturing next year. "The perceived stigma attached to central bank borrowing has not prevented eurozone banks from making extensive use of the ECB's offer," said Martin van Vliet, an economist at ING Group. "The take-up of loans is massive."
Gold posts biggest gain this month as U.S. dollar weakens
A falling U.S. dollar sent investors to gold, which on Tuesday gained the most this month. On the New York Mercantile Exchange, gold futures for February delivery rose 1.3%, to $1,617.60 an ounce.
Spain's borrowing cost falls sharply in auction
Spain's $7.3 billion debt auction ended with a huge decline in the nation's borrowing cost. Three-month bills priced at 1.74%, compared with 5.11% in a sale of comparable debt in November. The average yield on six-month debt fell from 5.227% to 2.44%.
India - Economy and Market
Food inflation at 4-month low of 1.8%
Food inflation has fallen to low single digits, the government's official data finally catching up with the talk of glut and plunging prices.
Economy to grow by 7.5 pc next fiscal, says Fitch
Economy is likely to grow by 7.5% in 2012-13 and public finances of various state governments are likely to see consolidation during the next fiscal.
New companies bill tightens regulations regarding subsidiaries
The new cos bill has tightened the provision relating to the way subsidiary cos are defined, ensuring that larger number of firms are brought under reporting ambit.
With higher wages, workers slip out of social security net
NEW DELHI: A new malaise has begun to infect India's labour market. The weakest sections of the workforce now earn more money with state governments hiking minimum wages, but they are no longer eligible for mandatory social security benefits like provident fund, pension and life insurance.
Indian loans caught in Euro squeeze
Nearly $160 billion worth of Indian borrowings from Europe faces an uncertain future as the continent's banks embark on panic deleveraging.
Moody's upgrades long-term Re bonds to investment level
Global rating agency Moody's upgraded government's long-term rupee bonds rating to investment grade (Baa3)from speculative grade (Ba1) .
US PE fund GCA plans to invest $200 mn in India
MUMBAI: San Francisco-based private equity fund Gerken Capital Associates is looking to foray into the Indian markets with an initial corpus of $200 million. The company, which manages assets worth $1 billion, has appointed Alok Gupta, former chief of Axis Private Equity, as managing director of its India operations. GCA, which manages funds for institutional and high net-worth clients, will enter India with its emerging markets private equity fund of funds
Investors in renewable energy sector planning to turn part-time farmers
US-based Kiran Energy, SGFT and Gurgaon-based Moser Baer are some of the project developers inclined towards agriculture.
Over 7 lakh tonnes of foodgrain damaged in decade: RTI info
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RBI eases borrowing norms to ease liquidity crunch
MUMBAI: In order to ease the liquidity situation, the Reserve Bank of India today allowed banks to borrow additional amount from it under the Marginal Standing Facility (MSF), a new lending window which was opened by the central bank in the current fiscal.
Technology News –
Indian start-ups: Light robots for physically-challenged
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HCL Infosystems hikes PC prices by 10-15 %
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Yahoo considers trimming its 40% stake in Alibaba
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EBay buys German technology company BillSafe
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India monitoring US call centre bill: Nirupama Rao
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TCS, Infosys, Wipro and others planning to reduce onsite work by up to 5%
BANGALORE: India's top outsourcing firms plan to reduce the amount of work performed onsite by their staff travelling on temporary visas in the US, as they battle increased immigration scrutiny and push harder to increase profitability by shipping more work offshore.
Oracle misfires in fiscal Q2 raising tech worries
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The countdown to the apocalypse is on.
We're one year away from Dec. 21, 2012, the date that the ancient Mayan Long Count calendar allegedly marked as the end of an era that would reset the date to zero and signal the end of humanity.
But will it?
There have been many end of times predictions over the years. Christian radio host Harold Camping faced widespread ridicule when his predictions that the world would end twice this year - on May 21, and then on Oct. 21 - failed to materialize.
But in the flurry of doomsday predictions - there have been similar dire warnings about the world coming to an end from various cultures, including Native Americans, the Chinese, Egyptians and even the Irish - the supposed Mayan prophecy seems to have held the most sway with believers.
The Mayan civilization, which reached its height from 300 A.D. to 900 A.D., had a talent for astronomy. Advanced mathematics and primitive astronomy flourished, creating what many have called the most accurate calendar in the world.
The Mayans predicted a final event that included a solar shift, a Venus transit and violent earthquakes.
Their Long Count calendar begins in 3,114 B.C., marking time in roughly 394-year periods known as Baktuns. Thirteen was a significant, sacred number for the Mayas, and they wrote that the 13th Baktun ends on Dec. 21, 2012.
The doomsday theories stem from a stone tablet discovered in the 1960s at the archaeological site of Tortuguero in the Gulf of Mexico state of Tabasco that describes the return of a Mayan god at the end of a 13th period.
"The Maya are viewed by many westerners as exotic folks that were supposed to have had some special, secret knowledge," said Mayan scholar Sven Gronemeyer. "What happens is that our expectations and fears get projected on the Maya calendar."
Gronemeyer, of La Trobe University in Australia, compares the supposed Mayan prophecies to the "Y2K" hype, when people feared all computer systems would crash when the new millennium began on Jan. 1, 2000.
For some reason, Gronemeyer says, people have ignored evidence that dates beyond 2012 were recorded.
The blogosphere exploded with more speculation when Mexico's archaeology institute acknowledged on Nov. 24 a second reference to Dec. 21, 2012, on a brick found at other ruins.
"Human beings seem to be attracted by apocalyptic ideas and always assume the worst," Gronemeyer said.
Believers have taken the end-of-the world fears to the Internet with hundreds of thousands of websites and blogs. Yet others are capitalizing on the heightened interest. Films depicting the end of the world - including the 2009 movie, "2012? - are contributing to the mounting hype as well as to misinformation, experts say.
In southern Mexico, the heart of Maya territory, a yearlong celebration is planned.
Mexico's tourism agency expects to draw 52 million visitors by next year only to the regions of Chiapas, Yucatan, Quintana Roo, Tabasco and Campeche. All of Mexico usually lures about 22 million foreigners in a year.
It's selling the date, the Winter Solstice in the coming year, as a time of renewal. Many archeologists argue that the 2012 reference on a 1,300-year-old stone tablet only marks the end of a cycle in the Mayan calendar.
"The world will not end. It is an era," said Yeanet Zaldo, a tourism spokeswoman for the Caribbean state of Quintana Roo, home to Cancun. "For us, it is a message of hope."
For those who are thinking about how to spend what could be their last year on earth, here's another message of hope: According to recent research, the mythological date of the "end of days" may be off by 50 to 100 years.
To convert the ancient Mayan calendar to the Gregorian (or modern) calendar, scholars use a numerical value (called the GMT). But Gerardo Aldana, a professor at the University of California, Santa Barbara, has said the data supporting the widely-adopted conversion factor may be invalid.
Aldana isn't the only detractor.
The National Aeronautics and Space Administration - yes, that's NASA - has also weighed in on the issue.
The agency's scientists posted answers to the most popular questions about the end-of-times theory associated with the prophecy.
"Remember the Y2K scare? It came and went without much of a whimper because of adequate planning and analysis of the situation. Impressive movie special effects aside, Dec. 21, 2012, won't be the end of the world as we know," the 2009 web page post says.
The answers addressed questions about whether there were any known threats to the Earth and the truth about the calendar.
One of answers posted was to the question of the possible approach of Nibiru (or Planet X or Eris), a supposed wayward planet that is said could pose a threat to Earth. The answer was a definitive rejection of the idea.
"Nibiru and other stories about wayward planets are an Internet hoax," scientists wrote. "There is no factual basis for these claims. If Nibiru or Planet X were real and headed for an encounter with the Earth in 2012, astronomers would have been tracking it for at least the past decade, and it would be visible by now to the naked eye. Obviously, it does not exist. Eris is real, but it is a dwarf planet similar to Pluto that will remain in the outer solar system; the closest it can come to Earth is about 4 billion miles."
Also Read
WILL 2012 REALLY BRING WORLD'S END? HERE ARE SOME OMENS TO SUPPORT IT
Also Read
WILL 2012 REALLY BRING WORLD'S END? HERE ARE SOME OMENS TO SUPPORT IT
ABC News' Susan Donaldson James and The Associated Press contributed to this story.
