Thursday 28 April 2011

Ben Bernanke Goes On Record to Warn US Deficit 'Not Sustainable'

THE GUARDIAN: Obama must address debt quickly, warns Federal Reserve chief, while interest rates will stay low to protect recovery

Federal Reserve chairman Ben Bernanke used his historic first conference to warn that the US deficit is "not sustainable" and tell political leaders they must address it "as quickly and effectively as they can".

Speaking at what was the first ever press conference on interest rate policy to be given by a Fed chairman, Bernanke confirmed that the US will keep interest rates low and continue its huge programme of buying back government bonds in order to keep the fragile economic recovery on track.

The conference followed a statement from the federal open market committee, which stated that the US recovery was "proceeding at a moderate pace, and overall conditions in the labour market are improving gradually". Household spending and business investment were picking up, but construction and the housing sector remained depressed, said the committee. » | Dominic Rushe in New York | Thursday, April 28, 2011

How profound, Mr. Bernanke! Please tell us something we don’t already know. – © Mark

THE GUARDIAN: Gold hits fresh high as US dollar falls to three-year low: Gold price rises to $1,532.91 an ounce after US Federal Reserve chairman Ben Bernanke effectively ruled out an early interest rate rise » | Zoe Wood | Thursday, April 28, 2011
British Businessmen in Dubai Sentenced to 10 Years for Fraud

THE DAILY TELEGRAPH: Two of the Gulf's most prominent British expatriates have been jailed for ten years in Dubai and fined $500 million for defrauding a bank over projects including a giant polo hotel project.

The downfall of Bahrain-based Charles Ridley, a private banker, and Ryan Cornelius, a hotelier, property developer and investor, has sent shock-waves through the expatriate community and cast a harsh light on the way Dubai handles financial crime.

The two men, along with a Dubai-based British property developer, Arthur Fitzwilliam, who was acquitted, and two Pakistani officials of the Dubai Islamic Bank were arrested in mid-2008. Their first trial collapsed last year when the judge refused to give a verdict.

Mr Ridley was accused of conspiring with the two bank officials to obtain a $501 million loan under false pretences. The money was to be lent to Mr Cornelius to invest in a variety of projects, including buying a Canadian oil refinery to rebuild it in Pakistan, and Mr Fitzwilliam's ambitious plans for a polo, equestrian, hotel and luxury villa complex in the desert outside Dubai. » | Richard Spencer, Dubai | Wednesday, April 27, 2011

Wednesday 27 April 2011

Euroview: Bernanke Unlikely To Halt Dollar's Slide

The U.S. dollar is unlikely to garner any support from Wednesday's FOMC decision, or from Fed Chairman Ben Bernanke's comments, and will remain out of favor for a while longer

Tuesday 26 April 2011

Tourists Flock to Britain for Royal Wedding

Preparations for the wedding between Prince William and Kate Middleton are in their final stages.



The couple tie the knot on Friday, and it is expected to attract the biggest television audience of any royal wedding to date.



Some 600,000 people are also expected to descend on London, the capital, for the big day.



Emma Hayward reports.


Die Reichen werden reicher

Die Gewerkschaften prangern die grossen Unterschiede zwischen reich und arm und den Lohnempfängern an. Die Schweiz werde immer reicher, aber nur wenige profitieren davon. Anders sieht das die Arbeitgeberseite. Reaktion von Thomas Daum, Direktor Schweizerischer Arbeitgeberverband

Tagesschau vom 26.04.2011
City Bonuses Shrink – But Basic Salary Rises More Than Make Up For It

THE GUARDIAN: Bonus payouts shrank by 8% over last 12 months at the same time as permanent 7% rise in basic salaries in Square Mile

Workers in the City of London who have seen contentious bonus payouts shrink by 8% over the last 12 months have more than made up for their loss through a permanent 7% rise in basic salaries, according to a study published today.

Bonuses paid to City workers fell from £7.3bn to £6.7bn for the year to April, the Centre for Economics and Business Research (CEBR) says, but these purported performance-linked payouts remain a step above levels recorded in 2009, when the worst banking crisis since the 1930s saw the City's bonus pool dip to £5.3bn.

However, more than offsetting the impact of shrinking City bonuses, basic salaries in the Square Mile – which still make up the lion's share of pay deals for most City workers – jumped 7%, according to CEBR's analysis of official data from the Office for National Statistics.

Lord Oakeshott, the Liberal Democrat peer who resigned as a party spokesman in protest at what he saw as the coalition's failure to curb banking industry excesses, said: "Real incomes are now being seriously squeezed in the rest of Britain but City pay just sails merrily on." » | Simon Bowers | Tuesday, April 26, 2011
Dollar Falls to New Low as Markets Await Fed's Next Move

THE GUARDIAN: Ben Bernanke, chairman of Federal Reserve, expected to maintain loose monetary policy

The US dollar has fallen to new lows against other major currencies, undermined by predictions that the US would continue to resist pressure to raise interest rates.

In early trading, the dollar dropped to its weakest level ever against the Swiss franc, having touched a record low against the Australian dollar overnight. It also hit a four-week low against the yen, while the dollar index, which measures it against a basket of rival currencies, was close to its lowest level since August 2008.

The fall came a few hours ahead of the start of the Federal Reserve's monthly two-day meeting to set monetary policy.

City experts believe that this will be a defining week for the dollar. Ben Bernanke, chairman of the Fed, will for the first time hold a press conference on Wednesday evening immediately after the Federal open market committee has voted. Traders expect no change to the Fed's current loose monetary position. » | Graeme Wearden | Tuesday, April 26, 2011

Monday 25 April 2011

Special Report: Is Buffett's Teflon Finally Wearing Off?

REUTERS: Aside from maybe the odd cheeseburger stain on his tie, nothing much sticks to Warren Buffett.

Whether his underlings are convicted of helping insurance companies inflate results or a major company he helps oversee is sanctioned for accounting shenanigans, his admirers don't seem to care. Or at least, they haven't historically.

But with a key Buffett lieutenant resigning under a cloud recently, some sophisticated investors are no longer willing to overlook the obvious. For all the shareholders who still consider Buffett the epitome of American capitalism, there are others who wonder whether the time may be near for Buffett to take a graceful bow and exit the stage.

Some will clamor for that this weekend, when 40,000 of his shareholders prepare to descend on Nebraska for the annual meeting of Berkshire Hathaway, the ice-cream-to-insurance conglomerate he runs with absolute authority. » | Ben Berkowitz | NEW YORK | Monday, April 25, 2011
For $70K a Night, You Can Rent Liechtenstein

Bank of England Accused of 'Smoke and Mirrors' on Inflation

THE DAILY TELEGRAPH: The Bank of England has been accused by a leading economist of using "smoke and mirrors" to present its official forecasts for inflation.

With the annual rate of price rises currently double the official target at 4pc, the Bank's central projection that the rate should return to 2pc next year is under considerable debate.

However, Simon Ward, Henderson's chief economist, thinks the Bank is deflecting attention away from a far more worrying presentation of how fast it thinks prices will rise in the future.

"Inflation-targeting has become meaningless," he said. "The opacity of the forecasting process and scope for creative interpretation of the remit and presentational manipulation imply that there is no effective constraint on the Monetary Policy Committee's [MPC] 'discretion'."

His argument is that the Bank's most recent quarterly forecasts show its mean forecast – the mathematical average of its projections – is for inflation of 2.48pc two years ahead, if interest rates do not rise. » | Emma Rowley | Sunday, April 24, 2011
UK Nears Swiss Tax Deal

THE DAILY TELEGRAPH: UK citizens will have to hand over millions of pounds in backdated taxes on secret bank accounts, after it emerged that the Government is close to signing a disclosure deal with Switzerland.

The European country is known for its banking secrecy and the Treasury estimates tens of thousands of British people have stored £125bn in its institutions without paying UK tax.

Any deal is likely to include a withholding tax, taken by the bank on dividend and interest payments, and a levy on previously untaxed income. Read on and comment » | Rowena Mason | Sunday, April 24, 2011

Sunday 24 April 2011

Happy Easter! Joyeuses Pâques! Frohe Ostern! Buona Pasqua! ¡Felices Pascuas! Pasg Hapus!

With every good wish to you all. May your Easter be filled with joy and happiness. To those in the middle of their celebration of the Passover, I wish you all Joyous Pesach!

Easter (Pâques) 1968 – Marc Chagall (1887 – 1985). Image: Google Images

Saturday 23 April 2011

THE GUARDIAN: Six Greek citizens are suing a German magazine for its assertion that their country tricked its way into the eurozone

Insulted Greeks are suing a German magazine over a cover story showing the Greek goddess Aphrodite sticking up her middle finger and an article which called them the "cheats in the Euro family".

Six Greek citizens are taking action against journalists working for the weekly German magazine Focus, including the magazine's then editor-in-chief and publisher, Helmut Markwort.

"Will the Greeks make off with our money?" the magazine asked on its front cover last February.

Tapping into growing German fears of a Greek bailout at the height of the financial crisis, the article depicted a country swamped in debt which had cheated its way into the eurozone.

More than a year after the article appeared, a state prosecutor in Athens is now investigating the magazine for libel and insult, according to the German newspaper, Handelsblatt. » | Abby d'Arcy Hughes in Berlin | Thursday, April 21, 2011
High Taxes and Crime Blamed for Britons Leaving the Country

THE DAILY TELEGRAPH: More than a third of wealthy British residents are considering leaving the country because of high taxes, the weather and crime.

A study by of 1,000 people with more than £250,000 in savings and investments found 35pc may move abroad because of high tax rates, while 44pc blamed the weather and 43pc want to avoid antisocial behaviour.

Recent changes in tax rules have proved controversial for many Britons, including a combination of the 50pc income tax rate on those earning more than £150,000, increases in national insurance and a reduction in personal allowances. » | Myra Butterworth, Personal Finance Correspondent | Saturday, April 23, 2011
France Threatens to 'Suspend' Schengen Treaty

THE DAILY TELEGRAPH: France has threatened to abandon European Union freedom of movement by “suspending” Europe’s Schengen Treaty due to an influx of Tunisian and Libyan migrants from Italy.

Italy has given up to 26,000 illegal migrants six-month residence permits, allowing them to travel freely in the border-free Schengen zone, which covers all EU countries except Britain and Ireland.

The decision to issue travel documents to the Tunisians and other Arab migrants has triggered a French warning over the 1995 treaty.

''It seems to us that we need to think about a mechanism that would allow us, when there is a systematic disruption at one of the EU’s external borders, to intervene with a temporary suspension for as long as the disruption lasts,” said an Elysée source. » | Bruno Waterfield, Brussels | Friday, April 22, 2011

Thursday 21 April 2011

BBC: Islamic Finance 'In Double Digit Growth'

Problems Linger in Sidi Bouzid

It was the self-immolation of a young Tunisian man that sparked the uprising that has spread across the Arab world.



However, months after the revolution that brought down 23 years of authoritarian rule, the struggle there in Tunisia is far from over, as Al Jazeera's Nazanine Moshiri reports from Sidi Bouzid.



Mohamed Bouazizi's desperate gesture might have ignited the uprising. But it was years of state oppression - poverty and unemployment that really inspired people to protest -- President Zine El Abidine Ben Ali is gone - but this remains one of the poorest parts of Tunisia.


Rich Chinese Consider Leaving China

THE DAILY TELEGRAPH: More than half of Chinese "new rich" said they want to leave the country and are considering buying citizenship elsewhere, according to a new report.

While Western businessmen are heading East to make their fortunes, 60 per cent of those with fortunes of more than $10 million (£6 million), had either considered "investment immigration" or already completed the process.

Investment immigration allows rich individuals to effectively buy their residence in another country, in the hope that their money will trickle into the local economy. In the UK, anyone depositing £1 million in a bank account is permitted to stay.

A decade ago, the idea of having such sums to spare would have been beyond the imagination of most Chinese, but this year the number of Chinese boasting disposable assets of more than £1 million is expected to reach 585,000, nearly doubled the total in 2008. » | Malcolm Moore, Shanghai | Thursday, April 21, 2011
Spotlight: Islamic Banking System

In times of financial crisis there is an alternative banking system, which has proved to be more stable, than the traditional, Western banking system. I mean - the Islamic banking. The financial systems in the Islamic countries, even in those, who were formerly Soviet republics - like Kazakhstan - are a real alternative, while the Russian business and science lacks necessary knowledge to adapt its finance to the severe conditions of the crisis.
We will be discussing this issue with our guests the Head of the Russian Islamic Committee Geidar Jemal and Financial analyst Sergey Aleksashenko

Gold Surges

How Sharia Compliant Financial Products Work

Riz Khan: A Cuban Evolution

Cuba's legendary leader Fidel Castro has taken his last bow as leader of the party he founded more than 50 years ago. Joining us on the Riz Khan Show to discuss Cuba's future are Richard Gott, British journalist and historian and Eric Hershberg, Director at the Centre for Latin American and Latino Studies at the American University in Washington DC.

Poverty Hits British Families

The British government hopes its tough spending cuts will save the country from the economic strife afflicting other European nations. But as Laurence Lee reports, the cuts are pushing more and more people into poverty

Wednesday 20 April 2011

Italy Risks Brain Drain Amid Tough Job Market

French Workforce On Strike Because of 'Anglo Saxon Imperialist' Management

THE DAILY TELEGRAPH: The entire workforce of a British French-based ceramics factory has gone on strike in protest at the "Anglo Saxon industrial imperialism" because management only speak English

Some 184 staff at Thermal Ceramics, in Saint-Marcellin-en-Forez, in the Loire Valley, are staging walkouts every day.

"We say 'hello' in French but then communication stops," said workers' representative Thierry Juvin, adding that "every meeting is an ordeal."

He said workers at the factory, which makes ceramic fibre insulation, wanted to discuss wage rises and improved working conditions, but it was proving impossible.

"We have to have someone who translates everything into English, and then anything our English boss says has to be translated into French.

"This makes dialogue extremely slow, if not impossible."

Mr Juvin said three walkouts had been held on most days since English-speaking bosses began managing them earlier this year. » | Peter Allen in Paris | Wednesday, April 20, 2011
Cuba to Allow Homes to Be Bought and Sold for First Time under Communist Rule

THE DAILY TELEGRAPH: Cubans will be allowed to buy and sell homes for the first time since Fidel Castro seized power in 1959 under a package of sweeping reforms.

Since the Communist revolution, inhabitants of the island have only been allowed to swap homes through a complicated system or pass them on to their children.

But a raft of reforms agreed at the first congress of the Communist Party since 1997 includes a plan to legalise property sales.

Under the current system of home swaps, a culture of corruption involving "under-the-table" payments has developed.

However, President Raul Castro, Fidel's brother, said that the concentration of property would not be allowed and no details were given on how sales would operate.

The plan to allow home sales was one of about 300 approved by the party, which also include more self-employment, cutting a million government jobs in the coming years, encouraging foreign investment and reducing state spending. » | Robin Yapp, Sao Paulo | Tuesday, April 19, 2011
The Buck Stops Here

THE DAILY TELEGRAPH: This week's warning about US debt is the wake-up call Obama needs – and the world needs him to act, says Martin Vander Weyer.

The good news is that America has not suddenly turned into the new Ireland. The bad news is that the Obama administration is only beginning to face up to its debt addiction, in the way that Ireland and other euro delinquents have been forced to do. And Washington's prolonged debt denial is one factor that has made the economic recovery so fragile and uncertain for all of us.

In that context, the announcement on Monday by the ratings agency Standard & Poor's that it had shifted its outlook on US government debt from "stable" to "negative", which sent markets into a tailspin, may actually turn out to be helpful, like the friend who says loudly to a incorrigible drunk at a party: "Another drink, George? Or is that a silly question?" The S&P analysis is not hugely significant – it is a first downward notch on a long scale of potential debt downgrades – but it is a timely warning that the world is aware America has a problem. Uncle Sam has been able to refill his glass time after time for the simple reason that Chinese investors – banks, state agencies and exporters – choose to store the wealth they gain in international trade largely in the form of US government paper. But as iconic as the greenback and the Treasury bill may be, they do not enjoy such a uniquely elevated status as to make them immune from the processes of risk assessment that have been applied so painfully elsewhere.

The IMF says America's fiscal deficit for 2011 will approach 11 per cent – similar to the UK's – and its net debt will exceed 70 per cent of gross domestic product, which is a worse position than ours if we exclude bank bail-outs from the equation. US debt has hitherto been regarded as virtually risk-free, but if the UK and other nations are seen to be making strenuous efforts to cut deficits while America's continues to balloon then, sooner or later, investors must begin to take a more cautious view. » | Martin Vander Weyer | Tuesday, April 19, 2011

My comment:

Obama is clueless! From the beginning, it was clear to me that the man was an “empty suit.” But the American electorate would hear none of it, and got carried away with his rhetoric. Nobody even bothered to find out what he meant by “hope and change.” Hope of what? And change to what? And the mantra, “yes, we can.” What was that supposed to mean? Yes, we can what? As a result, Americans became transfixed by a man who could speak (arguably), but nothing else. Words, words, words!

Meanwhile, all Obama has ever wanted to do is spend, spend, spend. The trouble is, he hasn’t learnt one simple lesson of economics: You have to have it to spend it. None of us can go out and spend like a drunken sailor, as if there weren’t a tomorrow. How foolish that is. Profligacy is never a good thing. It will always lead to disaster.

In fairness to Obama, it’s true that he inherited a huge deficit from George W. Bush. Another profligate president. He ruined America by spending vast sums on wars which America could ill-afford, on wars which could achieve nothing to boot. But that was all the more reason why Obama should have got to work on reducing the deficit straightaway upon getting into office. Instead of that, he embarked upon a spending spree.

The Americans, too, must shoulder part of the burden of responsibility. They don’t seem to understand the meaning of the word ‘saving.’ Saving has become an alien concept to Americans. Americans prefer to consume, consume, consume. They also like to be generous with foreign aid. They give foreign aid abroad in billions, trying to buy influence and popularity. We can all see where that has got them.

In addition, the nature of politics in America is far too ideological. The Republicans and Democrats are far away from each other in political terms, so that it is difficult to find any middle ground. As a result, they cannot move forward in a meaningful way.

The future for America is looking very bleak indeed. This is a seminal moment for the US, and a seminal moment for the rest of the West. One can ask oneself but one question: Is this the start of the decline of the West? It might sound melodramatic, but it isn’t. If the US cannot save itself from bankruptcy, its influence in the world will decline. If this happens, it will no longer be the beacon of freedom. This will have serious consequences for us all. One can only fear the consequences of the eclipse of the US. Its loss of influence may have just begun.

It is to be hoped that, somehow, America will wake up before it’s too late. Bernanke’s love of quantitative easing will not solve anything. Quantitative easing is a fancy term for printing money. Turning on the printing press won’t solve anything. In fact, it will make matters worse. – © Mark


This comment also appears here

Tuesday 19 April 2011

US-Haushaltsdefizit: Countdown zum Staatsbankrott

STERN.DE: Gehen die USA pleite? Möglich, sogar ein Datum für den Bankrott gibt es schon, den 8. Juli. Nun wird um Sparpläne gefeilscht. Aber was scheren uns eigentlich die Miesen der Amerikaner? Eine Analyse von Florian Güßgen

Es ist ein Weckruf, ein Warnschuss - eine dringende Aufforderung an die in politischen Schützengräben liegenden US-Demokraten und Republikaner. Einigt euch! Vergesst eure ideologischen Gefechte! Das Wohl des ganzen Landes steht auf dem Spiel. Und, bitte, macht vor allem schnell. Nicht anders ist die Botschaft zu bewerten, die die Rating-Agentur Standard & Poor's am Montag nach Washington und in die Welt geschickt hat. Es ist der Job der Agentur, die Kreditwürdigkeit von Staaten zu beurteilen. Nun sagen die Finanzexperten, es könne sein, dass die USA ihre Top-Bewertung als Kreditnehmer - das dreifache A, das "triple A" - verlören, und zwar schon 2013. Das alles könnte geschehen, wenn die Herren und Damen in Washington jetzt nicht bald einheitlich und schlüssig erklären können, wie sie Amerikas schwindelerregendes Haushaltsloch stopfen wollen. Und zwar subito!

Denn in den USA sieht es haushaltspolitisch derzeit in zweierlei Hinsicht zappenduster aus. Das erste Problem ist die Staatskasse. Die befindet sich in einem dramatischen Zustand. Steuert die Politik hier nicht gegen, können die USA mittel- und langfristig tatsächlich in einen Strudel geraten, der dann auch die Weltwirtschaft herunterziehen könnte. Das zweite Problem ist dummerweise die Politik selbst. In den USA sind Demokraten und Republikaner auch nach mehr als zwei Jahren unter dem als Versöhner angetretenen Präsidenten Barack Obama so tief gespalten, dass es fast unmöglich erscheint, dass sie haushaltspolitisch an einem Strang ziehen. Vor diesem Hintergrund ist der Weckruf von Standard & Poor's zu sehen. » | Eine Analyse von Florian Güßgen | Dienstag, 19. April 2011
Kuba will ausländische Investoren anlocken

David Cameron Blocks Gordon Brown as Head of IMF

THE DAILY TELEGRAPH: David Cameron will block Gordon Brown's attempts to head up the International Monetary Fund after criticising his handling of the financial crisis.

In a direct attack on the former Prime Minister, Mr Cameron said his predecessor was not the "most appropriate person" to lead the IMF because he would not admit the UK had a "debt problem".

Mr Brown is reportedly hoping to take on the £270,000-a-year role but he must first be nominated by the Government.

“If you have someone who didn’t think we had a debt problem (running the IMF) they may not be the best person to decide whether other countries have that problem," he said on BBC Radio 4's Today programme.

He added that the role needed to be filled by “someone who understands the dangers of excessive spending.”

And in a clear signal that Britain would block Mr Brown if stood for the job, Mr Cameron suggested the position should be filled by a candidate from “China, India or south east Asia.” » | Andrew Porter and James Kirkup | Tuesday, April 19, 2011
Wall Street Shares Slump as S&P Downgrades US Debt Outlook

THE DAILY TELEGRAPH: Ratings agency cuts long-term outlook from stable to negative for first time since Pearl Harbor attack 70 years ago

Shares fell heavily on Wall Street on Monday after a leading ratings agency fanned fears of Europe's debt crisis spreading across the Atlantic by issuing a strong warning about America's failure to tackle its budget deficit.

In a move seen by Wall Street as a "shot across the bows" of bickering politicians in Washington, Standard and Poor's (S&P) said it was cutting the outlook on the US's long-term rating from stable to negative for the first time since the attack on Pearl Harbor 70 years ago.

The announcement surprised the financial markets, where attention in recent months has been focused on the problems of the weaker nations of the eurozone. Renewed speculation that Greece will be forced to default on its debts led to a sharp sell-off in the euro, but S&P stressed that the US was not immune from the sovereign debt crisis.

In New York, the Dow Jones industrial average ended the day down 140 points, or 1.1%, with the dollar weaker on the foreign exchanges and yields rising on US treasury bills. The FTSE 100 in London was down 126 points at 5870 – a drop of more than 2% – as ongoing concerns about the eurozone's debt crisis were compounded by the setback for the world's biggest economy. » | Larry Elliott, Economics editor | Tuesday, April 19, 2011

here and here

Monday 18 April 2011

US Warned Over Debts, as S&P Cuts Outlook to 'Negative'

THE DAILY TELEGRAPH: America's ability to tackle its deficit has been given a strong vote of no confidence, after leading rating agency Standard & Poor's said the chances are rising that the country will lose its prized AAA status.

S&P downgraded the outlook for the US government's debt to negative from stable on Monday in a clear shot across the bows of Congress and The White House.

In sharp contrast to every other developed economy, the US has increased its budget deficit in the last year in an effort to accelerate the economic recovery here.

While President Barack Obama and the Republicans have in the last month laid out plans to reduce the deficit, S&P warned that a plan needs to be agreed upon within the next two years for the US to retain its status as a top borrower.

"More than two years after the beginning of the recent crisis, US policymakers have still not agreed on how to reverse recent fiscal deterioration or address longer-term fiscal pressures," said Nikola Swann, an analyst at S&P.

The move by S&P sparked an immediate reaction in financial markets, with US government bond prices falling alongside the S&P 500. Gold prices jumped to a new record of $1,496. » | Richard Blackden, US Business Editor | Monday, April 18, 2011
Markets Hub: Stocks Tumble as S&P Cuts U.S. Outlook

Stocks tumbled Monday after Standard & Poor's cut its credit outlook on the U.S. to negative, increasing the likelihood of a potential downgrade from its triple-A rating. Paul Vigna, George Stahl, Kathleen Magigan and Jim McTague discuss

Sunday 17 April 2011

Furious Greeks Press for Country to Default on Debt

THE OBSERVER: Violence on the streets as backlash grows over Greece's austerity package and €110bn bailout

A growing chorus of voices is urging the Greek government to restructure its debt as fears grow that a €110bn bailout has failed to rescue the country from the financial abyss and is forcing ordinary people into an era of futile austerity.

"It's better to have a restructuring now … since the situation is going nowhere," said Vasso Papandreou, whose views might be easier to discount were she not head of the Greek parliament's economic affairs committee.

Other members of prime minister George Papandreou's party have said that Greece is locked in a "vicious cycle", unable to dig itself out of crisis with policies that can only deepen recession.

International fears of a Greek default rose last week after the German finance minister, Wolfgang Schäuble, refused to rule it out and markets, sensing upheaval, sent Greek borrowing costs soaring.

The normally mild-mannered prime minister has vehemently rebuffed the prospect of Greece failing to meet its debt obligations, saying restructure would not only be catastrophic for the country – blocking its access to markets for years – but also for the eurozone's delicate economy. "Our problems will be addressed in depth not if we restructure our debt but if we restructure the country," he said, announcing the "road map" that would lead Greece out of crisis.

Amid speculation over the country's ability to avoid default, a wave of civil disobedience is causing many to wonder if Greece is becoming ungovernable. Read on and comment » | Helena Smith in Athens | Sunday, April 17, 2011

Saturday 16 April 2011

Castros Embrace Reform at Cuba's Communist Congress

THE DAILY TELEGRAPH: Cuba’s communist leaders kicked off a crucial party congress with a huge parade celebrating the 50th anniversary of the defeat of the invasion by CIA-backed exiles at the Bay of Pigs.

Military music and revolutionary slogans were broadcast from loudspeakers as ranks of soldiers marched through Revolution Square past President Raul [sic] Castro and fellow regime dignitaries.

Jet fighters roared overhead, helicopters flew by and assault vehicles drove through the square before hundreds of thousands of civilians - from college students to factory workers – filed past the podium.

"Long live the Communist Party of Cuba! Long Live the Cuban Revolution! Long Live Fidel! Long Live Raul [sic]!” a female announcer shouted. Fidel Castro, the country’s ailing former leader, did not make an appearance.

But away from the communist fervour and propaganda, the country’s ageing leaders were preparing for a party congress that will be crucial for the regime’s survival.

Raul [sic] Castro is seeking his comrades’ endorsement for market reforms designed to bolster the creaking Soviet-style economy while maintaining their firm grip on one-party power. » | Christopher Hart, Havana | Saturday, April 16, 2011

Thursday 14 April 2011

Obama's Bid to Beat the Deficit: Tax the Rich

THE AUSTRALIAN: BARACK Obama has set the scene for an ideological battle in next year's presidential election, announcing tax increases for the wealthy.

The proposed hike is part of his plan to reduce the federal budget deficit by $US4 trillion ($3.8 trillion) over 12 years.

In a break from his conciliatory style, Mr Obama has ripped into his Republican opponents for trying to put the burden of deficit reduction on the poor and elderly while continuing to cushion the wealthy.

The President announced a broad plan for reducing the US budget deficit yesterday, including cuts to government health programs and defence spending.

But he raised Republican hackles by refusing point blank to extend tax cuts introduced by the Bush administration for people earning more than $US250,000 a year.

Mr Obama said he had agreed to renew the tax cuts for high-income earners once, as part of a deal with Republicans to guarantee cuts for the middle class. "I refuse to renew them again," he said. » | Brad Norington, Washington Correspondent | The Australian | Friday, April 15, 2011
In Financial Crisis, No Prosecutions of Top Figures

THE NEW YORK TIMES: It is a question asked repeatedly across America: why, in the aftermath of a financial mess that generated hundreds of billions in losses, have no high-profile participants in the disaster been prosecuted?

Answering such a question — the equivalent of determining why a dog did not bark — is anything but simple. But a private meeting in mid-October 2008 between Timothy F. Geithner, then-president of the Federal Reserve Bank of New York, and Andrew M. Cuomo, New York’s attorney general at the time, illustrates the complexities of pursuing legal cases in a time of panic.

At the Fed, which oversees the nation’s largest banks, Mr. Geithner worked with the Treasury Department on a large bailout fund for the banks and led efforts to shore up the American International Group, the giant insurer. His focus: stabilizing world financial markets.

Mr. Cuomo, as a Wall Street enforcer, had been questioning banks and rating agencies aggressively for more than a year about their roles in the growing debacle, and also looking into bonuses at A.I.G.

Friendly since their days in the Clinton administration, the two met in Mr. Cuomo’s office in Lower Manhattan, steps from Wall Street and the New York Fed. According to three people briefed at the time about the meeting, Mr. Geithner expressed concern about the fragility of the financial system.

His worry, according to these people, sprang from a desire to calm markets, a goal that could be complicated by a hard-charging attorney general.

Asked whether the unusual meeting had altered his approach, a spokesman for Mr. Cuomo, now New York’s governor, said Wednesday evening that “Mr. Geithner never suggested that there be any lack of diligence or any slowdown.” Mr. Geithner, now the Treasury secretary, said through a spokesman that he had been focused on A.I.G. “to protect taxpayers.”

Whether prosecutors and regulators have been aggressive enough in pursuing wrongdoing is likely to long be a subject of debate. All say they have done the best they could under difficult circumstances.

But several years after the financial crisis, which was caused in large part by reckless lending and excessive risk taking by major financial institutions, no senior executives have been charged or imprisoned, and a collective government effort has not emerged. This stands in stark contrast to the failure of many savings and loan institutions in the late 1980s. In the wake of that debacle, special government task forces referred 1,100 cases to prosecutors, resulting in more than 800 bank officials going to jail. Among the best-known: Charles H. Keating Jr., of Lincoln Savings and Loan in Arizona, and David Paul, of Centrust Bank in Florida.

Former prosecutors, lawyers, bankers and mortgage employees say that investigators and regulators ignored past lessons about how to crack financial fraud. » | Gretchen Morgenson and Louise Story | Thursday, April 14, 2011
America Loves Debt!

US Dollar Should Be Replaced by New Global Reserve – Leading Economist

«Bernanke pumpt eine weitere Blase auf»

TAGES ANZEIGER: Der Chef des Bostoner Vermögensverwalters GMO, Jeremy Grantham, hält Aktien für überbewertet und warnt vor grossen Risiken am Bondmarkt.

Wenige Investoren haben in den vergangenen Jahren so viel Klarsicht bewiesen wie Jeremy Grantham. Der Gründer des Bostoner Vermögensverwalters GMO warnte vor 2007 wiederholt vor einem Kollaps am US-Immobilienmarkt und vor einem Börsencrash. Im März 2009, auf dem Höhepunkt der Marktpanik, empfahl er in einem Kundenbrief mit dem Titel «Reinvesting When Terrified» den Kauf von Aktien. Heute ist er skeptisch. Die Aktienmärkte seien als Folge der enorm expansiven Geldpolitik der US-Notenbank bereits überbewertet, während der Bondmarkt für Investoren «tödlich» sei – ein Riesendilemma für Anleger, sagt Grantham. Er rät zum Aufbau von Cashreserven. » | Von Mark Dittli, Finanz und Wirtschaft | Donnerstag, 14. April 2011
Vince Cable: David Cameron's Immigration Claims 'Risk Inflaming Extremism'

THE DAILY TELEGRAPH: Vince Cable, the Business Secretary, has accused David Cameron of “inflaming extremism” with his speech on immigration.

The Prime Minister will today claim that uncontrolled immigration has undermined some British communities.

Pledging to cut the numbers entering Britain to tens of thousands, rather than hundreds of thousands, Mr Cameron will say that "for too long, immigration has been too high".

Mr Cameron’s speech, his first major address on the issue since the general election, will please many Conservative MPs and voters.

But Mr Cable, a Liberal Democrat, described the speech as “very unwise” and suggested it could fuel extremism over immigration.

“The reference to the tens of thousands of immigrants rather than hundreds of thousands is not part of the coalition agreement, it is Tory party policy only,” Mr Cable told the BBC.

“I do understand there is an election coming but talk of mass immigration risks inflaming the extremism to which he and I are both strongly opposed.”

The Conservatives and Lib Dems agreed in their Coalition deal to take differing views on immigration, but Mr Cable’s forthright criticism of Mr Cameron may raise questions about his position in the Cabinet. Continue reading and comment » | James Kirkup, Political Correspondent | Thursday, April 14, 2011



My comment:

Doesn't Vince Cable understand that he is in office to serve the people? Doesn't he understand that the people's concerns should be of paramount importance in a so-called democracy? The good British people are fed up of all this unrestrained immigration into our once rather homogenous land. Do the people's wishes mean nothing to this man? If he is concerned about extremism, the one thing he and his colleagues could do to nip extremism in the bud is bring immigration under control. It is precisely in countries where immigration has been allowed to get out of hand that we are seeing the growth of the so-called extremist parties. Now surely you can get that, Dr. Cable! – © Mark

This comment also appears here
David Cameron: Migration Threatens Our Way of Life

THE DAILY TELEGRAPH: David Cameron will claim today that uncontrolled immigration has undermined some British communities.

In his most forthright speech on the issue since he became Prime Minister, he will say that mass immigration has led to "discomfort and disjointedness" in neighbourhoods because some migrants have been unwilling to integrate or learn English.

Pledging to cut the numbers entering Britain to tens of thousands, rather than hundreds of thousands, Mr Cameron will say that "for too long, immigration has been too high".

He will also promise to "stamp out" forced marriages, saying that "cultural sensitivity" cannot be allowed to stop the Government from acting.

In the speech to party members in Hampshire, the Prime Minister will attack Labour for claiming it was racist to talk about immigration, saying it is "untruthful and unfair" not to speak about the issue, however uncomfortable. Continue reading and comment » | Andrew Porter, Political Editor | Wedmesday, April 13, 2011

My comment:

He won't do anything about this problem, because his chums, the captains of industry, want cheap labour. What has he done about curbing bankers' bonuses? Not a lot! This is all politicians' talk: sweet words to appease the common folk! – Mark

This comment also appears here

Wednesday 13 April 2011

Procter & Gamble and Unilever Fined for Laundry Detergent Price Fixing

THE DAILY TELEGRAPH: Unilever and Procter & Gamble (P&G), the consumer goods giants, have been handed a €315.2m (£280m) fine for their involvement in a pan-European price-fixing ring.

The European Commission (EC) found that the two companies, together with Germany's Henkel, had colluded to fix the price of washing powder in eight continental European countries between January 2002 and March 2005.

Unilever has agreed to pay €104m and P&G €211m following the investigation which was launched in June 2008. The scale of the fines reflect the size of the groups' businesses in the eight countries.

Henkel was spared a fine after it informed the EC of the cartel's existence. P&G's fine was reduced by 50pc after it co-operated with the EC's investigation, with Unilever receiving a 25pc reduction after subsequently also co-operating. Continue reading and comment » | Jonathan Sibun | Wednesday, April 13, 2011
Andrew Lansley Receives Vote of No Confidence from Royal College of Nursing

THE DAILY TELEGRAPH: Nurses have voted overwhelmingly in favour of a motion saying they have "no confidence" in the Health Secretary's management of NHS reforms.


Delegates at the Royal College of Nursing conference in Liverpool voted 99 per cent in favour of the motion, to 1 per cent against.

Never before has the RCN voted on a motion of no confidence in a Health Secretary. Nurse Geoff Earl told delegates it was a "very, very serious issue".

"Mr Lansley says he wants to hear from us - well go out on to the wards, go out into the community and listen to what our colleagues are saying.

"This is being driven by ideological dogma, not what is best for our patients."

Angry delegates said Andrew Lansley's plans would ruin the NHS and lead to worse patient care.

Bethann Siviter, from Birmingham, said she did not have confidence in GP commissioning - one of the central planks of the reforms.

"They mismanaged the flu jabs - how are they going to manage the NHS?" She added that if the reforms went ahead "the NHS is dying". » | Wednesday, April 13, 2011
U.S. Sends Another Top Official To Saudi Arabia

NPR: The Obama administration is sending another official to Saudi Arabia to try to smooth over relations damaged by the so-called Arab Spring. The Saudis think the U.S. is being naive about the democracy movements and canceled recent plans for Secretary of State Hillary Clinton to visit. They hosted, but only briefly, Defense Secretary Robert Gates last week, and this week it is National Security Adviser Tom Donilon's turn. Analysts say it will be difficult for the U.S. to support democracy in the Middle East and keep this strategic alliance on track. Read the transcript » | Michele Kelemen | Tuesday, April 12, 2011

IMF Warns US to Make a 'Down Payment' on Deficit

THE DAILY TELEGRAPH: The US should make a 'down payment' this year on tackling its budget deficit, the International Monetary Fund has warned, as it emerged that the world's biggest bond investor is shorting the country's bonds.

America will rack up a budget deficit of 10.8pc of gross domestic product this year, the largest of any of the developed economies, the IMF said in its latest Fiscal Monitor report.

In sharp contrast to Britain and much of the rest of Europe, the US has so far delayed any move to cut its budget deficit. Instead, through a combination of extending tax cuts and a second, $600bn round of quantitative easing, Congress and The White House have focused efforts on trying to quicken a recovery that failed to take off last year. » | Richard Blackden, US Business Editor | Wednesday, April 13, 2011

Tuesday 12 April 2011

Witness - Greece: Protesting the Protesters

This unusual take on the Greek protests centres on a small group of 'anti-activists' who think the austerity measures undertaken by the government are in fact a good thing for the crisis-ridden Greek economy. We follow Fotis and his friends in their Liberal Party as they mount their own campaign, while around them the masses gather on the streets for the huge protests that regularly rock the capital.

Saturday 9 April 2011

Aussie Dollar Boosted by Its Own 'Gold Standard'

THE DAILY TELEGRAPH: The Australian dollar is one of the strongest currencies in the world because it is a commodity -backed currency. That’s why it hit a 29-year high against the US dollar today – and it’s all related to the gold price.

The gold price is hitting new all-time highs on a daily basis because many investors have lost faith in paper money. They believe that central bank printing presses are devaluing currencies on a daily basis.

It is the same lack of belief in paper money that has been boosting the Aussie dollar. Paper money used to be backed by gold held in a central bank, but this was abandoned all over the world, allowing central banks to print money via processes such as quantitative easing.

Today, no currency in the world is on the gold standard – all money is “fiat” money.

However, Australia has significant resources of gold, uranium, iron ore, coal and many other important and valuable commodities. They are in the ground, not in a central bank, but this is the nearest thing the world has to the old gold standard. That’s why the Australian currency is so strong.

The same is also true of currencies in Canada, South Africa and Russia. They are effectively backed by commodities in the ground. » | Garry White | Friday, April 08, 2011
Britain's Deficit-cutting Plans Are 'Oxymoronic' Says Former US Treasury Secretary Larry Summers

THE DAILY TELEGRAPH: Larry Summers, President Obama's chief economic adviser for his first two years in office, has labelled Britain's plan to revive growth by tackling its deficit as "oxymoronic", in an unusually outspoken attack.

"I find the idea of expansionary fiscal contraction in the context of the world in which we now live to be every bit as oxymoronic as it sounds," Mr Summers told a gathering of economists and policy makers at the resort of Bretton Woods in New Hampshire.

The analysis from Mr Summers, who also served as US Treasury Secretary under President Clinton, will be unwelcome to a Coalition government that's pushing through tax increases and cutting spending.

The government insists that tackling the budget deficit is required to prevent bond investors losing confidence in the country's fiscal policy in the way they did with Greece and Portugal and have threatened to with Spain and Italy.

In last month's Budget, George Osborne, the chancellor of the exchequer, outlined plans to cut the budget deficit, which has reached 10p of gross domestic product (GDP), to £29bn in 2015 from £146bn this year.

Though it has damaged the Government's rating in the opinion polls, the policy has won the backing of business leaders in the UK who are now tasked with helping to drive the recovery.

However, Mr Summers said he was sceptical that a policy focused on improving "fiscal hygiene" would generate the confidence a recovery needs. "I'd be happy to say that if Britain enjoys a boom for the next two years from increased confidence," I will change my opinion, he said.

The attack from Mr Summers underlines the extent to which many in Washington DC are watching Britain to see whether the government's effort drives the economy back into recession or helps lays the foundation for a lasting recovery. » | Richard Blackden, US Business Editor | Saturday, April 09, 2011
Marine Le Pen rate son grand oral d'économie

LE POINT: La présidente du FN a tenté d'expliquer son programme économique pour la France. Sans convaincre.

"De quoi ? Qui ça ? Ah oui ! Borloo a quitté l'UMP... Très bien, vous savez, moi, je suis pour la concurrence !" plaisante Marine Le Pen, vendredi matin. Pour la concurrence en politique, peut-être, mais en économie, rien n'est moins sûr... Tout sourire, lunettes de soleil sur la tête, veste couleur crème et bottines noires, la présidente du Front national fume une dernière cigarette avant de se livrer à un exercice dont elle n'a pas l'habitude. Son équipe a en effet convié des journalistes économiques - et non pas les "politiques", qu'elle connaît bien - à un "petit-déjeuner de travail " pour expliciter les grandes orientations de son programme dans ce secteur. "Nous ne sommes pas légitimes que sur l'immigration et l'insécurité", veut-elle convaincre. Elle souhaite démontrer que son programme n'est "ni simpliste, ni fantaisiste, ni ringard". » | Par Pauline de Saint Remy | Vendredi 08 Avril 2011
Australians Up In Arms Over Carbon Tax

On a per-capita basis, Australians are among the world's worst polluters, and the government is trying to put a price on carbon.



But the plan to change that -- by taxing polluting industries -- is running into stiff opposition, with thousands turning out to protest the move.



Al Jazeera's Andrew Thomas reports from Sydney. (08 April 2011)


Thursday 7 April 2011

Barack Obama Locked in Last Minute Budget Talks

THE DAILY TELEGRAPH: Barack Obama was locked in crisis budget talks with congressional leaders as the US faces the prospect of a costly government shutdown.


The shutdown would see 800,000 workers asked to stay at home and could cost taxpayers more than $100 million (£61 million) a day.

Mr Obama called for a “sense of urgency” as America sought to avoid the first shutdown since 1996 when Bill Clinton was president.

Failure to reach a deal by midnight on Friday would mean that Washington would essentially run out of money. » | Toby Harnden, Washington | Thursday, April 07, 2011
Portugal Asks for Bail-out Which Could Cost Britain £4.4 Billion

THE DAILY TELEGRAPH: Portugal last night became the third European Union country after Greece and Ireland to formally request an emergency bail–out which could cost Britain £4.4 billion.


The country's caretaker prime minister José Sócrates said the measure had been taken after the stricken nation had run out of options.
Economists last night put the UK's involvement in a Portuguese bail–out at up to a potential £4.4billion.

After months of resisting having to apply for a bail–out from the EU and the International Monetary Fund, Portugal's cost of borrowing has reached unsustainable levels.

Addressing the nation last night Mr Sócrates, said: "I have always said that asking for aid would be the final way to go, but we have reached the moment."

It is understood that the rescue fund could be as high as £70 billion, or €80 billion.

Sources close to the Treasury said last night that Britain would take part in any Portugal–related discussions involving the EU's 27 member states. However, the type of bail–out is yet to be discussed and therefore the extent of the UK's exposure was impossible to gauge, the sources said. » | James Hall | Thursday, April 07, 2011

THE DAILY TELEGRAPH: Spain 'won't follow Portugal' with bail-out: Spain said it will not follow ailing neighbour Portugal in seeking a European bail-out. » | James Hall | Thursday, April 07, 2011

Wednesday 6 April 2011

Le Portugal demande l’aide financière de la Commission européenne

TRIBUNE DE GENÈVE: Le Portugal a demandé mercredi à bénéficier d’une assistance financière de l’Union européenne, a annoncé le président de la Commission européenne José Manuel Barroso dans un communiqué.

"Le Premier ministre du Portugal José Socrates a informé ce jour (mercredi) le président de la Commission européenne José Manuel Barroso de son intention de demander l’activation des mécanismes de soutien financier" de l’UE, a précisé la Commission.

"Le président de la Commission a assuré que cette demande serait examinée le plus rapidement possible (...) et s’est dit confiant dans les capacités du Portugal de surmonter ses difficultés actuelles avec la solidarité de ses partenaires", a ajouté la commission. Peu auparavant, le Premier ministre portugais José Socrates avait annoncé lors d’une allocution télévisée que le gouvernement portugais avait "décidé aujourd’hui même d’adresser une demande d’assistance financière à la Commission européenne". » | AFP | Mercredi 06 Avril 2011