They’ll keep our homes, track our finances and clean up after our pets. Best of all, they’ll be robotic. So you won’t have to feel guilty. You won’t even have to tip them! Within a few years, truly sophisticated consumer robots will be common in high-income households. Before you know it, incredibly capable general-purpose robots will be seen as essential appliances.

It’s funny how hard it is for people to accept big, obvious change. Even when the world is transforming in front of their eyes, lots of folks don’t see it. I remember when the prevailing opinion was that personal computers were a novelty. The real money, analysts said, would be in mainframes. Do you remember when the Internet itself was viewed as merely interesting, but with little financial potential?

If you go back further, you’ll see this same inability to recognize trends with cars. At first, the notion that people would want to own automobiles was too much for the mainstream. Sitting in traffic these days, it’s hard too imagine such shortsightedness was once conventional wisdom.

Those who understood that those changes were inevitable made fortunes. They didn’t worry about timing or recessions. They just invested in a portfolio of early carmakers. Despite the fact that some automakers crashed and burned, those who bought diversified portfolios of car stocks made vast fortunes. That’s what I’m urging investors to do with robotics now: build a diversified portfolio of the companies that hold key competitive positions in the industry.

Already, some low-end robots are exploding into new markets. Even as consumers cut back dramatically last quarter, sales at one of the robot companies I follow increased dramatically during the first quarter. This trend will continue. Selected robot companies are bucking dismal economic conditions. Moreover, military spending on robotics continues to expand and buoy many robot companies. Just days ago, the U.S. Army ordered 125 robots from a company I have been following.

The proposed Obama budget increases funding for the Department of Defense programs that move robotics forward. The trend toward unmanned robotic weaponry, like iRobot’s PackBot, is unstoppable. Military conflict will not go away, and robots offer many developed nations a way to reduce battlefield casualties.

As Moore’s Law continues to improve computer technologies, the decision to risk robots, rather than humans, will be easier and easier to make. Regardless of consumer spending trends, we will see far more advanced robots in the battlefield and on crime scenes. Those advances will, in turn, accelerate the domestic and industrial robotic industries.

Believe me. You want to own robots.

Part II: Memristors

Memristors are the “fourth circuit variable” hypothesized in 1971. Until now, though, three circuit variables have long been the basis for all electronic circuits. They are resistance, capacitance and inductance.

Last year, HP made news by demonstrating a practical application of memristance. At the time, I was astonished that the development had occurred so soon after HP’s announcement that it had discovered a way to build memristors.

HP may have been only the first group to recognize what it had on its hands. Researchers from such institutions like the University of Parma in Italy and UC San Diego have also built prototype memristors from polymers and metallic oxides. They too are exploring applications for this exciting new technology and could end up holding important memristor intellectual property.

Nearly all existing commercially available transistor-based technology is capable of assuming only two states per element, either 1 or 0. So by necessity, all calculation is done in binary.

Memristors, because they can assume different states corresponding to different levels of resistance, are multi-state elements. This quality facilitates a much higher data density. Memristor storage density will be at least 10 times that which is achievable using current transistor-based technology. Imagine the storage capacity of a large hard drive on the head of a pin.

Moreover, memristor memory is nonvolatile. It retains its state even when no power is applied to the circuit. This has tremendous advantages over current memory technologies that lose their data when the power is switched off. Furthermore, unlike current transistor technology, memristance becomes more pronounced and efficient the smaller the element is. In transistors, small size and high density lead to greater power loss and heat production. The opposite is true with memristors. Nanotech-level scaling actually amplifies the memristive properties of the individual elements.

It’s not only computer scientists who are excited by these developments. Biologists are beginning to realize the potential memristors have to mimic organic or biological computing.

Because many of the properties of memristors are so similar to brain cells they may be used to imitate brain functions. If, as scientists believe, they can be used to mimic synaptic function, they could bring true artificial intelligence much closer.

Recently, researchers have been able to model the learning ability of the amoeba with a simple memristive circuit. According to HP, these circuits can “remember and associate a series of events in a manner similar to the way a human brain recognizes patterns.” In other words, the circuits learn.

While HP has grabbed the headlines, such devices are currently being developed for use as nonvolatile resistive memory by various companies. Some, like HP, are probably too big to be breakthrough technology stocks. Samsung is one of the giants working on the technology. On the other hand, Micron Technology and Unity Semiconductor apparently have some patent rights, at least, to memristor technologies. If they’re significant, these companies could be small enough to experience transformational profits that rival Intel’s historic growth.

It is only a matter of time before this new technology begins to break through. We will be monitoring this area for developments and will keep you informed.

P.S.: The question now, of course, is will there be a memristor pure play. One of my colleagues (an IT engineer) is currently talking to researchers about that very question… Get on my list and become one of the first to learn about these transformational companies as they develop. Here’s a link.

Source: Robots and Memristors

Consider the airport. While more subdued than it was just prior to the 2008 Summer Olympic Games, it’s still humming. And the airplane on the flight over here was packed, with nearly a vacant seat in sight. Of course, having my luggage actually beat me to the carousel was a big plus – just like it always is. There’s a policy that all bags are unloaded in 12 minutes.

From my hotel room in the Beijing Central Business District, I can see no end of sleek black cars, including the latest VWs, BMWs, Audis and Toyotas. Even Mini Coopers are becoming a common sight. But to many a guy’s dismay. According to my friend Chris Choi, a longtime Beijinger, the girls actually prefer big SUVs, including Range Rovers, Toyota FJs and, of course, the ubiquitous Jeep.

Speaking of cars, the Shanghai auto show kicked off here in China with the world’s automakers vying to get a foothold in this market, which is one of the fastest-growing in the world. Volkswagen AG (ADR: VLKAY), Porsche SE (soon to have closer ties to VW), Bentley Motors Ltd. are all here – and are enjoying record sales in China.

Some carmakers – such as China’s Geely Automobile Holdings Ltd. – are making noises about their global ambitions, too. To those who think that’s unlikely, take a moment to remember how dismissive American consumers were about the prospects of Japan’s automakers back in the late 1960s or early 1970s. And now Japan dominates the American market.

Are you listening, Detroit? I hope so.

I took a quick stroll around the block to shake off some jet lag. In that short time, I noted two new malls filled with Prada, Gucci, Versace and other upscale brands. Gone are the Citigroup Inc. (C) advertisements, but in their place are Deutsche Bank AG (DB) branches, as well as those of domestic China banks, which remain spectacularly liquid – meaning they’ve escaped the vast majority of the credit-crisis contagion.

Then there’s the media. Recent liberalization of media ownership and usage requirements have created a form of Wild West capitalism that our industries once dreamed about, but now only visit in the museums of their boardroom minutes. With ownership restrictions being substantially relaxed, companies that possess global brands are stepping up their efforts to reach consumers through increasingly direct advertising channels that are already making them known.

I’m excited about what I expect that I’ll be able to bring you over the next several weeks.

Stay tuned.

Source:  Despite Rumors to the Contrary, Beijing Economy Continues to Boom

[Editor’s Note: Money Morning Investment Director Keith Fitz-Gerald is one of the world’s biggest experts on Asia, especially China. Right now, Fitz-Gerald is leading an investment tour of the Red Dragon, and he’ll be sending along regular investment travelogues to update Money Morning readers on his latest observations. This is the first installment of that series.]

The EIA report says that increases in fuel-efficiency standards, use of renewable fuels and advances in technology will translate into less dependence on imported oil. At the same time, the reports projects that hybrid vehicles will comprise 38% of total sales by 2030 – a hefty share if any investor is willing to wait 21 years for that kind of growth.

While some form of battery-powered vehicle will emerge in the coming decades, the U.S. market will also see a diversification in fuel consumption flex-fuel, hybrid, and diesel vehicles, according to the report.

While this growing adoption of new fuels is bound to impact the sales of hybrid and electric vehicles, Detroit is ramping up production of small fuel-sipping cars that could meet or exceed the mileage of any kind of car with a battery.

It’s going to be a zero-sum game when it comes to oil imports versus gasoline consumption. The EIA reports that overall liquid fuel demand will increase by 1 million barrels per day between 2007 and 2030, during which we’ll see a dramatic increase in miles per gallon among different types of fuels.

During this historic transition, hybrid vehicle sales will rise from 2% in 2007 to 38% in 2030 (sales are tracking at around 2.4% for 2008), with full and mild hybrid systems accounting for most of that. Sales of plug-in hybrid electric vehicles (PHEVs) are expected to grow to 90,000 vehicles annually by 2014, supported by recently enacted tax credits. By 2030, PHEVs account for 2% of new light vehicle sales.

These numbers clearly show that hybrids will be the green vehicle of choice over PHEVs — or will they?

Ford CEO Alan Mulally said earlier this month that it will stay the course of bringing small, fuel-sipping cars to the marketplace.

Mulallay believes is betting that fuel prices will stay relatively high, and that consumers will continue to adopt small cars. This is certainly true, but the questions looms if Americans are willing to pay more for a hybrid than a cheap, high-mileage gas car.

These sub-compacts and microcars produce profit margins of $2,500 to $3,500 compared with $8,000 or more in profit for SUVs and pick-up trucks. So while Ford will manufacture and import these tiny cars, the other question that needs to be asked is where Ford will put its marketing dollars? Into microcars or SUVs?

The other consideration is safety. It’s hard to believe that SUV-driving soccer moms will be real eager to shuttle around their kids in something like a Chevy Aveo.

Bottom line is that hybrids could be the vehicles of the future — 21 years from now. Are you willing to wait that long?

I’ve been reading about a new crop of garages that convert hybrid cars such as the popular Toyota Prius into all-electric vehicles. Once you consider the economics of this folly, you see why electric cars are a fallacy for both the owner and investors looking for a toehold in this burgeoning market.

I read my first story a few months ago. It was about the Luscious Garage in San Francisco. Run by women, they carved out a juicy niche for themselves by yanking out the gas engine in hybrid cars and replacing it with another set of batteries. The job cost about $7,500.

More recently, I read another story about a similar operation — this one across San Francisco Bay in Berkeley. Run by two guys, they’ll do the same thing for $7,000.

Regardless of who you used for the conversion, the results were pretty much the same. Instead of filling up at the pump, you plugged your car into a socket. Let’s forget, for a moment, that you’re still burning up fossil fuels from your local power plant and instead focus on the feel-good economics of actually operating the cars.

In both cases, the writers of these articles interviewed the cars’ owners. What you get are comments like this when asked about shelling out $7,000 and more for the conversion…

“My carbon footprint concerned me more…”

“We don’t like what oil is doing to the world…”

One piece in CNN included a gentleman named Dave Moore. A resident of Washington state, CNN said Moore had “started down the electric-car path when he became worried about climate change. On the waiting list for an $85,000 Audi sports car, he decided to buy a Prius instead and got it converted to a plug-in car for about $10,000. He figures he has a green car for less than half what the Audi would have cost.”

That may in fact be true, but that doesn’t make it a valid business case for investors.

When it comes to making investments in green technology for the road, only one thing matters: ROI.

Carbon footprint, sticking it to the sheiks or that butt-tingling smugness as you sit in rush-hour traffic won’t cultivate a new industry. When you’re pitching fuel economy, it’s all about the economics.

So I ran a few numbers to see what the ROI would be on a hybrid-to-electric conversion just to get an idea of whether or not electric cars are something for investors should consider for future growth. Here’s what I came up with…

The average price of a gallon of regular gas today is $1.65 according to Consumer Reports. And the average driver logs 12,000 miles per year, using 550 gallons of gas, says the AAA.

For the $7,500 conversation, the ROI is 12 years for your average driver at today’s gas prices. For the $7,000 conversion, the ROI is 7.7 years.

Anyone can see that a 12-year ROI is ludicrous in terms of trying to sell an electric car. We’re not even sure the batteries would last 12 years. And as far as 7.7 years goes, well that’s marginal – again assuming that all the batteries can hold a charge of that long.

Now, what I didn’t take into account is the approximate $5,000 premium that people are paying for the privilege of buying that stock, hybrid Prius in the first place over the price of a gas-powered economy car such as the Honda Civic. If you want to tack on that extra $5,000, you’ll see that the ROI is simply absurd (or maybe not as absurd as Moore’s $10,000 Prius conversion).

What do these numbers mean in the real world of major automakers?

It means that electric cars could become nothing more than window dressing for empty showrooms. Sure people will flock to the Chevrolet dealership to see the impending Volt for about $35,000, but they’ll drive out with an econo-box Aveo for $12,600.

And why not?

You would have to drive the Volt for 13.5 years longer than the Aveo to justify the price difference at $1.65 per gallon.

So if you want to invest in an industry that strictly caters to people worried about their carbon footprint, well, more power to you.

U.S. stocks were set for a mixed open on Wednesday, which ends one of Wall Street’s worst years and raises hopes that a new year and fresh policy initiatives will stave off a deepening recession.

The Federal Reserve on Tuesday pushed forward with its effort to drive down mortgage costs, setting a target of buying $500 billion in mortgage-backed securities by mid-2009.

The move could bolster optimism as investors have been heartened by signs that the Fed is fighting aggressively to cushion the downturn, including dropping interest rates to near zero.

“Things haven’t improved but at least the Fed has stopped things from appreciably worsening,” said Barry Ritholtz, chief market strategist at Fusion IQ in New York.

“Clearly most investors this year were not prepared for what happened and I think there’s a sigh of relief from those that were blindsided that the year is finally over.”

The number of workers filing new claims for jobless benefits fell much more than expected to 492,000, but seasonal factors likely contributed to the drop and the labor market remains very soft.

S&P 500 futures rose 3.40 points and were above fair value, a formula that evaluates pricing by taking into account interest rates, dividends and time to expiration on the contract. Dow Jones industrial average futures climbed 14 points, while Nasdaq 100 futures were off 3.25 points.

The broad S&P 500 looks set to end 2008 down about 40 percent for the year, though it has recovered almost 18 percent since hitting an 11-year low on Nov. 20.

Markets around the world have been pummeled as the collapse of the U.S. housing market evolved into a global credit crunch and economic slowdown which infected everything from financials to automakers to retailers.

The U.S. casualties include the bankruptcy, acquisition or government takeover of such household names as Bear Stearns, American International Group , Washington Mutual, Merrill Lynch and Lehman Brothers.

AIG, which was rescued by the government soon after the collapse of Lehman, is prepared to ask the Federal Reserve to relax rules on its more than $60 billion disposals program to allow bidders to use a greater proportion of shares to pay for its assets, the Financial Times reported.

On the housing front, demand for U.S. mortgage applications was unchanged during the Christmas holiday week, holding the highest levels in more than five years with loan rates near record lows, an industry group said on Wednesday.

Bernard Madoff, alleged to have run a decades-long $50 billion Ponzi scheme, faces a Wednesday deadline to tell regulators how much he is worth and where his money and other assets are.

The Madoff scandal, which came to light earlier this month, has added to already negative sentiment in the markets. Scores of wealthy people, banks, universities and charities around the world say they are victims, but so far the exact amount of money lost is not known in what could be the largest fraud in Wall Street history.

On Tuesday, stocks climbed after the government expanded its bailout of the auto industry, encouraging hopes policy-makers will continue to take steps to minimize the severity of the year-long recession.

NEW YORK, Dec 31 (Reuters)

I think about this action and how New Castle doesn’t have any auto plants anymore, but there are so many retired Chrysler workers here that it will certainly affect the local economy. Many of the residents rely on the pension program of Chrysler to maintain their lifestyles and had Chrysler gone under, New Castle would have taken several steps back.

The town has grown in the past 10 years and as we drove in from Indianapolis last night, I couldn’t help but notice the new stores and restaurants. There are three hotels now instead on the one that we used to have. There is a new Steak N Shake and a new White Castle. These may not be the highest paying jobs in the world, but it shows that the town is growing and attracting new business.

As I look forward to 2009 and what I would like to see, I guess my Christmas wish list would be for the economy to improve. In an appearance on CNBC’s Closing Bell the other night, I predicted that 2009 would be a good year for stocks. Maria Bartiromo was shocked when I said the market could be 20-30 percent higher next year.

The bailout of the automakers will help stem the tide to some degree. Unlike the financial bailout, this one is a more direct bailout of the middle-class. Hopefully we will see the labor market start to stabilize.

I have mentioned before in IDE that the market tends to improve before the economy and the economy improves before the labor market.

I have been looking at historical charts of the Dow and I found out something interesting the other day. I didn’t realize that from 1932 to 1935, in the heart of the Great Depression, the Dow moved from around 44 to up over 170. Did anyone else know this? This just goes to show how the market and the economy are not always in sync.

The job losses will likely continue through the first quarter at the very least. The recession will likely continue through the first quarter as well. But that doesn’t mean that the stock market will be lower for the first quarter.

As I was preparing for the interview on CNBC, I had a thought about how much fear there was towards the stock market. How telling is it that people are pouring money into treasuries when the yield on the 10-year note is right at 2.0 percent?

The old saying that “the market likes to climb a wall of worry” doesn’t begin to capture the pessimism we have right now. It is more like a mountain of fear than a wall of worry.

I would like to wish all of you a happy holiday season and may 2009 bring all of you massive profits in your investments.

Source: An Early Christmas Present For Detroit

In the shorter term, U.S. Treasury Secretary Henry Paulson may ask for the other half of October’s $700 billion Troubled Asset Relief Program (TARP), money originally earmarked for bank rescue but now possibly a source for a highly anticipated auto bailout, Bloomberg also reported.

But for Obama to begin his spending spree, and for Paulson to continue his, each will genuflect before Congress to get the money. The combined total is about $1.2 trillion, but some analysts believe that figure could be higher.

Paulson says the money he’s requesting is urgent, and would be asking a Congress that officially isn’t in session until the New Year. As a compromise, Paulson has indicated that he could use the extra money to also help troubled automakers General Motors Corp. (GM) and Chrysler LLC.

So far, banks on the receiving end of Paulson’s spending spree haven’t been shoring up their shoddy mortgage holdings, but rather going on their own spending sprees – increasing stakes in foreign holdings and buying up weakened banks that didn’t receive federal aid.

Safe to say, he’s losing fans.

“Please don’t come here and ask for another penny, because if you do, I’m going to work 24 hours a day with the same people that I worked with to support you to make sure that they do not support giving you another dime,” Rep. Maxine Waters, D-Calif., said at a Dec. 10 House hearing.

That’s not to say it will be easy for Obama, either. Even though he’ll be speaking to a Congress with some of the very Democrats that surfed into congress on his wave of support, the idea of writing out yet another taxpayer check – this time for $850 billion – could struggle to find support.

House Speaker Nancy Pelosi doesn’t said Monday that the pending stimulus package should cost about $600 billion, with $400 billion for investments and other government aid and $200 billion in tax cuts, Reuters reported.

Source: Obama, Paulson May Ask for a Combined $1.2 Trillion from Skeptical Congress

This from Today’s Financial News:

I wonder how well the folks at the Big Three sleep at night. The last few weeks must have been torturous for Mullaly, Nardelli and Wagoner on their big, cushy beds, but the past five days have got to have topped them all.

After Congress hung the automakers out to dry last week, Detroit has been curled up in front of the Oval Office’s door waiting to hear their fate. Inside the office, President Bush is answering calls with mixed demands. Southern representatives are demanding union concessions. At the same time, northern leaders argue it is Washington’s obligation to rescue the domestic manufacturers.

It is like the 1860s all over again.

While our lawmakers argue politics, their constituents have had time to think the matter over a bit. As each day goes by, more and more Americans believe bankruptcy is a viable option. Even the press is leaning that way these days.

Backing bankruptcy

As I have told anybody that would listen over the past three months, I stand by my belief that a pre-packaged, government-backed bankruptcy is the only route to success. It allows General Motors and Chrysler to dump their impossibly heavy burdens and start from scratch. No banks will fund the measure, but Uncle Sam certainly can.

The Big Three have their product lineups where they need to be. Now they need to get their balance sheets in order. They only way it is going to happen is if we crumble up the old books and start with a new set (and keep the UAW out of it).

Moody’s announced the findings of its recent research yesterday. It helps prove my point. It says there is a mere 25% chance of a rescue plan that does not involve a near-term bankruptcy, and there is only a 5% chance of a “freefall” Chapter 11 filing (one with no pre-set terms). That means Moody’s believes there is a 70% chance of a government-backed prepackaged filing.

For investors in Ford (NYSE:F), this is no big deal. The company’s balance sheet shows enough cash to get it by for at least another year. But for the folks that have an equity stake in General Motors (NYSE:GM), it means your shares could be worthless in a matter of weeks, even days. Get rid of those things while you still can.

Cut and run

If you want to reinvest the cash, put your money in the suppliers feeding Detroit. They will be able to survive a bankruptcy with some short-term pain but little permanent damage. Best of all, you will be able to get them dirt cheap following any news of a bankruptcy filing. Initially, shares will plummet.

So take this as a call to action. Be prepared to buy shares of Detroit suppliers like Tenneco (NYSE:TEN), TRW Automotive (NYSE:TRW) and BorgWarner (NYSE:BWA) on any news or even rumors of an automaker bankruptcy.

Detroit is in a state of purgatory. Its fate is in the hands of the lame-duck Bush administration. As each day goes by, chances of a pre-packaged bankruptcy grow larger. Play the situation right and it could be a very profitable opportunity.

Be prepared to take action between now and the New Year.

Source: Detroit Bankruptcy: Be Prepared To Buy On The News

It’s also expected to outline cost cutting measures that could include laying off employees, suspending plant operations, delaying the opening of new plants, and cutting the budget for research and development.

According to several Japanese media outlets, Toyota plans to eliminate bonuses for its executives and is expected to post a second-half loss.

One analyst believes the company’s dividend also could be on the chopping block.

“We anticipate that even Toyota could see its post-dividend cash flow turn negative should it keep its dividends at 140 yen,” Morgan Stanley (MS) analyst Noriaki Hirakata wrote in a report. “Thus, in this perfect storm, we expect the firm to cut its dividend to 100 yen per share for this business year.”

That’s a gigantic step backwards from last year, when Toyota took the crown from General Motors Corp. (GM) as world’s largest automaker by selling 9.37 million cars worldwide.

But like all automakers – and nearly every major industry – Toyota has been crippled by a worldwide dearth in demand, brought on by a whirlwind of job losses, devalued property, lack of credit and falling stock markets.

From January to October this year, Toyota sold 7.74 million vehicles. And during its fiscal first half – six months ended September 30 – net revenues fell 6.3% compared to the same period last year.

Year-to-date, Toyota’s New York-listed ADR shares have fallen about 38%, still much better than GM and Ford Motor Co.’s (F) respective stock declines of 83% and 53%. But recently, Toyota’s ADR shares have been moving forward in hopes that the U.S. government will bailout Detroit’s Big Three – GM, Ford and Chrysler LLC – because that would shore up the auto industry’s underpinnings: Dealerships and parts and supply manufacturers.

The United States is also the largest market for most foreign automakers. Allowing one or all of the Big Three to go under would add millions to the running unemployment numbers and deepen the recession, making the U.S. market less likely to buy their cars.

Source: Toyota to Slash 2009 Sales Outlook, Cut Costs

The U.S. dollar fell to two-month lows against the euro and a basket of currencies on Monday, pressured by uncertainty over the fate of U.S. automakers and reduced safe-haven flows.

The dollar was starting to respond negatively to concerns about further weakness in the U.S. economy, analysts said, after a run of weak data caused an exodus from risky positions and increased flight-to-quality buying in the currency.

Investors shunned the greenback amid fears a failure of one or more of the automakers could exacerbate a year-long recession and drag down other companies.

“The uncertain outlook for the U.S. automakers continues to keep investors wary of over exposure to the dollar at this point,” said Omer Esiner, senior market analyst at Ruesch International in Washington.

“We’re starting to see a shift in the market where negative data is starting to actually impact the dollar negatively, which is contrary to what we’ve seen for the better part of the last couple of months,” he added. “We’re seeing a naturally weaker dollar as we get into the year end, so bad news is only exacerbating the need for investors to just exit their long dollar positions.”

In early New York trading, the euro was up 1.5 percent at $1.3570 , after climbing as high as $1.3584, the highest level since Oct. 15, according to Reuters data.

The ICE Futures U.S. dollar index, which tracks the value of the greenback against a basket of six currencies, hit a low of 82.517, the weakest level since Oct. 20. It last traded down 1.3 percent at 82.606.

A more upbeat tone in the global equities market also helped ease extreme risk aversion, reducing the greenback’s safe-haven appeal and boosting demand for higher-yielding currencies.

The Australian dollar rose 1.1 percent and the New Zealand dollar was up 1.5 percent .

Against the yen, the dollar fell 0.9 percent to 90.31 , after hitting a more than 13-year high of 88.10 yen on Friday. But yen gains were capped on speculation that Japanese authorities could intervene to stem further currency strength.

BAILOUT IN FOCUS

The White House said on Friday it was considering tapping a $700 billion financial industry bailout fund to prevent a collapse of ailing U.S. automakers. That came after the U.S. Senate on Thursday rejected a bailout plan to avert a possible bankruptcy by one or more of the nation’s three automakers.

But U.S. President George W. Bush said on Monday an announcement on a car industry rescue was not imminent, leaving the industry’s fate clouded.

Investors also awaited the outcome of a policy meeting by the Federal Reserve on Tuesday to see how close to zero the U.S. central bank will cut interest rates and what alternative measures it will take to boost the economy. The Fed is widely expected to cut rates by at least 50 basis points from the current 1 percent.

“What the Fed says will likely overshadow its rate move,” currency strategists at Brown Brothers Harriman, wrote in a research note. “Many investors are looking for insight into where the Fed anticipates ending the rate cuts and what other non-traditional steps will the Fed adopt.”

Wanfeng Zhou
NEW YORK, Dec 15 (Reuters)