Thursday, 31 May 2012

Euro Is Facing Disintegration, Commission Warns

THE DAILY TELEGRAPH: The euro faces 'disintegration' unless European governments do much more to work together, the European Commission has warned.

Olli Rehn, the economics commissioner, gave the warning as Mario Draghi, the head of the European Central Bank, criticised national leaders for a “lack of action” to help the single currency out of its crisis.

Spain remained at the eye of the financial storm yesterday, amid continuing fears for its banking sector.

Investors in Spanish banks are withdrawing money at a record rate, figures showed yesterday. More than £55 billion was withdrawn and moved out of the country last month.

Yesterday’s figures are for the month before the Spanish banking crisis entered its latest phase with the nationalisation of Bankia, one of the country’s biggest banks.

Even more money is thought to have left the country since then, raising fears that Spain is locked in an unbreakable cycle of market panic.

The flow of money out of Spain has raised fears that its banking system could collapse, requiring a bail-out that its government cannot afford.

Those fears are pushing up Spanish borrowing costs, which intensifies pressure on Spanish banks. » | James Kirkup, Deputy Political Editor | Thursday, May 31, 2012

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Troubled Greece: Fears of 'First Domino' to Fall as Austerity Is Counted a Failure

THE GUARDIAN: Greek's leftist party Syriza says recovery depends on a renegotiated bail-out and access to European structural funds

The soup kitchen opens at noon but long before then the queues start to form in the hot Athens sun. A couple of streets away from where sardines, red mullet and squid are piled high in the fish market, those down on their luck line up. While elsewhere life goes on seemingly as normal, students, jobless people, single parents and pensioners swallow their pride and wait patiently. They get two meals a day, at midday and 5pm. This is what a depression looks like.

At first blush, Greece seems no different from any other developed country. People sit in the city centre cafes sipping their iced coffees; yellow taxis cruise the streets; the shops are open for business. But different it is, and it is not hard to spot the signs that this is an economy that has contracted by 20% since the downturn began three years ago and that it is still falling.

You don't need to know that spending in the shops is down by a sixth over the past year; it is obvious from the empty cabs and those shops open but with no customers. You don't need to know that the official unemployment rate is well above 20% and youth unemployment is nudging 50%: it's obvious from the young men idling on street corners and openly dealing drugs.

Greece is broke and close to being broken. It is a country where children are fainting in school because they are hungry, where 20,000 Athenians are scavenging through waste tips for food, and where the lifeblood of a modern economy – credit – is fast drying up.

It is a country where the fascists and the anarchists battle for control of the streets, where immigrants fear to go out at night and where a woman whispers "it's like the Weimar republic" as a motorcycle cavalcade from the Golden Dawn party, devotees of Adolf Hitler, cruises past the parliament building. Graffiti says: "Foreigners get out of Greece. Greece is for the Greeks. I will vote for Golden Dawn to remove the filth from the country." » | Larry Elliott, economics editor | Thursday, May 31, 2012

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Foreign Goods Disappear from Argentina's Shelves

In Argentina the Apple computer stores are almost empty. Imported Parma hams, and French cheeses, are not being allowed into the country. Even vital materials for Argentina's automobile and pharmaceutical industries are unavailable. It's all part of government crackdown on foreign imports to the country to stimulate local industry and protect the trade balance. Al Jazeera's Lucia Newman reports from Buenos Aires.

Spain Cries for Help: Is Berlin Listening?

REUTERS.COM: Crisis is the watchword in Madrid. Take your pick - liquidity crisis, debt crisis, banking crisis, economic crisis, confidence crisis, investor crisis, jobless crisis. Spain, the ailing euro zone's latest problem child, has them all.

As the problems pile up, Prime Minister Mariano Rajoy's five-month-old conservative administration feels like a government under siege. Nervy top officials are reluctant to speak on the record for fear of slipping up. Policymakers contradict one another. Plans keep changing. Financial markets reel amid the uncertainty. The gloom in ministry corridors is palpable.

The latest gaffe: after weeks insisting that one of the country's biggest banks, Bankia, did not need fresh funds, ministers dropped the bombshell last Friday that there was a 23-billion-euro hole in the accounts. They have yet to explain clearly how they will find the money when they are already struggling to finance a spiraling national debt.

The effect of the Bankia news on fragile financial markets was devastating. Spanish shares dived to 9-year lows, the euro sank and investors fled Spanish government debt, pushing the yield towards the 7 per cent level at which fellow eurozone members Ireland and Portugal were forced to seek national bailouts from Brussels. » | Michael Stott | Reuters | Wednesday, May 30, 2012
Hollande to Clamp Down on Fat Cat Pay

THE GUARDIAN: France's president has vowed that the highest state salary must not be 20 times more than the pay of the lowliest worker

France's new socialist government has announced an immediate, dramatic clampdown on fat-cat pay, promising to cap the salaries of chief executives at state-owned companies which could see top pay-packages slashed or halved.

The president François Hollande vowed during the election campaign that in majority state-owned companies, the highest salary must not be 20 times more than the pay of the lowliest worker. The squeeze on state fat cats, expected to be enacted by decree next month, is part of the new government's quest for France to set a moral example in a crisis-hitEurope where top earners' stratospheric pay packages and benefits has exasperated workers and voters. The measure will sit alongside Hollande's promised new top tax rate of 75% on income over 1 million euros, which is extremely popular among the French public, and which he has described as an act of "patriotism" and "morality". Socialists brushed aside criticisms from the right that state pay-caps could make it difficult to recruit from private sector. » | Angelique Chrisafis in Paris | Wednesday, May 30, 2012

Tuesday, 29 May 2012

Eurozone Crisis: Spanish Fears Send Euro Near to Two-year Low against Dollar

THE GUARDIAN: Currency hit as concerns grow about solvency of Spanish banks and central bank governor reveals decision to step down early

The euro sank to a near two-year low against the dollar on Tuesday amid worries about the solvency of Spanish banks, and as the governor of the country's central bank quit. The single currency fell below $1.25 after rating agency Egan-Jones cut the country's credit rating. Against the pound it was worth 79.95p.

Miguel Ángel Fernández Ordóñez, governor of the Bank of Spain, will step down on 10 June, a month earlier than expected, the central bank said.

The decision came amid fierce criticism from the ruling People's party over the central bank's role in failing to deal quickly enough with the toxic real estate problems of Spanish banks. The government has invited external auditors to value bank assets, in effect bypassing the central bank. The government is expected to ask central bank board member Luis María Linde to take over. » | Ian Traynor, Giles Tremlett and agencies | Tuesday, May 29, 2012

THE GUARDIAN: One bust bank could bring Spain to its knees, warns prime minister: Government will not allow any bank or regional government to collapse 'otherwise country will fall,' says Mariano Rajoy » | Giles Tremlett in Madrid | Tuesday, May 29, 2012
Linksradikalen-Chef Tsipras im Interview: "Wir befinden uns im Kalten Krieg"

STERN.DE: Er schreckt nicht vor drastischen Worten zurück: Der Chef der Linksradikalen, Alexis Tsipras, vergleicht im Interview mit die Situation Griechenlands mit der Lage im Kalten Krieg.

Herr Tsipras, Sie machen Europa Angst. Sie können bei den Wahlen am 17. Juni griechischer Premierminister werden, und je mehr ihre Popularität steigt, desto tiefer rauschen die internationalen Aktienkurse in den Keller.

Sie sehen also, es geht nicht nur darum, dass ein junger politischer Führer extreme Positionen vertritt und damit das politische Establishment stört. Alle haben begriffen: Diese Wahl betrifft ganz Europa. Die Menschen spüren, dass wir die Unterstützung des griechischen Volkes genießen, weil wir unser Wahlversprechen erfüllen werden. Nämlich das Memorandum zu annullieren.

Sie meinen das Sparabkommen zwischen Griechenland und seinen internationalen Geldgebern. EU-Kommission Zentralbank und Währungsfonds.

Es gibt keine Alternative. Entweder diese Troika rückt von der beschlossenen Sparpolitik ab. Oder sie versetzt die ganze Euro-Zone in Gefahr. Sie müssen verstehen: Das Memorandum ist erledigt. Die Sparpolitik hat sich als falsches Medikament der Therapie erwiesen. Nicht nur für Griechenland, auch für Portugal, Spanien und Italien. » | Interview: Andreas Albes und Ferry Batzoglou | Dienstag, 29. Mai 2012

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Crise grecque: Playdoyer d'Athènes contre le risque de fuite des touristes

TRIBUNE DE GENÈVE: Le gouvernement grec intérimaire défend l’attrait touristique du pays. Il souligne la «sécurité» et la «compétitivité» de celui-ci face au risque d’un massif désamour des visiteurs estivaux.

«Il est crucial que l’image qui est donnée du pays corresponde à la réalité», a relevé mardi lors de son premier point de presse le porte-parole du cabinet dit «de service» chargé de mener le pays aux législatives du 17 juin. La Grèce «est une destination totalement sûre», avec des tarifs devenus «très compétitifs», a ajouté Dimitris Tsiodras.

Ce dernier a précisé qu’à la demande du Premier ministre intérimaire, Panayotis Pikrammenos, le ministère en charge du Tourisme oeuvrait à un rebond des réservations touristiques et à «dissiper les inquiétudes» éventuellement nourries à l’étranger. » | ats/afp/Newsnet |mardi 29 mai 2012

Monday, 28 May 2012

Inside Story Americas: Facebook IPO: Fair Risk or Casino Capitalism?

As the stock offering creates big winners and losers, we ask if the odds are stacked against main street investors.

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Germany Now Divided by an Economic Wall

After the fall of the Berlin Wall, some Germans saw the need to have money flowing from the west to the east. Now, however, resentment is growing in the western portion of Germany about the amount of money flowing into cities and towns in the former East Germany. Al Jazeera's Nick Spicer reports from Jena, in what was once East Germany.

A Golden ‘Golden Handshake’ for New Apple Boss

MAIL ONLINE: The former boss of PC World and Currys will reportedly receive a $56million (£36million) golden hello from Apple after taking charge of its retail arm.

John Browett was awarded the hefty payout from the technology giant following its poaching of him from Dixons Retail in February.

The payment, which will be staggered over five years and paid in shares, is likely to fuel the debate even further over executive pay.

The decision to set Mr Browett's salary so high comes after a series of shareholder revolts elsewhere, in which investors have overwhelmingly voted to reject company's pay reports. But boards have insisted that they must offer strong incentives in a bid to recruit the best talent and remain competitive.

The Sunday Times [£] reported that Mr Browett's annual package will be at least seven times his take-home pay at Dixons, according to documents filed with America's stock market watchdog.

The generous salary is not the first time Apple has been willing to spend vast sums on retaining or attracting senior staff. That's one heck of a welcome! New Apple boss to be handed extraordinary £36million 'golden hello' after being poached from Dixon » | Tom Goodenough | Sunday, May 27, 2012

THE TIMES: Browett has struck golden shot at Apple » | Murad Ahmed | Monday, May 28, 2012 [£]

Sunday, 27 May 2012

Merkel: Euro-Bonds kurbeln Wachstum nicht an

La Grèce choquée par la sévérité de Christine Lagarde

LE FIGARO: Le pays se déclare humilié par les propos de la patronne du FMI, qui leur fait porter la responsabilité de leurs difficultés. Les Grecs veulent un mea culpa, mais la dirigeante refuse de céder. Pendant ce temps, l'incertitude politique persiste.

«Avez-vous simplement songé que nous étions à court d'argent?». Les réactions fusent de toutes parts en Grèce, au lendemain de la sévère interview donnée par Christine Lagarde au quotidien britannique The Guardian, sur la situation de la péninsule hellénique, et les difficultés rencontrées au quotidien par ses citoyens.

Ce message, laissé comme près de 3000 autres sur la page Facebook de la directrice du Fonds monétaire international (FMI), illustre l'indignation des Grecs face à l'intransigeance de la dirigeante. Dans cet entretien publié hier, Christine Lagarde estimait qu'une partie des Grecs, en tentant d'échapper systématiquement aux impôts, était responsable de la dégradation des conditions de vie dans le pays. Et face aux révoltes populaires, celle-ci se déclarait plus préoccupée par le sort des enfants d'Afrique que par celui des Grecs. » | Par Olivia Derreumaux | dimanche 27 mai 2012

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My comment:

Christine Lagarde comes over as a very cold, hard, self-possessed, aggressive, and ambitious woman. How someone without a specialty in economics could be given this position beats me. She's a generalist in a specialist's role. Her comments about the Greeks' plight were harsh and cruel. In particular, her comments about Greek children showed a level of heartlessness which was surprising, especially coming from a woman. Her words will not endear the Greeks to her, and they won't endear many others to her either. Comparing the conditions children in African schools have to put up with is totally irrelevant to the Greek question; and in any case, not being able to put food in your child's stomach is hardly comparable to three children in Africa having to share a chair in school. – © Mark

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Eurozone Crisis: If Greece Goes, Germany's Prosperity Goes With It

THE OBSERVER: If the eurozone were to shrink, Germany's once-captive markets would become too poor to import: and the rapid appreciation of a stronger euro would make its exports much pricier

Germany last week found itself able to borrow for two years at the astonishingly low rate of 0.07%. Very nice too: but surely the real message Angela Merkel and her colleagues must take from the successful auction of those zero-coupon schatz bunds is that the single currency simply isn't working.

All the money wants to flow in one direction: towards Germany. It is only the efforts of the European Central Bank, as a giant recycler of liquidity to dry areas of the eurozone banking system, that is ensuring a stability of sorts. This position can't be sustained.

You would be hard-pressed to identify any shift in sentiment in Germany, however. Eurozone politicians had dinner in Brussels on Wednesday and most came away hungry. Mariano Rajoy in Spain is screaming that his country can't afford to keep paying 6% to borrow over 10 years. François Hollande in France and Mario Monti in Italy want to see the introduction of eurobonds, a system of joint issuance of debts. But their prayers have so far gone unanswered, because Germany is not persuaded, even after the rest of the world's most powerful leaders, led by Barack Obama, ganged up on Merkel at last weekend's G8 summit at Camp David.

Her reluctance is, of course, understandable. First, Germany's interest costs would rise, perhaps by €50bn a year, if eurozone members were to borrow collectively, instead of as individual countries. And in the event of one country suffering a crisis, stronger governments – for which read Germany – would be on the hook. » | The Observer | Sunday, May 27, 2012

Friday, 25 May 2012

Summit on Eurozone Crisis Ends in Failure

The euro has fallen to its lowest level against the dollar in almost two years, following Wednesday's late night meeting in Brussels. The talks in Belgium were meant to come up with an agreement on how to tackle the eurozone crisis. But no deal has been reached, as Andrew Simmons reports.

Australian Mining Magnate Becomes World's Richest Woman

The richest woman in Australia is now the richest woman in the world. Mining magnate Gina Rinehart is number 1 on the world's female rich list, thanks to a fortune worth 29 billion dollars. Andrew Thomas has the story.

WIKI: Gina Rinehart »
Why Facebook Is Almost as Greedy as Bernie Madoff

Market strategist Barry Ritholtz explains his views on the Facebook IPO debacle and why the social-networking company has no one to blame but itself for the mess due its greed, which he describes as not that far below that of Bernie Madoff. Photo: AP.

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Britain Can’t Afford to Fall for the Charms of the False Economics Messiah Paul Krugman

THE DAILY TELEGRAPH: Superstar economist Paul Krugman wants us to change course, but his solutions are simplistic.

What does the future hold as Europe slides, ever more hopelessly, towards the abyss? As David Cameron has pointed out, there have been 18 EU summits since he became Prime Minister little more than two years ago, and none of them has produced anything remotely resembling a solution.

The stand-off got a whole lot worse this week. France and Germany are now in open conflict over the way forward, if indeed there is one. For the UK, already bleeding badly from the after-effects of the financial crisis, the situation could scarcely look more threatening.

The fiscal consolidation chosen by the Coalition was always likely to have a negative impact on output, at least in the short term. To make it work, the Government needed the following wind of decent growth elsewhere in the world economy. Instead, it’s facing a hurricane. We look set to be broken by the storm.

But fear not – salvation is at hand. Next week, there comes to these shores a Messiah, a prophet of great wisdom and understanding whose teachings promise to vanquish despair and “end this depression”. He is Prof Paul Krugman, a superstar polemicist who has been described by The Economist as “the most celebrated economist of his generation”. Actually, “celebrated” is not exactly the right word, for Krugman divides opinion like no other. To his followers, he’s a saint; to his detractors, he’s a false prophet with satanic intent.

I’ve been a little misleading here. He’s not really coming to Britain to save us, but rather to promote his latest book, End This Depression Now! Krugman is an economist with attitude, and he thinks Britain is in the midst of a “massive blunder” in economic policy. The UK is the very worst example of austerity economics, he believes, for unlike the poor beleaguered nations of the eurozone periphery, we’ve not had this misery forced on us by the ghastly euro, but have opted for it as an unnecessary penance for the sins of the boom. If only we could be persuaded to forsake “Osbornomics” and tread the path originally set out by our dearly beloved former leader, Gordon Brown – that of spending our way back to growth – then all would be well again. Read on and comment » | Jeremy Warner | Thursday, May 24, 2012

Right Now We Need Expansion »

Thursday, 24 May 2012

EU Leaders Discuss Debt Crisis

The European Union summit has kicked off in Brussels with the focus expected to shift from austerity to growth plans. The summit comes amid concerns over Greece's eurozone future and Spains troubled banks. One idea is to have all eurozone debt guaranteed by all the nations, with Germany having to shoulder much of the burden. But, the German leader Angela Merkel has already dismissed that idea. Al Jazeera's Barnaby Phillips reports from Brussels.

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Eurozone Crisis: Germany and France Clash over Eurobonds at Summit

THE GUARDIAN: French president François Hollande marks his Brussels debut by challenging chancellor Angela Merkel over bailout

A major rift has opened up between Germany and France for the first time in 30 months of euro crisis over how to restore confidence in the single currency.

A special EU summit marking the debut of France's President François Hollande saw him challenge Germany's chancellor, Angela Merkel, on the euro, arguing that the pooling of eurozone debt liability – eurobonds– had to be retained as an option for saving the currency. Merkel has ruled out eurobonds as illegal under current EU law.

Hollande told the dinner of 27 leaders that he wanted to see eurobonds established, while conceding that this would take time, witnesses at the talks said.

Merkel responded that this was nigh-on impossible since it would require changes to the German constitution and around 10 separate legal changes, the sources said.

There was no policy breakthrough at the summit, rather a reiteration by leaders of known positions. Any decisions were postponed until the end of next month after French and Greek parliamentary elections on 17 June.

The fissure between Paris and Berlin widened further when Hollande also called earlier for the eurozone's new bailout vehicle to be allowed to draw funds from the European Central Bank and to be able to recapitalise banks directly, both proposals fiercely resisted by Berlin and also currently impossible under EU law.

Senior German government officials had insisted that eurobonds should not be even discussed at the summit. The Hollande team maintained that all topics were on the table and also held open the prospect that France could refuse to ratify Merkel's fiscal pact compelling debt and deficit reduction in the eurozone unless eurobonds were recognised as a possible tool. » | Ian Traynor in Brussels and Patrick Wintour | Thursday, May 24, 2012

Wednesday, 23 May 2012

Les marchés rechutent, l’euro plonge

LE FIGARO: Pessimiste sur l’issue du sommet européen prévu dans la soirée, le CAC 40 a plongé de 2,62 % à 3 003,27 points. Sur le marché des changes, l’euro est tombé sous 1,26 dollar au plus bas depuis août 2010.

Le répit aura été de courte durée sur les marchés financiers. Le CAC 40 a chuté de 2,62 % à 3 003,27 points. Il a ainsi effacé l’ensemble des gains accumulés en début de semaine et se trouve de nouveau au seuil des 3000 points.

Partout en Europe, les Bourses se sont enfoncées dans le rouge foncé. À Londres, le Footsie a ainsi abandonné 2,53 % et Francfort, le Dax a lâché 2,33 % et Milan 3,68 %. Quant à Madrid, il a chuté de 3,31% au plus bas depuis fin mai 2003. New-York, qui garde les yeux rivés sur la zone euro faisait également grise mine. En séance le Dow Jones reculait de 1,09 % et le Nasdaq de 0,84 %.

Sur le marché des changes, l’euro, bon baromètre de la confiance des investisseurs dans la capacité de la zone euro à s’extraire de la crise, est passé, en séance, sous le seuil de 1,26 dollar pour la première fois depuis août 2010. » | Par Herve Rousseau | mercredi 23 mai 2012
Facebook Founder Mark Zuckerberg Sued by Shareholders over IPO

THE DAILY TELEGRAPH: Facebook founder Mark Zuckerberg has been sued by the social media network's shareholders over its disastrous IPO.

The lawsuit accuses Mr Zuckerberg, Facebook and several banks led by Morgan Stanley of hiding the company's weakened growth forecasts ahead of its $16bn initial public offering.

The defendants are claimed to have concealed from investors during the IPO marketing process "a severe and pronounced reduction" in Facebook revenue growth forecasts.

The news comes as Morgan Stanley, the bank in charge of the IPO, is being investigated over possible securites fraud.

The US bank has been accused of failing to warn smaller investors of a more negative assessment of Facebook's future profits.

It is claimed that several major investors had been pre-warned that a Morgan Stanley analyst had cut the amount of money he expected Facebook to make. » | Telegraph Staff | Wednesday, May 23, 2012

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Griechische Linke will Sparpolitik neu verhandeln

Verbunden »
Eurozone Crisis 'Threat' to Global Economy

The eurozone financial crisis could threaten the global economy, according to Organisation for Economic Development and Co-operation. The 17-nation eurozone will see its economies shrink by 0.1 per cent, before rebounding to 0.9 per cent next year, the Paris-based organisation said in its latest report released on Tuesday. Nick Spicer reports from Berlin.

Regulators Demand Review of Facebook's Initial Public Offering (IPO)

As Facebook's share prices continue to fall, US regulators have called for a review of last week's Initial Public Offering (IPO) of the world's largest social networking site. The financial services group Morgan Stanley has been ordered to account for its handling of the sale of Facebook's shares. Of particular concern for regulators at the Securities and Exchange Commission (SEC) and the Financial Industry Regulatory Authority (FIRA) is a report that the consumer internet analyst at the stock's lead underwriter, Morgan Stanley, cut revenue forecasts for Facebook in the days before the offering, information that may not have reached many investors before the stock was listed. Traders questioning whether the initial share price was realistic to begin with have been further shaken by the company's decreasing value on the NASDAQ. On Friday, the day of the IPO, the firm was valued at over $100bn but that has has been more than decimated, dropping by $16bn in under a week. Al Jazeera's Dominic Kane reports.

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Canada's Growing Debt Woes

Canadians are being told by their government to borrow less money as household debt climbs to near record levels. It is a bit of a blow for an economy that weathered the financial crisis better than most. Al Jazeera's Daniel Lak reports from Toronto on Canada's growing debt problems.

Tuesday, 22 May 2012

'Socialist' Vince Cable Not Fit for Office, Says Adrian Beecroft

THE DAILY TELEGRAPH: Vince Cable is a “socialist” who should never have been put in charge of business policy, a Downing Street adviser claims today.

Adrian Beecroft, who reviewed employment law for No 10, says that Liberal Democrat objections to plans for removing red tape are harming the economy and preventing companies from creating jobs.

In his first newspaper interview, the venture capitalist tells The Daily Telegraph that entrepreneurs are going abroad and that unemployment is rising because of the Coalition’s failure to help business. The impact on the public sector of outdated employment regulations is even more damaging, he says, with taxpayer-funded services “hugely less efficient than they could be” because of the legal difficulties associated with dismissing under-performing workers.

He concludes that the economy will grow by five per cent less than expected – the equivalent of more than £50 billion – because of the Government’s failure to push through radical reform of employment laws. » | Robert Winnett, Political Editor | Tuesday, May 22, 2012

My comment:

Cable has talked sense; Beecroft has talked nonsense. And I'm no socialist. I'm a lifelong Conservative voter. Go eat ****, Mr. Beecroft! Your suggestions are ante-diluvian. – © Mark

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Christine Lagarde Tells Britain to Step Up Recovery Plan

THE DAILY TELEGRAPH: The Bank of England should cut interest rates, print more money and ease the regulatory pressure on banks as part of a radical set of measures to return Britain to recovery, the International Monetary Fund has urged.

Warning that weak growth was putting the country at risk of permanently high unemployment, the Bretton Woods institution called for swift and co-ordinated action between the Bank and the Treasury.

If the joint efforts had failed to have much effect by November, the Government should then consider cutting taxes and boosting infrastructure spending by as much as £30bn, said the IMF.

In an unusually alarmist annual assessment of the UK, IMF managing director Christine Lagarde said that "growth is too slow and unemployment too high, and policies to bolster demand before low growth becomes entrenched are needed".

However, she stressed that austerity had been the right course for the UK, applauding George Osborne as "courageous" and insisting that fiscal stimulus should only be considered as a last resort.

"When trying to imagine what the situation would be like today if no such fiscal consolidation programme had been decided, I shiver," she said. » | Philip Aldrick, Economics editor | Tuesday, May 22, 2012

Monday, 21 May 2012

Facebook Tumbles Below Issue Price as Investors Scramble to Sell Shares

THE DAILY TELEGRAPH: More than $10bn (£6.3bn) was wiped off Facebook's value on its first full day as a public company, rattling investors and provoking criticism of the social network's banking advisers.

Facebook slumped as much as 13pc over the first hour of trading in New York as shareholders scrambled to sell shares in what had been pitched as the greatest growth story of the decade,

The company's founder Mark Zuckerberg, who married his long-term girlfriend over the weekend, saw the value of his fortune drop by more than $2bn to just under $17bn.

"The market is now collectively reflecting the real risks around Facebook," said Brian Wieser, an analyst at Pivotal Research Group, which has a "sell" rating on the company. "The danger for Facebook, is that when you price it very high, the risks to that price now become the overarching narrative for the company."

The much vaunted $104bn flotation – the largest ever by a US technology company – is rapidly turning into a major embarrassment for the social networking site and Wall Street. Technical problems suffered by Nasdaq delayed the opening on Friday.

The company's main banking adviser Morgan Stanley is thought to have bought up shares in significant volumes to support Facebook's stock after the lacklustre float last week. That support is likely to have been withdrawn in part yesterday, accentuating the share price fall. » | Richard Blackden, US business editor | Monday, May 21, 2012

My comment:

Facebook is a bubble just waiting to burst. It's worthless tripe hyped up by people who should know better. Just goes to show how little the investors know about investing. How can a company that deals in chit-chat, gossip, and banalities be worth so much? What does Facebook own, what are its assets? What does it make? What business experience do these nerds have? What does it contribute in real terms to the economy? I think the answer to all those questions is a resounding sweet little, or even nothing. Facebook will sooner or later go the way of all the other bubbles. It will fart its way into the four winds. – © Mark

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Europa droht „verlorene Generation“

DIE PRESSE: Weltweit haben 75 Millionen junge Menschen keine Arbeit. Das führt zu Hoffnungslosigkeit und Resignation, so die Vereinten Nationen. Auch das reiche Europa steht vor einer hohen Jugendarbeitslosigkeit.

Wien. Spaniens Junge riefen als Erste die Revolution aus. Studenten und arbeitslose Jungakademiker gingen auf die Straße, um auf ihre Jobmisere aufmerksam zu machen. Das war im Mai 2011, und seither ist alles schlimmer geworden. Nirgends in Europa sind so viele Junge arbeitslos wie in Spanien. Aber die Situation ist rund um den Globus dramatisch. So sehr, dass die Internationale Arbeitsorganisation der UNO (ILO) vor dem Heranwachsen einer „verlorenen Generation“ warnt und den Regierungen empfiehlt, den Kampf gegen die Jugendarbeitslosigkeit ganz oben auf die Agenda zu setzen.

Weltweit haben laut ILO 75Millionen Jugendliche keine Arbeit, um vier Millionen mehr als vor der Krise im Jahr 2007. Die Wirtschaftskrise hat die Jungen in den entwickelten Regionen der Welt besonders getroffen: Der Anstieg war mit 4,7 Prozentpunkten weltweit am stärksten. Rund zwei Millionen junge Arbeitskräfte sind dort im Zuge der Krise vom Arbeitsmarkt verschwunden. » | Von Jeannine Hierländer (Die Presse) | Montag, 21. Mai 2012
Debatte um zweite Währung: Deutsche Bank will den Geuro für Griechenland

SPIEGEL ONLINE: Griechenland ist kaum noch in der Euro-Zone zu halten, auch wenn die meisten Krisenpolitiker sich genau dies wünschen. Nun macht der Chefvolkswirt der Deutschen Bank einen ungewöhnlichen Vorschlag: Das Land soll einfach zwei Währungen parallel nutzen - den Euro und den Geuro.

Hamburg - Thomas Mayer, der Chefvolkswirt der Deutschen Bank, hält die Einführung einer griechischen Parallelwährung zum Euro für möglich. Diese soll für den inländischen Zahlungsverkehr und die Bezahlung lebensnotwendiger Importe verwendet werden, heißt es in einem Bericht der Forschungsabteilung der Deutschen Bank. Name der neuen Währung: Geuro.

Hintergrund ist die Annahme, dass Griechenland kaum noch in der Euro-Zone zu halten ist. Eine Regierungsbildung im Land ist gerade gescheitert, Neuwahlen stehen an, bei diesen könnten Parteien die Mehrheit erringen, die ein Sparprogramm ablehnen. Die Hilfszahlungen an Griechenland dürften dann eingestellt werden, und das Land würde den Währungsraum wohl verlassen müssen.

Die meisten Ökonomen halten es allerdings für wahrscheinlich, dass Griechenland selbst nach einem Euro-Austritt noch Hilfen anderer EU-Länder erhalten würde. Denn ein völliges Chaos mitten in Europa würden die anderen Länder definitiv vermeiden wollen.

Hier setzt Mayers Vorschlag an: Seinem Modell nach würde die griechische Regierung ihre Rechnungen wohl mit Schuldscheinen bezahlen. Diese würden zum Kern einer neuen Währung werden, da die Schuldscheine weiterverkauft werden könnten. » | ssu | Montag, 21. Mai 2012

Related »
Facebook Sinks On First Day Without Underwriter Support

REUTERS.COM: Facebook stock sank on Monday in the first day of trading without the full support of the company's underwriters, leaving some investors down nearly 25 percent from where they were Friday afternoon.

Facebook's debut was beset by problems, so much so that Nasdaq said on Monday it was changing its IPO procedures. That may comfort companies considering a listing but does little for Facebook, whose lead underwriter Morgan Stanley had to step in and defend the $38 offering price on the open market.

Without that same level of defense, its shares fell $4.64 to $33.67 in the first minutes of trading. That represented a decline of more than 12 percent from Friday's close and about 24.4 percent from the intra-day high of $45 a share. » | Chuck Mikolajczak and John McCrank | Moonday, May 21, 2012

My comment:

Facebook is a bubble just waiting to burst. It's worthless tripe hyped up by people who should know better. Just goes to show how little the investors know about investing. How can a company that deals in chit-chat, gossip, and banalities be worth so much? What does Facebook own, what are its assets? What does it make? What business experience do these nerds have? What does it contribute in real terms to the economy? I think the answer to all those questions is a resounding sweet little, or even nothing. Facebook will sooner or later go the way of all the other bubbles. It will fart its way into the four winds. – © Mark

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Vince Cable Calls Sacking Plans In Beecroft Report 'The Wrong Approach'

BBC: Business Secretary Vince Cable has condemned proposals to make it easier for firms to sack under-performing staff as "the wrong approach".

A report commissioned by the prime minister is also expected to call for shorter periods of consultation over compulsory redundancies.

But Mr Cable told the BBC it was not the job of government to "scare the wits" out of people.

Many Tory MPs back the plans as a means to boost the UK's businesses.

The economy re-entered recession in the first quarter of this year and the coalition government is looking for ways to encourage growth.

The report, which is expected to be published later this week, was compiled by Conservative-supporting venture capitalist Adrian Beecroft.

Its proposals are expected to include:
• An end to a mandatory 90-day consultation period when a company is considering redundancy programmes. Instead it will suggest a standard 30-day period and an emergency five-day period if a firm is in severe distress

• A cap on loss-of-earnings compensation for employees who make successful unfair dismissal claims

• Reform of the rights that workers are allowed to "carry" to new employers when their companies are the subject of a takeover

• Scrapping provisions in the Equality Act which make employers liable for claims from employees for "third-party harassment", such as customers making "sexist" comments to staff in a restaurant

• Shifting responsibility for checking foreign workers' eligibility to work in the UK from employers to the Border Agency or the Home Office
The study follows David Cameron's call for British industry to be freed from "red tape", with labour markets altered to encourage greater investment and fluidity among workers. » | Monday, May 21, 2012

THE SUN: Cable blasts Tory zealots: He attacks plan to axe workers’ rights » | Tom Newton Dunn | Monday, May 21, 2012

THE DAILY TELEGRAPH: Coalition split over employment reforms as Vince Cable dismisses Beecroft Report as 'complete nonsense': Plans to cut employment red tape by stripping labour rights and making it easier for firms to sack under-performing staff have been blasted as "complete nonsense" by Business Secretary Vince Cable. » | Robert Winnett and Christopher Hope | Monday, May 21, 2012

THE GUARDIAN: Scrapping unfair dismissal would affect us all: Where's the evidence that current employment law rules have a negative impact on British business? » | Anya Palmer | Wednesday, October 26, 2011

My comment:

I agree with Vince Cable 100%. It would be utterly ridiculous to get rid of workers' rights like this. Don't forget, the people at the top will continue to get their rights, and multi-million pound bonuses.

This benighted Tory administration will return us to the Victorian model very quickly. The people in the cabinet haven't a care in the world – they're all multi-millionaires. What do they care about workers' rights?

What the Tories want is slave labour for the captains of industry to continue to line their own pockets at the expense of cheap workers. At this rate, we'll soon be returning to child labour, we'll soon be sending children down the coalface to bring up the coal.

In one word: disgusting! More power to Dr. Vince Cable! – © Mark

This comment also appears here

Sunday, 20 May 2012

G8-Staaten wollen Wachstum und Sparpolitik

Does the G8 Represent a Modern World Economy?

With China and India not represented in the G8, we ask if the group can deal with the current global economic problems.

Affluent Greeks Moving Cash Abroad

As analysts start to look at what happens if Greece leaves the euro zone, its wealthier citizens have taken matters into their own hands. Vast amounts of money are heading to countries elsewhere - to Switzerland and to the UK. Al Jazeera's Peter Greste investigates.

Saturday, 19 May 2012

Crisis of Confidence: Fears of Bank Runs Mount in Southern Europe

SPIEGEL ONLINE INTERNATIONAL: Following the downgrade of 16 Spanish banks by Moody's, the focus in the euro crisis is back on the banking sector. Greeks are withdrawing hundreds of millions from their accounts, with reports that the same is happening in Spain. Experts are calling on the European Central Bank to step in and prevent full-scale bank runs.

The final wake-up call came from Moody's. On Thursday evening, the US rating agency downgraded 16 Spanish banks in one fell swoop, some of them by three notches. On Monday, the agency had already downgraded 26 Italian banks -- including major institutions such as UniCredit and Intesa Sanpaolo. The outlook for all the institutions involved is negative, Moody's said.

These are drastic steps, but they are hardly excessive. The European sovereign debt crisis long ago also became a banking crisis. The fate of the affected countries can not be separated from that of their financial institutions: If a state goes bankrupt, its banks too will struggle to survive. On the other hand, the examples of Ireland and Spain show that a shaky banking system can quickly overwhelm national budgets.

Moody's justified its downgrades of Spanish banks with the argument that the ability of the government to support individual banks has worsened. On Friday, the Spanish central bank was also forced to admit that the proportion of bad loans on the books of Spanish banks has risen to an 18-year high. According to the central bank, the share of bad loans rose in March to 8.36 percent, compared to 8.15 percent in the previous month. » | Stefan Kaiser | Friday, May 18, 2012
David Cameron Criticised for Delivering 'Irritating' Lectures to Eurozone Leaders

GUARDIAN – WINTOUR AND WATT BLOG: Former British ambassador to France says EU leaders are unamused by prime minister's advice on how to save the euro

David Cameron and George Osborne have decided to lecture the eurozone on what it needs to do to put its house in order.

In a video conference on Thursday with François Hollande and Angela Merkel, the prime minister decided to repeat his public warning of a "remorseless logic" that struggling members of a single currency should be supported by stronger members.

Sir John Holmes, Britain's former ambassador to France, told Radio 4's The World at One that EU leaders are unamused:
Other leaders find David Cameron's lectures rather irritating.
Veterans of Britain's tortuous relationship with the EU say Cameron and Osborne are giving a masterclass in how to annoy France and Germany, the two most important powers in Europe. They say that the prime minister and chancellor are putting their short term political interests – a need to blame Britain's double dip recession on the eurozone's failings – before the British national interest of ensuring maximum influence in the EU. David Miliband told MPs on Thursday that the government was seeking to find an "alibi for the collapse of our economy". Read on and comment » | Nicholas Watt | Friday, May 18, 2012

Friday, 18 May 2012

Crisis Forces Greeks to Keep Cash Out Of Banks

Fitch Downgrades Greece On Euro Exit Fears: Europe's Financial Contagion Spreads

Debt-stricken eurozone nation given "Triple C" rating, the lowest possible grade for a country that is not in default.

Thursday, 17 May 2012

Poor at Risk as US State Mulls Austerity

Jerry Brown, Califronia's governor, has called on state assembly members to adopt austerity measures and urged citizens to approve tax increases in a speech outlining a revised budget. Brown proposed on Monday $8.3bn in spending cuts for education, health care and welfare programmes in a plan aimed at combating the state's severe budget deficit amounting to $15.7b. But critics say the plan will hurt the poor the most. Al Jazeera's Rob Reynolds reports from Los Angeles.

From Porsches to Diamonds: What the Wealthy Are Pawning

View the photo gallery and comment here
Defying the Odds: Why the French Economy Works Surprisingly Well

SPIEGEL ONLINE INTERNATIONAL: According to German calculations, the new French president's call for an even lower retirement age and more public workers should not add up to economic growth. But despite violating established economic principles, the French economy works surprisingly well.

The journalists' visit to the Paris-based headquarters of French automaker Renault kicked off in a very French way: with an almost two-hour lunch. It was naturally not a simple affair in the company cafeteria. The meal at the nearby Cap Sequin restaurant boasted three artery-clogging courses, a bottle of white wine and a wonderful view of the Seine River followed by coffee and chocolates. At about half past two, it was finally time to get back to work, though it was somehow difficult to do so.

For decades, France's economy has violated established laws of economics and not just because of the cholesterol-packed lunches. There's also the fact that France is the world leader in terms of vacation days, has a nationwide 35-hour work week and allows its citizens to retire at 65, two years earlier than in Germany. On top of that, France has strict regulations regarding employee termination and a swollen public sector. Nearly 57 percent of France's economic performance flows through state hands. That figure is about 10 percent higher than in Germany and a record level among industrialized nations.

Now France has elected François Hollande, a Socialist president whose most important pledge was "More of the same!" He has called for public-sector jobs financed with a 75 percent tax on top earners, and more time to enjoy retirement. Indeed, while Germany just boosted its retirement age to 67, its western neighbors might soon be able to leave the working world at 60 with a full pension. » | Christian Rickens | Thursday, May 17, 2012

Wednesday, 16 May 2012

Bank of England Cuts Growth Forecasts: Sir Mervyn King's Speech In Full

The Bank of England has cut its growth forecasts and warned in its May Inflation Report that inflation will stay high for longer than it previously thought. Here is Sir Mervyn King's speech in full.

Read the speech in full here | Wednesday, May 16, 2012

Tuesday, 15 May 2012

Euro-Zone wirtschaftlich immer tiefer gespalten

REUTERS DEUTSCHLAND: Berlin - Boom in Deutschland, Stagnation in Frankreich, Rezession in Italien & Co: Der wirtschaftliche Riss in der Euro-Zone wird immer größer.

Der Währungsunion schrammte nur dank des überraschend kräftigen Wachstums in Deutschland an einer Rezession vorbei. Experten warnen aber, dass sich Europas größte Volkswirtschaft nicht auf Dauer von der Konjunkturflaute in den Krisenstaaten abkoppeln kann. Die Rufe nach einem Konzept für mehr Wachstum und Beschäftigung werden deshalb lauter.

Boomende Exporte und kauffreudige Verbraucher ließen das Bruttoinlandsprodukt von Januar bis März um 0,5 Prozent zum Vorquartal steigen, teilte das Statistische Bundesamt am Dienstag mit. Ende 2011 war es noch um 0,2 Prozent geschrumpft - zum ersten Mal seit fast drei Jahren. Bei zwei Minus-Quartalen in Folge sprechen Ökonomen von Rezession. "Deutschland hat die konjunkturelle Schwächephase im Winterhalbjahr zügig überwunden", sagte Wirtschaftsminister Philipp Rösler. » | Reuters | Dienstag, 15. Mai 2012
What Happens If Greece Leaves the Euro?

Greek leaders have been struggling to form a new coalition for the past eight days, but with little success. A failure to form a government would mean Greeks would have to vote again in less than two months. Opinion polls show the anti-austerity Radical Left party, known as Syriza, leading the polls, and if they win the country could be pushed out of the eurozone. Al Jazeera's Nadim Baba takes a look at what that would mean.

Related »
Al Jazeera Interviews Analyst about Hollande Presidency

Thomas Costerg says new president has stiff challenges to grapple with.

Standing Firm: Merkel Won't Budge on Austerity Despite Setback

SPIEGEL ONLINE INTERNATIONAL: Hopes that Chancellor Angela Merkel will back down from her strict insistence on austerity are likely to be dashed despite mounting European criticism of her policy and a crushing state election defeat for her party on Sunday. Most Germans like how she has handled the crisis, say analysts.

When the going gets tough, Chancellor Angela Merkel is prone to making a quick U-turn. Last year's departure from nuclear energy weeks after the Fukushima accident is a prime example.

But Europeans hoping that mounting international opposition will make her drop her austerity plan to save the euro -- a policy that is causing so much pain in ailing economies like Greece and Spain -- are likely to be disappointed, say analysts in Germany.

The chancellor's personal approval ratings remain high, and opinion polls show the majority of Germans support her European strategy, which they see as the best way to limit the impact of the crisis on their personal finances.

An opinion poll for Stern magazine published last week showed that 59 percent of Germans are opposed to stimulating growth through new borrowing, and 61 believe that Merkel should stick to her position.

As long as that doesn't change, Merkel won't significantly soften her stance. Minor concessions are all France's new Socialist president François Hollande, due to meet her for the first time in Berlin on Tuesday evening, can expect, say analysts. The reinvigorated center-left opposition at home is also likely to get less than it wants. » | David Crossland | Tuesday, May 15, 2012

Monday, 14 May 2012

Hainan, l'île au trésor des milliardaires chinois

LE FIGARO: REPORTAGE - Tous les riches Chinois se doivent de posséder une résidence secondaire dans cette île tropicale ancrée au sud de leur pays, parce que c'est bon pour le prestige et excellent pour les affaires. Un endroit vraiment très surprenant, où tout paraît curieusement permis. Pour l'instant.

Il fait si chaud que le tarmac fondrait s'il n'était pas en béton. 38°C à l'ombre et 82% d'humidité sur cette piste où rissolent une douzaine de jets privés, alignés et briqués comme à la parade, à l'intention de clients qui se succèdent sans discontinuer. Au pied des passerelles, les dirigeants des plus grandes compagnies aéronautiques européennes et américaines sont pourtant tous là, en train de transpirer le plus élégamment possible tout en se félicitant d'avoir réussi à acheminer jusqu'ici un exemplaire de leur plus récent modèle, quitte à l'emprunter pour trois jours à un émir de Bahreïn ou à un PDG de Hongkong.

Mais le Salon du luxe, organisé depuis trois ans sur l'île de Hainan par une jeune Française de Shanghaï, Delphine Lignières, mérite amplement leurs efforts. Cette année encore, une bonne vingtaine de yachts et sans doute autant de jets privés y ont été vendus entre le 5 et le 8 avril, en plus de toute une collection de voitures et de téléphones d'un luxe inouï (dont l'un qui valait deux fois plus cher qu'un coupé Mercedes) et davantage de bijoux que les joailliers n'en prêtent à eux tous pour une cérémonie des Oscars. Bien qu'ouvert uniquement sur invitation - dont la plus recherchée était siglée VVIP: Very Very Important Person -, cet incroyable «Rendez-vous de Hainan», ponctué de fêtes aussi fastueuses et élitistes que celles du Festival de Cannes, est parvenu cette année à attirer plus de 10.000 visiteurs qui ont dépensé au total «plusieurs milliards de yuans»... ce qui équivaut tout de même à plusieurs centaines de millions d'euros. » | Par vgrousset | vendredi 11 mai 2012

WIKI – HAINAN : ici et ici
Facebook Co-founder Eduardo Saverin Quits US

THE DAILY TELEGRAPH: Eduardo Saverin, the billionaire Facebook co-founder, has renounced his US citizenship in a bid to avoid millions of dollars in taxes.

Facebook is set to go public this week and Brazilian-born Saverin is likely to avoid a tax bill of $600million. He has lived in Singapore since 2009.

Although the move will put new pressure on President Obama to extend tax breaks for the wealthy, rather than allow them to expire as is currently planned, Saverin’s actions were widely condemned online. The Huffington Post claimed he owed America “nearly everything”.

Mr Saverin’s name appeared in a list published by on Friday by America’s Internal Revenue Service of people who had renounced their citizenship. A spoeksman [sic] for Saverin said that he made the change last September.

Mr Saverin was Facebook’s first chief financial officer but left the company after arguing with colleague Mark Zuckerberg. » | Matt Warman, Consumer Technology Editor | Monday, May 14, 2012

Sunday, 13 May 2012

Bachelor-Affäre: Yahoo-Chef Thompson muss gehen

SPIEGEL ONLINE: Ein falscher akademischer Titel in seinem Lebenslauf kostet Yahoo-Chef Scott Thompson den Job. Nach Angaben des Konzerns wird er seinen Posten abgeben. Wegen der Affäre stand der Manager bereits seit Tagen in der Kritik.

New York - Der wegen eines geschönten Lebenslaufs in die Kritik geratene Yahoo-Chef Scott Thompson stellt seinen Posten zur Verfügung. Wie der Konzern am Sonntag auf seiner Website bekannt gab, verlässt er das Unternehmen. Sein Nachfolger werde den Angaben zufolge bis auf weiteres der bisherige Leiter des globalen Mediengeschäfts, Ross Levinsohn. » | suc/dpa/dapd | Sonntag, 13. Mai 2012
Banking Crisis Hits Ordinary Spaniards Hard

The Spanish government has announced major reforms to the country's banking sector. The key measures include requiring banks to set aside more money to protect themselves from bad loans, and an independent audit of the sector's debts and assets. Spanish banks are saddled with large amounts of bad debt, after the property market collapsed in 2008. The resulting crisis hit ordinary Spaniards hard, as Sonia Gallego reports from Madrid.

Saturday, 12 May 2012

Violences en Italie contre des symboles de l'austérité

LE FIGARO: La colère monte dans la péninsule à mesure que l'austérité se fait ressentir. Un bureau de l'agence de perception de l'impôt Equitalia a encore été la cible samedi de cocktails Molotov.

«On se serait cru dans les années 1970», affirme la sénatrice Sabina Rossa, fille d'un syndicaliste tué par le group terroriste d'extrême gauche des Brigades Rouges. À l'instar de la Grèce, l'Italie suffoque sous la pression de l'austérité. Certains n'hésitent pas à user de la violence pour exprimer leur colère. À tel point que le pays craint de revivre les heures noires des années 1970 et 1980, dites «les années de plomb», avec la montée d'un activisme politique violent.

Cible de ces attaques, les symboles de la politique d'austérité. Ce samedi matin, deux cocktails Molotov ont été lancés contre un bureau de l'agence de perception de l'impôt Equitalia dans la ville de Livourne (nord-ouest de l'Italie). La veille, des heurts ont éclaté devant un autre bureau de l'agence à Naples. La semaine dernière, un responsable d'Equitalia avait été pris en otage pendant quelques heures par un commerçant avant que ce dernier ne se rende à la police. » | Par Guillaume Errard | samedi 12 mai 2012