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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.

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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 »

REDESIGNING CAPITALISM

Posted by Gilmour Poincaree on December 10, 2008

Monday, December 8th, 2008, 10:21 am ET

by Michel Rocard

PUBLISHED BY ‘THE JORDAN TIMES’

When the heads of state of the world’s 20 largest economies come together on short notice, as they just did in Washington, D.C., it is clear how serious the current global crisis is. They did not decide much, except to call for improved monitoring and regulation of financial flows. More importantly, they committed themselves to launching a lasting process to reform the world’s financial system.

Of course, those who dreamed of a Bretton Woods II were disappointed. But the original Bretton Woods framework was not built in a day; indeed, the 1944 conference was preceded by two and-a-half years of preparatory negotiations, which is probably the minimum needed to decide such weighty issues. The recent G-20 summit occurred with virtually no real preliminary work.

Three tasks must now be addressed. First, a floor must be put under the international financial system in order to stop its collapse. Second, new regulations are needed once the system revives, because if it remains the same way, it will only produce new crises. Finding the right mix will not be easy. For 25 years, the world has experienced a huge financial crisis every five years, each seemingly with its own cause.

The third task is to focus on real economic activity, end the recession, sustain growth, and, above all, reform the capitalist system to make it be less dependent on finance. Long-term investments, not short-term profits, and productive work, rather than paper gains, need to be supported.

The first task is already being tackled. But, although the United States and some European countries have gone a long way toward restoring the lending capacity of banks, that may not be enough. After all, if the economy is to grow again, banks need borrowers, but the recession has led entrepreneurs to cut their investments.

The second task remains open. Disagreements about how to re-regulate the financial markets are deep, owing to countless taboos and the huge interests at stake. Moreover, there can be no comprehensive agreement that does not take into account the relationship between finance and the real economy.

The essential problem in addressing the third task is to find out precisely what is going on in the real economy. Some states (Iceland and Hungary) are clearly bankrupt. Some merely face a hazardous financial situation (Denmark, Spain, and others). Their financial crisis is the main reason for their weakness.

All of these problems are so difficult to resolve because they have been festering for so long. It is now increasingly evident that today’s crisis has its roots in February 1971, when US president Richard Nixon decided to break the link between the dollar and gold. Until that point, America’s pledge to maintain the gold standard was the basis for the global fixed-exchange-rate system, which was the heart of the Bretton Woods framework.

During the 27 years that it lasted, huge growth in international trade, supported by non-volatile pricing, was the norm, and large financial crises were absent.

Since then, the international financial system has been highly volatile. The era of floating exchange rates that followed the end of the gold standard required the development of products that could protect international trade from price volatility. This opened the way to options, selling and buying on credit, and derivatives of all kinds.

These innovations were considered technical successes. Prices were (mostly) stabilised, but with a slow, if continuous, rising trend. The market for these financial products grew over 30 years to the point that they delivered huge opportunities for immediate gain, which provided a strong incentive for market participants to play with them more and more.

During this time, capitalism – smooth and successful between 1945-1975 (sustained high growth, low unemployment, and no financial crises) – weakened. Through pension funds, investment funds, and arbitrage (or hedge) funds, shareholders became well organised and seized power in developed countries’ firms. Under their pressure, more and more processes were “outsourced”.

In real terms, wages no longer rose (indeed, the average real wage has been stagnant for 25 years in the US), and a growing share of manpower (currently around 15 per cent) was without steady employment.

Everywhere, the share of wages and incomes began to fall as a proportion of GDP. As a result, consumption weakened, unsteady employment grew, and unemployment stopped declining.

Under such circumstances, the upper middle classes in developed countries increasingly came to look for capital gains instead of improving their living standards through productive work. This promoted inequality, and led to the under-regulated financial system’s seizure of power over the entire economy, destabilising the real economy by fatally weakening its capacity to react to external shocks.

Today’s crisis marks the end of economic growth fuelled only by credit. But untying the knot that an overweening financial sector has drawn around the economy will take time. Indeed, there is still no consensus that this needs to be done. Yet the G-20 has opened the way to discussion of these fundamental issues.

Today’s recession will be a long one, but it will compel everybody to consider its root causes.

(*) – The writer, former prime minister of France and leader of the Socialist Party, is a member of the European Parliament.

©Project Syndicate, 2008. www.project-syndicate.org

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PUBLISHED BY ‘THE JORDAN TIMES’

Posted in BANKING SYSTEMS, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, ECONOMY - USA, FINANCIAL CRISIS - USA - 2008/2009, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, G20, HUNGARY, ICELAND, INTERNATIONAL, MACROECONOMY, RECESSION, REGULATIONS AND BUSINESS TRANSPARENCY, SPAIN, THE FLOW OF INVESTMENTS, THE LAST DAYS OF GEORGE WALKER BUSH - 2008/Jan. 2009, THE WORK MARKET, THE WORKERS, USA | Leave a Comment »

SUZUKI CORTARÁ 1,2 MIL POSTOS DE TRABALHO NA HUNGRIA – Produção diária será reduzida a partir de dezembro

Posted by Gilmour Poincaree on November 30, 2008

29/11/2008 – 06h57min

PUBLISHED BY ‘ZERO HORA’ (Brasil)

A japonesa Suzuki Motor anunciou que no final de fevereiro cortará 1,2 mil empregos em sua fábrica da Hungria por causa da diminuição da demanda na Europa, segundo informou a agência local Kyodo.

Os postos de trabalho na fábrica húngara se reduzirão dos 5,6 mil atuais para 4,4 mil.

A partir de meados de dezembro, o fabricante japonês diminuirá a produção diária até produzir um total de 210 mil unidades anuais, ou seja, menos 90 mil veículos ao ano.

Em outubro, a companhia anunciou uma redução de sua previsão de lucro para o presente ano fiscal, que concluirá em março de 2009, em um 25,2%, para 60 bilhões de ienes (US$ 629 milhões).

EFE

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PUBLISHED BY ‘ZERO HORA’ (Brasil)

Posted in AUTOMOTIVE INDUSTRY, BANKING SYSTEMS, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HUNGARY, INDUSTRIAL PRODUCTION, INDUSTRIES, INTERNATIONAL, JAPAN, NATIONAL WORK FORCES, OUTSOURCING INDUSTRIES, RECESSION, THE FLOW OF INVESTMENTS, THE WORK MARKET, THE WORKERS | 1 Comment »

OCDE ESPERA RECESSÃO PARA EUA E EUROPA EM 2009

Posted by Gilmour Poincaree on November 25, 2008

Plantão – Publicada em 25/11/2008 às 13h01m

por Juliana Cardoso – Valor Online

SÃO PAULO – A Organização para a Cooperação e Desenvolvimento Econômico (OCDE) espera recessão em vários países no próximo ano, como Estados Unidos e Japão. Acredita que a desaceleração econômica deverá ser mais severa em economias mais vulneráveis a crises financeiras ou às fortes quedas de preços das casas, como Hungria, Islândia, Irlanda, Luxemburgo, Turquia e Reino Unido. Também avalia que o desaquecimento global afetará as principais economias emergentes, como Brasil, China, Rússia e Índia, mas o efeito será mais limitado.

Nos Estados Unidos, conforme o relatório da OCDE, o Produto Interno Bruto (PIB) deve declinar 0,9% em 2009 antes de apresentar crescimento de 1,6% em 2010. Na zona do euro, o PIB deve ter contração de 0,6% no próximo calendário e expandir-se 1,2% um ano depois. A economia japonesa declinará 0,1% em 2009, mas deverá registrar avanço de 0,6% em 2010.

No levantamento Perspectivas Econômicas, a organização prevê que o números de desempregados nos países pertencentes à OCDE deve crescer em cerca de 8 milhões de pessoas nos próximos dois anos uma vez que a recessão mais séria desde o início dos anos de 1980 afeta a atividade econômica.

O contingente de desempregados pode alcançar 42 milhões de pessoas em 2010 em comparação aos 34 milhões registrados atualmente. A atividade econômica nos integrantes da OCDE deve ceder 0,4% em média em 2009 antes de crescer 1,5% no ano seguinte.

“As incertezas envolvendo as projeções são excepcionalmente altas”, declarou o economista-chefe da OCDE, Klaus Schmidt-Hebbel. “Muito depende de de como ocorrerá a superação da crise financeira, o principal motor da desaceleração”, acrescentou.

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PUBLISHED BY ‘PORTAL G1’ (Brasil)

Posted in BANKING SYSTEMS, BRASIL, CHINA, ECONOMIC CONJUNCTURE, ECONOMY, FINANCIAL CRISIS 2008/2009, FINANCIAL MARKETS, HUNGARY, ICELAND, INDIA, INTERNATIONAL, IRELAND, JAPAN, LUXEMBOURG, ORGANIZATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (OECD), RECESSION, RUSSIA, THE FLOW OF INVESTMENTS, THE WORK MARKET, TURKEY, UNITED KINGDOM, USA | Leave a Comment »

IMF LOAN AVERTED POSSIBLE BANKRUPTCY AND SOCIAL CRISIS – PM (Hungary)

Posted by Gilmour Poincaree on November 3, 2008

Budapest, November 1, 2008 – (MTI)

Without the IMF standby loan granted earlier this week, the financial crisis in Hungary could have led to bankruptcy and social crisis, Prime Minister Ferenc Gyurcsany told the Sunday newspaper Vasarnapi Hirek, which made the interview available to MTI on Saturday evening.

The PM was disputing a statement by opposition Fidesz party chief that accessing the line of credit from the International Monetary Fund was “shameful”.

In a worst-case scenario, the forint, Hungary’s currency could have continued sinking to 350/400 to the euro, triggering 20 to 30 percent inflation, he said.

It had dropped from 238/240 to the euro to 280/285 at the time the loan was announced, and firmed to 255/260 in the aftermath.

The other part of the problem, he said, was that Hungary was already having a hard time finding buyers for government securities. If it failed to sell them, all its foreign loans would have had to be paid off within three to six months, leaving the country without the money to pay government employees such as teachers and doctors, or to pay pensions, the PM continued.

“That would have been shameful,” Gyurcsany said.

What we were facing could have evolved into bankruptcy, said the PM, adding that two-thirds of the problem was caused by the international crisis and one-third by domestic shortcomings. As far as the domestic portion is concerned, the government is partly, but not wholly responsible. One concern is that residents have not saved any money since 2000/2001, leading to excessive spending and borrowing. Residents and businesses have done the lion’s share of their borrowing in foreign currencies, he added, which means an enormous foreign debt. In addition, there has been such – opposition initiated – resistance to reforms in the past two years that Hungary was extremely vulnerable, the PM suggested.

British Prime Minister Gordon Brown, German Chancellor Angela Merkel and French President Nicolas Sarkozy had all played key roles in securing the IMF loan for Hungary, Gyurcsany told Vasarnapi Hirek.

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PUBLISHED BY ‘MTI HUNGARIAN NEWS AGENCY’ (Hungary)

Posted in BANKING SYSTEMS, CENTRAL BANKS, ECONOMIC CONJUNCTURE, ECONOMY, ENGLAND, EUROPE, FINANCIAL CRISIS 2008/2009, FRANCE, GERMANY, HUNGARY, IMF, INTERNATIONAL, INTERNATIONAL RELATIONS | Leave a Comment »