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Archive for November 22nd, 2008

WORLD BANK TO LOAN ANGOLA $1B

Posted by Gilmour Poincaree on November 22, 2008

Nov 20, 2008 1:35 AM

The World Bank will loan an estimated $1 billion to Angola between 2009 and 2013 to help the oil-rich WORLD BANK LOGOAfrican nation diversify its economy, the World Bank’s director for Angola said.

“Between June of 2009 and June of 2013 we will make available an estimated $1 billion in loans to the Angolan government to help diversify the economy away from oil,” Alberto Chueca told Reuters.

“Angola is beginning to diversify its economy, but it still has a long way to go,” he added.

Angola rivals Nigeria as sub-Saharan Africa’s largest petroleum producer, with oil making up over 80 percent of the southwestern African nation’s exports and a projected 58 percent of gross domestic Secretary-General with Joao Bernanrdo de Miranda FM Angolaproduct in 2008, according to the World Bank.

Angola’s government, however, is keen to boost investment and production in non-oil sectors, including agriculture and banking, as it rebuilds an economy shattered by a 27-year civil war.

Luanda has received billions in oil-backed loans and credit from China to help rebuild ports, railways, roads and other infrastructure damaged by the conflict, which ended in 2002.

Source: Reuters

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PUBLISHED BY ‘ONE NEWS – TVNZ’ (New Zealand)

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Posted in AGRICULTURE, ANGOLA, BANKING SYSTEMS, CHINA, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL MARKETS, FUELS, INDUSTRIES, INTERNATIONAL, MARITIME, PETROL, RAILWAY TRANSPORT, ROAD TRANSPORT, THE FLOW OF INVESTMENTS, WORLD BANK | Leave a Comment »

RUPEE ENDS 7-DAY FALLING STREAK (India)

Posted by Gilmour Poincaree on November 22, 2008

22 Nov 2008, 0000 hrs IST, ET Bureau

MUMBAI: After a gap of several days, the rupee took a break from its falling routine and posted gains on Wednesday. However, this is the second week in a row that the currency posted weekly losses, as a slide in global stocks fuelled concerns foreign investors would step up equity sales. Liquidity was comfortable, with banks parking more than Rs 9,000 crore with the Reserve Bank of India (RBI), although overnight call money rates closed higher. Bonds dealers are expecting interest rate cuts any moment now. Bonds rose on these hopes.

The rupee ended at 50.04 against the dollar, 0.3% stronger than 50.18 at close on Thursday, when it hit a record low of 50.60 during trade. Stock market benchmark BSE Sensex snapped a seven-day losing streak and rose 5.5% on late buying by large domestic funds. Foreign funds have sold a net $13.5 billion of Indian stocks this year, after buying $17.4 billion in 2007.

“The upward movement in the rupee was also because of dollar losing against the major world currencies,” says the head of fixed income at a local MF. He said that the dollar fell dramatically in the non-deliverable forwards market, reducing the arbitrage opportunity. However, he said that the outlook for the rupee still remains subdued.

Overnight cash rates closed slightly higher on Friday after outflows toward treasury bill auctions drained some funds from the system and due to borrowing by banks for fresh auctions earlier in the day. Call rates closed at 6.25%, higher than Thursday’s close of 6.20%. However, banks parked Rs 9,220 crore with the central bank through its daily twin money market operations, indicating sufficient cash supplies with banks.

The government sold Rs 7,000 crore worth of treasury bills and another Rs 9,000 crore of bonds this week. The money leaving the system on account of the latter is to be compensated by the buyback of short dated MSS bonds that took place earlier in the week.

Bonds rose, as dealers say that it is only a matter of time before RBI announces a cut in rates. Yields of the 10-year government securities fell to 7.19% reflecting the bullishness in the market.

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PUBLISHED BY ‘THE ECONOMIC TIMES’ (India)

Posted in BANKING SYSTEMS, CENTRAL BANKS, CURRENCIES, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL MARKETS, INDIA, INTERNATIONAL, RUPEE (India), STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

BILLIONS MORE WIPED OFF CITIGROUP SHARES – Market jumps on hopes of new treasury secretary – Boost fails to help US banking giant

Posted by Gilmour Poincaree on November 22, 2008

Saturday November 22 2008 00.01 GMT

by James Doran, in New York

The Guardian

Wall Street ended a volatile week with renewed confidence last night, after reports that Barack Obama has chosen Timothy Geithner, the head of the New York Federal Reserve, as his treasury secretary.

As speculation mounted over Geithner’s nomination, shares rebounded. The Dow Jones industrial average recorded a 494-point gain on the day as stocks surged by 6.5% to close above the psychologically important 8,000 level at 8046.42. It was still 5% down for the week, however, as worries persist about the global economic slowdown.

Geithner, 47, has always been a favourite to take the top job and his appointment is expected to be announced by the Obama camp in the next 24 hours.

Banking stocks still suffered, though, despite the market’s abrupt recovery.

Citigroup, once the world’s biggest banking group, saw another $5bn (£3.35bn)wiped off its value after an emergency board meeting failed to come up with any initiative to stem the unprecedented flight of investors. Shares fell to $3 after the bank’s chief executive, Vikram Pandit, ruled out selling its retail stockbroking arm, Smith Barney, in an attempt to stop the rout.

Shares in Citigroup have lost more than half their value this week since Pandit announced plans on Monday to sack 52,000 workers. Measures by the bank and its biggest investors to reverse the share price decline, from a level of $54 two years ago, have all failed.

However, a Citigroup source within Pandit’s inner circle, defended the bank last night, saying the sinking share price “has nothing to do with our viability”. The source added that it was of no consequence if the price fell to zero.

“This is all about market perception,” she said, claiming that the market was wrong. “We are the same as everybody else. Our stock price is declining but so is everybody else’s.”

The executive added that talk of a government bail-out or nationalisation was misguided. “This is not the same as Lehman Brothers,” she said, referring to the Wall Street bank that collapsed in September. “Citi has no liquidity issues” and so did not need government help.

Analysts are concerned that Citigroup has more than $100bn of toxic, debt-related assets on its books and may need to raise as much again in order to keep its balance sheet in check.

But the Citi executive said this was another false perception in the market. “We are very comfortable,” she said. “We have reached a very different conclusion to the market. We have no liquidity problems at all.”

The board is nevertheless considering all its options. Pandit called an emergency meeting with staff at 8am in New York yesterday before a full board meeting to confront the collapsing share price. The board wants Citi to consider either a break-up, a merger with another company, or a fire sale of assets and divisions. Pandit is believed to have told his closest lieutenants “everything is on the table”.

It is understood that teams of executives within Citigroup had begun drawing up plans for the emergency sale of the Smith Barney retail brokerage, the global credit card division, and the transaction services unit. Shares rose briefly as rumours of the emergency plans leaked into the market. But within minutes it emerged that Pandit told staff he was opposed to a break-up of the company and had no plan to sell Smith Barney.

The conflicting reports added to the confusion and fear already stalking the market and sparked a further steep sell-off in Citigroup shares.

Striking a deal to sell all of Citigroup would be fraught with problems. The banking group is huge, spanning the globe with more than 350,000 employees. Morgan Stanley, the former Wall Street brokerage that recently became a commercial bank, held preliminary merger talks with Citi in September when its own share price was under pressure. Pandit spent much of his career at Morgan and is close to John Mack, the Morgan chief executive. Sources said talks have not been rekindled. A source close to Mack said the bank had no interest in doing a deal with Citi.

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PUBLISHED BY ‘THE GUARDIAN’ (UK)

Posted in BANKING SYSTEM - USA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL MARKETS, OUTSOURCED WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE WORK MARKET, THE WORKERS, USA | Leave a Comment »

À DGCI – BANCOS VÃO TER DE DENUNCIAR CONTAS ABERTAS POR DEVEDORES – E também os que estão inseridos em sectores de risco

Posted by Gilmour Poincaree on November 22, 2008

2008/11/22 12:50

Redacção / MDAAAA

Os bancos e a generalidade das sociedades financeiras vão ter de comunicar automaticamente à Direcção-Geral dos Impostos (DGCI) todas as aberturas ou manutenção de contas por parte de contribuintes que estejam na lista de devedores ao fisco, bem como os que estão inseridos em sectores de risco, avança o «Público».

A medida faz parte de um vasto pacote de alterações apresentadas ontem pelo Partido Socialista (PS), em consonância com o Ministério das Finanças, à proposta de Orçamento do Estado (OE) para 2009 e que, com base na maioria parlamentar dos socialistas, será aprovada e entrará em vigor a partir de 1 de Janeiro do próximo ano.

Adianta ainda o «Público» que, actualmente, o número um do artigo 63-A da Lei Geral Tributária (LGT), onde são reguladas as informações relativas a operações financeiras, não estabelecia nada em relação a esta matéria e a proposta de Orçamento apresentada pelo Governo deixava tudo como dantes.

No entanto, a proposta apresentada pelos socialista na passada sexta-feira altera esta legislação, determinando-se que «as instituições de crédito e sociedades financeiras estão sujeitas a mecanismos de informação automática relativamente à abertura ou manutenção de contas por contribuintes cuja situação tributária não se encontre regularizada, nos termos dos números 5 e 6 do artigo 64.º [da LGT], e inseridos em sectores de risco». Como os números 5 e 6 do artigo 64.º da LGT determinam precisamente quais os contribuintes a colocar na lista de devedores ao fisco, tanto estes, como os que sejam englobados em sectores de risco pela DGCI, vêem agora os seus bancos, ou o banco onde pretendam abrir uma nova conta, a ter de comunicar ao fisco essa situação.

Contribuintes que paguem pensões de alimentos vão ser penalizados no IRS

Mas, de acordo com o mesmo jornal, as várias dezenas de propostas apresentadas pelo PS vem introduzir ainda uma outra alteração que terá efeitos significativos sobre o rendimento dos contribuintes divorciados e que pagam pensão de alimentos ao seu anterior cônjuge.

Actualmente, o Código do Imposto sobre o Rendimento de pessoas Singulares (IRS) permite que os contribuintes divorciados que paguem pensões de alimentos deduzam ao seu rendimento líquido as pensões pagas, desde que as mesmas sejam determinadas judicialmente. Mais uma vez, a proposta de Orçamento apresentada pelo Governo não alterava esta situação. Mas o PS altera-a totalmente. Deixa de ser possível deduzir estas importâncias ao rendimento líquido e permite-se que seja dedutível à colecta, mas apenas 20 por cento da pensão paga. Ou seja, serão penalizados de várias formas. Por um lado, porque é mais desvantajoso deduzir à colecta do que abater ao rendimento (esta era, aliás, a única situação de abatimento ainda prevista no CIRS); por outro, a despesa paga com pensões, apenas poderá ser deduzida em 20 por cento desse valor.

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PUBLISHED BY ‘AGÊNCIA FINANCEIRA’ (Portugal)

Posted in BANKING SYSTEMS, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, MACROECONOMY, PORTUGAL, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS | Leave a Comment »

GOODYEAR TO STOP PRODUCTION FOR ONE WEEK (Luxembourg)

Posted by Gilmour Poincaree on November 22, 2008

21-NOV-08

GOODYEAR Goodyear in Colmar-Berg have announced that they will stop CHARLES GOODYEARproduction of truck tyres for next week, according to local media reports.

It is understood that the decision was taken due to a slump in the demand for truck tyres as fewer trucks are being purchased.

The new follows recent stoppages of production at week-ends.

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PUBLISHED BY ‘STATION’ (Luxembourg)

Posted in COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, LUXEMBOURG, RECESSION, ROAD TRANSPORT, THE FLOW OF INVESTMENTS, THE WORK MARKET, THE WORKERS, TRANSPORT INDUSTRIES | Leave a Comment »

UNIVERSITY PROFESSOR DETAINED FOR DESTABILIZING FINANCIAL SYSTEM (Latvia)

Posted by Gilmour Poincaree on November 22, 2008

Nov 21, 2008

TBT Staff in cooperation with BNS

VENTSPILS – The rector of Ventspils University College has expressed his surprise over the detention of a lecturer for attempts to destabilize the Latvian financial system.

University College Rector Janis Vucans told the Baltic News Service that he did not know the exact reasons for the detention of lecturer Dmitrijs Smirnovs, but that he expected to receive a written explanation.

The rector said that the discussion that led to the lecturers detention was an ordinary talk in which each participant voiced his own opinion and vision.

Asked whether Smirnovs’ detention should be taken as interference with a person’s freedom of speech, Vucans said that Smirnovs is a lecturer at the Ventspils University College, delivering lectures on banks and monetary systems. “On what basis should we lecture? Not on examples of some Switzerland or the US, the situation in Latviais more important to us,” he said.

“The question is whether we are teaching something abstract, what does not refer to us, or we are trying to educate our students on issues that are topical,” said the rector. “As far as I understand, his statements are not populist, but based on analysis,” said the rector.

Smirnovs’ detention was one in a string of detentions allegedly following a rumor that the lat was on the verge of devaluation. Parliament made it a crime to spread such rumors after a previous incident saw hundreds of thousands of lats sold over the course of a few days.

Smirnovs said in the discussion: “The only thing I can advise: first, not to keep money in banks, second, not to accumulate savings in lats as it is very dangerous now. Convert them to the US dollars. The euro is an artificial currency, and what is achieved by the euro in a year, can be lost in a month. These are real threats to the value of the euro. Maybe some people do not understand it, but the main oppositionist and competitor to the US is the European Union (EU). The main goal of the US is to destroy the EU as it does not benefit from a strong and united Europe, strong currency – the euro.”

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PUBLISHED BY ‘THE BALTIC TIMES’ (Estonia, Latvia and Lithuania.)

Posted in CURRENCIES, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FREEDOM OF SPEECH AND CONSCIENCE, HUMAN RIGHTS, HYPERINFLATION, INFLATION, INTERNATIONAL, JUDICIARY SYSTEMS, LATVIA, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY | Leave a Comment »

ISRAELE: ATTACCHI DI RAZZI SU SDEROT E ASHQELON

Posted by Gilmour Poincaree on November 22, 2008

22-11-2008 – 19:26

(ANSA) – TEL AVIV, 22 NOV – Alcuni razzi palestinesi sono stati lanciati stasera dalla striscia di Gaza in direzione delle citta’ israeliane di Sderot e Ashqelon.Lo affermano fonti locali secondo cui si sono udite quattro deflagrazioni. In diversi insediamenti ebraici a ridosso della striscia sono risuonate la sirene di allarme e la popolazione e’ andata nei rifugi. Fonti palestinesi aggiungono che alcune persone sono rimaste ferite a Beit Hanun,nel nord di Gaza,da una cannonata sparata da un carro armato israeliano.

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PUBLISHED BY ‘IL MESSAGGERO’ (Italy)

Posted in FOREIGN POLICIES, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, ISRAEL, MIDDLE EAST, MILITARY CONTRACTS, PALESTINE, THE ARMS INDUSTRY, THE ISRAELI-PALESTINIAN STRUGGLE, WARS AND ARMED CONFLICTS | Leave a Comment »

PIANO ANTI-CRISI: TAGLI ALLE RATE DEI MUINTERVENTI SU TARIFFE, ENERGIA E CARBURANTITUI,

Posted by Gilmour Poincaree on November 22, 2008

di Luca Cifoni

ROMA (22 novembre) – Bonus per le famiglie a basso reddito, ma anche interventi su carburanti, bollette energetiche, tariffe autostradali. E mutui, la cui riduzione potrebbe rientrare negli impegni presi dalle banche in cambio dei nuovi finanziamenti offerti dallo Stato. È ad ampio raggio il pacchetto famiglie che il governo sta mettendo a punto e che verrà approvato venerdì 28. Lo slittamento di due giorni, rispetto alla data prevista di mercoledì, è dovuto all’esigenza di coordinare i provvedimenti italiani con quelli che saranno proposti dalla Commissione europea proprio mercoledì; in particolare per quanto riguarda il rilancio degli investimenti in infrastrutture, che è al centro anche del piano di Bruxelles. Ieri il ministro dell’Economia ha illustrato al presidente Napolitano le grande linee del decreto.

L’obiettivo di tutti gli interventi destinati alle famiglie è naturalmente risollevare i consumi in particolare nel periodo natalizio. Dunque si punta a dare un po’ di soldi da spendere ai nuclei a reddito più basso, e allo stesso tempo a ridurre l’importo di alcune spese fisse sostenute da tutti. A partire da quelle energetiche. In questo, a dire la verità, la difficile fase economica paradossalmente aiuta. A causa delle prospettive di recessione il prezzo del barile è ormai arrivato intorno ai 50 dollari, e quello della benzina alla pompa si è adeguato scendendo a 1,17 euro al litro, il livello più basso dal novembre 2005. A partire dall’8 dicembre e fino al 6 gennaio, il governo potrebbe mettere di suo una riduzione temporanea delle accise, ottenendo quindi un prezzo ancora più basso. E di riduzione delle accise, piuttosto che di blocco delle tariffe, si parla anche relativamente alle bollette di elettricità e gas. In questo caso, dato il meccanismo “ritardato” di formazione dei prezzi, il calo del greggio avrebbe iniziato a farsi sentire nei prossimi mesi. L’ipotesi è che il governo lo anticipi con il proprio intervento fiscale, a partire dal mese di gennaio, per poi lasciare che il prezzo si stabilizzi ad aprile quando le accise sarebbero riportate al loro livello attuale.

Quanto alle tariffe autostradali, l’idea è invece un intervento diretto per congelare possibili aumenti futuri. Questa possibilità ha provocato ieri a Piazza Affari un tonfo di Atlantia, che controlla autostrade per l’Italia. Il blocco però non riguarderebbe l’incremento che la società ha in programma per il prossimo gennaio (pari a circa il 2,5 per cento). Nel mirino ci sono piuttosto aumenti più sensibili che sarebbero stati richiesti dal gruppo Gavio. La linea dell’esecutivo, enunciata dallo stesso ministro Tremonti, è legare qualsiasi incremento della tariffe agli investimenti effettivamente realizzati dal concessionario.

C’è poi la partita dei mutui. Anche in questo caso le famiglie italiane dovrebbero beneficiare a partire dai prossimi mesi della riduzione dei tassi Euribor in corso dalla metà di ottobre. In campo c’è anche la convenzione con l’Abi, che prevede la possibilità di ridurre le rate in cambio di un sostanziale allungamento della durata del prestito. Finora però questa formula non ha avuto troppo successo tra i risparmiatori. Siccome i tassi praticati dalle banche non si possono ridurre per legge, si è fatta strada l’ipotesi di inserire questo tema nelle nuove norme per il sostegno alle banche. Com’è noto, le banche le cui obbligazioni perpetue saranno sottoscritte dal Tesoro dovranno aderire ad un codice etico. Il quale dovrebbe prevedere, oltre alla garanzia di non far mancare in credito alle imprese, anche un impegno a ridurre gli spread a vantaggio delle famiglie, eventualmente anche adottando come base il tasso di riferimento della Bce invece che l’Euribor. Dalle banche per ora non arriva una conferma a questo scnario, mentre gli istituti avrebbero offerto al governo proprio una proroga della attuale convenzione.

Confermate le misure a favore delle imprese, anche se il taglio degli acconti dovrebbe riguardare Ires e Irap ma non l’Irpef.

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PUBLISHED BY ‘IL MESSAGGERO’ (Italy)

Posted in BANKING SYSTEMS, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, EUROPE, EUROPEAN CENTRAL BANK, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, PETROL, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE EUROPEAN UNION, THE FLOW OF INVESTMENTS | Leave a Comment »

RUSIA DEBERÍA AUMENTAR LA PRODUCCIÓN DE ALIMENTOS UN 15% PARA GARANTIZAR LA SEGURIDAD ALIMENTARIA – Las importaciones deben ser un complemento a la agricultura nacional, pero no una alternativa

Posted by Gilmour Poincaree on November 22, 2008

21/11/2008

MARM- El porcentaje de los alimentos importados en Rusia excede el umbral de seguridad alimentaria en un 10 ó en un 15%, según manifestó el vicepresidente de la Academia de Ciencias Agrícolas, en una conferencia internacional dedicada a la seguridad alimenticia del país. “Si las importaciones exceden el 20% de la producción global, en vez de servir como un complemento a la agricultura nacional, la desplazan, constituyéndose en una alternativa, lo que provoca la caída de la producción”.

Actualmente la producción nacional respecto a la demanda interna, es la siguiente: carne el 60%, productos lácteos menos del 80%, azúcar el 58%, hortalizas el 84% y frutas el 40%, señalando el vicepresidente que un nivel tan bajo de independencia alimentaria, provoca inestabilidad en los precios y en el mercado agroalimentario.

En su opinión, para alcanzar el umbral de seguridad alimentaria, el porcentaje de materias primas agrícolas y de alimentos nacionales en el mercado, debería ser, para los cereales de al menos el 90%; para el azúcar el 80%; para el aceite el 80%; para la carne y productos cárnicos el 85%; para la leche y productos lácteos el 90%; y para el pescado y sus derivados el 80%.

Actualmente, en Rusia se está elaborando un plan para garantizar la seguridad alimentaria del país, plan que se presentará a la firma del Presidente a comienzos de diciembre del año en curso, con el fin de garantizar esta seguridad hacia el año 2020.

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PUBLISHED BY ‘AGROINFORMACION’ (Spain)

Posted in AGRICULTURE, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FOOD PRODUCTION (human), INDUSTRIES, INTERNATIONAL, RUSSIA | Leave a Comment »

LA CRISIS FINANCIERA IMPONE CONDICIONES MÁS RESTRICTIVAS A LOS PRÉSTAMOS BANCARIOS AL SECTOR AGRARIO ITALIANO – Las organizaciones agrícolas consideran que las condiciones impuestas por los bancos son demasiado severas e insostenibles para el sector

Posted by Gilmour Poincaree on November 22, 2008

21/11/2008

MARM- También en las empresas agrarias hay una restricción del crédito. Las organizaciones agrícolas denuncian las señales restrictivas, con el requerimiento por parte de los bancos de condiciones consideradas demasiado severas e insostenibles para el sector. Así pues, tras una fase en la que las instituciones bancarias animaban a las empresas a que se endeudaran, con la complicidad de los tipos de interés favorables, ahora se ha pasado a un drástico endurecimiento de las condiciones.

Por otra parte se han puesto de manifiesto las dificultades para hacer frente a los compromisos a corto plazo. El aumento de los tipos ha creado una fuerte crisis de liquidez. La confirmación de que las cosas están yendo mal, es el incremento de los impagos. Desde hace unos años la tendencia estaba disminuyendo, y la agricultura había alcanzado los niveles de los demás sectores, pero ahora se corre el riesgo de una brusca inversión de la tendencia. En el último trimestre los impagos pasaron de 6,5% a 7,3%, pero el aspecto más preocupante es el incremento del 0,8% en el último mes.

El presidente de CONFAGRICOLTURA, Federico Vecchione, ha denunciado que muchas empresas que ya habían formalizado planes financieros incluso con grandes instituciones bancarias, se encuentran ahora frente a condiciones que son insostenibles y el resultado es que los empresarios deben bloquear las inversiones.

Hasta hace algunos meses, los bancos incentivaban a las empresas para solicitar préstamos. Ahora el crédito se concede con cuentagotas. Los bancos necesitan reconstituir su liquidez y por ello tienden a restringir los créditos concedidos, exigiendo mayores garantías.

Para la agricultura, el requerimiento de garantías patrimoniales es una vieja historia, pero en los últimos años algo se estaba moviendo, pero ahora, después de la crisis financiera, los bancos están en una situación de espera y, de todos modos, la relación de confianza ha sufrido un menoscabo y si hasta hace unos meses la relación entre préstamos y garantías era de 1 a 2, ahora es de 1 a 3.

Si bien se está consolidando el fenómeno de un leve incremento del crédito a corto plazo, que se estaba comprobando ya en 2007, el mismo está determinado, entre otras cosas, por la necesidad de recurrir a financiaciones a corto plazo para hacer frente a los costes de los préstamos contraídos a medio y largo plazo. Pero el crecimiento del crédito a corto plazo es también una señal de alarma sobre el estado de salud de las empresas que, en algunas situaciones, están obligadas a recurrir a los bancos, para hacer frente a la gestión ordinaria.

La tendencia positiva que ha marcado en estos últimos años la financiación a la agricultura, ha quedado confirmada también en ocasión de la reciente presentación del Protocolo entre PattiChiari (servicio de orientación de las relaciones entre clientes y bancos), CIA y CONFAGRICOLTURA, por el Presidente de la Asociación Bancaria Italiana (ABI) y el consorcio PattiChiari, que ha subrayado que en cinco años el crecimiento fue del 57% pasando de 23.000 a 36.000 millones en 2007. El Presidente de la ABI ha explicado que es necesario activar una comunicación cada vez más inmediata entre empresa agrícola y banco, una exigencia determinada por los procedimientos de evaluación del sistema crediticio introducidos en el acuerdo de Basilea 2. Para el Presidente de la ABI “existe una fuerte atención del mundo bancario al sector y hoy los plazos medios de respuesta a una solicitud de financiación se han reducido de 9 a 6 días”.

Según los datos de la ABI, han sido las pequeñas y medianas empresas quienes han impulsado las inversiones. Para esta tipología de empresas, de hecho, ha habido un crecimiento de la incidencia que pasó de 39,3% en 2001 a 48,2% en diciembre 2007, por un importe de 16.000 millones, respecto a los 7.900 de 2001. También aumento la financiación a las grandes empresas (de 3.000 a 7.600 millones) mientras que se redujo la cuota de las pequeñas empresas, que bajó a 29,2% frente al 45,7%.

En cuanto a los impagos, que en 2007 disminuyeron en un 3,5%, los datos mejores se obtuvieron en el centro (-9.3%) y sur (-2.4%), mientras que en el norte hubo un ligero incremento de un 0.1%. en total; los impagos, siempre según los datos de la ABI, se redujeron pasando de 3.200 millones en 2001 a 2.200 millones (-29%), mientras que el porcentaje de los impagos brutos sobre el total de créditos concedidos pasó del 14 al 6,2%.

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REFORMA DEL SECTOR LÁCTEO CHINO TRAS LOS CASOS DE LECHE CONTAMINADA – El Gobierno chino emprendió hoy una campaña para reformar en un año el sector lácteo en su conjunto, desde la cría de ganado hasta la venta final, “ya que el escándalo de la leche contaminada dañó la salud, la imagen de China y la industria”

Posted by Gilmour Poincaree on November 22, 2008

20/11/2008

TAINTED MILK FROM CHINA EFE- Según informó el Consejo de Estado (Ejecutivo), en un plazo que concluirá en octubre del 2009 deberán estar en vigor nuevas leyes, reglamentos y normas de calidad para estimularla producción de la industria y devolver la confianza de los consumidores.

La crisis de la leche con melamina reveló los principales problemas que afronta el control de calidad en la industria láctea china y el Ministerio de Salud Pública revisará durante la campaña los criterios que deben cumplir en calidad y seguridad alimentaria los productos lácteos.

Por su parte, el Ministerio chino de Agricultura deberá elaborar las normas de control para las pruebas tanto de melamina como de otras sustancias tóxicas contenidas en los alimentos para animales y mientras llegan las normas poner en práctica controles temporales.

Los ganaderos recibirán subsidios y las empresas lácteas préstamos que les ayuden a superar la crisis que les afecta ya que las ventas de productos sufrieron un gran descenso tras el último escándalo de la leche contaminada que originó la muerte de 3 bebés y la hospitalización de decenas de miles.

El grupo lácteo Xingtai Sanlu Dairies, uno de los principales de China, registró una caída del 20 por ciento en sus ventas, respecto al período anterior al escándalo, dijo Cao Zhanwu, su director de A 3D REPRESENTATION OF A MOLECULE OF MELAMINEventas.

Las directrices para reformar el sector lácteo chino implicarán a la Comisión Nacional de Reforma y Desarrollo (CNRD), máximo órgano de planificación de China, el Banco Central, 11 ministerios, comisiones y departamentos, según la agencia oficial Xinhua.

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ESPAÑA Y PORTUGAL FIRMAN LA “CARTA DE INTENCIONES PARA LA SOSTENIBILIDAD Y DESARROLLO DE LA AGRICULTURA ECOLÓGICA” – La ministra de Medio Ambiente y Medio Rural y Marino, Elena Espinosa y el ministro de Agricultura, Desarrollo Rural y Pesca de Portugal, Jaime Silva han firmado hoy la “Carta de intenciones para la sostenibilidad y desarrollo de la agricultura ecológica”, con el objeto de fomentar el desarrollo de la misma, a través de acciones comunes o propias coordinadas, que beneficien a ambos territorios

Posted by Gilmour Poincaree on November 22, 2008

21/11/2008

MARM – Las relaciones existentes entre España y Portugal, permiten un amplio campo de cooperación mutua en los ámbitos del desarrollo cultural, social, económico y tecnológico. Ambos países son depositarios de grandes tradiciones agroalimentarias y comparten el interés en la conservación medioambiental y de la biodiversidad de la península ibérica.

En producción ecológica las situaciones respectivas de las dos naciones son similares, en cuanto a la importancia de la superficie agraria, orientaciones productivas basadas en un compartido medio geográfico y climático, en estructuras de comercialización y en el nivel de demanda interna de sus productos.

En la “Carta de intenciones para la sostenibilidad y desarrollo de la agricultura ecológica”, ambos gobiernos destacan que la Agricultura Ecológica constituye un sector estratégico que conecta perfectamente con políticas medioambientales, de gestión de recursos escasos, de sostenibilidad y de calidad alimentaria.

Por otro lado, la agricultura ecológica responde a una demanda moderna de productos naturales por parte de los consumidores, y sus producciones, debido a su exigente sistema de certificación y control.

La práctica y el estímulo de la transformación de sus producciones, supone un modo de diversificación agraria y contribuye a la revalorización de productos agroalimentarios aunando viabilidad económica con sostenibilidad ecológica y social.

La Agricultura Ecológica tiene un papel decisivo en el desarrollo rural, dinamizando las comarcas donde se practica y actuando como catalizador de la incorporación de jóvenes agricultores, como herramienta de educación ambiental y soporte de actividades de ecoturismo, así como elemento de promoción de todo un legado gastronómico.

El método de la Agricultura Ecológica es acorde con las tendencias de la nueva PAC y la política general de fomento de la calidad agroalimentaria y de desarrollo sostenible que se llevan a cabo por ambos gobiernos.

A estos fines, los firmantes se comprometen a promover coordinadamente las siguientes iniciativas para la defensa y promoción de la Agricultura Ecológica, de las producciones de calidad obtenidas con el método de producción ecológica, con el doble objetivo de desarrollar el sector y de mejorar las condiciones de calidad y competitividad de sus productos en los mercados nacionales e internacionales, respetando los derechos de los consumidores:

– Consolidar e incrementar la posición de ambos gobiernos dentro de la Unión Europea en cuanto importancia de la superficie dedicada a la producción ecológica

– Favorecer la integración e identificación de los elementos característicos de la producción ecológica en el resto de políticas.

– Fomentar el desarrollo general del sector primario reconociendo sus especificidades.

– Propiciar el intercambio de conocimientos y de iniciativas relacionadas con la formación y la investigación específica aplicadas a este método productivo.

– Promover el establecimiento real de un mercado único comunitario en lo que respecta a la producción ecológica tratando de reducir los elementos que fomentan los mercados nacionales.

– Consolidar los canales de distribución específicos de los productos de la Agricultura Ecológica, fomentando, al mismo tiempo, la introducción de estos productos en los canales convencionales y la creación de nuevas iniciativas de concentración de la oferta.

– Mejorar el conocimiento de la población al respecto de este tipo de productos tratando así de promover su consumo.

– Promover la convergencia hacia una aplicación uniforme de los instrumentos de control y certificación.

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MUTUAL FUNDS OR STOCKS ?

Posted by Gilmour Poincaree on November 22, 2008

First Posted 08:49:00 11/06/2008

by Ma. Esther Salcedo-Posadas

MoneySense

Beth Tan invests her money in stocks and mutual funds. Would she advise others to do the CHARGE BY BALDWINsame? “The stock market is riskier so it depends on your appetite for risk. There are mutual funds that balance stock market investment with fixed income securities,” she counsels.

When deciding whether to invest in mutual funds or stocks, here are four factors to consider:

Time. The decision to invest in mutual funds or go directly in the stock market will depend on how much personal involvement you want in terms of time and effort.

If you like to watch the stock market, do research, get high on technical analysis, and you actually have a lot of time in your hands, then turn your passion into an income-generating activity.

However, if you don’t have enough time to closely watch the stock market because of a day job or whatever reason, you’re better off investing in mutual funds.

Knowledge. If your eyes glaze and you get a headache from reading financial statements and stock charts, better rely on professional advice. In the same way, if you do not have enough knowledge about mutual funds, your best bet is to find an expert. STRANGE MUTUAL FUNDS

If you have limited experience in both, mutual fund investing through a reputable institution should be a safer option than stock market trading.

Risk. By investing in mutual funds, you get instant diversification since your money is invested in various securities. Putting your money in a diversified portfolio equates to lower risk.

If you want to try your hand at the stock market, you can look at investing in a wider variety of stocks. This helps minimize risks since the ups and downs in prices across numerous stocks tend to negate losses with gains. The downside, though, is that this – rather than focusing on a few high-value stocks – means lower returns.

There is no such thing as complete security in mutual fund investing because your investment is not guaranteed and the value could wildly fluctuate. Then again, compared to the stock market, mutual funds remain the less risky route.

Potential return. Some investors choose to invest in the stock market because the potential returns are greater, especially if you know how to pick the right stocks.

With online stock trading, you get to see the value of your portfolio in real time including the fees involved and other details. Online stock trading has made investing in the stock market friendlier for the average investor.

Citiseconline.com, for example, conducts free half-day seminars for interested participants who want to learn the concepts of stock market trading. According to Juanis Barredo, Citiseconline.com vice
president, one may trade online and use the company’s research tools and resources with just P25,000.

With stock prices at current discounted levels, now is the best time to explore this online investment tool. Just remember that by choosing the stock market, you become your own fund manager, and if you do not know what you are doing, you can lose money big time.

There is a lot of technical data that needs to be considered when deciding to buy or sell a stock, so much so that a new investor may get quite confused. The best precaution in mitigating risk, therefore, would be to educate yourself with the rules of the game (there are many ways to play the game).

It is also a good idea to start small so that you can learn from your mistakes without breaking the bank.

(This article is from MoneySense, the country’s first and only personal finance magazine. Visit www.moneysense.com.ph for more.)

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CHEATING THE POOR (Philippines)

Posted by Gilmour Poincaree on November 22, 2008

First Posted 02:45:00 11/22/2008

Editorial

Philippine Daily Inquirer

On Nov. 18, the National Food Authority (NFA) published an innocuous-looking notice in the CHEATING THE POORpapers: “In reference to our previous announcement we would like to remind the public that effective December 1, 2008, the sale of highly subsidized NFA rice at P18.25 per kilogram will be limited to those holders of Family Access Card (FAC) in NCR and Rice Allocation Ledger (RAL) at the provincial level as validated by the Department of Social Welfare and Development.”

Behind that notice is a story of incompetence, inefficiency and buck-passing, and of officialdom being blind to what the public could clearly see all along: their leaders and fellow citizens subverting the system for personal advantage.

When the government admitted that there was a rice crisis, it also announced that it would pour billions of pesos into providing subsidized rice for the poor and that it would institute rationing to ensure that everyone would get at least something. What followed was a stampede, as queues formed and government’s perennially creaky infrastructure groaned under the weight of public panic and official promises.

Observers began to notice that the queues forming had a curious human composition. People who weren’t residents of the area would appear in them. There seemed to be roving bands of entrepreneurial folk—whole families at a time—queuing up to then resell their subsidized rice to middle-class types who wanted to save on rice for their household help or company employees. We won’t even go into the whispered allegations of importers profiting from the emergency purchases decreed by President Gloria Macapagal-Arroyo, or the politicians who found sorting out the confusing queuing going on to be a good way to allocate patronage.

The emergency purchase and distribution of rice was funded by the expanded value-added tax. But as the crisis atmosphere concerning rice, then oil, has dissipated, to be replaced by growing concern over the global financial crisis, it seems that the government threw good money after bad, with nothing to show for it as far as rice is concerned.

Social Welfare Secretary Esperanza Cabral, who has had her fair share of having otherwise rational pro-poor programs altered beyond recognition by the President’s obsession with political patronage above all else, admitted recently that what the World Bank said in a report was true: Only a third of the rice bought in great quantities and at great cost, for resale at subsidized prices for the poor (families with five members, and a monthly income of P5,000), found its way into the hands of the poor. As much as 41 percent of the subsidized rice, on the other hand, found its way into non-poor households, which, as we’ve pointed out, was widely noticed and commented on during the rice crisis. The two wealthiest sectors of society, according to the same World Bank study, consumed 16 percent of the NFA’s subsidized rice—again something conspicuous during the rice crisis, when chauffeurs waited for the entrepreneurial beneficiaries to sell their rations to the drivers’ bosses.

Everyone, we believe, will welcome both Cabral’s admission that something is wrong (studies to look at the organizational flaws, bureaucratic inefficiency and mismanagement of our government agencies represent a worthy and useful thing to do, and not just “destabilization”) and the NFA’s efforts to fix matters by refocusing on validating the identities of those who want subsidized rice. But this is a government that has periodically engaged in trying to map the population without, it seems, ever accomplishing the task in a manner that actually works.

The flaws in the system point to two real problems: the way the national government finds even well-intentioned programs swamped by the sheer logistics required by such programs, and the way local governments, which are supposed to be an increasingly independent partner and not just a servant of the national government, end up thinking only of patronage and short-term political gain, and not the common good. The end result is billions wasted, public confidence further reduced, and the poorest of the poor getting the short end of the stick.

Copyright 2008 Philippine Daily Inquirer. All rights reserved.

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STEEL SHEETS TO COST MORE EARLY NEXT YEAR

Posted by Gilmour Poincaree on November 22, 2008

Vol. XXII, No. 85-A – Saturday, November 22, 2008

MANILA, PHILIPPINES

PRICES OF steel sheets sold locally may increase next year, as suppliers of raw steel abroad are STEEL SHEETScutting back on production, industry leaders said yesterday.

Foreign suppliers of cold-rolled coils, the main material used in producing galvanized iron (GI) sheets, are reducing production in response to a slump in global demand, Federation of Philippine Industries (FPI) President Jesus L. Arranza said in a statement.

Citing industry data, Mr. Arranza said that foreign steel giants Tata Corus Steel, Baosteel, Nippon Steel Corp., and JFE Steel have reported plans to cut back on output by as much as 20% early next year.

Filipino Galvanizers Institute President Salvio D. Perez, also general manager of Puyat Steel Corp., confirmed this scenario. “We import [cold-rolled coils] from Korea, Taiwan and China. Yes, they’re cutting on production already,” Mr. Perez said in a telephone interview yesterday.

This development will affect local production, as foreign suppliers account for 92% of cold-rolled coils used here, Mr. Arranza said.

As a result, prices of GI sheets are likely to rise in 2009, Mr. Perez said, declining to elaborate. “If there is a tightness in supply [in raw materials], naturally there will be a price increase. But I am not in a position to say by how much,” Mr. Perez said.

An 0.4mm GI sheet spanning eight feet now costs around P384, Mr. Perez said.

Jessica Anne D. Hermosa

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CENTRAL BANK TO KEEP MONEY-MOPPING SCHEME (Philippines)

Posted by Gilmour Poincaree on November 22, 2008

Vol. XXII, No. 85-A – Saturday, November 22, 2008

MANILA, PHILIPPINES

by Gerard S. dela Peña

THE CENTRAL bank will nether do away nor change its special THE CENTRAL BANK OF PHILIPPINES - STAMP deposit account, which allows it to mop up excess money in the system and keep inflation at bay, an official said.

“The facility is still effective in achieving its objective. [We don’t] have plans of changing this facility,” central bank Governor Amando M. Tetangco, Jr. told reporters on Friday.

Banks have clamored to abolish the liquidity-mopping facility, which offers interest rates higher than yields from government securities of the same tenor, after the central bank cut the reserve requirement ratio by two percentage points.

The cut frees up about P60 billion into the financial system, but banks are wary that the funds will only end up at the central bank’s special deposit account. THE CENTRAL BANK OF PHILIPPINES - THE BUILDING

This defeats the purpose of increasing banks’ loanable funds to prop up economic activity, they have argued.

At its meeting on Thursday, the Monetary Board kept its overnight borrowing rate at 6%, and maintained the rate of special deposit account.

The central bank revived the account in 2006 to remove excess money in the financial system, amid a more-than-a-quarter growth in money supply following massive foreign exchange inflows.

In May last year, the central bank liberalized access to the facility by extending it to banks’ trust departments. THE CENTRAL BANK OF PHILIPPINES - CURRENCY BILL

The special deposit account comes in tenors of a week, two weeks and a month.

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MERKEL WARNS 2009 WILL BE ‘YEAR OF BAD NEWS’ FOR ECONOMY (Germany)

Posted by Gilmour Poincaree on November 22, 2008

November 23, 2008 – 12:28AM

Chancellor Angela Merkel warned that 2009 will be “a year of bad news” for the economy, while a ANGELA MERKELGerman regional bank announced it had secured Saturday up to 30 billion euros in state loan guarantees.

“We must expect that next year will be a year of bad news, at least in the first months,” Merkel was quoted as saying in an interview to be published in the Welt am Sonntag newspaper on Sunday.

She said it was harder than before to predict the progress of the international and German economic situations.

“We have stabilised the financial markets thanks to a series of measures for the banks, but confidence still has to be found again and the interbanking market must become functional again,” Merkel said.

Berlin’s Financial Markets Stabilisation Fund offers up to 400 billion euros in guarantees to get the interbank lending market functioning again, and up to 80 billion euros in direct cash infusions to bolster banks’ balance sheets.

Merkel’s comments came as HSH Nordbank announced it had obtained up to 30 billion euros (38.5 billion US dollars) in loan guarantees, the largest chunk yet allocated from the special fund which was set up last month.

Based in the port of Hamburg and the state of Schleswig-Holstein, the regional public bank had requested government aid earlier this month.

“We are working on a series of concrete measures that will allow us to advance the future strategy of HSH Nordbank,” interim chief executive officer Dirk Jens Nonnenmacher said after the deal was agreed late Friday. ANGELA MERKEL

Shareholders will “ensure that the bank benefits from equity accordingly,” the bank said in a statement, adding that it had “different tools” at its disposal, with the elimination of assets a top target.

The board of directors and shareholders will meet in the coming weeks to discuss their options, the statement said.

The former head of Nordbank, Hans Berger, resigned on November 10 due to the financial crisis.

Announcing its plans on November 3 to seek state loan guarantees, the bank said it had recorded a net loss of 360 million euros in the third quarter of 2008.

It also wrote down the value of its assets by around one billion euros in the same period owing to the bankruptcy of US investment bank Lehman Brothers and financial turmoil in Iceland.

Nordbank’s announcement came after Germany’s biggest state-owned regional bank, Landesbank Baden-Wuerttemberg (LBBW), said Friday it may seek between 10 billion and 15 billion euros in loan guarantees from the government.

LBBW also said its owners – the state of Baden-Wuerttemberg, the city of Stuttgart and local savings banks – would provide five billion euros (6.3 billion US dollars) in fresh capital. ANGELA MERKEL - caricature by Paddy

Regional bank BayernLB was the first one to tap into the rescue package, getting a 5.4 billion euro capital injection from the government and one billion more euros from its regional shareholders.

Hypo Real Estate, Germany’s biggest financial crisis casualty to date, said on Friday it has been given more help from Berlin with 20 billion euros (25 billion US dollars) in loan guarantees.

© 2008 AFP

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AMID THE MANY SIGNS OF A MAJOR SLOWDOWN, IT PAYS TO SWIM TO STAY AFLOAT – A major slowdown hits every part of the economy, but for some businesses the news isn’t all bad

Posted by Gilmour Poincaree on November 22, 2008

November 22, 2008

RUTH WILLIAMS by Ruth Williams, with Ari Sharp

ROSS Amott knows when an economic slowdown is building — and he’s MONEY LANEseen plenty of them. At 66, Amott has spent more than 50 years manning his family’s butcher’s stall at Queen Victoria Market. His father worked there during the Great Depression.

Whenever the wider economy starts to sour, the Amott family’s business picks up. “At the moment our turnover is really good, it’s up,” Amott says. “Market people work on higher turnover and lower profit; we survive by having a big turnover. During normal times people get lazy, they think it’s easy enough to head down to the supermarket, but when times change, they all of a sudden get off their backsides and make the effort to come in.”

Plus, if people cut back on eating out, they need to buy more food to cook and eat at home. Yet Amott hasn’t noticed a trend towards cheaper cuts of meat — apparently people are willing to forgo a lot of things, but not yet their favourite steak.

It may come to that, though. In recent weeks, Australia’s confidence in its ability to escape major economic pain has been crushed like a can. Australian shares have more than halved in value since their peak last year, the ANZ job ads index plunged 5.9 per cent last month, and national house prices, as measured by the Australian Bureau of Statistics, dropped 1.8 per cent in September.

Right now, employment remains solid and, according to official forecasts, the Australian economy will cling to positive growth in the next 12 months. But some economists, including JPMorgan’s Stephen Walters, believe Australia may already be in a recession. Others expect us to follow the rest of the rich world, if not into a recession, then something just slightly removed.

For his part, Reserve Bank governor Glenn Stevens told a dinner in Melbourne this week that “the economy will probably now experience a more significant slowing than was otherwise going to occur”, before noting, in typical central banker parlance, that this was “barely detectable yet in some of the key official data sets”.

Clearly, the level of business at Ross Amott’s meat stall is not a “key official data set”. Nor are the increasingly common empty tables at business lunch spots in Melbourne, or the much-reported scaling back of corporate Christmas festivities this year.

Behind the official statistics and the obvious and terrible effects of a major slowdown — company collapses, multiple job losses, government intervention and the like — there are millions of other adjustments in the economy, some large, some tiny, but all of consequence.

Stevens warned this week that the “biggest mistake” Australia could make would be to talk ourselves into “unnecessary economic weakness”. But the slowdown is already flowing through in many ways; some that are unexpected, some that are positive, and some that are anticipated with dread.

But how to capture and measure the adjustments? What are we seeing already, and what are we likely to see?

Theoretically, a way of measuring and predicting consumer spending is CREDIT CRUNCHthe information consumers are seeking. According to a crunch of online search terms provided by Sensis for last month, substantially more people searched for real estate valuers, resume and employment services, financial planners and child-care centres than a year ago. And fewer people were interested in video games and currency exchange.

The lack of interest in currency exchange makes sense, with the dollar wallowing below US65¢, and barely staying above US61¢ yesterday.

Overseas travel is expected to be hit hard by the slowdown — witness the desperate moves by Qantas this week offering 2-for-1 flights to destinations around the world. Travel companies running tours to Antarctica said customers were abandoning $2000 deposits just weeks ahead of departure dates on trips costing between $5000 and $10,000.

Yet some results are baffling — a warning, perhaps, about reading too much into statistics. According to Yellow Pages figures, there was a huge surge in inquiries about beauty salons in October — a surge of almost 350 per cent on last year.

And another category scored even higher — swimming pool construction. Yes, in October — a month in which a string of companies announced staff cuts and the sharemarket dropped through the floor — there was an annual jump of more than 400 per cent in people typing “swimming pool construction” into the online Yellow Pages.

That doesn’t make sense, does it? “When I think about it, it doesn’t surprise me,” says Brendan Watkins, managing director of the Swimming Pool & Spa Association of Victoria. He has no hard evidence to explain the rise, but believes there may be more at work than the low dollar deterring would-be overseas travellers, and the fact that it’s getting, well, hotter.

“People are tending to stay at home and enjoy their homes,” he says.

“We hear, anecdotally, a lot of stories that people tend to have a protective, siege mentality — that with the economic climate the response has been for people tending not to sell their homes but to renovate, dig in and do their homes up.”

Paul Rees-Jones, director of strategy at advertising agency Clemenger BBDO, also uses the words “siege mentality” to describe the current mindset of the Australian consumer. The advertising industry’s stock in trade is knowing the thinking of shoppers, and right now, Rees-Jones says, they are delaying purchases, justifying their purchases on a “different level”, and planning purchases carefully.

According to Clemenger research, consumers are buying more beer and less high-end wine, choosing white bread and more expensive razors. “They are delaying those big-ticket items and fulfilling that need to consume in different ways,” he says.

What happens to advertising during an economic slowdown — what kind of ads will we see, and how will they convince hesitant consumers to buy?

“The tone is crucial,” Rees-Jones says. “You have to make your brand useful. (The ad) should have lightness with a serious undertone, it can’t be frivolous.”

He’s not surprised at the rise in business at fresh-food markets. People are wanting to be around other people right now, he says, wanting to see that life still goes on.

IT’S true that for some people hit by the slowing economy, home becomes less a retreat and more a place to escape from. Unemployment results in more than just lost income — an inbox worth of contacts and acquaintances, as well as a reason to get out of bed, also vanish overnight.

Victoria’s public libraries are expecting increased patronage as the economic outlook worsens. The appeal lies not only in the free hire of books and DVDs, says Debra Rosenfeldt, manager public libraries at State Library Victoria. There’s also the free internet access and newspapers — handy for job hunting — and the word processing essential for job applications.

But the chance to be out in public, among people, without being hassled to spend money can be just as important, Rosenfeldt says. “Public libraries have a very strong role and ability to reach out to people in the community who are disadvantaged.

“If, as we expect, unemployment numbers increase and people find themselves in financial crisis, you would expect them to make greater use of public libraries.”

If any group has borne the brunt of the economic pain so far, it’s probably seniors. The sharemarket has halved in value, taking superannuation funds and modest portfolios with it, and a host of fund managers have frozen redemptions out of mortgage funds — a form of investment once popular with retirees.

Centrelink has seen a rise in claims for the age pension since early October, says general manager Hank Jongen. “There has also been a general increase in calls and face-to-face inquiries Centrelink has received,” he says.

Psychiatrists are bracing for a rise in patients presenting with depression, anxiety and other mental health issues.

Ken Kirkby, president of the Royal Australian and New Zealand College of Psychiatrists, points to “retirees whose super funds have gone down dramatically in value” as among those most at risk.

“What we are seeing now is the potential for much more widespread hardship and pain across the community,” Professor Kirkby says.

At times like this, it’s easy to forget that markets are simple gauges of human confidence, and that economies are simply constructions of millions of transactions between people. They do not have lives of their own, but reflect our lives — our gains and losses, our jobs and homes, our pessimism and our confidence.

When it comes to tracking an economic slowdown, economists can look to a plethora of official statistics from the likes of the Australian Bureau of Statistics, the Reserve Bank and others, coldly recording everything from job advertisements and retail sales, to house prices and share prices.

And there have been some unorthodox attempts to capture the economic climate, in the US at least. The R-word Index, created by The Economist magazine, is based on the number of stories published in The Washington Post and The New York Times containing the word “recession”.

And there is the Lipstick Index, an oft-cited piece of fluffery, suggesting lipstick sales surge during times of economic pain.

If the Lipstick Index is allowed to exist, then perhaps the “market trolley index” should also be tracked. For not only is business strong at Ross Amott’s butcher’s stall, but the Preston Markets are also reporting a “noticeable increase” in trade over the past few months. And overall pedestrian traffic at Queen Victoria Market is up between 5 per cent and 10 per cent on the same time last year, according to chief executive Jennifer Hibbs.

Ross Amott hasn’t seen it yet this time around, but he knows things are getting worse when people stop buying eye fillet, and start fishing out the dusty old cookbooks, the “retro” ones that explain how to tastily cook a cheap cut.

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CITI CEO LASHES OUT AT FEAR MONGERING (USA)

Posted by Gilmour Poincaree on November 22, 2008

November 22, 2008

by David Enrich

Article from: The Wall Street Journal

CITIGROUP Chief Executive Vikram Pandit told employees he has “no India-born Vikram S Pandit was appointed the chief executive officer of Citigroup in 2007, the world's largest financial services organisation, with immediate effect. The 50-year-old Pandit from Mumbai and Nagpur, has also been made a member of the board of directors, ended a weeks-long high level search for a new person to lead the New York-based banking giant after former CEO Charles Prince stepped down on November 4 following huge investment losses for Citigroup
desire” to sell the Smith Barney brokerage unit or other pieces of the financial company, even though its stock tumbled another 20 per cent today to a 16-year low.

Mr Pandit’s comments, which included lashing out at “fear mongering” by investors that the 55-year-old CEO said was partly “fuelled by competitors,” were part of a counterattack aimed at stabilising Citigroup shares while executives and directors wrestle with whether changes are needed at the New York company.

Citigroup’s board met today to discuss the situation and their options if this week’s 60 per cent stock-price slide continues next week. Citigroup’s chairman, Sir Win Bischoff, dialed in from Portugal, where he was meeting with clients and attending a conference, according to people familiar with the situation.

In the past few days, Citigroup executives have been talking to Treasury Department and Federal Reserve officials, and those discussions are expected to continue throughout the weekend. Citigroup hopes for the government to make a public expression of confidence in Citigroup that would help reassure clients and customers.

If a public endorsement is ruled out, Citigroup executives believe even a small capital infusion from the government would send a positive signal. Citigroup already has received $US25 billion ($39.5 billion) from the Troubled Asset Relief Program, bolstering capital levels that bank executives and many analysts believe are sufficient to absorb future losses on loans and securities.

Federal officials have encouraged Citigroup to weigh a range of Morgan Stanley chief executive John Mack, left, and Citigroup chief executive Vikram Pandit leave a meeting at the Treasury Department.scenarios, but the company hasn’t made a formal request for federal money, according to people familiar with the discussions.

Government officials believe Citigroup’s capital position is as good or better than peers in the US banking industry, these people said, adding that the Federal Deposit Insurance Corp’s broad guarantee of bank liabilities, which became official today, should be enough to soothe customers and trading partners. Citigroup also has broad access to the Fed’s discount window, and the central bank received the authority last month to expand its balance sheet as a backstop to financial firms facing a funding crunch.

“It would take a depression every bit as large and long as the 1930s debacle to shake this company’s viability,” Richard Bove, an analyst at Ladenburg Thalmann & Co, wrote in a note to clients.

“The current decline in the stock price is reflecting a series of fears related to loans and security values that cannot be actualised without a severe setback in the economy and a very rapid increase in interest rates.”

Citigroup executives spent hours today huddling in Mr Pandit’s office in Manhattan. The mood was tense, with executives frustrated about their inability to halt the company’s stock slide, said one person who was there. Executives were tied up in meetings and conference calls with employees, clients and government officials.

Citigroup’s shares closed down fell US94 cents, to $US3.77. The stock is down 93 per cent from its all-time high in May 2007.

There are no signs of an exodus in Citigroup’s customer base, which includes more than 200 million accounts in 106 countries. But in a sign that maintaining confidence is crucial, Mr Pandit told managers on the 26-minute conference call to “treat (customers and clients) better than ever.”

“Make sure they understand that we are one of the best counterparties in the world based on our capital, based on our liquidity,” Mr Pandit said. “Show them that you are confident, just as I am.”

Starting Sunday, Citigroup is running newspaper ads in eight major US cities that don’t mention the company’s troubles but stress that it is “providing stability” and will “rise to the challenges and take advantage of new opportunities.” Citigroup also plans to run the ad in Hong Kong, Singapore, Tokyo and the United Kingdom.

Gary Crittenden, Citigroup’s chief financial officer, said today that the company has far less exposure to mortgages than JP Morgan Chase and Bank of America. Both those banks recently bought companies with “a very strong mortgage concentration,” he added, referring to Washington Mutual’s banking operations and Countrywide Financial.

JP Morgan declined to comment. “Our first-mortgage losses are pretty minimal,” a Bank of America spokesman said.

Mr Pandit maintained on the conference call that Citigroup has “a fantastic business model.” But executives haven’t ruled out a possible sale or breakup of Citigroup if they conclude there is no alternative, according to people familiar with the matter.

In recent days, federal officials have been gauging interest by other banks in buying Citigroup. There isn’t any indication that those discussions represented a formal approach or occurred with the blessing of Citigroup executives or directors. The response to those overtures has been lukewarm, these people said.

—Damian Paletta, Sudeep Reddy and Robin Sidel contributed to this article.

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Posted in BANKING SYSTEM - USA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL MARKETS, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, USA | Leave a Comment »

WALL STREET CAST ITS VOTE FOR NEW YORK FEDERAL RESERVE PRESIDENT TIMOTHY GEITHNER FOR TREASURY SECRETARY, RALLYING IN HIS FAVOUR

Posted by Gilmour Poincaree on November 22, 2008

November 22, 2008

LATEST: Rob Curran

Article from: Dow Jones Newswires

The Dow Jones Industrial Average surged nearly 500 points in the last hour of trading after reports Reutersthat president-elect Barrack Obama would name Mr Geithner to the top Treasury post.

Buyers became energised after a report by NBC News that Mr Obama will personally unveil Mr Geithner as the incoming Treasury boss at a news conference on Monday, along with other members of his economic team.

The report by NBC’s Andrea Mitchell, who is married to former Fed chairman Alan Greenspan, cheered depressed investors, even though there was no immediate confirmation.

“The market is running up on the news that Timothy Geithner will be the next treasury secretary,” said Peter Cardillo of Avalon Partners.

“Maybe it can bring confidence back.”

Yet the Dow still lost more than 5 per cent on the week, as Citigroup plunged to levels not seen in 15 years and traders worried about the survival of General Motors and Ford.

Mr Geithner, 47, is intimately familiar with Wall Street and worked on recent rescue efforts for the financial system. Those rescue efforts are a work in progress, however.

Citigroup fell US94 cents, or 20 per cent, to $US3.77, taking its losses to 60 per cent for the week and 72 per cent for November as the bank scrambles to review strategic options.

Selling of Citi’s shares grew heavier after chief executive Vikram Pandit said he had no desire to sell the Smith Barney brokerage unit. The stock’s close was the lowest for Citi since the last day of 1992; it has lost more than $US53.8 billion ($67.7 billion) in market value in November.

“It’s mind-boggling,” said Bud Haslett, chief executive of Miller Tabak Capital Management.

Traders say the Treasury Department’s decision last week not to buy distressed assets abruptly changed the outlook for banks.

“The change in the direction of the Troubled Asset Relief Program was the major thing” weighing on financials, said Peter McCorry, senior equity trader at Keefe Bruyette & Woods. “Changing the rules of the TARP is an indication that the rules can and will change mid-game.”

The Dow rose 494.13 points, or 6.54 per cent, to 8046.42, its biggest gain in more than a week.

The broad S&P 500 index rose 47.59 points, or 6.32 per cent, to 800.03, a day after closing at its lowest mark since 1997. The tech-oriented Nasdaq Composite added 68.23 points, or 5.18 per cent, to 1384.35. For the week, the Dow lost 5.3 per cent, the S&P 500 lost 8.4 per cent and the Nasdaq was down 8.7 per cent – and all three had their biggest drops in four weeks.

In response to Wall Street, the Sydney Futures Exchange’s December share price index futures contract jumped 68 points to 3500, representing an 83.5-point premium to the benchmark S&P/ASX 200 Index and suggesting a solid start to the Australian market on Monday.

The Australian dollar settled offshore trading at just above US63 cents.

In the most volatile Wall Street market since the 1930s, traders say it takes little to push the market in one direction or another.

“We’re dealing with a lot of redemptions,” said one manager at a fund of funds, indicating that forced selling due to clients’ requests for cash is ongoing.

Goldman Sachs Group rose $US1.31, or 2.5 per cent, to $US53.31, finishing the week with a loss of 20 per cent. Morgan Stanley rose US85c, or 9.2 per cent, to $US10.05, but declined 16 per cent on the week.

The model of Wall Street banks is under strain as investments across all asset classes turn sour, and trading with leverage goes out of style.

KeyCorp fell US64c, or 9.3 per cent, to $US6.27 after the regional bank slashed its dividend.

Dell shed US51c, or 5.2 per cent, to 9.30. Third-quarter profit exceeded the Wall Street estimate, helped by cost cuts, but revenue fell to $US15.16 billion from $US15.65 billion a year earlier.

The shopping season begins in force next week, and traders will see if consumer-spending fears are justified. The Consumer Select Discretionary SPDR, a basket of retailers and other consumer stocks, rose $US1.12, or 6.9 per cent, to $US17.45, but fell 9 per cent this week, just one of many wild swings.

Gold mining companies surged as a wave of “deflation” fears receded for now.

Gold is used as a safe haven, but also a hedge against inflation, a market worry that was replaced by deflation lately. Newmont Mining added $US5.79, or 25 per cent, to $US28.79, but has fallen by almost half since its peak.

In Europe, the London FTSE 100 index fell 2.43 per cent to 3780.96 points — its lowest closing level since April 3, 2003, capping an overall fall of 10.68 per cent for the week.

In Paris, the CAC 40 plunged 3.33 per cent and in Frankfurt the DAX shed 2.20 per cent, with banks Allianz and Deutsche Bank among the heavy losers.

“Although this morning saw a slight rally for the UK market, the afternoon has seen these gains eroded with the market nose diving,” said David Jones, a strategist at IG Index in London.

“Sentiment this week has turned even gloomier than we have been used to of late.”

Additional reporting by AFP and staff writers

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DOZENS OF PILOT WHALES HAVE DIED IN A MASS STRANDING IN TASMANIA

Posted by Gilmour Poincaree on November 22, 2008

November 22, 2008

Article from: Reuters

A wildlife official put the number of stranded whales at 64, and said 13 of those were still alive as of November 30, 2004 - Volunteers and Parks and Wildlife officers battle to rescue beached pilot whales on Maria Island, Tasmania. Photo - Peter Mathewaround 8pm local time (0900 GMT).

The whales were discovered by a member of the public at Stanley on the island’s northwest coast, local parks manager Chris Arthur said in a statement.

An attempt would be made to rescue the surviving animals on Sunday, he said.

“We have equipment and whale rescue trailers coming from around the state,” Mr Arthur said.

Mass strandings of whales occur periodically in Australia and New Zealand for reasons that are not entirely understood.

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BUBBLE, TOIL AND TROUBLE

Posted by Gilmour Poincaree on November 22, 2008

November 12, 2008

by Stephen Kirchner

Article from: The Australian

IN December 1996, then US Federal Reserve chairman Alan Greenspan famously mused: “How do we BUBBLE BUBBLE, TOIL AND TROUBLE
know when irrational exuberance has unduly escalated asset values?”

Greenspan suggested the following answer to his own question: “We as central bankers need not be concerned if a collapsing financial asset bubble does not threaten to impair the real economy, its production, jobs, and price stability. Indeed, the sharp stock market break of 1987 had few negative consequences for the economy. “But we should not underestimate or become complacent about the complexity of the interactions of asset markets and the economy. Thus, evaluating shifts in asset prices must be an integral part of the development of monetary policy.”

Greenspan’s view was that monetary policy should take account of the implications of asset prices for the real economy and consumer price inflation, but that asset prices per se should not be a target forpolicymakers.

In the context of the present global financial crisis, this orthodoxy is being questioned, not least by central bankers. Fed chairman Ben Bernanke said last month that “the last decade has shown that bursting bubbles can be an extraordinarily dangerous and costly phenomenon for the economy, and there is no doubt that as we emerge from the financial crisis, we will all be looking at that issue and what can be done about it”.

In Australia, Reserve Bank governor Glenn Stevens recently asked “whether something can and should be done to dampen the profound cycles in financial behaviour, with associated swings in asset prices and credit, given the damage they can potentially do to an economy”. Stevens noted BUBBLE BUBBLE, TOIL AND TROUBLE the view that “an effective response against the financial cycles almost certainly involves monetary policy”, and that “I sense now that among many thoughtful people this question is once again up for discussion.”

Bernanke and Stevens stopped short of arguing that monetary policy should explicitly target asset prices, but the fact that the question is even being broached is potentially a seismic shift for modern central banking.

There are two great ironies underpinning this apparent shift in sentiment in response to the worst financial crisis since the Great Depression of the 1930s.

First, an attempt by the Fed to manage stock prices was in fact the cause of the Great Depression. Second, Bernanke, more than any other contemporary scholar, has highlighted the dangers of using monetary policy to manage asset prices.

In 2002, prior to becoming Fed chairman, Bernanke gave a speech titled Asset “Bubbles” and Monetary Policy. Bernanke noted that “the correct interpretation of the 1920s is not the popular one: that the stock market got overvalued, crashed and caused a Great Depression. The true story is that monetary policy tried overzealously to stop the rise in stock prices. But the main effect of the tight monetary policy was to slow the economy. The slowing economy, together with rising interest rates, was in turn a major factor in precipitating the stock market crash”.

The singular cause of the Great Depression of the 1930s, in Bernanke’s view, was that the Federal Reserve fell under “the control of a coterie of bubble poppers”.

Bernanke was merely reaffirming a well-established consensus among economists, ranging all the way from John Maynard Keynes to Milton Friedman. In his A Treatise on Money, Keynes said: “I BUBBLE BUBBLE, TOIL AND TROUBLEattribute the slump of 1930 primarily to the deterrent effects on investment of the long period of dear money which preceded the stock market collapse and only secondarily to the collapse itself.” Friedman’s 1963 A Monetary History of the United States also laid blame for the Great Depression squarely at the feet of the Fed and its attempt to become “an arbiter of security speculation or values”.

The US Fed’s attempts at managing asset prices in the late 1920s were mirrored in Germany, where Reichsbank president Hjalmar Schacht feared that capital was being diverted from “productive uses” into a Borsenblase, or stock bubble. Schacht’s view was that “nothing better could happen to us than it collapses”. The subsequent Reichsbank-led credit tightening precipitated the Black Friday crash in Berlin’s stock market on May 13, 1927.

The subsequent economic downturn was a major factor in the demise of the Weimar Republic, with BUBBLE BUBBLE, TOIL AND TROUBLEwell-known consequences for Germany and the rest of the world.

The US economist John Taylor developed a rule that benchmarks the stance of monetary policy with respect to consumer price inflation and the level of real economic activity. According to Taylor’s rule, US monetary policy was too easy between 2003 and 2006. The Fed’s main concern between 2001 and 2003 was pre-empting the risk of consumer price deflation, which it rightly saw as a larger danger to the US economy than the emerging boom in housing and house prices. If the Fed made a mistake, it was in not following the policy benchmarks established by Taylor. If the Fed is at all implicated in the current problems in financial markets, it is because of its failure to consistently target actual consumer price inflation, rather than any failure to manage asset price inflation.

The lesson from historical episodes, as well as the present crisis, is that monetary policy needs to be more rule-bound, not more discretionary. History shows that a discretionary monetary policy that targets asset prices leads to economic and social misery on a scale far worse than anything we have seen in the present crisis.

Stephen Kirchner, research fellow at the Centre for Independent Studies, will speak tonight at the CIS’ CrisisCommentary.

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