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Archive for December 12th, 2008

ASIA IS A BANKING EL DORADO, SAYS EXPERT

Posted by Gilmour Poincaree on December 12, 2008

December 12, 2008

by Richard Gluyas – The Australian

PUBLISHED BY ‘THE AUSTRALIAN’

Asia looms as an El Dorado for major Australian banks in the same way Spanish lenders have enjoyed the fruits of their Latin American expansion, according to consultancy Accenture.

Financial services practice global head Pierre Nanterme said yesterday the big four banks would concentrate on getting their local franchises in order over the next year.

“That means avoiding doing anything stupid, investing in the domestic market and driving their cost-to-income ratios down to 40 per cent,” he said. “In a year’s time, they should have a unique operating model that they can use as an acquisition and integration engine in the region.

“Asia is a new El Dorado, and banks making bets in the region will get the same kind of returns the Spanish banks have from investing in Latin America a decade ago.”

Mr Nanterme, who is in Australia to meet banking leaders, said the global banking landscape had changed irreversibly as a result of the financial crisis.

There would be a select few super-global players, certainly including HSBC, which was coming out of the crisis “even stronger”, and possibly a wounded Citigroup, he said.

Then, in markets such as Britain, France, Germany and Spain, as well as the US, there would be groupings of three or four giants, each with market shares of about 20 per cent.

The Australian banking industry, Mr Nanterme said, had been structured along those lines for some time, and in that sense was ahead of the curve.

However, the opportunity existed for strong domestic players to become super-regional operations, replicating the success of the Spanish bank, Santander, which had acquired Abbey National, and Alliance and Leicester, in Britain.

“I’ve found banking leaders here saying they’d like to be the Santander of Asia, which means dominating your home market first, and from that base developing an industrial model, underpinned with technology, that can be exported to the rest of the world,” Mr Nanterme said.

“They make the comparison with Santander, which has 30 per cent market share in Spain, and a cost-to-income ratio of 50 per cent – very good in Europe.”

A year ago he might have been critical of the reluctance of Australian banks to embrace Asia, the Accenture chief said.

The exception would have been ANZ Bank, with new chief executive Mike Smith already having revealed his plan to create a super-regional bank.

Then the financial crisis had intervened.

“The crisis has forced us all to be a little more humble, but certainly the potential is there in Asia in the medium to long term,” Mr Nanterme said.

“In Europe, the economy will be in recession for the next couple of years, but if you’re a super-regional in Asia, you’re looking at 2-3 per cent growth for the region, minimum.”

Local banks, in the short term, would concentrate more on the cost line than revenue expansion.

This could involve re-engineering the business, investment in software, and improved efficiency of the back office through outsourcing and offshoring of jobs to countries with cheaper labour.

“Banking will become more industrialised, like a manufacturing company,” Mr Nanterme said. “The name of the game is scale, and customers expect a low unit price.”

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE AUSTRALIAN’

Posted in ASIA, AUSTRALIA, BANKING SYSTEMS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, FOREIGN POLICIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, LATIN AMERICA, OUTSOURCING INDUSTRIES, RECESSION, SPAIN, THE FLOW OF INVESTMENTS, THE WORK MARKET | Leave a Comment »

AIR FRANCE SEEKS PROBE INTO AUSTRIAN AIRLINES SALE

Posted by Gilmour Poincaree on December 12, 2008

Thursday, 12.11.08

Associated Press

PUBLISHED BY ‘THE MIAMI HERALD'(USA)

PARIS – Air France-KLM Group said Thursday it has lodged a complaint with the European Commission, accusing German rival Lufthansa of benefiting unfairly from state aid in its deal to acquire Austrian Airlines.

The French-Dutch carrier dropped out of the running for the Austrian carrier, while Lufthansa agreed last week to buy the Austrian government’s stake in the ailing national airline and offered to buy any outstanding shares.

Air France-KLM said in a statement it “strongly believes that the sale of Austrian Airlines to Lufthansa is not being conducted in the best interest of Austrian Airlines stakeholders and at a fair market price.”

The sale “entails state aid elements that need to be thoroughly investigated by the European Commission,” it said.

Under the agreement, the Austrian government will assume up to euro500 million of the carrier’s debt, which amounted to euro900 million as of last month. Air France-KLM said the deal doesn’t follow the instructions imposed on it during the bidding process.

Lufthansa said it was “convinced that the transaction agreed to last week on the acquisition of Austrian Airlines is in compliance with corresponding statutary requirements.”

Lufthansa also said that the Austrian state holding company had obtained legal opinion showing that the deal conformed to law.

The agreement signed by Lufthansa and officials of the Austrian government’s privatization agency gives the German carrier the state’s 41.56 percent share in Austrian Airlines.

That deal carries a price tag of euro366,000 ($465,000) but foresees additional payments of up to euro162 million depending on whether, and to what degree, Austrian turns profitable again.

Lufthansa has also offered to buy the rest of Austrian Airlines for euro4.44 per publicly held share.

Austria’s government decided in August to sell its share in the country’s flagship carrier. Air France-KLM and S7 of Russia had previously expressed an interest but then dropped out of the bidding.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE MIAMI HERALD'(USA)

Posted in AIR TRANSPORT INDUSTRY, AUSTRIA, BANKING SYSTEMS, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, FRANCE, GERMANY, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, RUSSIA, STOCK MARKETS, THE EUROPEAN UNION, THE FLOW OF INVESTMENTS, TRANSPORT INDUSTRIES | Leave a Comment »

IRISH READY TO HOLD NEW EU VOTE

Posted by Gilmour Poincaree on December 12, 2008

Thursday, 11 December 2008

PUBLISHED BY ‘BBC NEWS'(UK)

The Irish Republic is willing to hold a second referendum on the EU’s reform treaty if given certain guarantees by the EU, a spokesman has told the BBC.

Those legally binding guarantees are to be discussed by EU leaders at a summit in Brussels.

The Lisbon Treaty has been on ice since being rejected by Irish voters in June.

The summit is also due to take crucial decisions on EU measures to tackle climate change, and to consider an EU-wide economic stimulus plan.

Opening the meeting on Thursday French President Nicolas Sarkozy, chairing the summit, said he hoped his fellow leaders would be able to unite on a climate package.

“Europe must not provide the spectacle of its own division,” he said.

‘Anti-democratic’

The mechanism for a second referendum is included in draft conclusions which are being presented by the current holders of the EU presidency, France, and which have been seen by the BBC.

According to the draft, the Irish government says “it is committed to seeking ratification” of the Lisbon Treaty by the end of October 2009.

Ireland was “seeking legally binding instruments to address the concerns of the Irish people”, a government spokesman told the BBC.

Once it got those assurances, it would present “a roadmap for ratification”, that would include another referendum, the spokesman added.

Hans-Gert Poettering, president of the European Parliament, said a wide-ranging consultation with the Irish people was needed. He said dialogue with Irish citizens before the first vote in June “was not serious enough”.

“We hope for a solution by the end of next year,” he said. “Realistically it won’t be the case before the European elections in June.”

The EU is set to offer guarantees that the treaty will not affect three main areas of concern to Irish “No” voters – abortion, Irish neutrality and taxation, says the BBC’s Europe editor Mark Mardell.

Ireland is also likely to be able to keep its EU commissioner.

But Declan Ganley, the chairman of the Libertas group that led the No campaign in the first Irish referendum, said this was an example of the Irish being dictated to.

“Do we think that democracy is important in Europe or do we want to exist in some post-democratic environment where European affairs are concerned?” he said.

He also announced that his Libertas group would be standing on an anti-treaty platform across the EU during next year’s parliamentary elections.

Credibility at stake

EU leaders will pore over and work on the summit conclusions before they are published on Friday.

They also face a major test of their willingness to tackle climate change, with a key agreement on cutting the EU’s carbon pollution at stake.

Mr Poettering said the parliament needed to find a compromise.

“It wouldn’t help anyone if industry simply relocates to China or somewhere,” he said. “The important thing is that Europe remains in front on this.”

Amid the economic downturn, Germany, Italy and Poland, among others, are fighting any deal that could cost jobs.

Poland’s Europe Minister Mikolaj Dowgielewicz said there would be long negotiations over the package, including Poland’s proposal for a central “solidarity” fund to help poorer nations cope with CO2 measures.

“It’s going to be a three or four-shirt summit. We’ve booked tickets for Sunday morning…” he told the BBC.

“There’s a number of issues which are still open, everything from the financing of CCS [carbon storage] to the solidarity fund – this is still on the table… we don’t really know what the compromise will be.”

The “20-20-20” package, which also requires approval by the European Parliament to become law, commits the EU to cutting carbon dioxide (CO2) emissions by 20% by 2020, compared to 1990 levels, and to raising renewable sources to 20% of total energy use.

President Sarkozy is pushing hard to clinch a deal before he hands over the rotating presidency of the EU to the Czech Republic at the end of the year.

European Commission President Jose Manuel Barroso said: “It would be a real mistake for Europe to give the signal that we are watering down our position, after all these years leading the efforts for a global solution.”

Also up for discussion is the EU’s 200bn-euro (£175bn) economic stimulus plan.

With recession looming, there will be broad agreement on the EU-wide package to boost the economy, although Germany opposes calls from Britain and France to cut taxes, says the BBC’s Oana Lungescu in Brussels.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘BBC NEWS'(UK)

Posted in BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, EUROPEAN CENTRAL BANK, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, IRELAND, MACROECONOMY, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STATE TARIFFS, THE EUROPEAN UNION | Leave a Comment »

WE WON’T BE ABLE TO ADAPT TO CLIMATE CHANGE: PACHAURI

Posted by Gilmour Poincaree on December 12, 2008

11 Dec 2008, 1021 hrs IST

IANS

PUBLISHED BY ‘THE ECONOMIC TIMES'(India)

POZNAN (POLAND): Very soon, the impacts of climate change will exceed our capacities to adapt to them, Rajendra Kumar Pachauri, Rajendra Kumar Pachaurihead of the Intergovernmental Panel on Climate Change (IPCC), has warned.

The head of the panel that has done more than anyone else to bring the effects of climate change, lowered farm output, more frequent and more severe droughts, floods and storms and a rise in sea level, to the forefront of world attention said, “The impacts of climate change are now so evident. If we don’t take immediate action they will get far worse.

“And remember, poorest countries and the poorest communities in these countries are the most vulnerable to these effects.”

As the Dec 1-12 climate summit here stayed bogged down in bickering between industrialised and developing countries over who should do what to combat climate change, Pachauri warned: “Very soon, climate change impacts will exceed the adaptive capacities of local communities.

“We have to have a strategy by which the adaptation has to be local, while mitigation (to reduce emissions of greenhouse gases that are warming the earth) has to be global.”

“The good news is that mitigation possibilities are not costly,” Pachauri added. “There is now plenty of evidence to show that moving to a low carbon renewable energy development path is a win-win solution.”

Pachauri also heads the New Delhi-based The Energy and Resources Institute, which is now distributing all over India lanterns powered by solar energy.

The head of the IPCC, which won the Nobel Peace Prize in 2007 with Al Gore for its seminal Assessment Report 4 (AR4), said that the next assessment report (AR5) would come out in 2014 and in that the IPCC would look at various new risk reduction strategies as well.

“Before that, we’re planning to bring out a special report on renewable energy sources in 2010 and maybe one on extreme weather events triggered by climate change as well.”

Since the publication of AR4, one of its principal authors Bill Hare has said here that science had advanced to the point where he could predict a strong possibility that the Greenland ice sheet would melt if the temperature rose 1.5 degrees Celsius above the pre-Industrial Age level and this would raise the sea level worldwide by 6-7 metres.

Asked about this, Pachauri said, “Even in AR4, we had not put an upper limit on sea level rise, because we simply don’t know.”

When it was pointed out that negotiators were working on the baseline figure of keeping temperature rise to two degrees Celsius and that this would mean the death of the Greenland ice sheet, Pachauri said: “Two degrees Celsius is an arbitrary number set by the EU (European Union).

“I deliberately raised that point on the opening plenary session on this Poznan summit (on Dec 1, when he had talked about the danger of even a 1.1 degree Celsius temperature rise). It was a warning that we should get nowhere close to it (a 1.1 degree rise).

“But IPCC does not prescribe. It provides the scientific information, the scenarios of what is likely to happen with what level of certainty if governments do this or that. After that, it is up to the governments.” But Pachauri did say that the IPCC would look at impacts at lower (than two degree) thresholds in its next assessment report.

When asked if he thought the negotiations at this climate change summit were too slow and the countries too reluctant to change from a business-as-usual scenario, Pachauri responded: “It is the only show in town, though it may seem painfully slow and a waste of time.

“But science can bring out the urgency of the situation. I am reasonably satisfied about the reaction we had from all countries in Bali (at the 2007 summit).” Pachauri repeated more than once, “We must keep reinforcing AR4 data, keep reminding people about it. We have to ensure that people do not lose sight of the science.”

Asked what kind of greenhouse gas emission reduction targets countries should be aiming at, Pachauri said: “The 20-20 target is very important”. That means industrialised countries reduce their greenhouse gas emissions by 20 percent from 1990 levels by 2020.

Asked how adaptation to climate change could be improved, the IPCC chief told media, “Don’t look at (global) averages. Look at specific impacts in different parts of the world. That is the way to adapt.”

What was the IPCC going to do with its share of the Nobel Peace Prize money? “We’re using it to provide fellowships to scientists in developing countries, those who are working in the area of climate change,” Pachauri said.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE ECONOMIC TIMES'(India)

Posted in AGRICULTURE, BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENVIRONMENT, EUROPE, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, HEALTH SAFETY, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS | Leave a Comment »

POLAND WILL SELL ITS EMISSION CREDITS – Poland has entered an agreement with Ireland and the World Bank to sell both parties greenhouse gas emission rights under the Kyoto Protocol

Posted by Gilmour Poincaree on December 12, 2008

11th December 2008

Source: Reuters

PUBLISHED BY ‘WARSAW BUSINESS JOURNAL'(Poland)

Ireland and the World Bank have entered into an agreement with Poland to purchase its carbon emissions rights, a move that will allow the country to invest in sustainable energy.

Ireland has signed a letter of intent to buy Poland’s carbon emission allowances worth €15 (zł.59.5) million, while World Bank signed a separate deal to purchase 10 million tones of emissions. According to a source that’s familiar with the transaction and who did not want to be named, “The price is around €10 (zł.39.6) a tonne.”

Under Kyoto, nations that are far below their emissions targets may sell excess quotas to other countries under the Assigned Amount Units (AAUs). Although Poland relies heavily on coal, World Bank said in a statement that Poland has a surplus of AAUs, since its greenhouse gas emissions have been decreasing since 1990.

Meanwhile, the proceeds from the deals allow Poland to invest in energy efficiency and renewable energy projects, which will be co-financed by the European Bank for Reconstruction and Development and the European Investment Bank.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘WARSAW BUSINESS JOURNAL'(Poland)

Posted in BANKING SYSTEMS, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, ENVIRONMENT, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, IRELAND, POLAND, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, WORLD BANK | Leave a Comment »

DEBT COLLECTION ON THE RISE AS POLISH COMPANIES AVOID PAYING UP

Posted by Gilmour Poincaree on December 12, 2008

12th December 2008

Source: Rzeczpospolita (M.M.)

PUBLISHED BY ‘WARSAW BUSINESS JOURNAL'(Poland)

Polish companies are increasingly not paying liabilities to vendors and, in the construction sector alone, the amount of debts collected by debt collectors increased by 40 percent.

“They [exporters] feel the deterioration of the business situation on the Western markets most,” said Tomasz Starus of Euler Hermes. According to their latest report, entrepreneurs await for their payments longest in the richest regions of the country.

In the Mazowsze region, companies have an average delay in payments of three weeks, a period similar in Małopolska, Lower Silesia, Wielkopolska. The worst with this regard is the Pomorskie voivodship, with an average 22 day delay in payment, while in one of the poorest region – Podlaskie – only 12 days. It turns out that the situation is influenced by the presence of exporters that cause much of the delays.

Experts warn that the crisis is increasing and thus problems with covering debts will also increase.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘WARSAW BUSINESS JOURNAL'(Poland)

Posted in BANKING SYSTEMS, COMMERCE, CONSUMERS AND PSYCHOLOGICAL FACTORS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, NATIONAL WORK FORCES, POLAND, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY | Leave a Comment »

ROCCO SABELLI PRESENTA LA NUOVA ALITALIA

Posted by Gilmour Poincaree on December 12, 2008

12/12/2008

Amerigo Francia – Milano Finanza

PUBLISHED BY ‘MILANO FINANZA’ (Italy)

La nuova Alitalia non aumenterà i prezzi e non ridurrà l’offerta di voli. Lo ha assicurato l’amministratore delegato di Cai, Rocco ROCCO SABELLISabelli, nella conferenza stampa per la presentazione del closing della vendita di Alitalia a Cai. “Non abbiamo in programma di aumentare i prezzi o ridurre l’offerta, anche sulle rotte dove abbiamo il 100% del mercato”, ha affermato Sabelli illustrando i punti principali del piano industriale.

L’obiettivo, spiega il braccio destro di Colaninno, “mira a ottenere il 56% del mercato interno nel 2009 rispetto all’attuale 30%. Una quota che ci farà tornare in Europa, visto che Air France ha il 91%, Lufthansa il 53%, Turkish Airlines il 43% e Iberia 39%. Puntiamo inoltre ad avere una flotta più moderna ed efficiente: nel 2009 l’età media dei nostri aerei sarà 8,6 anni, mentre attualmente è di 12,4 anni”.

Nel piano industriale, ha spiegato Sabelli, una forte attenzione è legata alla creazione di un network completo ed efficiente focalizzato su medio e lungo raggio. “Non si può fare una compagnia grande quanto si vuole, ma grande quanto si deve. Dico un’ovvietà”, ha osservato Sabelli, “ma è meglio avere meno aerei ma più pieni che tanti aerei mezzi vuoti. Il piano industriale parte dall’esame della struttura della domanda e dalle dimensioni del mercato, e punta a creare un leader forte sul mercato domestico. L’integrazione con Air One va in questa direzione e ci fornisce densità, dimensione e sinergie”.

Per la capitalizzazione della nuova Alitalia il manager conta sui 1.100 milioni, che era il target iniziale, e sul contributo del partner straniero. L’aumento di capitale avverrà in due tranche: per 850 mln dai 21 soci attuali, ai quali “non escludiamo se ne aggiungano altri”, mentre la restante parte avverrà in un secondo momento “per garantire la struttura finanziaria”.

Riguardo invece al partner industriale con la nuova Alitalia, l’ad di Cai ha confermato che “La scelta del partner straniero sarà tra Lufthansa e Air France”, precisando che da parte di entrambe le compagnie è stata avanzata la proposta di partenariato industriale come la disponibilità a investire in equity. La proposta di British Airways era invece “di natura solo commerciale”, ha spiegato Sabelli. Il manager ha quindi detto che “noi privilegiamo le prime due e crediamo che un ingresso nell’equity possa rafforzare la compagnia”. Parlando di Lufthansa e Air France, Sabelli ha detto che si tratta di “due proposte molto buone, duole lasciarne fuori una. Sceglieremo la proposta migliore”.

In ultimo, stamattina è partito il processo di assunzioni. “Siamo assolutamente tranquilli sulla trasparenza dei criteri concordati”. Le proposte di assunzione saranno dirette a “quasi 9mila persone, ci aspettiamo una risposta entro 48 ore”. Per quanto riguarda il rapporto con i sindacati, Sabelli ha detto di aver avuto con i sindacati confederali “una trattativa molto dura, ma comunque negoziale”, mentre con le associazioni professionali c’è stato “il rifiuto di cedere il controllo della compagnia”. Per questo, “da oggi il dialogo va direttamente ai nostri dipendenti”, ha concluso Sabelli.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘MILANO FINANZA’ (Italy)

Posted in AIR TRANSPORT INDUSTRY, BANKING SYSTEMS, COMMERCE, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SERVICES INDUSTRIES, FRANCE, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, ITALY, NETHERLANDS, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, TRANSPORT INDUSTRIES, TURKEY, UNITED KINGDOM | Leave a Comment »

INNOVATION IS KEY (Iceland)

Posted by Gilmour Poincaree on December 12, 2008

12/12/2008 – 11:00

ESA

PUBLISHED BY ‘ICELAND REVIEW’

Last week I wrote that if I were the boss of Iceland I would bet my money, or rather the nation’s money, on innovation rather than large-scale labor-intensive industries, such as aluminum smelting, which some people seem to think is the solution to all of our problems—never mind the fact that the world market price of aluminum is plummeting.

However, there are plenty of creative, ambitious and hard-working Icelanders out there who share my opinion that it would be a mistake to rely too heavily on only a few industries. They would rather see Iceland become a platform for a host of companies of different genres and they are working towards making that happen. Like me, they believe innovation is key to the reconstruction of Iceland’s economy.

Such companies are known as sprotafyrirtaeki in Icelandic, literally “sprout companies,” but more commonly referred to as start-ups or starters. The term is not new in Iceland and has become somewhat of a fad in recent years.

Business magazine Frjáls verslun published a list of 100 starters to watch right before the collapse of the economy, and shortly thereafter Björk stepped forward and presented innovative companies she had been working with.

So the problem is not that we don’t have innovation, the problem lies with the government, which doesn’t seem to realize the potential in start-ups. Instead of giving young and promising companies the support they need to thrive, which with time can become valuable sources of income for the economy as a whole, the government searches for easy short-term solutions. Or so it seems.

The Icelandic media is stepping up by reporting on initiatives aimed at encouraging innovation and there appears to be a lot going on in that field.

The Iceland Academy of the Arts, Reykjavík University and Bifröst University are cooperating on three projects aimed at encouraging innovation and education, among them an interactive online starter development center entitled “I Am Innovation” where people will be able to share their business ideas and seek partners.

There are also umbrella organizations for innovation, such as Klak Innovation Center, whose purpose it is to enhance the growth of start-up IT companies.

I wanted to find out if and to what extent the government is supporting Klak’s important initiative and asked the innovation center’s CEO Eythór Ívar Jónsson, who is also an associate professor in entrepreneurship at Copenhagen Business School.

Jónsson said the government’s support to Klak has not been at all sufficient. He explained that although Klak and the companies supported by the center operate within the private sector, it is important to receive funding from the government for the first three years of their existence, often referred to as “death valley.”

During the first three years companies are spending but not earning money and during that period investors avoid them like the plague. During that period many promising companies give up, in many cases because of lack of funds. Therefore the government should step in.

Such support is not thought of as charity. Jónsson explained that the government has to adopt a different attitude towards innovation and realize that investing in starters is beneficial for the national economy.

Many of these companies (it is too optimistic to believe that every company will survive) will flourish and deliver profits for the state treasury. It will take time, though, five to ten years, and the government wants to see money flowing in right now.

For this reason the government was reluctant to support innovation before the crisis hit and now there is no money. Or is there? It is all a question of prioritizing, Jónsson stated.

Had he really made an effort talking to the appropriate ministries, I wondered. At that, Jónsson laughed, saying that he had spent eight months arguing with the Ministry of Industry. People seem positive and eager but then nothing happens. However, Jónsson is hopeful that Minister of Industry Össur Skarphédinsson will soon start lobbying for innovation for real.

After all, the Ministry of Industry does operate the Innovation Center Iceland which recently launched Torgid, “The Square,” a trade center offering facilities to young promising companies to work on their business ideas. Thirteen companies are operating there already.

Skarphédinsson himself discusses Torgid on his blog while referring to himself as the “Minister for Sprout Affairs,” describing how his ministry has been flooded lately with innovative ideas from people who are determined to turn this crisis around and transform it into a business opportunity.

“That’s how adversity often creates new opportunities that didn’t exist before and creates an environment which enforces and fabricates new business opportunities in the form of mini sprouts,” the minister writes. “We don’t mess around in the Ministry of Industry. If we see a good idea we’ll make it happen in an instant.”

So is this a sign that times are about to change? I certainly hope so.

In my last column I wondered whether any Icelanders would respond. Many foreign readers did and had some excellent ideas at that, but not a single native.

That leads me to conclude that despite the fact that icelandreview.com is among the 20 most popular websites in Iceland, week after week, after Eve Online the most popular English-language Icelandic website and a regular source of information for foreign media outlets, it goes unnoticed by most Icelanders.

Therefore, I’m going to bring the website, and this particular column, to the attention of the “Minister for Sprout Affairs,” and see whether he would like to contribute to the discussion on the international platform that this website represents.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘ICELAND REVIEW’

Posted in ALUMINUM, BANKING SYSTEMS, CENTRAL BANKS, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, ICELAND, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, METALS, METALS INDUSTRY, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE FLOW OF INVESTMENTS, THE WORK MARKET, THE WORKERS | Leave a Comment »

ICELAND INCREASES TARIFFS ON WINE, TOBACCO AND OIL

Posted by Gilmour Poincaree on December 12, 2008

12/12/2008 – 11:59

PUBLISHED BY ‘ICELAND REVIEW’

Iceland’s Althingi parliament accepted new laws yesterday on increasing the tariffs on alcohol, tobacco, oil and automobiles by 12.5 percent as well as introducing a tax on driven kilometers and an excise tax on vehicles and fuel.

According to the budget bill, the aforementioned tariffs were going to increase by 11.5 percent next year, but now the increase is 12.5 percent and takes effect already today. The state treasury will as a consequence have an additional income of more than ISK 3.5 billion (USD 30 million, EUR 23 million) in 2009, Morgunbladid reports.

The State Alcohol and Tobacco Company of Iceland (ÁTVR) said the price of tobacco will increase immediately, but it will take some time before the price of alcoholic beverages increases.

Minister of Finance Árni M. Mathiesen said at Althingi yesterday that the state tariffs on these products had depreciated with the development of the consumer price index and that the current increase is meant to counter that development.

Minister for Foreign Affairs Ingibjörg Sólrún Gísladóttir explained that the purpose with the new laws is to protect those who have the lowest wages. Child benefits and interest relief will remain unchanged, she said, and personal exemption will increase by ISK 2,000 (USD 17.25, EUR 12.99) next year, Fréttabladid reports.

However, the tariffs will also influence indexation and increase loans. “It is obvious that this will go straight into our loans. It is a very controversial path to take because it will also have an impact on the highly indebted state treasury, no less than households. I doubt that the state treasury will benefit from this in the end,” President of the Confederation of Labor (ASÍ) Gylfi Arnbjörnsson told Morgunbladid.

Runólfur Ólafsson, managing director of the Icelandic Automobile Association (FÍB), is equally critical of the new laws; expenses for average-sized cars will increase by ISK 20,000 (USD 172, EUR 130) per year because of them.

The price of gasoline and diesel oil will also increase considerably, by ISK 7.70 and 6.40 (USD 0.07 and 0.06, EUR 0.05 and 0.04) per liter respectively, and Ólafsson said it is not good at all that the state is going to take advantage of the recent decrease in the price of fuel in such a way.

Arnbjörnsson told Fréttabladid that the government only plans to increase benefits to senior citizens and the disabled by 9.6 percent, but not in consistency with indexation. The benefits of these groups are indexed and should thus increase every month, he said.

“They are planning to take four billions [ISK 4 billion = USD 34 million, EUR 26 million] from the poorest people. It is so incredibly unjust that we cannot agree to it,” Arnbjörnsson said.

Minister for Social Affairs Jóhanna Sigurdardóttir said Arnbjörnsson is wrong in his assumptions.

“We added two billions to the social security system compared to what was estimated in the budget bill. Next year pension benefits will be higher than ever compared to the lowest salaries of ASÍ,” Sigurdardóttir explained.

Click here to read about other recent measures taken by the government.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘ICELAND REVIEW’

Posted in ALCOHOLIC BEVERAGES, AUTOMOTIVE INDUSTRY, COMMERCE, COMMERCIAL PROTECTIONISM, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, FUELS, GASOLINE, ICELAND, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, NATIONAL WORK FORCES, RECESSION, STATE TARIFFS, THE WORK MARKET, THE WORKERS, TOBACCO | Leave a Comment »

FIRST PORK, NOW TAINTED BEEF IN IRELAND – DIOXINS IN CATTLE DOUBLE OR TRIPLE LEGAL LIMITS; MEDICAL CHIEF SAYS NO HEALTH RISK

Posted by Gilmour Poincaree on December 12, 2008

DUBLIN, Ireland, Dec. 9, 2008

Associated Press

PUBLISHED BY ‘CBS NEWS’ (USA)

(AP) Ireland announced Tuesday it has found illegal levels of dioxins – the chemicals that are devastating its pork industry – in cattle, but insisted its beef was safe to eat.

Agriculture Minister Brendan Smith said Ireland has decided not to recall any of its beef products at home or abroad because, unlike the contamination of pork products, the level and extent of dioxin found so far in cattle is much lower.

Smith said dioxin tests had come back positive for three farms out of 11 tested so far, while results were pending for 34 more farms that received dioxin-contaminated feed. He described the three farms that failed as “technically noncompliant, but not at a level that would pose any public health concern.”

Smith said the government would prevent any cattle at those three farms from being slaughtered and put into the food chain until they could be individually tested for dioxin levels. Until then, he said, no meat from those farms would be permitted to enter the market.

Alan O’Reilly, deputy chief executive of the Food Safety Authority of Ireland, said dioxin levels detected in cattle from the three farms were two to three times over legal limits. He contrasted that with last week’s finding of dioxin levels in pigs that were 80 to 200 times over those limits.

“There’s a huge difference,” O’Reilly said.

Ireland’s chief medical officer, Dr. Tony Holohan, said the levels of dioxins detected in Irish beef and pork would not pose a health risk to anyone who ate either meat.

“To all intents and purposes this is not a public health issue. … We do not expect to see symptoms as a result of this,” Holohan said.

Nonetheless, the latest findings threatened to undermine Ireland’s annual $2 billion industry in beef, Ireland’s primary agricultural export – more than three times the value of Ireland’s gridlocked pork industry.

Ireland’s major pigmeat processors have been refusing to start slaughtering an estimated 100,000 pigs at nine farms where illegally high levels of dioxins have been confirmed. The processors have already laid off 1,400 workers and say they won’t budge until the government reimburses their costs.

© MMVIII The Associated Press. All Rights Reserved.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘CBS NEWS’ (USA)

Posted in CATTLE, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENVIRONMENT, FINANCIAL CRISIS 2008/2009, FOOD INDUSTRIES, FOOD PRODUCTION (human), HEALTH SAFETY, INTERNATIONAL, IRELAND, MEAT, PORK, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY | Leave a Comment »

AER LINGUS CHIEF LOBBIES DUBLIN TO REPEL RYANAIR OFFER – THE CHIEF EXECUTIVE OF AER LINGUS BRANDED RYANAIR’S RENEWED TAKEOVER ATTEMPT AS “PATHETIC” YESTERDAY (Ireland)

Posted by Gilmour Poincaree on December 12, 2008

December 12, 2008

by Susan Thompson – The Times

PUBLISHED BY ‘THE TIMES’ (UK)

Dermot Mannion said that Ryanair’s €1.40 offer per share, made on December 1, fell far short of the Irish flag carrier’s true value. The offer puts a €748 million (£665 million) value on the former state-controlled airline. It is half the amount that Ryanair offered two years ago when it first made a bid.

Mr Mannion, who has been lobbying the Irish Government for its help to repel the hostile bid, called Ryanair’s offered price “a pathetic sum in the context of the €1.3 billion in cash on the group’s balance sheet, the substantial value of our fleet and the value of the Heathrow slots”.

Mr Mannion met Noel Dempsey, the Irish Transport Minister, yesterday to seek government assurances that it would not sell any shares to Ryanair. The Government holds 25 per cent of Aer Lingus, while Ryanair is the top shareholder with 30 per cent.

Firm opposition until now from the Government had helped to blunt Ryanair’s ambitions. So too had a June 2007 ruling by European competition regulators that a takeover would create a near-monopoly in European flights out of Dublin.

However, since December 1, the Government has wavered because it faces a financial crisis involving a sharp drop in tax revenues and soaring deficit spending, and could badly use the cash that Ryanair is offering. Mr Dempsey declined to comment.

Michael O’Leary, Ryanair’s chief executive, has admitted that the €1.40 offer, if successful, would mean that Ryanair acquired its rival for “almost nothing”. However, he argued that the spate of airline bankruptcies caused by the economic downturn had strengthened the company’s position.

Mr O’Leary claimed that Aer Lingus had no medium-term future in the face of competition from Ryanair and Europe’s rapidly consolidating flag-carrier airlines.

Ryanair has sought to defuse opposition to its bid by offering to recognise Aer Lingus’s unions, cut the airline’s short-haul fares by 5 per cent, scrap its fuel surcharge and give control of landing slots at Heathrow to the Irish Government. Mr O’Leary also pledged to increase Aer Lingus’s workforce by 1,000.

If Ryanair is to succeed it must win support from shareholders, including Aer Lingus’s employees. The crew and pilots own about 18 per cent of the airline and have expressed concern about job and pay cuts if they are acquired by the budget carrier.

Aer Lingus shares slipped 0.7 per cent to €1.50. Ryanair shares fell 5.7 per cent to €3.04.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE TIMES’ (UK)

Posted in AIR TRANSPORT INDUSTRY, BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, COMMERCIAL PROTECTIONISM, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, IRELAND, ISLAMIC BANKS, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE WORK MARKET, THE WORKERS | Leave a Comment »

EU AGREES $260BN ECONOMY PLAN

Posted by Gilmour Poincaree on December 12, 2008

Friday, December 12, 2008 15:17 Mecca time, 12:17 GMT

PUBLISHED BY ‘AL JAZEERA’ (Qatar)

European Union leaders have agreed a $260bn stimulus package designed to dig the continent’s troubled economies out of recession.

The deal, which see each EU French President Nicolas Sarkozy, right, shares a word with German Chancellor Angela Merkel during a round table meeting at an EU summit in Brussels, Friday Dec. 12, 2008. European Union leaders continue their two days of talks aimed at sealing a final accord on their climate change package to cut emissions by 20 percent by 2020member invest on average the equivalent of 1.5 per cent of gross domestic product (GDP) into their economies in order to temper the impact of a global recession, was reached on Friday at a two-day summit in the Belgian capital Brussels.

“What Europe has proved unanimously today is that it is ready to act in a united way to deal with the global downturn,” Gordon Brown, Britain’s prime minister, said.

“We will continue to reject the do-nothing approach and we will not stand by and let the recession take its course.”

Ahead of the summit, Germany had expressed reservations about ploughing so much public money into the economy and resisted pressure to contribute more than what it judged necessary to revive the German economy again.

Officials revised earlier versions of the conclusions to say the package should be worth “about” 1.5 per cent of GDP rather than “at least” 1.5 per cent as seen in an earlier draft.

Climate change

After securing an agreement in the morning for Ireland to submit a stalled EU reform treaty to a second referendum next year, the 27 leaders were also hoping to reach more common ground on climate change as the day progressed.

Copies of a draft agreement indicated the leaders should commit themselves to warding off the threat of a “recessionary spiral” with the stimulus package and an ambitious climate package.

“In these exceptional circumstances, Europe will act in a united, strong, rapid and decisive manner to avoid a recessionary spiral and sustain economic activity and employment,” the draft conclusion said.

“It will mobilise all the instruments available to it and act in a concerted manner to maximise the effect of the measures taken by the [European] Union and by each member state.”

The EU’s climate-energy package, the “20-20-20” deal, seeks to decrease greenhouse gas emissions by 20 per cent by 2020, make 20 per cent energy savings and bring renewable energy sources up to 20 per cent of total energy use.

Angela Merkel, the German chancellor, said: “The member states still have essential negotiations but I am cautiously optimistic that good conclusions can be reached here and send an important signal” to an international climate conference in Copehagen next December.

Under Ireland’s referendum deal, a new referendum will be held by November 2009 on the controversial treaty in exchange for guarantees on key issues including an assurance that it does not lose its EU commissioner.

Irish voters rejected the treaty, designed to streamline EU decision-making and institutions, at a first referendum in June.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘AL JAZEERA’ (Qatar)

Posted in AEOLIC, BANKING SYSTEMS, BELGIUM, BIOFUELS, BIOMASS, CENTRAL BANKS, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, ENVIRONMENT, EUROPE, EUROPEAN CENTRAL BANK, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, FRANCE, GERMANY, HYDROGEN - FUEL CELLS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, IRELAND, NATURAL GAS, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, SOLAR, THE EUROPEAN UNION, THE FLOW OF INVESTMENTS, UNITED KINGDOM | Leave a Comment »

DE MENEZES JURY RECORD OPEN VERDICT AND REJECTS POLICE VERSION OF SHOOTING (UK)

Posted by Gilmour Poincaree on December 12, 2008

December 12, 2008

by Sean O’Neill – Crime & Security Editor – Times Online

PUBLISHED BY ‘THE TIMES’ (UK)

JUSTICE FOR JEAN

The inquest jury examining the death of Jean-Charles de Menezes has returned an open verdict – refusing to accept the idea that he was lawfully killed in a fast-moving anti-terrorist operation.

The jurors also answered a series of questions about the circumstances of Mr de Menezes’s death on board a Tube train at Stockwell, South London, in a way which rejected much of the account of the shooting given by police firearms officers.

Asked if they believed that the policemen had shouted a warning of armed police, the jury answered no. They also answered no when asked if Mr de Menezes had moved towards the officers before he was shot.

The jury had been banned by Sir Michael Wright, QC, the coroner, from considering a verdict of unlawful killing. His ruling led the de Menezes family to withdraw from the proceedings and brand the inquest “a complete whitewash”.

But the outcome of the inquest is a damaging result for the Metropolitan Police and could lead to a legal challenge to the verdict in the High Court.

The coroner said he would be preparing a report on what practices of the Metropolitan Police required changing. It will be sent to the Metropolitan Police Commissioner, the police authority and the Home Secretary and should be made public.

Sir Michael expressed his “sincere condolences” to the de Menezes family.

He said: “In any view this was a tragic and terrible event, the killing of an entirely innocent young man.”

The majority verdict of 8-2 came at the end of seven days of deliberations by the jurors, whose number was reduced from 11 to 10 earlier this week.

The inquest, held at the Oval Cricket Ground, south London, has lasted for 12 weeks and is estimated to have cost around £6million in court costs and legal fees. It heard evidence for the first time from the two armed officers who shot Mr de Menezes, 27, a Brazilian electrician.

They fired nine shots, hitting Mr de Menezes in the head seven times, after mistaking him for a suicide bomber on July 22 2005 – the day after four terrorists failed to set off suicide bombs in London then went on the run.

The officers, identified only as Charlie 12 and Charlie 2, said they had shouted “armed police” as the ran onto the Northern Line train at Stockwell, south London, and that Mr de Menezes had stood up and moved towards them aggressively. They claimed his reaction led them to shoot him because they feared he was about to detonate a bomb.

But passengers on the train said they did not hear warning shouts and did not see Mr de Menezes leave his seat. One woman claimed that the policemen appeared to be “out of control”.

During the evidence, the court heard that surveillance officers deployed to search for Hussain Osman, one of the fugitive bombers, did not have a picture of the man they were looking for. Mr de Menezes was thought to be a likeness for Osman but never positively identified as the terrorist before he was shot.

Deputy Assistant Commissioner Cressida Dick, who was Gold Command officer in charge of the operation, told the hearing that she did not believe any officer had done anything wrong or unreasonable. She also said she feared that a similar incident could happen again.

Last year, an Old Bailey jury found the Metropolitan Police guilty of breaching health and safety law in the operation which led to Mr de Menezes’s death. The force was fined £175,000.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE TIMES’ (UK)

Posted in A QUESTÃO ÉTNICA, BRASIL, CIDADANIA, DIREITOS HUMANOS - BRASIL, ECONOMIC CONJUNCTURE, ENGLAND, FINANCIAL CRISIS 2008/2009, FOREIGN POLICIES, HATE MONGERING AND BIGOTRY, HISTORY, INTERNATIONAL, INTERNATIONAL RELATIONS, JUDICIARY SYSTEMS, RECESSION, UNITED KINGDOM | Leave a Comment »

CENTRAL BANK PRESIDENT SURPRISED AT LOW NOVEMBER INFLATION DATA (Hungary)

Posted by Gilmour Poincaree on December 12, 2008

12 December 2008, Friday

MTI – THE HUNGARIAN NEWS AGENCY

PUBLISHED BY ‘THE HUNGARIAN NEWS AGENCY’

Budapest, December 11 (MTI) – Hungary’s central bank (NBH) and the markets were taken by surprise after the sharp drop in the November inflation rate, the bank’s president Andras Simor said on Thursday.

Annual consumer price inflation slowed to 4.2 percent in November from 5.1 percent in October, the Central Statistical Office (KSH) said on Thursday.

Analysts in the latest Reuters poll and those surveyed by the business daily Napi Gazdasag put November CPI at 4.8 percent while the average estimate of London-based emerging markets analysts polled by MTI-Econews was 4.58 percent.

Simor told a conference that the bank would nevertheless pursue a cautious interest rate policy and convince foreign investors that the bank is aware of the risks of cutting interest rates.

Simor added that were foreign investors to stay away from the Hungarian government securities market in 2009, funds from the IMF loan package would be available to finance Hungary’s external debt expiries.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE HUNGARIAN NEWS AGENCY’

Posted in BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HUNGARY, IMF, INFLATION, INTERNATIONAL, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS | Leave a Comment »

CONGRESO AUTORIZA ENDEUDAMIENTO POR US5,000 MILLONES EN 2009 – BM ABRE LA CARTERA PARA MÉXICO; PONE A DISPOSICIÓN US3,000 MILLONES

Posted by Gilmour Poincaree on December 12, 2008

11 Diciembre, 2008 – 17:16

APR

PUBLISHED BY ‘EL ECONOMISTA’ (Mexico)

El Banco Mundial (BM) está dispuesto a otorgar a México hasta 3,000 millones de dólares en financiamiento para 2009, anunció el director de la institución para México y Colombia, Axel Van Trotsenburg.

En rueda de prensa conjunta con funcionarios de la Secretaría de Hacienda y el Banco Interamericano de Desarrollo, destacó que la cifra supera los 2,400 millones de dólares que en total prestará este año al país, de los cuales 400 millones canalizará la próxima semana.

“El Banco Mundial tiene una relación privilegiada con México en el último año y medio”, situación que permite al organismo multilateral definir su relación con países medios.

Por su parte, el titular de la Unidad de Asuntos Hacendarios Internacionales de la Secretaria de Hacienda, Ricardo Ochoa, informó que el Congreso autorizó para 2009 un endeudamiento externo neto por 5,000 millones de dólares.

Esos recursos se utilizaran para el desarrollo de infraestructura, vivienda, medio ambiente y programas sociales, precisó.

Ochoa recordó que el nivel de endeudamiento externo aprobado para el presente año fue de 1,500 millones de dólares.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘EL ECONOMISTA’ (Mexico)

Posted in BANKING SYSTEMS, CENTRAL BANKS, CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, EDUCATION, ENVIRONMENT, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, MEXICO, RECESSION, THE FLOW OF INVESTMENTS, WORLD BANK | Leave a Comment »

PARA CONSTRUIR EDIFICIO PARA PROYECTO DE LEARJET 85, BOMBARDIER INVERTIRÁ US250 MILLONES EN QUERÉTARO PARA PROYECTO LEARJET (Mexico)

Posted by Gilmour Poincaree on December 12, 2008

11 Diciembre, 2008 – 19:44

APR

PUBLISHED BY ‘EL ECONOMISTA’ (Mexico)

El vicepresidente de Operaciones Bombardier Aerospace México, Réal Gervais, informó que durante la primera mitad del
próximo año, iniciará la construcción de un edificio para el proyecto Learjet 85.

El proyecto contempla una inversión por 250 millones de dólares, generará entre 600 y 700 nuevos empleos y se ubicará en el parque Aeroespacial en el municipio de El marqués.

Aclaró que este Learjet es diferente a los modelos que recientemente tuvieron problemas y causaron los accidentes aéreos; la nueva inversión complementa los 200 millones de dólares que se anunciaron con la llegada de esta empresa a Querétaro en octubre del 2005.

‘El proyecto Learjet 85 es muy importante para Bombardier, es totalmente nuevo para la empresa, es un avión totalmente nuevo de hecho, es muy importante también porque utiliza la última tecnología a partir de materiales compuestos para la elaboración de fuselaje y otras piezas, es totalmente distinto a los otros modelos Lear’, dijo.

La manufactura de la estructura de materiales compuestos de Learjet se realizará en la entidad y la terminación de interiores, los vuelos de prueba y la entrega final al cliente se llevarán a cabo en Estados Unidos.

Réal Gervais indicó que la empresa es muy cuidadosa con las inversiones frente a las condiciones económicas que se esperan para el próximo año, por lo que extremará la vigilancia ‘sobre todo en el primer cuarto del 2009’.

Hasta el momento no hay afectaciones, toda vez que el registro de órdenes de compra de Bombardier asciende a 26.1 millones de dólares y no hay cancelaciones extraordinarias de trabajo.

La empresa espera que para el 2010 se llegue a 2,000 empleados, toda vez que ahora se cuenta con 1,200 trabajadores de los que 150 son del área administrativa.

‘Los planes de la empresa no han cambiado en términos de lo que se está produciendo en Querétaro y actualmente 500 personas se dedican a la parte de ensambles de arneses eléctricos y más de 500 personas están dedicadas al ensamble de diferentes componentes estructurales’, detalló.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘EL ECONOMISTA’ (Mexico)

Posted in AIR TRANSPORT INDUSTRY, CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIAL PRODUCTION - USA, INDUSTRIES, INDUSTRIES - USA, INTERNATIONAL, MEXICO, RECESSION, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, TRANSPORT INDUSTRIES, USA | Leave a Comment »

AUNQUE SE DESACELERA 0.48% CON RESPECTO A AGOSTO – Inversión fija bruta sube 7.6% en septiembre: INEGI (Mexico)

Posted by Gilmour Poincaree on December 12, 2008

11 Diciembre, 2008 – 15:53

APR

PUBLISHED BY ‘EL ECONOMISTA’ (Mexico)

La inversión que hicieron las empresas en México subió un 7.6% en septiembre frente al mismo mes del año pasado, dijo el instituto de estadísticas, por arriba de lo esperado por el mercado.

Analistas consultados por Reuters esperaban un alza del 5.59% en la inversión para septiembre, según el promedio de un sondeo MEX17 entre 13 especialistas. La mediana de la encuesta había sido del 7.0 por ciento.

La inversión en maquinaria y equipo creció un 21.1% en septiembre a tasa anual, pero en la construcción cayó un 1.6%, según el reporte del Instituto Nacional de Estadística y Geografía (INEGI).

En cifras desestacionalizadas, la inversión fija bruta cayó un 0.48% en septiembre con respecto a agosto.

El año pasado, la inversión se expandió un 6.7%, mientras el Producto Interno Bruto (PIB) creció un 3.3 por ciento.

Para este año, tanto el Gobierno como el Banco de México (central) esperan una expansión de la economía del 2.0 por ciento.

En el 2009, el banco central pronostica una desaceleración hasta un nivel de entre 0.5 y 1.5%, mientras que el Gobierno prevé una expansión del 1.8 por ciento.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘EL ECONOMISTA’ (Mexico)

Posted in AGRICULTURE, BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, CONSTRUCTION INDUSTRIES, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, MEXICO, RECESSION, THE FLOW OF INVESTMENTS | Leave a Comment »

GIRLS CHEW QAT TOO (Yemen)

Posted by Gilmour Poincaree on December 12, 2008

Friday December 12, 2008 – Issue: (1215), Volume 16 , From 11 December 2008 to 14 December 2008

by Saddam Ashmori For the Yemen Times

PUBLISHED BY ‘THE YEMEN TIMES’

In the governorate of Amran, some 50 kilometers north of Sana’a, chewing qat and smoking among women is strongly disapproved of by society. Although only a few elder women would practice these habits in the past, nowadays more and more women of different ages chew qat and spark up their cigarettes and hookahs, the ancient Middle Eastern water pipe filled with sweetened tobacco, on a daily basis during social gatherings similar to those of men.

Elham, a university student says that she picked up the habit when she was in high school: “I liked qat because it helped me stay up late to study, particularly during exams. Now, I chew qat every day and in increasing quantities.”

Um Ammar says that she usually chews qat at her friend’s house. “I chew every day at the qat session and smoke my hookah as well,” she points out. “Girls like these sessions as it’s an opportunity for them to share their problems and they talk about different things including politics and gossip.”

Some girls say they are only victims, as they succumb to peer pressure. “One of my friends insisted that chew qat and smoke with her until I became addicted,” says Siham, another university student. “Now, I don’t believe I can ever give up chewing or smoking. I have tried, but unfortunately I couldn’t quit, although I know the risks of these habits. I chew qat in front of my family members but started smoking in secret.”

Najwa says that, after she completed high school, her family didn’t allow her to attend university. “I found myself always idle and bored and resorted to chewing qat and smoking with my friends. It helps me momentarily relax and to forget some of my troubles.”

Um Arwa says that she chews qat to keep slim. She says that she doesn’t have her supper because qat causes loss of appetite. “If I chew qat, I don’t eat supper and only eat a small portion at breakfast. This helps me to maintain my grace,” she points out.

Many girls in Amran lead a life of chewing and smoking with little regard to the dangers that result from such practices. Balqees Al-Masswari, a sociologist, says that the reason of this increasing trend is a vacuum in other forms of entertainment such as clubs for women. She says that it is widely thought that chewing qat and smoking bring about psychological relaxation, which prompts many girls to practice these habits. She also stressed that families are responsible for their daughters’ well-being.

“The absence of family scrutiny on the behavior of girls during their teenage years makes them subject to peer pressure with little awareness of its consequences. Some girls believe that these practices are part of a woman‘s freedom,” says Al-Masswari, adding, “Families should educate their daughters about the dangers of qat and smoking to health.”

General medical practitioner Dr. Faisal Makhidi confirms that chewing qat and smoking have many bad consequences on health. “Many girls who come to the hospital suffer from health problems due to qat and smoking such as pulmonary diseases, toothache and insomnia, apart from other serious ailments including cancer and liver diseases,” he says.

He maintains that smoking and chewing qat have many detrimental effects on pregnant women and their unborn child. In addition, the practices decrease the amount of breast milk during feeding and can even lead to infertility and schizophrenia.

For centuries, men in Yemen have gathered around hookahs to puff fruit-scented smoke and chew qat, talk and pass the time. Today, unaware of the devastating -quite possibly even deadly- consequences of the habit, women are increasingly taking it up as a favorite pastime.

CLICK HERE FOR THE ORIGINAL ARTICLE

PUBLISHED BY ‘THE YEMEN TIMES’

Posted in COMMERCE, COMMODITIES MARKET, CONSUMERS AND PSYCHOLOGICAL FACTORS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FRUITS AND FRESH VEGETABLES, HEALTH SAFETY, INTERNATIONAL, RECESSION, YEMEN | Leave a Comment »

YEMEN COMES LAST IN GLOBAL GENDER GAP REPORT FOR THE THIRD YEAR IN A ROW

Posted by Gilmour Poincaree on December 12, 2008

December 11, 2008

by Ebrahim Al-Wadee and Yemen Times Staff

PUBLISHED BY ‘THE YEMEN TIMES’

SANA’A, Dec. 6 — For the third consecutive year, Yemen ranks last in the Global Gender Gap Report 2008 published by the World Economic Forum with a slight improvement in its score compared to last year.

The Global Gender Gap Index scores can be interpreted as the percentage of the gap between women and men that has been closed. This year Yemen scored 0.466 compared to 0.45 in 2007. Each country is judged based on four categories: Economic participation and opportunity – outcomes on salaries, participation levels and access to high-skilled employment; Educational attainment – outcomes on access to basic and higher-level education; Political empowerment – outcomes on representation in decision-making structures; and Health and survival – outcomes on life expectancy and sex ratio.

Yemen having a score less than 0.5 means that in these four categories together Yemeni women nearly have half the rights Yemeni men do.

However, the individual scores of each of the four categories vary. According to the report when it comes to health and survival, Yemeni women are almost as equal to men with a score of 0.98 while educational attainment comes second at 0.62, then comes economic participation at 0.25 and finally political empowerment which is 0.016.

Despite the slight progress from last year which was mainly in the health and survival category and education, the economic and political empowerment have dragged Yemen again to the bottom of the list of 130 countries world wide. The calculations include factors such as literacy rate, employment, healthy life expectancy, number of women in leading decision making positions.

Yemeni government’s report

The Yemeni government had preceded the WEF’s report by a local report which allegedly said that women participation has improved in the political, economic and social fields during the last few years.

Released by the Ministry of Planning and International Cooperation, the third local report, which included statistics of the year 2008, said that women achieved progress in terms of decision making inside four political parties, General people’s Congress, Islah, Socialist and Nasserite parties. It indicated that women assumed leading positions in these parties.

“Around 70 Yemeni women were able during 2006 to hold leading diplomatic positions in the Ministry of Foreign Affairs,” said the government’s report, adding, “The number of women who held leading positions in the unions of different professions mounted to 371 and those who are members of these unions committees are 2,453.

Women who held the judge degree mounted to 67 including three women holding management positions in the Ministry of Justice and another five were nominated in the High Judiciary Institute. The rest 59 women were appointed as judges in the public courts and prosecutions.

However, the local report maintained that women participation in decision making is still low as only 13 women work in the leading positions in the Republic Presidency representing only 14 percent compared with 191 men in the same institution. Women participation in the Cabinet represents only 7 percent as only 18 women work there, whereas the number of men mounted to 131, according to the government’s report.

Yet as co-author of the WEF report Ricardo Hausmann, Director of the Centre for International Development at Harvard University in USA explains that the index assesses countries on how well they are dividing their resources and opportunities among their male and female populations, regardless of the overall levels of these resources and opportunities. Thus, the Index does not penalize those countries that have low levels of education overall, for example, but rather those where the distribution of education is uneven between women and men.

A third report

A shadow report on women’s empowerment in light of the Convention on the Elimination of all Forms of Discrimination against Women prepared by civil society organizations in Yemen contradicts the government’s report, confirming that women participation is still low in the leading positions of the political parties.

Presented to the 41th session of CEDAW’s Committee last May, the report said that there are no signs that indicate the Yemeni government works toward enhancing women participation through adopting the quota system in elections and the system of closed constituencies.

It pointed out that women’s participation is only 0.33 percent in the parliament and 0.08 percent in the local councils.

While the report said that, in the field of health care, maternal mortality rate during delivery has decreased during 2008, it confirmed that the gap between men and women is still big in the different levels of education. It pointed out that curriculum, despite the recent change on it, still highlights the stereotyped roles of women.

Nabila Al-Mufti , a lawyer and women rights activist, maintains that improving women situation in Yemen is correlated with a solution to the problem of codification of laws and lack of awareness of women issues among members of the parliament in a fair way. She said that the situation is also related with the society adoption of such issues, noting that the society is still far from women issues.

Asked whether Islam is a barrier in front of women participation, Al-Mufti said that Islam doesn’t hinder women progress as it contains all principles of justice, pointing out that the problem consists in lack of awareness of the Islamic teachings.

Although recent political debates especially regarding the probable boycott of the opposition parties of the coming parliamentary elections in April 2009, the ruling party is strongly hinting at promoting women in the political sphere and recognizing a quota of at least ten percent of the party’s nominees in the parliament.

“The boycott of the opposition would be an excellent opportunity to for women’s political movement as they can transform the competition from political between different parties, to social by integrating minorities such as women in the political competition,” said Dr. Ahmed Al-Sofi Director of the Yemeni Institute for Developing Democracy and a prominent figure at the ruling party.

And although the Women’s National Committee which is the government machinery for empowering women praised the President’s pledge to allocate 15 percent of the parliamentary seats for women, Hooria Mashhour, deputy director of the committee admitted that the way is still too long in front of Yemeni women to reach their targets. She said that three issues imposed themselves on Yemeni women during 2008 on the national level. The first one was the amendment of laws related to women in the Yemeni legislation. She said that out of 20 articles that represent discrimination against women, only five were amended, the second issue is women political participation, and the third being safe motherhood.

The Global picture

Norway leads the world in closing the gender gap between men and women, according to the overall ranking in the World Economic Forum’s Global Gender Gap Report 2008. Three other Nordic countries – Finland (2), Sweden (3) and Iceland (4) – also top the Report’s Gender Gap Index. Previously higher ranking countries such as Germany (11), United Kingdom (13) and Spain (17) slipped down the Index but stayed in the top 20, while Netherlands (9), Latvia (10), Sri Lanka (12) and France (15) made significant gains.

The United States (27) made progress this year and closed gender gaps in estimated earned income and perceived income gaps for similar work. The United States also made strides in political empowerment, driven by increased participation of women in political decision-making positions. Switzerland’s (14) advancement up the rankings was based on large increases in the percentage of women in parliament and those in ministerial-level positions. France (15) improved significantly for the third consecutive year, thanks to gains in both economic participation and political empowerment. China (57) gains 17 places relative to last year driven by narrowing gender gaps in educational attainment, economic participation and political participation. Brazil (73) improves on education and economic participation but falls to 110th place in political empowerment. In the bottom half of the rankings, countries such as Tunisia (103), Jordan (104) and United Arab Emirates (105) made overall gains, driven by narrower gaps in literacy, and in the case of Jordan and the UAE, in the percentage of women in political decision-making positions. Syria (107), Ethiopia (122) and Saudi Arabia (128) not only fell farther in the relative ranking, but also showed a drop in scores relative to their own performance last year.

According to the report, the three highest ranking countries have closed a little over 80% of their gender gaps, while the lowest ranking country has closed only a little over 45% of its gender gap. Out of the 128 countries covered in both 2007 and 2008, more than two-thirds have posted gains in overall index scores, indicating that the world in general has made progress towards equality between men and women. Additionally, taking averages across the subindexes for these 128 countries reveals that, globally, progress has been made on narrowing the gaps in educational attainment, political empowerment and economic participation, while the gap in health has widened.

“Greater representation of women in senior leadership positions within governments and financial institutions is vital not only to find solutions to the current economic turmoil, but to stave off such crises in future. At the World Economic Forum, we put strong emphasis on addressing this challenge with a multi-stakeholder approach through our global and regional Gender Parity Groups,” said Klaus Schwab, Founder and Executive Chairman of the World Economic Forum. These communities of highly influential leaders from business, politics, academia, media and civil society – 50% women and 50% men – seek to share best practices and identify the most effective strategies to optimize the use of talent.

The Global Gender Gap Report 2008 is based on the innovative new methodology introduced in 2006 and includes detailed profiles that provide insight into the economic, legal and social aspects of the gender gap in each country. The Report measures the size of the gender gap in four critical areas of inequality between men and women.

The Report also provides some evidence on the link between the gender gap and the economic performance of countries. “Our work shows a strong correlation between competitiveness and the gender gap scores. While this does not imply causality, the possible theoretical underpinnings of this link are clear: countries that do not fully capitalize effectively on one-half of their human resources run the risk of undermining their competitive potential. We hope to highlight the economic incentive behind empowering women, in addition to promoting equality as a basic human right,” said Laura Tyson, co-author of the report and Professor of Business Administration and Economics at the University of California, Berkeley, USA.

“The Report reveals that progress is not only possible, but possible in a relatively short space of time: calculating the Index as far back as data would allow, we found that countries such as Chile, Spain, Turkey and Finland have closed between 5 and 10 percentage points of their respective gender gaps over just the past eight years. When we interpret these percentage changes at the societal level, we see that hundreds of thousands of lives are impacted, and at the economic level, we see enormous potential competitiveness gains,” said Saadia Zahidi, Head of Constituents at the World Economic Forum and co-author of the WEF Global Gender Gap report.

The World Economic Forum continues to expand geographic coverage in the Report. Featuring a total of 130 countries, this year’s Report provides an insight into the gaps between women and men in over 92% of the world’s population. Coverage has been expanded this year to include Barbados and Brunei Daressalam. The Report covers all current and candidate European Union countries, 23 from Latin America and the Caribbean, 23 from sub-Saharan Africa, over 20 from Asia and 15 from the Middle East and North Africa. Thirteen out of the 14 variables used to create the Index are from publicly available “hard data” indicators from international organizations, such as the International Labor Organization, the United Nations Development Program and the World Health Organization.

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PUBLISHED BY ‘THE YEMEN TIMES’

Posted in ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, INTERNATIONAL, NATIONAL WORK FORCES, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE ARABIAN PENINSULA, THE WORK MARKET, THE WORKERS, YEMEN | Leave a Comment »

SWISS BANK SECRECY IN TOUGHEST TEST SINCE NAZI GOLD

Posted by Gilmour Poincaree on December 12, 2008

December 11, 2008

by John O’Donnell – Reuters

PUBLISHED BY ‘THE FINANCIAL MIRROR’ (Cyprus)

More than a decade after holocaust survivors won compensation from Swiss banks for emptying Jewish accounts that had lain dormant since the war, the pressure is on again to dismantle Swiss banking secrecy.

This time, the tax collector is leading the charge.

With Washington joining Germany to press for an end to a code they believe helps tax dodgers, many see it as only a matter of time before the Swiss lift the cloak guarding the secrets of the world’s wealthy.

“The challenge to bank secrecy is a thunderstorm which has been brewing since the holocaust money,” said Sebastian Dovey of consultancy Scorpio Partnership. “It is a hot potato and I don’t think the heat is going to be turned down.”

Nearly one-third of wealth kept abroad globally is in Swiss banks: the Swiss Bankers Association and consultants estimate this at $2.2 trillion, making the Alpine state the globe’s biggest offshore centre ahead of Britain and Luxembourg.

But its code of secrecy — which local myth inaccurately claims was introduced to protect fleeing Jews — is as controversial as it is protective.

Laid down in a 1934 law, it has spawned plots for bestselling thrillers, but also real-life intrigues such as that of Gizella Weisshaus.

Shortly before her father was murdered by the Nazis during the war, he told his children about gold coins and jewellery he had stowed away as Germany’s army marched towards their home in Romania.

“I found the money and his gold watch hidden in the roof of my house,” she told Reuters by telephone from New York. “And there were some pieces of paper. It didn’t mean anything to me.”

Decades later, the Auschwitz survivor was still trying to unravel the riddle of those long-discarded papers which likely contained the numbers of Swiss bank accounts.

But like many others who travelled to Zurich to trace her father’s money, she was turned away repeatedly.

She later became central to a series of legal actions taken against the banks and in the mid-1990s under pressure from Washington and Jewish community group the World Jewish Congress, they finally paid $1.2 billion for accounts they had sucked dry.

Now Switzerland faces its toughest assault since. In an escalation of a U.S. investigation into its biggest bank, Raoul Weil, head of UBS’s wealth management business, was recently charged with helping Americans hide billions.

“With the UBS case, Switzerland is under huge international pressure and pretty much back in the situation it was then,” said Swiss Social Democrat party official and historian Peter Hug.

“Holding onto bank secrecy is not going to work in the long term. Switzerland is small and it cannot afford to help tax evasion in its neighbouring countries.”

POLITICAL PRIORITY

Germany, which at the start of the year paid an informant for the names of tax dodgers who parked money at LGT bank in smaller hideout Liechtenstein, is also pushing for change.

“In the end, Switzerland will have no way around declaring who its foreign bank account holders are,” said Hans Eichel, who as German Finance Minister between 1999 and 2005 tried to tackle offshore havens.

“This is a business based on a criminal activity — dodging tax in a neighbouring country.”

The Swiss have already made some concessions: introducing, for example, a tax on income earned by European Union citizens in Swiss accounts.

Stuart Eizenstat, U.S. Deputy Secretary of the Treasury under Bill Clinton, said the dormant accounts case he helped negotiate prompted the Swiss to cooperate on other fronts.

“I do think it had a catalytic effect of making the banks more open,” he said. “They became strong supporters, for example, of the anti-terrorist financing measures. It did spur them to become more open on money-laundering.”

But with demands from Germany that Switzerland be blacklisted by the Organisation for Economic Cooperation and Development, pressure is rising for more.

“The Americans said that if you do not cooperate, then we will make sure you cannot do business here,” said Eichel. “European neighbours of Switzerland such as Germany have to consider similar measures.”

Many believe an agreement between Liechtenstein and the United States this week to drop bank secrecy in cases of tax evasion could force Switzerland into similar concessions.

Prince Nikolaus, the brother of Liechtenstein’s ruling monarch and the country’s ambassador to Brussels, said UBS’s problems and Germany’s probe of his family’s bank, LGT, sent a clear message to offshore havens.

“It was these two banks — the biggest in their respective countries — which were turned into a big case,” he told Reuters by telephone from Brussels. “It has symbolic value. It shows the political priority.”

AIR THINNING FOR ELITE

The pressure from Washington is unlikely to let up. As a senator, U.S. president-elect Barack Obama introduced legislation early last year to make it easier to probe and prosecute tax dodging in offshore locations.

As president, he will need to fund an economic stimulus plan that analysts estimate could cost at least $500 billion.

Hug believes Liechtenstein’s move shows the air is also getting thinner for the Swiss elite. And he sees the first cracks appearing in the country’s usually unshakeable facade.

“There is a conflict of interest between Swiss industry and the banks,” he said. “Industry wants compromise on bank secrecy so that the country’s image is not spoilt.”

Switzerland’s banks — the liabilities of its two largest are more than seven times the country’s Gross Domestic Product — have been talking up the services they offer beyond hiding customer identity.

“This is not all we have,” said Urs Roth, Chief Executive of the Swiss Bankers Association. “We do have a number of traditional advantages, like the economic, monetary and social stability.”

Ultimately, however, it may not be the industry but Swiss pride that is the biggest hurdle to dropping bank secrecy. A nationwide vote would likely be needed to change the rules.

Few speak out publicly on the subject. No major Swiss bank wanted to discuss it with Reuters.

“The Swiss are so brainwashed, that the bank there is untouchable,” said Maram Stern, who as Deputy Secretary General of the World Jewish Congress oversaw negotiations with the Swiss banks about dormant accounts.

“This was what the normal person on the street was not capable of understanding. There were people asking me: how can you question the bank?”

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PUBLISHED BY ‘THE FINANCIAL MIRROR’ (Cyprus)

Posted in BANKING SYSTEMS, ECONOMIC CONJUNCTURE, ECONOMY, EUROPE, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FOREIGN POLICIES, HISTORY, HUMAN RIGHTS, INTERNATIONAL, INTERNATIONAL RELATIONS, JUDAISM, JUDICIARY SYSTEMS, RECESSION, SWITZERLAND, TAX EVADING, THE EUROPEAN UNION, USA | Leave a Comment »

EU EDGES CLOSER TO CLIMATE, STIMULUS DEALS – ITALY, POLAND SEE EU CLIMATE DEAL IN OFFING

Posted by Gilmour Poincaree on December 12, 2008

December 12, 2008

by Jan Strupczewski and Pete Harrison – Reuters

PUBLISHED BY ‘THE FINANCIAL MIRROR’

European leaders moved towards agreement on Friday on a multi-billion dollar plan to tackle the global recession and a climate change plan amended to limit impact on struggling industries.

Green groups warned that the European Union could forfeit its credibility as a force in tackling climate change if it accepted too many changes to a plan to cut carbon dioxide emissions by 20 percent by 2020.

One British group said compromises in climate policy, which will be key to world talks next year to produce a successor to the Kyoto pact on climate change, could amount to a ‘meltdown’.

The climate discussions took on a special significance, taking place some six weeks before Barack Obama takes over the U.S. presidency holding out the prospect of closer co-operation in matters of global warming.

Italian Prime Minister Silvio Berlusconi, who had threatened to veto a deal without concessions to protect key industries, emerged from the first day of a two-day summit, declaring: “We are heading towards a compromise…We are getting what we want.”

Poland, which had demanded concessions on its heavily polluting coal-based power industry, was also cautiously optimistic.

“The prime minister (Donald Tusk) achieved everything he wanted in negotiations on the climate package,” an official told Reuters. “The deal is flexible, allowing for the modernisation of the Polish power sector.”

HISTORIC?

The economic crisis sweeping Europe has further complicated climate talks that had already raised tensions in a 27-member bloc embracing former Soviet bloc states besides western Europe.

German Chancellor Angela Merkel, who opposes the heavy spending advocated by Britain and France for fear it could lead to escalating budget deficits, said at the start of the summit she was nonetheless keen to seal a 200 billion euro ($260 billion) stimulus package, amounting to some 1.5 percent of GDP.

Luxembourg Prime Minister Jean-Claude Juncker said on Thursday evening he thought EU leaders would agree on the main lines of the economic package and the climate deal on Friday.

“The economic crisis will pass, the climate crisis will stay. We have to do something,” he told reporters.

Finnish Foreign Minister Alexander Stubb said Friday would bring a ‘historic decision’ on energy and climate change.

‘Europe is going to show the way,’ he said.

Several leaders stressed the need to maintain the EU’s ambitious targets; but Merkel, seeking to limit damage to industry, appeared to have secured compromises.

Steel, cement, chemicals, paper and other industries will be sheltered from the added cost of buying permits to emit carbon dioxide from the EU’s flagship emissions trading scheme (ETS), according to a draft text that formed the basis for talks.

“This covers about 90 percent of industry, and I don’t see any reason why Germany would not accept this proposal,” German conservative Peter Liese told Reuters. “I see it as a victory.”

British Green group member Caroline Lucas said the proposals represented ‘the lowest possible common denominator’.

‘The eyes of the world are on the EU. The EU’s credibility as a leading actor on climate change is in freefall. It’s not too late for heads of state and government to intervene and save face.’

EASE THE SHOCK

In their first session of the summit, leaders agreed in principle on a set of concessions to Ireland enabling Dublin to hold a second referendum by next November on the Lisbon treaty, intended to streamline EU decision making. The treaty was rejected at a first poll and needs approval from all states.

“There was no opposition, there was no objection, there was no veto,” one European official said. Another stressed that the agreement was only provisional and there would be talks on the details of the arrangements on Friday.

The Lisbon Treaty — successor to the defunct EU constitution — aims to give the bloc more weight in the world by creating a long-term president and its own foreign policy supremo.

EU leaders aim to agree how to reach targets of slashing carbon emissions by 20 percent by 2020 and winning 20 percent of the bloc’s energy from renewable sources such as wind and solar power by that date, ahead of global talks next year on a successor to the Kyoto agreement from 2012.

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PUBLISHED BY ‘THE FINANCIAL MIRROR’

Posted in ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, ENVIRONMENT, EUROPE, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, GERMANY, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, INTERNATIONAL RELATIONS, ITALY, MACROECONOMY, PAPER INDUSTRIES, POLAND, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE EUROPEAN UNION, THE FLOW OF INVESTMENTS | 1 Comment »

DOLLAR HITS 13-YR LOW VS YEN AS AUTOS BAILOUT FAILS – Dollar dives below 89 yen, hits 13-year low

Posted by Gilmour Poincaree on December 12, 2008

December 12, 2008

by Kaori Kaneko – Reuters

PUBLISHED BY ‘THE FINANCIAL MIRROR’

The dollar hit a 13-year low against the yen on Friday after the U.S. Senate failed to agree on a bailout for U.S. automakers.

The U.S. Senate failed on Thursday night to reach a last-ditch compromise to bail out U.S. automakers, effectively killing any chance of congressional action this year.

The $14 billion legislation officially died in the Senate late on Thursday after supporters failed to get enough support in a procedural vote.

“It has become really severe for the prospect of the bailout plan,” said Mitsuru Sahara, senior manager at Bank of Tokyo-Mitsuibishi UFJ.

Traders said there were fewer market participants, making market swings larger, pushing the dollar below 89.00 yen for the first time in 13 years.

The dollar fell as low as 88.40 yen, the lowest since 1995.

The euro declined 0.4 percent to $1.3313.

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PUBLISHED BY ‘THE FINANCIAL MIRROR’

Posted in AUTOMOTIVE INDUSTRY, BANKING SYSTEM - USA, COMMERCE, COMMODITIES MARKET, DOLLAR (USA), ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, JAPAN, RECESSION, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, USA, YEN (Japan) | Leave a Comment »

VIETNAM LOWERS GASOLINE PRICES BY 8 PERCENT AMID DECLINING WORLD OIL PRICE

Posted by Gilmour Poincaree on December 12, 2008

December 10, 2008 – 2:57 AM

Associated Press

PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

HANOI, Vietnam – Vietnam has lowered gasoline prices by 8 percent as world oil prices hover around $43 a barrel.

The government said Wednesday that effective immediately, the price of gasoline was cut to 11,000 dong (65 cents) per liter. The government also raised import tax from 35 percent to 40 percent.

The government has cut gasoline prices 10 times since they reached a high of 19,000 dong ($1.1) in July when world oil prices hit a record high of nearly $150 a barrel.

Light, sweet crude for January delivery was up 91 cents to $42.98 a barrel in electronic trading on the New York Mercantile Exchange by midafternoon in Singapore as investors looked to an expected OPEC production cut next week to help stabilize prices that have plummeted amid a global economic slowdown.

Vietnam exports about 16 million tons of crude oil each year but has to import all refined oil products. The country’s first oil refinery is scheduled to open early next year.

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PUBLISHED BY ‘THE STAR TRIBUNE’ (USA)

Posted in COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, GASOLINE, INDUSTRIAL PRODUCTION, INDUSTRIES, INFLATION, INTERNATIONAL, OPEC, PETROL, RECESSION, REFINERIES - PETROL/BIOFUELS, SINGAPORE, THE FLOW OF INVESTMENTS, USA, VIETNAM | Leave a Comment »

BANK INTEREST RATES GOING DOWN, BONDS BECOMING MORE ATTRACTIVE – It seems that investors prefer injecting money in bonds to stocks thanks to the higher attractiveness of bonds at this moment and their greater safety with bank interest rates expected to further decrease (Vietnam)

Posted by Gilmour Poincaree on December 12, 2008

12/12/2008

VIR

PUBLISHED BY ‘THE VIETNAM ECONOMIC TIMES’

As the stock market has become more risky, investors have begun eyeing the bond market. On December 4, after 18 consecutive trading sessions that saw foreigners’ sales higher than their purchases, the Hanoi Securities Trading Centre (HASTC) witnessed foreigners’ purchases higher than their sales, once again. The net purchase reportedly reached 280,000 bonds, worth VND30.7bil.

Analysts say that injecting money in bonds now is considered attractive and safe as bank interest rates are expected, after many times of decreasing, to decrease further.

After the decision by the State Bank of Vietnam to slash the basic interest rate, a lot of commercial banks have announced interest rate cuts to VND10% per annum at the lowest level, while the average interest rates are now at 13-14% per annum. The rates are the same as the ones at the end of 207, and the lowest levels in 2008, while representing the decreases of 6-11% per annum over the end of June 2008.

Chu Hung, an independent economist, said that the decreasing bank interest rates prove to be the main reason that investors are now making investments in bonds.

A representative of SME Securities Company said that it is untrue to say that foreign investors only eyed the bond market when the stock market showed uncertainties. Foreign investors sold a lot of bonds in October 2008, nearly 150mil, which showed that they held a big volume of bonds before.

Recently, with more interest from domestic commercial banks, the bond transaction volume has been on the increase. For example, on December 8, 2008, the figure was over 60mil bonds.

Though investment in bonds is considered a safe and stable investment channel, which can bring stable profit, the bond market previously was the playing field mainly of foreign investors. Domestic investors, including commercial banks and securities companies, were not really much interested. It is partially because investors now make investments in bonds because they aim to get the high interest rates, while there is not a bustling secondary bond market in Vietnam.

A representative of SME Securities Company said that bonds mainly attract long-term investors who have a lot of capital and good knowledge of the bond market. Foreign investors satisfy all those conditions, while among domestic investors, only big financial institutions can.

According to the Ministry of Finance, the total capital mobilisation through bond issuance in the first ten months of the year fulfilled 52% of the yearly plan. The bond issuance through the state treasury system fulfilled 42% of the yearly plan, while the issuance through the Vietnam Development Bank fulfilled 82% of the plan.

In 2008, except the Vietnam Express Corporation (VEC), which issued bonds with government guarantee, other economic groups and state general corporations have not issued bonds due to the lack of favourable conditions, including the high inflation and high interest rates. Sources say that the Vietnam Shipbuilding Industry Group and the Electricity of Vietnam are following necessary procedures to mobilise capital for investment projects.

The Ministry of Finance, in its plan to develop the bond market by 2010, said that it would amend Decree 14 on government bond issuance in an effort to raise the liquidity and attractiveness of the nation’s bond market.

The ministry is planning to issue regulations to encourage the issuance of bonds in big lots, and create favourable conditions for the development of the secondary bond market.

With the renovations, the bond market is expected to be very bustling in 2009, creating a more attractive investment channel for investors, both foreign and domestic.

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PUBLISHED BY ‘THE VIETNAM ECONOMIC TIMES’

Posted in ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INTERNATIONAL, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS, VIETNAM | Leave a Comment »

WHAT ARE FINANCIAL DERIVATIVE PRODUCTS?

Posted by Gilmour Poincaree on December 12, 2008

Sunday, 7 December 2008

by A. D. D. Akmeemana

PUBLISHED BY ‘THE SUNDAY OBSERVER’ (Sri Lanka)

There is a serious discussion going on about financial derivatives (a kind of financial instruments) in the media, political circles and other sections of the general public after the disclosure of the Ceylon Petroleum Corporation’s (CPC) hedging activities and the alleged losses suffered by the CPC due to these transactions. It seems, quite understandably, that only a few in the general public has any understanding about theses financial instruments.

Our objective here is to provide a basic introduction to a highly technical area in finance. These instruments are being used for speculative and risk management purposes by highly sophisticated and experienced professionals. We will not discuss any of the CPC’s alleged activities relating to hedging transactions. It is purely an educational discussion to make the public aware of what these instruments are and to explain how they work. We will stick to the risk management aspects of the contracts for simplicity. We will not discuss about the pricing of the derivative, because it is a highly technical and mathematical in nature.

There are two kinds of financial instruments, fundamental and derivative. Stocks and bonds are fundamental instruments. Anybody with money can invest in stocks and bonds.

A coupon bond holder’s income will be the interest earned if it was purchased in the primary market and held till maturity. If a coupon bond is bought in the secondary market, income will be the interest received plus any capital gain realised. Income of a stock will be the dividends you receive, if any plus any capital appreciation at the time of the sale of the asset.

Instead of buying stocks or bonds, the investor can buy derivative products for the same purpose, to make money or to hedge any long or short positions.

A derivative instrument is a contract whose value depends on something else, commodity, security or an index. The value of the derivative instrument depends on the value of the underlying asset.

Forward contracts

Derivatives are bought and sold for speculative and risk management purposes as mentioned earlier.

Financial derivatives are forward contracts, futures contracts, options, options on futures, swaps and options on swaps. We will explain the very basics of them. Forward contracts sometimes are very simple arrangements we all use at times. For example, one agrees to buy a piece of land at one point in time but requiring the parties to execute the terms of the contract at a future point in time.

A person who has a small plot of rubber might agree to sell the next crop to a trader at an agreed price at present but the rubber to be delivered and to receive payment on a future date. The buyer and the seller secure the terms of the contracts at the time of the agreement. But most forward contracts are not that simple.

There are two groups of people who deal with forward contracts, speculators and hedgers. For example a builder may need timber in three months time. He expects timber prices to go up in the near future and does not want to buy and store it. There is a timber dealer who has timber and expects the prices to go down. Both of them can come to a contract today to hedge their perceived exposure to market volatility.

There is another group of people who assume risks for profit called speculators who bring liquidity to the market. For instance a person who wants timber in three months does not have to find a person who has timber to sell in three months because speculators come forward and assume the risk for a price. Both parties hedge their perceived exposure.

The contracts are negotiated by the parties involved (there are brokers to bring the parties together) and there is no structural arrangement to support the parties, which is a drawback of the forward contracts. The biggest advantage of forward (OTC ) contracts over futures contracts (discussed later) is the flexibility, and they can be structured according to the requirements of the parties. The biggest drawback for hedgers in developing countries like Sri Lanka is also the same flexibility.

Futures contracts

The party who has more information, knowledge or any other influence over the counterparts, can take advantage by structuring the contract to their benefit at the expense of the other party. According to economic theory, the market system fails in a situation like this due to asymmetric information and moral hazard.

Futures contracts are special forms of forward contracts that are designed to reduce the disadvantages associated with forward contracts. They are nothing more than forward contracts whose terms have been standardised so that they can be traded (much like securities) in the marketplace.

Standardisation makes futures contracts less flexible than forward agreements, but it makes it more liquid.

There is no futures exchange operating in Sri Lanka. In a futures market like Chicago Mercantile Exchange all contracts are standardised as to the quantity, price, delivery date, settlement and the other major terms of the contract. Participants do not have to find counterparties and contracts are transparent because they are created by the exchange.

The exchange is the clearing house and parties are dealing directly with the exchange which takes the responsibility of the performance of the contract. This is a very efficient market and futures contract prices are indicative of the future spot prices; and this feature is known as price discovery.

The parties who enter into a forward contract are on their own, and they have to take all precautions to safeguard their interests. If the participants are not experienced professionals, it is advisable for them to deal with an exchange rather than getting involved in forward contracts.

In case the participants cannot find exactly what they want in a futures market, still they can find something very close to their requirements because markets are nearly complete in economic sense. Futures contracts can be closed out by entering in to an offsetting transaction, making physical delivery or cash settlement. Compared to futures contracts, forward contracts are illiquid, have credit risk and are unregulated.

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PUBLISHED BY ‘THE SUNDAY OBSERVER’ (Sri Lanka)

Posted in ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FINANCIAL SCAMS, FRAUD, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, USA | Leave a Comment »

EX-NASDAQ CHAIRMAN ARRESTED (USA)

Posted by Gilmour Poincaree on December 12, 2008

Dec 12, 2008 21:59

AGENCE FRANCE PRESSE

PUBLISHED BY ‘THE STRAITS TIMES’ (Singapore)

NEW YORK – A WALL Street advisor and former chairman of the Nasdaq stock market was arrested on Thursday for fraud after allegedly admitting to running a ‘giant’ pyramid scheme, prosecutors announced.

Bernard Madoff, 70, faces a maximum 20 years prison and a fine of up to five million dollars if convicted on the securities fraud charge, prosecutor Lev Dassin and the FBI said in a statement.

According to the statement, Madoff on Wednesday told his employees at Bernard L. Madoff Investment Securities LLC, a securities broker, that an investor advisory business he had been running in parallel was fraudulent.

Madoff filed with the Securities and Exchange Commission on January 7 that his investor advisory business served 11 to 25 clients with about 17 billion dollars in assets under management.

But Madoff allegedly told his employees that he was ‘finished’, that he had ‘absolutely nothing’ after losing approximately 50 billion dollars (S$74.5 billion).

According to the prosecutor’s statement, he said he had run ‘a giant Ponzi scheme’ – essentially a pyramid scam.

He told the employees he would surrender himself to the authorities after using his remaining 200-300 million dollars to pay selected employees and family and friends, the statement said.

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Posted in ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, FRAUD, JUDICIARY SYSTEMS, RECESSION, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, USA | Leave a Comment »

$650.5B ECON STIMULUS PLAN (Japan)

Posted by Gilmour Poincaree on December 12, 2008

Dec 12, 2008

AGENCE FRANCE PRESSE

PUBLISHED BY ‘THE STRAITS TIMES’ (Singapore)

TOKYO – JAPAN’S government plans to increase a stimulus package to 40 trillion yen (S$650.5 billion) as Asia’s largest economy rapidly worsens, a newspaper said on Friday.

Prime Minister Taro Aso, who unveiled a 26.9-trillion-yen boost in late October, will hold a news conference on Friday to announce the rise, the top-selling Yomiuri Shimbun said.

The package announced earlier includes tax cuts, benefits sent directly to households and loans for small businesses.

Additional programmes would include measures to help people who lose their jobs, the Yomiuri said.

Japanese companies had long championed employment security but news on steep job cuts are making headlines every day amid a rapidly shrinking economy.

The government also aims to facilitate bank loans to smaller companies by enhancing a bill to inject capital into ailing banks, the daily said.

Under an earlier plan, banks would be able to receive public funds of up to two trillion yen pre-emptively to shore up their capital bases, which are being hurt by a credit crunch and a slump in the value of their shareholdings.

But the government aims to hike the amount six-fold to 12 trillion yen, it said.

No confirmation of the report was immediately available from the government.

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Posted in BANKING SYSTEMS, CENTRAL BANKS, COMMERCE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, JAPAN, NATIONAL WORK FORCES, RECESSION, THE FLOW OF INVESTMENTS, THE WORK MARKET, THE WORKERS | Leave a Comment »

TENAGA TO REDUCE CAPEX NEXT YEAR (Malaysia)

Posted by Gilmour Poincaree on December 12, 2008

2008/12/11

Bernama

PUBLISHED BY ‘THE NEW STRAIT TIMES’ (Malaysia)

TENAGA Nasional Bhd is reducing its capital expenditure (capex) next year on expectation of a downward trend in electricity demand, said its group chief executive officer, Datuk Seri Che Khalib Mohamad Noh.

“We expect electricity demand will not increase as what it was before, (thus) we have cut down some of the capex that we are supposed to do for 2009,” he told reporters after the company’s annual general meeting in Kuala Lumpur.

He said TNB has experienced an increase in demand (electricity) within the region of six to eight per cent every year but early part of this year saw the demand reduced to four per cent.

“We think it is going to be tough. We are worried that the total demand for the financial year 2009 may go down further,” he said.

But he noted that the the fall would not go as low as 10 per cent which was recorded during the 1997/98 financial crisis.

TNB is spending some RM5-RM6 billion every year in terms of capital expenditure.

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Posted in COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ENERGY, ENERGY INDUSTRIES, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, MALAYSIA, RECESSION, THE FLOW OF INVESTMENTS | Leave a Comment »

FORD’S DEBT GAMBLE PAYS OFF

Posted by Gilmour Poincaree on December 12, 2008

12:23PM Thursday Dec 11, 2008

ASSOCIATED PRESS

PUBLISHED BY ‘THE NEW ZEALAND HERALD’

DEARBORN – A decision Ford CEO Alan Mulally made during his first months on the job may turn out to be the automaker’s saving grace.

In 2006, the chief executive fresh from Boeing wanted to concentrate on making smaller, more fuel efficient cars, matching production with consumer demand, and focusing on the Ford, Lincoln and Mercury brands.

The company has announced the closure of 17 factories and eliminated 50,000 jobs since its latest restructuring started in 2005, many through buyout and early retirement offers. It sold non-Ford brands Jaguar, Land Rover and Aston Martin and is studying the sale of Sweden’s Volvo. Smaller cars produced by its European unit are coming to the US starting in 2010.

But to fulfil that vision for the company, Mulally needed at least $17 ($32) billion. He took his plan – one very similar to the one Ford submitted to Congress last week – to 40 banks at a time when credit flowed freely, and he ended up raising $23.5 billion. He bet all of Ford’s buildings, stock, intellectual property, stakes in foreign automakers, and even its trademark blue logo as collateral.

“At the time people were wondering if we were being too aggressive to leverage assets,” Mulally said in an interview. “I erred on the side of being conservative on financing.”

The move to secure credit proved to be key to Ford’s assertion that it doesn’t need an emergency loan from Congress now like General Motors and Chrysler LLC do. While the company boasts how its fleet and future vehicles set it apart from its Detroit competitors, its ability to maintain operations through 2009 without government aid is a key differentiator.

The company had $18.9 billion in cash on hand on Sept. 30 and still had about $10.7 billion of its credit lines available.

Yet Ford could be standing on a melting iceberg. The company spent $7.7 billion more than it took in the third quarter as US auto sales fell, reaching an annualised sales rate of 10 million in November, the lowest level since October 1982.

Should industry wide US auto sales drop to new lows in 2009, Ford says it would need to come to the government for help. In the plan it submitted to Congress last week, it asked for access to a $9 billion line of credit just in case.

Ford’s F-series pickup trucks are still the best-selling vehicles in the US But the company needed to slim down from its steady truck and SUV diet, as $4-a-gallon gas scared consumers away from the vehicles.

The company announced plans in July to transform three North American truck plants to make small, fuel-efficient cars that it already sells in Europe. A plant in Wayne, Michigan, that made Lincoln Navigator and Ford Expedition SUVs will start churning out Ford Focus compacts in 2010.

The company’s goal is to take leadership in fuel economy with direct-injection turbocharged engines, new hybrid gas-electric powertrains and eventually electric vehicles. Competitors, including Chrysler, GM, Toyota and Honda, have or are working on similar technologies.

Besides upgrades of the conventional models, Ford rolled out new versions of its Fusion and Milan sedans, including hybrid models, at the Los Angeles Auto Show last month with fuel economy that beats current offerings from Toyota and Honda.

“Longer term, it looks as if these are the right moves for Ford,” said Aaron Bragman, research analyst for automotive marketing for IHS Global Insight in Troy, Mich.

But in the short term, Ford needs US consumers to regain confidence in the economy and return to showrooms, said Bragman, who thinks even a minor dip below next year’s expected sales level of 10.5 million to 11 million would force Ford to take government aid.

“It all depends on how spooked consumers are in 2009 to buy enough cars to keep them off the government dole,” he said.

Ford never thought the credit it lined up would be needed to run basic operations, at least until car sales plummeted this year.

“None of us thought it would go as deep as it was going to go and we would have to use it all,” Mulally said.

And if GM, Chrysler or both declare bankruptcy, it could drag down parts suppliers and force Ford into the same situation, Mulally said. Any long-term gains in market share would be overshadowed by short-term pain in a disrupted supply chain, and negative customer perception.

“I can’t predict the future, and this thing might degrade further, even Ford with its dynamite plan might have to need a small bridge loan,” Mulally said. “We don’t need it now.”

In that sense, Ford appeared to take a back seat at Congressional hearings in November, and it reiterated the changes it is already making when Mulally returned to Washington last week.

“When I heard Mulally’s presentation, it sounded like an advertisement for Ford, rather than a plea for help,” said Bruce Belzowski, associate director of the Automotive Analysis Division at the University of Michigan’s Transportation Research Institute. “It’s more a laid back strategy but a serious one. They’re very supportive of getting government to help the companies.”

Mulally said his pilgrimages to Congress had little to do with Ford’s position, but more of a gesture to “stand tall” with the US auto industry.

“I have a plan, it’s a solid plan. I have the money, but I’m there standing with the industry,” he said. “My competitors said they’re in dire financial straits. Having a bridge loan and keeping it going is right for the economy and right for the United States.”

Among the requirements in the proposed bailout legislation is the appointment of a “car czar” to oversee GM and Chrysler with authority to yank the loans if the companies don’t make substantial progress toward restructuring.

Mulally said Ford has completed much of the restructuring that Congress is demanding of the other two, and it anticipates no further cuts will be necessary as long as the US auto market doesn’t worsen considerably.

“I think they’re in the best position,” said Brad Coulter, a turnaround consultant for O’Keefe and Associates in Oakfield, Michigan. “If Ford sees harsh medicine being doled out, and if they want to back off, they can.”

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Posted in - UNCATEGORIZED, AUTOMOTIVE INDUSTRY, BANKING SYSTEM - USA, BANKRUPTCIES - USA, CENTRAL BANKS, COMMERCE, COMMODITIES MARKET, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, INDUSTRIAL PRODUCTION - USA, INDUSTRIES - USA, NATIONAL WORK FORCES, RECESSION, STOCK MARKETS, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, USA | Leave a Comment »

U.S. WEAKENS ENDANGERED-SPECIES RULES

Posted by Gilmour Poincaree on December 12, 2008

DECEMBER 11, 2008, 4:44 P.M. ET

by Siobhan Hughes

PUBLISHED BY ‘THE WALL STREET JOURNAL’ (USA)

WASHINGTON – The Bush administration on Thursday eliminated one step in the effort to protect endangered species, allowing federal agencies to bypass consultation with government scientists about whether new projects will harm threatened wildlife.

The U.S. Interior Department issued a rule that allows agencies to avoid consulting with the Fish and Wildlife Service or the National Marine Fisheries Service if they conclude that any actions they fund wouldn’t harm an endangered species.

Environmentalists have been up in arms over the rule since it was proposed in August, but the Bush administration says the changes are narrowly targeted and came out of concern that the Endangered Species Act would be used as a back-door approach to curb greenhouse-gas emissions.

“It should come as no surprise that today the Department of the Interior and the Department of Commerce are announcing final regulations clarifying a segment of the consultation process under section 7 of the Endangered Species Act, particularly as it relates to global processes like climate change,” Interior Secretary Dirk Kempthorne said.

Write to Siobhan Hughes

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PUBLISHED BY ‘THE WALL STREET JOURNAL’ (USA)

Posted in ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, ENVIRONMENT, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, USA | 1 Comment »

GLOBAL FORECAST BECOMES BLEAKER AS CANADA ENTERS RECESSION

Posted by Gilmour Poincaree on December 12, 2008

Thursday, December 11, 2008

AFP

PUBLISHED BY ‘THE MANILA TIMES’ (Philippines)

WASHINGTON, D.C.: The World Bank offered a grim 2009 outlook Tuesday of just 0.9 percent growth for the global economy, while a recession was declared in Canada and a rescue for US automakers hung in the balance.

In its “Global Economic Prospects” report, the World Bank sharply cut its growth forecast and predicted world trade volume would fall 2.1 percent as a worldwide credit crisis hits rich and poor nations alike.

Developing countries’ economies would likely expand at a reduced annual pace of 4.5 percent while wealthier, developed economies are expected to contract 0.1 percent, the multilateral development lender said.

“The global economy is at a crossroads, transitioning from a sustained period of very strong developing country-led growth to one of substantial uncertainty as a financial crisis rooted in high-income countries has shaken financial markets worldwide,” said World Bank chief economist Justin Lin.

In Canada, the central bank lowered its key interest rate Tuesday by 0.75 point to 1.50 percent and said the Canadian economy had slid into a recession amid the global financial crisis.

“The outlook for the world economy has deteriorated significantly and the global recession will be broader and deeper than previously anticipated,” the bank said in a statement.

In Washington, the White House demanded that Detroit automakers prove their “long-term viability” in return for a $15-billion rescue bailout but said a deal with Congress was in sight.

President George W. Bush’s administration is making “good progress” in its talks with congressional leaders over legislation to shore up General Motors, Ford and Chrysler, White House spokeswoman Dana Perino told reporters.

“We are still working through a number of issues, some of them just small and technical, and other ones a little bit more meaty in scope, but, all in all, making sure we’re headed in the right direction,” she said.

In Geneva, the International Air Transport Association forecast that airlines would likely lose $2.5 billion (1.9 billion euros) in 2009 due to the economic crisis.

“The outlook is bleak,” said Giovanni Bisignani, the association’s director general and chief executive.

“We face the worst revenue environment in 50 years.”

In Britain meanwhile, data showed manufacturing output sank 1.4 percent in October from September, the eighth monthly drop in a row, and was down 4.9 percent on a 12-month basis, the Office for National Statistics said.

The monthly fall was the largest decline since March 2005 and marks the country’s longest consecutive contraction in manufacturing output since 1980.

In Japan, Sony said it would cut investment in its electronics business by 30 percent, cut 10 percent of its manufacturing sites and exit unprofitable businesses to cope with the downturn.

The announcement came just hours after Tokyo said the Japanese economy shrank 0.5 percent in the third quarter—1.8 percent on an annualized basis—even worse than initially estimated.

“The data suggests that the economy is contracting faster than previously thought, and the depth of the recession will be more severe,” said Glenn Maguire, chief Asia economist at Societe Generale in Hong Kong.

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PUBLISHED BY ‘THE MANILA TIMES’ (Philippines)

Posted in BANKING SYSTEMS, CANADA, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HOUSING CRISIS - USA, INTERNATIONAL, JAPAN, NATIONAL WORK FORCES, RECESSION, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, USA, WORLD BANK | Leave a Comment »