Banks rally on rescue deal hopes

AppId is over the quota
AppId is over the quota
26 September 2011 Last updated at 20:21 GMT Continue reading the main story Last Updated at 17:44 GMT

Market indexCurrent valueTrendVariation% variationEuropean bank shares have risen as investors react to the latest attempts to stabilise the eurozone debt crisis.

A number of measures are being discussed according to reports from the weekend's international meeting in Washington.

They are expected to involve a 50% write-down of Greece's massive government debt, the BBC's business editor Robert Peston says.

French and German bank shares were up 10% at one stage in Monday trading.

European governments hope to have measures agreed in five to six weeks, in time for a meeting of the leaders of the G20 group in Cannes at the beginning of November.

But EU officials in Brussels stress that they should not be seen as "a single grand plan", the BBC's correspondent Chris Morris says.

The measures being discussed are:

Institutions that have lent money to Athens writing off about 50% of the money they are owedThe size of the eurozone bailout fund, the European Financial Stability Facility (EFSF), increasing dramatically to 2 trillion euros (￡1.7tn; $2.7tn)Strengthening big European banks that could be hit by any defaults on national debt obligations.

However, on Monday evening AFP reported that German Finance Minister Wolfgang Schaeuble had told television news channel NTV that there was no plan to boost the size of the EFSF.

"We are giving it the tools so it can work if necessary," Mr Schaeuble was reported as saying.

"Then we will use it effectively but we do not have the intention of boosting its volume."

Pan-Europe gains

Uncertainty over how to tackle Greece's problems has led to some European bank shares losing half their value in recent months due to concerns about their holdings of Greek debt.

But on Monday, French banks, which are particularly exposed to Greece, rallied, with BNP Paribas and Societe Generale up 4% and 5.4% respectively, and Credit Agricole up 3.7%.

Continue reading the main story

Unless the banks are fixed, there will remain too big a risk that a financial crisis could turn the current global economic slowdown into something more akin to depression than recession”

End Quote Robert Peston Business editor, BBC News Germany's big banks were also up sharply. Allianz was up 10%, Deutsche Bank 8% and Commerzbank 7.7%. In the UK, Barclays rose 6.8% and RBS 3.3%.

The Frankfurt was up about 3% at close, and in Paris by about 2%. The UK's main index, the FTSE 100, was virtually unchanged.

US shares closed higher, with the Dow ahead by 2.5%, the S&P 500 by 2.3%, and the Nasdaq by 1.4%.

However, commodity prices were lower on remaining concerns that the eurozone crisis could affect the global economy.

Philip Tyson of brokerage MF Global told the BBC that the proposed bailout fund had to be at least 2tn euros.

He said: "Markets need confidence that the fund has the firepower to deal with the likes of Italy and Spain should contagion risks spread.

"It does need to happen, but there are big question marks about the detail, and exactly how it will happen. Time is running out."

Ben Critchley, a sales trader at spread betting group IG Index, said: "For now at least, it looks as if markets are giving some credence to a firm plan on how to tackle the debt crisis beginning to emerge.

"But if recent experience is anything to go by, this patience is unlikely to last too long if details are not forthcoming."

Key elements

The reports about the rescue proposals emerged from the annual meeting of the IMF in the US capital last week, attended by finance ministers from the G20 group of countries.

The package is expected to involve a quadrupling - from the current projected level of 440bn euros - in the firepower of the eurozone's main bailout fund, the EFSF.

Continue reading the main story

The problem, they said privately, was that ministers couldn't talk openly about a new solution to the crisis when the old one had not even been passed by national parliaments. This was a particular issue, naturally, for Germany.”

End Quote Stephanie Flanders Economics editor, BBC News It is not entirely clear how any expansion of the facility would be managed, but one suggestion is for the EFSF to guarantee the first part of any losses creditors sustain from a government defaulting on its debts, with the European Central Bank (ECB) providing an additional 1.5tn euros of loans.

The EFSF would take on the main risk of lending to governments struggling to borrow from normal commercial sources - governments like Italy.

It is also thought that private investors in Greek debt are likely to have to accept a 50% reduction in what they are owed, our editor says.

Eurozone leaders agreed a plan in July, which has yet to be ratified, that provided for a reduction in Greece's repayments to banks of about 20%.

European officials in Brussels stressed that their current focus was on getting measures, including changes to the EFSF, agreed back in July ratified by 17 national parliaments within the eurozone.

It was proving a difficult task, the BBC's Chris Morris says, to get these less far-reaching changes passed, with Germany one of three assemblies to vote this week.

The third element of the rescue plan envisages a strengthening of big eurozone banks, which are perceived to have too little capital to absorb losses.

'Critical days'

Commodity prices remained under pressure, pulled between relief that a eurozone deal could be nearer and worries that the global economy faces a downturn.

Continue reading the main story Oil prices fell sharply in early trading, but recovered with Brent crude up 60 cents at $104.57 a barrel and US light, sweet crude up 55 cents to $80.40 a barrel.

The stronger dollar, which rose around 0.2% against a basket of currencies, also weighed on oil prices as it makes dollar-denominated assets more expensive.

Gold fell 3.2% to $1,603.95 an ounce, continuing recent declines from record highs. Copper, which has already fallen, was down another 4%.

Senior commodities analysts Edward Meir, at brokers MF Global, said: "These are very critical days and weeks ahead, reminiscent very much of the touch-and-go situation we were in back in 2008.

"The key difference this time around is that it is countries and not companies that are in danger of going bust."

View the original article here

Video: Apple's Steve Jobs died 56

6 October 2011 last updated 05: help GMT

View the original article here

Trend in EU economic bucking of Estonia

October 6, 2011, last updated: 57 GMT by Charlotte Ashton, World Tallin Tallinn, Estonia-Skype, as well as other companies in emerging technologies now has the fastest economic growth in the European Union, so what does Estonia just when other countries are so many economic problems?

Ave Maria Ounapuu enjoys boom of Estonia.

Organic cosmetics company established JOIK four years ago to take its business to making candles.

She has received grants from the European Union for machinery and marketing help, but says the business agenda of the Government of Estonia helped too: "it was pretty easy.

"There was no problem with the regulations, even finding products to sell went smoothly enough.

"You can report your taxes online so you don't need to spend valuable time to forms and things. We don't have our growth to the Government, but they will not put any obstacles in our way. "

Currently, JOIK employs four people, was moved to a larger space. It has an annual turnover of 250,000 euros, on export to countries bordering the Baltic.

Ave Maria Ounapuu says the Government of Estonia has set up an independent business with ease

This is a similar story of Estonia as a whole, as the country has a long way since she joined the EU in 2004.

The initial flow of credit to the construction boom that led to high House, but the bubble burst in 2008, when the country found itself the economic doldrums, it had to smarten up their act.

Labour laws were liberalised, increased retirement age and public spending cut. But the tax remained low to encourage business; Entrepreneurs were fashionable.

Estonia GDP grew at 8.5% in the first quarter of this year, the fastest growth of all the EU economy. One of the biggest growth areas in it technology.

Estonia exports mainly to the EU, but exports of its main markets, Finland, Sweden are distorted

Skype Online software used by people 200 m each month to make free or cheap video phone calls over the Internet, has its development, on the outskirts of Tallinn.

The software was invented in Tallinn of Dane, Swede and Estonians.

Stan Tankivi, head of Skype Estonia, says: "you can show the country of Estonia itself as a witness. It regained independence 20 years ago, the company generally or culture here has very little hierarchy.

"It is very small and nimble, that sort of environment is very positive for entrepreneurship".

In January, Estonia joined the euro. Stability of the currency result, along with those low corporate taxes (zero profits reinvested), this tiny nation of 1.3 m investment very attractive. Exports are soaring, up 53% last year. This summer came the euro 1bn for the first time.

But 70 percent of exports go to EU countries, growth is deteriorating steadily and its two main export markets, Finland and Sweden.

How is the economy of Estonia so fragile?

It is still a net recipient of EU money but its contribution to financial stability facility means that European companies is decreasingly profitable. Contribution of Euro 2bn represents one third of the annual budget.

"We were invited to a wedding but turned out to be a funeral," says Anders Arrak, Estonian who has entrepreneurial University apply.

Read on the Central story

of course we understand what the meaning of the credit crisis, but in Estonia is not a hot topic for us "

end quote Andrus Ansip Estonian Prime ??????"??? us a lot of money from the EU.

"We have already renovated churches and roads. But now we are being asked to pay money to improve the errors made in the past, Greece and the countries of the eurozone.

"It makes sense. We have to invest in the future of Estonia. "

But the Prime Minister of Estonia Andrus Ansip stay safer will continue its growth: "of course we all need to be concerned but our banking sector is doing well, our commercial banks are well capitalised and correspond to the reserves.

"The State the money are the best of all the European Union because we have still 12% GDP reserves.

"Yes, of course, we understand what the meaning of the credit crisis, but in Estonia is not a hot topic for us."

Mr Ansip thank him an erection activities explaining why Estonia, a poor cousin Mizrahi, fresh out of troubled times himself, bail out its richer southern cousins.

Drinkers in the lounge of their obligation to contribute to the Museum say bailouts EU

But support for the European Union young Estonians soothes the unwavering with a glass of wine in one of the new trendy bars, lounge Tallinn Museum.

Memories of Soviet occupation, which ended just 20 years ago, are still fresh among the younger generation.

Ali is a teacher at the school who says it fully supports Estonia's contribution to the bailout.

"I don't even understand what the discussion. We already received money from the EU now is a good thing because ultimately we are in a position to help someone else. I think it's only fair. "

The Museum lounge Manager, ARGO, agrees. "An overview of Estonia in the West now, only the West," he says.

And Estonia are ready to pay the price.

The world tonight is broadcast weekdays on BBC Radio 4: 00 p.m. BST.

View the original article here

Amazon unveils Kindle Fire tablet

AppId is over the quota
AppId is over the quota
28 September 2011 Last updated at 16:42 GMT Amazon boss Jeff Bezos unveils the Kindle Fire

Amazon has unveiled a colour tablet computer called the Kindle Fire.

The $199 (￡130) device will run a modified version of Google's Android operating system.

Until now, the company has limited itself to making black and white e-readers, designed for consuming books and magazines.

As well as targeting Apple's iPad, Amazon is likely to have its sights on rival bookseller US Barnes & Noble, which already has a colour tablet.

The Kindle Fire will enter a hugely competitive market, dominated by Apple's iPad.

Amazon will be hoping to leverage both the strength of the Kindle brand, built up over three generations of its popular e-book reader, and its ability to serve up content such as music and video.

In recent years, the company has begun offering downloadable music for sale, and also has a streaming video-on-demand service in the United States. Those, combined with its mobile application store, give it a more sophisticated content "ecosystem" than most of its rivals.

Continue reading the main story 7" IPS (in-plane switching) display1024 x 600 resolutionCustomised Google Android operating system$199 (￡130)Weighs 413 grammesDual core processor8GB internal storage"It's the price and the backup services that make it really exciting," said Will Findlater, editor of Stuff magazine.

"Content is the big differentiator. It's what every other platform has been lacking, except the iPad."

Amazon's decision to opt for a 7" screen, as opposed to the larger 10" displays favoured by many rival manufacturers was a cause for concern for Ovum analyst Adam Leach.

"This screen size has undoubtedly helped them achieve a lower price point for the device but so far this form factor has not been popular with consumers, we shall see if this is related to other aspects of those devices other than its screen size. "

Digital dividend Digital content has already proved itself to be a money-spinner for Amazon.

Although the company has never released official sales figures for the Kindle, it did state - in December 2010 - that it was now selling more electronic copies of books than paper copies.

Its US rival, Barnes & Noble, has also enjoyed success with its Nook devices.

In October 2010, the company unveiled the Nook Color, which also runs a version of Android, albeit with lower hardware specs than many fully featured tablets.

While the Nook Color is largely focused on book and magazine reading, some users have managed to unlock its wider functionality and install third-party apps.

Amazon has dropped the keyboard from some of its Kindles in favour of touch

The Kindle Fire's $199 (￡130) price tag undercuts the Nook Color by $50 (￡30) and is significantly cheaper than more powerful tablets from Apple, Samsung, Motorola and others.

It is due to go on sale on 15 November in the US, although global release dates are currently unavailable.

Price cuts

Alongside the Kindle Fire, Amazon also announced a refresh of its Kindle e-readers.

The entry level device has had its keyboard removed and will now sell for $79, down from $99. Amazon UK announced that the new version would retail at ￡89.

A version with limited touchscreen capability, known as the Kindle Touch, will sell for $99. Only the US pricing has been announced so far.

"These are premium products at non premium prices," said Amazon chief executive Jeff Bezos. "We are going to sell millions of these."

View the original article here

Russia bleeds cash as investors pull out

AppId is over the quota
AppId is over the quota
29 September 2011 Last updated at 23:00 GMT By Natalia Golysheva BBC World Service Political turbulence has spooked investors in Russia Five months ago the Russian stock market was among the world's top performer, peaking after a steady rise in share prices that had lasted since early 2009.

Since then, the market has taken a tumble, with Russia's Micex index of leading shares losing more than a quarter of its value and the RTS index of 50 Russian shares falling by some 40% to levels not seen since this time last year.

According to the Russian government, investors are pulling back because they have been spooked by falling oil prices and global economic turmoil.

But many observers are instead blaming internal political turmoil for the retrenchment, which last year saw capital flight to the tune of some $30bn (￡19bn) - only to accelerate this year, with some $31bn leaving the country during the first six months alone.

Wheeling cash out of Russia has become a sport shared by wealthy Russians and foreign investors alike, with one Russian opposition party leader, Boris Nemtsov, predicting that capital flight could rise to $100bn this year.

The capital flight is matched by a brain drain as the country's much needed skilled and educated people head for better opportunities abroad.

A recent survey suggests more than a fifth of Russia's adult population would like to emigrate, compared with 7% in 2007.

'Pillar of stability'

This week's ousting of Russia's long-standing finance minister, Alexei Kudrin, did little to mollify neither the people nor the markets.

Mr Kudrin eventually lost his battle with Russia's leaders

So the Russian rouble, already weakened by the turmoil in the world economy, has plunged and is trading around its lowest level against the US dollar since May 2009.

Mr Kudrin's main cheerleaders, Western investors and analysts, have long applauded the way his conservative budget policies have helped restore the country's financial health in the wake of the global financial crisis.

To them, his departure is seen as a deep blow to Russia's economy.

"The surprise factor of Kudrin leaving is bigger than the nomination of Putin to be the next president," according to Roland Nash, senior partner of Verno Capital.

"Kudrin personifies fiscal stability in Russia. It was really his big success that we've had this fiscal stability now for more than 10 years - him and the oil price.

Neil Shearing, chief emerging markets economist at Capital Economics, a private-sector think tank in London, agrees.

"It's difficult to see how Kudrin's resignation can be anything but market-negative," he says.

Economic differences

Mr Kudrin's departure after 11 years in the job could not have been announced at a worse time, coming hot on the heels of President Dmitry Medvedev announcing that that he will swap jobs with Prime Minster Vladimir Putin in March of next year.

Investors are nervous as share prices, oil prices and the rouble all fall sharply

The Russian media initially speculated that Mr Kudrin may have openly rebelled to bolster his own ambitions to become Russia's next prime minister.

Mr Kudrin has accused President Medvedev of economic mismanagement and excessive spending.

In particular, in the latest of the two politicians many disagreements over economic policy, Mr Kudrin has been vocal in his opposition to President Medvedev's efforts to raise military spending by some 2.1 trillion over three years, insisting the plan would create "additional risks for both the budget and the economy".

President Medvedev has been dismissive of Mr Kudrin's criticism, insisting Russia "cannot avoid defence spending worthy of the Russian Federation, which is not some 'banana republic' but a very large country, a permanent member of the UN Security Council that possesses nuclear weapons".

In the end, the conflict came to a head with President Medvedev telling Mr Kudrin to step down after the rebellious finance minister said he would be unwilling to work with the next prime minister.

And if investors were concerned about Mr Kudrin's departure, then they were far from mollified by the man Prime Minister Putin appointed to succeed him.

Mr Putin described the new acting finance minister, the rarely heard of former deputy Anton Siluanov, as a "good, strong specialist", which investors immediately took to mean he would tow the party line and as such be a safe bet for the Russian leaders during the upcoming election season.

Optimistic assumptions

Mr Siluanov's first challenge will come next week, when Russia's government will have to submit its 2012 budget for approval by parliament.

It will be a challenge because the budget is calculated on a rather optimistic assumption, namely that price of oil will rise to $116 (￡72)per barrel next year.

According to the ousted Mr Kudrin, Russia needs oil to average $112 in 2012 to balance its budget.

However, the price of Russia's main export, Urals crude oil, has recently tumbled and is currently trading close to the $105-a-barrel level.

If the price of oil fails to bounce back, then Mr Kudrin will be proven right about the need to curb spending and plan for a future when Russia's earnings will be much lower than they have been in recent years.

View the original article here

Soros' sympathy for bank protests

AppId is over the quota
AppId is over the quota
3 October 2011 Last updated at 20:34 GMT Other protests have been held in Boston, Los Angeles and Chicago Billionaire investor George Soros says he can sympathise with the ongoing protests on Wall Street, which have spread to other US cities.

He said he understood the anger at the use of taxpayers' cash to prop up stricken banks, allowing them to earn huge profits.

A large rally is planned for Wednesday in New York City, with backing from union groups.

More than 700 protesters were arrested on Saturday on Brooklyn Bridge.

The demonstrations - based at Zuccotti Park, near Wall Street and the Federal Reserve - are now entering their third week.

Answering questions during a news conference at UN headquarters on Monday, Mr Soros said: "The decision not to inject capital into the banks, but to effectively relieve them of their bad assets and then allow them to earn their way out of a hole leaves the banks bumper profits and then allows them to pay bumper bonuses."

Mr Soros was announcing a gift of $40m (￡26m) to a development project in Africa.

'Corporate zombies'

Protests continued on Monday in New York, with many under the Occupy Wall Street banner wearing make-up to pose as "corporate zombies", eating fake money.

Protesters dressed as zombies took to the streets of Manhattan on Monday

One of the protesters, John Hildebrand, 24, an unemployed teacher from the US state of Oklahoma, told the Associated Press news agency: "My issue is corporate influence in politics. I would like to eliminate corporate financing from politics."

Union members are expected to back a large rally planned for Wednesday.

Last Thursday, the United Federation of Teachers and the Transport Workers Union, which has 38,000 members, pledged support for the protests.

In Los Angeles on Monday, an anti-Wall Street demonstration was held outside the court where Michael Jackson's doctor is being tried for manslaughter.

Protests were held in recent days in Boston, Los Angeles and Chicago in front of their respective cities' Federal Reserve buildings. A march was also held in Columbus, Ohio.

A rally is planned, too, for later this month in the Canadian city of Toronto.

On Saturday, 700 protesters were arrested on the Brooklyn Bridge, where traffic was halted for several hours.

The protesters won support from actor Alec Baldwin, who posted videos on his Twitter page that had already been widely circulated.

One appeared to show police using pepper spray on a group of women, and another a young man being tackled to the ground by an officer.

"This is unsettling," Baldwin wrote. "I think the NYPD has a PR problem."

But the NYPD said the marchers had been warned many times not to stray on to the road, and released video footage on Sunday showing protesters chanting "take the bridge".

View the original article here

VIDEO: Cargill chief executive on its success

AppId is over the quota
AppId is over the quota
29 September 2011 Last updated at 08:43 GMT Help

View the original article here

Growing trade ties between Indian and Pakistan

AppId is over the quota
AppId is over the quota
2 October 2011 Last updated at 16:04 GMT By Shahzeb Jillani BBC News Pakistan's commerce minister (right) took a large delegation with him Business leaders from India and Pakistan say there's new optimism about the efforts their governments are making to improve trade ties. But critics warn that overcoming decades of mistrust may not be that easy.

For the first time in 35 years, a Pakistani commerce minister led a business delegation to India last week. The entourage included nearly 80 leading industrialists, traders and high-ranking officials.

Peace talks between the two nuclear-armed neighbours broke down in 2008 after the attacks in the Indian city of Mumbai, which India blamed on Pakistan-based militants.

Nearly three years on, as if to emphasize a sense of normalcy, the Pakistani Commerce Minister, Makhdoom Amin Fahim, was hosted at the city's iconic Taj Mahal Hotel - which was one of the main targets of the 2008 attacks.

There, leading Pakistani traders got a chance to mingle with their equally eager-for-business Indian counterparts.

Between them, they spoke not just of the profits their individual businesses could make if their governments removed the long standing hurdles in their way. But also of how much the people of their two countries, and indeed the wider region, stand to benefit from freer movement of goods, money and commodities.

Win-win situation Continue reading the main story

The only way I see realization of trade potential between our two countries is for India to remove its non-tariff trade barriers and for Pakistan to reciprocate by granting the MFN status to India”

End Quote Hasan Khan Former advisor to Pakistan's Ministry of Finance Vijay Kalantri, president of All India Association of Industries, said traders on both sides feel business between India and Pakistan is a win-win situation for everyone.

"Why are Indians and Pakistanis forced to trade unofficially via third countries like Dubai or Sri Lanka?" he tells the BBC from Mumbai.

"All we are asking is, let there be direct business-to-business contact between us."

After the talks in Delhi, ministers from the two sides announced their agreement to boost their annual bilateral trade from current $2.7bn (￡1.7bn) to $6bn by 2015.

They also pledged to ease business travel and promote bilateral trade through the land route.

For Pakistan, a significant announcement was a pledge by India to drop its opposition to the European Union's plan to grant Pakistan tariff waiver on select commodities to help it recover from the devastation of 2010 floods.

There was hope that Pakistan might reciprocate and grant India the Most Favoured Nation status (India granted Pakistan MFN status way back in the 1990s).

Even though no such announcement came, Pakistan committed itself to a road map to implement preferential trade ties with India, as prescribed under the South Asia Free Trade Agreement (SAFTA).

Trade barriers

There are a number of explanations why Pakistan has so far withheld the MFN status from India.

At present there are a number of barriers to prevent trade between Indian and Pakistan

First is political. Pakistani leaders have often linked it to the resolution of the core issue of Kashmir.

It's a stance which has long been propagated for mainly domestic consumption.

But there is a sense in Pakistan that while the country should continue to push for a negotiated settlement of the Kashmir issue, trade and commerce should not be held hostage to resolution of political disputes.

The second is protectionism. For years, domestic industry in Pakistan has feared it would be swamped by imports from India. But even there, the mood appears to have shifted.

Senator Haji Ghulam Ali, president of Federation of Pakistan Chambers of Commerce and Industry, says there's a consensus that Pakistan should open up to Indian business.

"Everyone now recognizes it will be beneficial for both sides. It's just a matter of time before it's done," he tells the BBC from Delhi.

Business leaders say that less trade barriers would benefit firms in both countries

However, the last, and more plausible, obstacle is the issue of non-tariff barriers.

"In my experience, India has one of the most restrictive trade regimes in the region," asserts Dr Ashfaq Hasan Khan, a former advisor to Pakistan's Ministry of Finance. His view matters, given has decades of dealings with South Asian governments on trade liberalization.

He explains that despite granting Pakistan the MFN status, India has a variety of non-tariff barriers in place - such as, stringent certification codes, customs rules, security clearances and movement restrictions - which make it virtually impossible for Pakistani traders to do business in India.

"The only way I see realization of trade potential between our two countries is for India to remove its non-tariff trade barriers and for Pakistan to reciprocate by granting the MFN status to India," says Mr Khan.

He adds: "Unless there's political will to do that, everything else is just talk and photo-op."

View the original article here

PM warns over eurozone break-up

AppId is over the quota
AppId is over the quota
2 October 2011 Last updated at 12:27 GMT David Cameron warns that the UK cannot shield itself from the crisis in the eurozone Prime Minister David Cameron has warned that it would be "very bad" for the UK if the eurozone was to break up.

Speaking to the BBC's Andrew Marr Show, he said the debt crisis in the eurozone was "a threat not just to itself, but also a threat to the UK economy, and a threat to the world economy".

He reiterated that eurozone leaders had to take quick and decisive action.

Mr Cameron said that, as 40% of UK exports went to the eurozone, it could not shield itself from the problem.

The prime minister said the UK government had "a very clear view" of what needed to be done, and that it was pushing this with its partners in Europe and the International Monetary Fund (IMF).

He said eurozone leaders had to strengthen the region's financial mechanisms, ensure the greater involvement of the IMF, and deal decisively with the high levels of sovereign debt.

Mr Cameron added: "Action needs to be taken in the next coming weeks to strengthen Europe's banks, to build the defences that the eurozone has, to deal with the problems of debts decisively."

He said these emergency measures were needed before any long-term plans of more economic coordination across the eurozone were introduced, such as a single tax system.

Greek fears

European stock markets again fell heavily on Friday due to concerns about the debt crisis in the eurozone.

Continue reading the main story Use the dropdown for easy-to-understand explanations of key financial terms:AAA-rating GO The best credit rating that can be given to a borrower's debts, indicating that the risk of borrowing defaulting is miniscule.It meant that for the three months from July to September, the main UK share index, the FTSE 100, recorded its biggest quarterly fall since 2002.

The concerns centre on Greece, the most indebted eurozone nation.

Greece needs its next 8bn euros (￡6.9bn; $10.9bn) instalment of European Union (EU) and International Monetary Fund (IMF) bailout loans by the middle of this month to be able to continue paying its civil servants and teachers.

This tranche was delayed in September after EU, IMF and European Central Bank officials said the Greek government was not carrying out sufficient austerity measures.

The wider fear is that Greece will ultimately default on its debt payments, and of the knock-on effect this would have on banks across Europe which own Greek government bonds.

Some commentators also warn that Greece may ultimately have to leave the eurozone, plunging the region's economic and political systems into chaos.

Eurozone leaders and the IMF are now continuing to work on a solution to the debt crisis, with French President Nicolas Sarkozy and German Chancellor Angela Merkel due to speak again this week.

View the original article here

Barclay brothers buy Claridge's

AppId is over the quota
AppId is over the quota
29 September 2011 Last updated at 21:39 GMT Claridge's is the latest luxury hotel to be owned by the Barclays The Barclay brothers have bought three of London's top hotels, including Claridge's, for 800m euros (￡695m).

They acquired Claridge's, the Connaught and Berkeley from the National Asset Management Agency (Nama), the Irish government agency created to manage the toxic property loans of its bust banks.

Nama said it had recovered 100% of the original value of the loans plus interest.

The Barclays already own the Ritz hotel in London.

The loans had originally been made to the Maybourne Hotel Group by two Irish banks to fund the acquisition of the hotels in 2005.

By buying the loans, the Barclays have acquired the hotels.

Nama took control of the bad property debt from Irish banks during the height of the financial crisis, and it is tasked with maximising the return to the Irish taxpayer over the long term.

The agency has said that it wants to dispose of 5bn euros of UK loans in 2011. Its annual report listed total UK assets of about ￡8.5bn.

Sir David Barclay and his brother Sir Frederick also own the Daily Telegraph and the Littlewoods retail group.

View the original article here

VIDEO: Sri Lanka tea hit by bad weather

AppId is over the quota
AppId is over the quota
4 October 2011 Last updated at 02:40 GMT Help

View the original article here

AUDIO: Germany 'committed to eurozone'

AppId is over the quota
AppId is over the quota

Germany's Chancellor Angela Merkel will today ask her country's politicians to sign off a plan to give more money to Europe's bail out fund.

Peter Altmaier, leader of the parliamentary group for the Christian Democrats, predicts the result and the long term consequences for Angela Merkel.

And Europe editor Gavin Hewitt previews a test of her power and authority.

Get in touch with Today via email , Twitter or Facebook or text us on 84844.

View the original article here

UK economic growth revised down

AppId is over the quota
AppId is over the quota
5 October 2011 Last updated at 14:44 GMT Industrial output fell less than previously thought The UK economy grew by 0.1% between April and June, less than the 0.2% estimated previously.

Output from the service sector grew by 0.2% in the quarter, compared with the previous estimate of 0.5%, the Office for National Statistics (ONS) said.

Separate data suggested activity in the UK service sector grew in September.

The Treasury pointed to these figures as evidence the UK economy was still growing and said it would be sticking with its deficit reduction programme.

'Continued expansion'

The ONS also revised down growth in the first three months of the year, from 0.5% to 0.4%.

It added that household consumption fell by 0.8% in the second quarter.

Separately, a survey from Markit/CIPS found the UK's service sector purchasing managers' index (PMI) recorded a figure of 52.9 for September, up from 51.1 in August. A figure above 50 indicates growth.

Figures from the same company published earlier this week showed surprise growth in the manufacturing sector.

A Treasury spokesperson said: "While the UK cannot insulate itself from what is happening to our major trading partners, with financial turbulence in the eurozone and a weaker outlook for global growth, the economy is still growing and this week's survey data for the manufacturing and service sectors are consistent with continued expansion."

The government has been criticised in some quarters for concentrating too much on cutting the budget deficit at the expense of stimulating growth.

Continue reading the main story

So if households do what Mr Cameron wants, and continue to pay back their debts, it is very difficult to see how the economy can grow at much more than 1% or so per year for many years to come”

End Quote Robert Peston Business editor, BBC News On Wednesday, the International Monetary Fund (IMF) said that Europe's stronger economies should avoid imposing drastic budget cuts at the expense of growth.

If economic conditions deteriorate in the UK, Germany or France, governments should "consider delaying" cuts, particularly as they can borrow at low interest rates, the IMF said.

However, the Treasury reiterated that it did not intend to hold back on its spending cuts.

"The government will stick to the deficit reduction plan which has won the UK credibility and stability, but the most important thing for the economy now is restoring confidence, which will depend on the eurozone decisively dealing with its problems."

Further stimulus

The latest GDP revision is likely to raise further questions about the strength of the UK's fragile economic recovery.

In an interview with the Reuters news agency, the head of the British Retail Consortium, Stephen Robertson, said: "The next six months are going to be characterised by very low levels of growth. I think we've probably got another 18 months of real challenge."

Underlying costs for businesses will continue to rise, with the retail sector finding life "extremely difficult", he added.

On Wednesday, supermarket giant Tesco reported a fall in like-for-like sales excluding petrol and VAT of 0.5% for the first half of the year, while retailer Mothercare said like-for-like sales between July and September fell by almost 10%, triggering a 36% slump in its share price.

Also on Wednesday, airline Flybe saw a similar fall in its share price after reporting a "significant slowdown in sales" across its UK domestic network in September.

There has been speculation that the Bank of England will restart its quantitative easing (QE) programme, whereby it pumps money into the economy to boost demand.

At its meeting last the month, most members of the Bank's Monetary Policy Committee (MPC) agreed the case for an "immediate" stimulus had strengthened.

Some analysts said the encouraging PMI data could mean a delay in restarting QE, but most agreed further stimulus would be introduced this month or next.

The MPC's next meeting begins on Wednesday, with an announcement on interest rates and QE due at midday on Thursday.

"The bigger picture, including the risks to the economy from the eurozone debt crisis, far outweigh the services PMI survey and our view remains that the MPC will probably sanction further asset purchases tomorrow," said Philip Shaw at Investec.

Brian Hilliard at Societe Generale said the continuing debt crisis "should trigger a move [for QE] this week. I give about a 60% chance to that; if not, it's an absolute racing certainty for November".

View the original article here

VIDEO: Typhoon Nesat shuts down Hong Kong

AppId is over the quota
AppId is over the quota
29 September 2011 Last updated at 13:19 GMT Help

View the original article here

Dot brand versus dot com

AppId is over the quota
AppId is over the quota
30 September 2011 Last updated at 03:54 GMT By Fiona Graham Technology of business reporter, BBC News Death sentence?: As brands are given the opportunity to have their own domains, could the dominance of .com be at an end? Business is good. Your bathroom fittings company has replaced the conveniences in half the homes in your neighbourhood. But there's one small fly in your ointment.

You were a bit late to the game when it came to the internet.

And when you finally decided to go online, www.bloggsbogs.com was already taken. You're pretty sure this must be the reason you haven't made quite the splash you wanted in other towns.

Is there another way?

Domain dominion

Beginning in January 2012, applications open for a new class of gTLD (generic top level domain).

The people who control the use of internet domains, Icann (Internet Committee for Assigned Names and Numbers), announced in June they were extending the suffixes used for web addresses beyond the existing 22 (.com, .net, .uk, etc).

Interested parties can apply to run one, and either retain it for themselves, or set up as a registrar selling domains within groups like .car or .bank.

Icann voted to allow the proposals for the new domains at their meeting in Singapore in June 2011.

The suffixes don't have to be roman letters, so could for example be Chinese characters.

Some rules do apply - for instance, they must have at least three letters (Icann is holding onto the remaining two letter domains in case new countries are created).

So now companies can bid for their own gTLD for the first time. Think .hitachi, .coke, .facebook.

Could .com's dominance be coming to an end?

Time limited

If your dream of registering .bloggsbogs is going to become reality, you'd better get your skates on. The application period opens on 12 January 2012, and closes three months later on 12 April.

Miss this and you may be twiddling your thumbs till 2015 according to Tim Callan, chief marketing officer at domain experts Melbourne IT DBS.

"[Companies] have to be prepping, and they have to be getting ready and figuring out what they're doing so they're ready."

Some may be left behind, says Simon Briskman, partner and IT specialist at law firm Field Fisher Waterhouse.

Tim Callan: "Verisign predicts there will be 1,500 applications"

"I think it's difficult for brands to take this very short period we've got - the last quarter of this year - to assess and make a full business case."

Mr Briskman says some companies have stalled, initially put off by the cost.

"I think we've now got to the point where people are going: 'Hang on a minute, this is a drop in the ocean compared with the investment we make in the brand. We really do need to properly assess the business case.'

"[Some] big brands are going to miss the window - simple as that. You can't move large organisations at this speed."

Shirt off your back

Cost may cut out all but the megabrands.

Applying will set you back $185,000, and it doesn't stop there, says Melbourne IT DBS's Tim Callan: "Your corner mom-and-pop shop, this is not right for them.

"A good estimate is it will cost between $150,000 - $200,000 a year to run [a gTLD]. So costly yes, compared to your and my wallets, but for the companies we're talking about - trivial.

"I've yet to run into anybody who I would consider a prospect for this who has a cost objection."

Rebecca Moody, head of planning at advertising agency Euro RSCG, agrees: "It's a no-brainer for John Lewis or for Coca-Cola, for example, both successful big brands who can probably afford dot brand."

Bloggs Bogs may have to settle for registering for a dot category domain - if anyone applies for .toilet that is.

The cost of applying for your own gTLD will probably restrict it to megabrand corporations like Coca Cola

When the application period closes, Icann will decide who has a viable bid.

"They're taking the public facing internet, they're slicing chunks off and they're giving them to people to operate," says Mr Callan. "So they want to be confident people can run it correctly."

Where there are multiple qualifying bids, Icann has a set of criteria to decide who wins - in the case of dictionary words for example, open communities trump private ones.

If this process doesn't resolve the situation, then it goes to auction, with the highest bidder winning. The first gTLDs could be live by early 2013.

Return on investment

So what is pushing companies to buy their own dot brand?

Mr Callan says protecting your trademark is one motive, not only to thwart cybersquatters, but to beat other companies using the same name to it.

"Trademark law allows non-colliding trademarks to exist. If I'm operating in North America and you're operating in Europe and we don't cross over, then we can both have a trademark. But only one of us can have the TLD."

Continue reading the main story dot category: .bank, .music, .shopdot place: .london, .berlin, .nycdot brand: .canon, .hitachi, .unicef, .motorolanon-Roman scripts allowed: Arabic, Chinese etcminimum three charactersno numbers, hyphens or non-letter charactersno country namesno two words that differ slightlyno plurals if singular exists, e.g. bank not bankstrademark holders can block cybersquattersThen, he says, there's the marketing benefit.

"[Companies] think they can have a better connection between offline marketing and online traffic by having names that are shorter, more memorable, easier to pop out in a marketing campaign."

"For example, laptop.hitachi. Very crisp. Very easy to remember, very easy to communicate."

This includes the benefits a loaded url brings in terms of search engine optimisation (SEO) strategy, a process where sites are built to make them more attractive to search engines.

Security is another draw.

"There are a lot of people who won't do internet shopping because of the security, I think dot brand has a lot of potential there," says Field Fisher Waterhouse's Simon Briskman.

"[It] is going to really help as a seal of authenticity."

Perception is a big deal, according to Dr Jonathan Freeman, senior lecturer in psychology at Goldsmiths, University of London and managing director of i2 media research.

"A lot of this is consumer perception. Reassuring consumers is going to enhance the online behaviours and transactions. They'll feel a lot more happy dealing [with] it."

Despite this, he anticipates consumers will not immediately take to the new naming conventions.

Dr Freeman says finding dot brand sites without having to search could be easier on mobile devices

"What people are used to doing is going to be a big determinant in how consumers adopt and use dot brand as it rolls out.

"I'd expect it to take a while to embed in consumer behaviour, especially given the extent to which consumers rely on search engines today."

So where does this leave the brands that cannot afford to be part of the new world order?

"There will inevitably be a new brand ranking system, which in a way I find kind of concerning." says Euro RSCG's Rebecca Moody.

"Do you risk looking like a second rate brand?"

Out of the loop

Understandably, smaller brands are uneasy.

"What the small businesses and not-for-profits have been complaining about is there's a significant barrier to entry," says Field Fisher Waterhouses's Simon Briskman.

"People are selling off slices of the internet real estate, and they feel they're going to get closed out."

He says subsequent rounds may prove a little cheaper.

Continue reading the main story

It's just not possible for everyone to get the names that they want in the new dot com space”

End Quote Simon Briskman Field Fisher Waterhouse "I think people will start to aggregate the running of these day-to-day, which ought to bring down some cost. I still don't think that it will be accessible to Martha with her boutique in Marylebone."

And the ubiquitous dot com? It's probably safe for some time to come.

"I don't believe anyone is going to be shutting their dot coms in the next five years," says Tim Callan of Melbourne IT DBS.

"But does any of us think we're going to be typing dot com in a hundred years? No."

Simon Briskman is somewhat more tempered.

"The reason dot com will survive is [for example] the Times - there's the Financial Times, the New York Times. It's just not possible for everyone to get the names that they want in the new dot com space."

"If you want a good presence, but maybe not the best presence, if you want someone else to run the infrastructure, you'll probably use dot coms.

"They'll happily co-exist I just don't think they'll have the same power that the dot brand does."

View the original article here

Olympic deals the company ' unsold '

October 6, 2011, last updated at 08: 37 GMT by Michael Hirst BBC 2012 almost two-thirds of the packages website for London 2012 can still sell companiesWith 300 days to go before London 2012, only a third of the tickets were sold on the site hosting the games.

But despite the financial downturn, the company with exclusive rights within Olympic venues hosting company remains bullish about the sales.

Ticketing prestige won a public tender by computerized Olympic Locog some 90,000 tickets-about one percent of the total allocation.

The British public must buy most tickets 6.6 m available by ballot.

However, more than 60% of the company's operations are still on offer.

The company did not disclose how much it paid for the tickets, nor the expected profit, citing commercially sensitive information.

And, like the London 2012 Olympics will be the first site hosting company, you can't compare the figures with previous games.

Redgrave Steve Sir said hosting VIP Olympics figaro behind other sporting events

But involved in the industry told the BBC that they would expect much more dimensional ratio of the packages were sold after almost 7 months of sales.

In a public ballot tickets acted outside his powers or more earlier this year, top-tier in any Olympic ceremonies tickets cost ￡ 2,012, with the best seats going for ￡ 750 Athletics events.

The cheapest cards cost ￡ 495 's luxury deals, while the most expensive suites ￡ 4,500 seats sold in batches of 10 or more secure ceremonies and athletics and cycling finals.

Events sell out

Corporate guests are the guests on the site can view:

"The best seats in the House of champagne lunch" Olympic events receptionFour-course canapé with as many "best of British" food and wines, Travelcards London transport, although hundreds of parking spaces will also be available

Olympic Park, the ticket is ￡ 7 luxury building. Pavilion three-story 5 m catering 3,000 guests at a time, only 70 metres (77 metres) from the main stadium.

Read on the Central story of 70 m (75 feet) from the Olympic Stadium cost ￡ 7. 5 m three-storey Pavilion with a massive glass atrium six restaurants catering for dinersIn 3,000 only 29 days before being placed in any well demolishedHospitality halls and Greenwich Park, North Greenwich arena, horses, dornei Eaton Wimbledon.

The economic depression to traditional customers in economics, he joined advertising by companies in areas like construction, energy resources, the company said.

While the company packages baoki women's final was the first to sell out, was also a demand for land in Wimbledon, rowing at Eton dornei coltori events in Greenwich, the company said.

Marketing Manager Tony Bernard Ticketing said he was sure that luxury to sell other packages like companies settled their budgets next year.

"We see significant growth in sales," he told the BBC. "Ballots tickets end so that people can know that if they want to go, there is only one way left to go."

Olympic opportunity

Prof Simon Chadwick, Director of Business Center for international sport at the University of Coventry, said that while the economic crisis hit the company's hosting industry in recent years, the exceptional nature of the London 2012 will allow him "above the prevailing economic conditions."

In a study commissioned by the luxury card, Prof Chadwick predicted companies buying hosting packages-with an estimated ￡ 45bn. 1-will return more than 12% on their investment.

But he warned this figure was based on factors such as language produced by the goodwill visit to strengthen business relationships.

Winner of gold medal Olympic champion Steve Redgrave, five-time Lord said London 2012 Olympic Games hosting a unique opportunity to put on a par with that of other international events.

"I've been invited to guest with other sponsors of the Olympic Games [the previous] after I retired, you looked after very well, but not quite as well as some other large sporting events," he said.

Prestige is one of three official providers for hosting packages, but has exclusive rights to the Olympics place for guests.

Thomas Cook paid by Locog over ￡ 20 m 200,000 tickets sold as part of the exclusive travel and accommodation packages, while sport Jet was bought 100,000 tickets offered as part of a five star deals for clients abroad.

Locog says revenue tickets will be hosting to give free tickets through a set of cards for the troops, the initiative to get set for school.

View the original article here

Will NFC make the mobile wallet work?

AppId is over the quota
AppId is over the quota

View the original article here

Video: protesters March on Wall Street

Help 6 October 2011, last updated on: 10: 05 GMT

View the original article here

VIDEO: ECB holds interest rates

AppId is over the quota
AppId is over the quota
6 October 2011 Last updated at 15:41 GMT Help

View the original article here

Hong Kong maid wins landmark case

AppId is over the quota
AppId is over the quota
30 September 2011 Last updated at 04:40 GMT By Katie Hunt Business reporter, BBC News Foreign domestic helpers are required to leave the country within two weeks if dismissed by employers Hong Kong's High Court has ruled that a domestic helper from the Philippines should be allowed to apply for permanent residency in the city.

The case was brought by Evangeline Banao Vallejos, who has lived in Hong Kong since 1986.

The ruling follows a landmark judicial review and could lead to more than 100,000 other foreign maids winning rights to residency.

The case has sparked widespread debate on equal treatment for foreign maids.

Mark Daly, the lawyer acting on behalf of Ms Vallejos, said that she was very pleased by the ruling, which meant that all domestic helpers now were able to apply for permanent residency.

"When we told her she said 'thank God'," he said, adding that it was a normal working day for her.

"It's a good day for the rule of law," he added.

Mr Daly pointed out that the government had 28 days to appeal.

A spokesman said the government was analysing the judgement and would issue a formal response later in the day.

Public resources

Some critics have said granting residency to domestic helpers would strain the provision of health care, education and public housing.

Continue reading the main story

We hope it will pave the way for Hong Kong to open its doors to equal treatment for migrant workers”

End Quote Norman Carnay Mission for Migrant Workers While other non-Chinese nationals can obtain residency after working in Hong Kong for seven years, immigration rules exclude domestic helpers from seeking permanent residency.

Human rights lawyers and many domestic helpers argue that this is discriminatory.

Permanent residency means that a person can remain in Hong Kong indefinitely, vote and stand in elections.

But some politicians and commentators warned that allowing foreign domestic helpers to have permanent residency would allow them to bring their children and other relatives to the city, who would require education and housing.

Equal treatment

Norman Carnay, programme officer at the Mission for Migrant Workers said that he welcomed the decision.

"We hope it will pave the way for Hong Kong to open its doors to equal treatment for migrant workers," he said.

But he added that right of abode was not necessarily a priority for many domestic helpers.

"From surveys of our community, the more pressing concerns are wages and working conditions," he said.

There are more than 300,000 foreign domestic helpers in Hong Kong, mainly from Indonesia and the Philippines. It is thought that around 120,000 have lived here for more than seven years.

They are required to live with their employers and cannot accept other jobs.

Without the right to permanent residency, if a maid is dismissed by her employer, she must find another job as a domestic helper or leave Hong Kong within two weeks.

Hong Kong's domestic workers have a guaranteed minimum wage of 3,740 Hong Kong dollars ($480; ￡308) a month and day off each week, meaning their working conditions are better than other countries in Asia with large numbers of domestic helpers, such as Singapore.

View the original article here

Will NFC make the mobile wallet work?

AppId is over the quota
AppId is over the quota

View the original article here

What went wrong with Dexia?

AppId is over the quota
AppId is over the quota
5 October 2011 Last updated at 23:09 GMT By Leo Kelion Business reporter, BBC News France and Belgium plan to break up Dexia because of its exposure to the eurozone debt crisis Dexia is set to become the first European bank to fall victim to the eurozone debt crisis.

A decision to split up its operations has been taken after investors sent its shares plunging to an all-time low.

As late as 27 September the firm's board boasted of a "robust capital base" and insisted a break-up was firmly off the agenda.

But one week on, Belgian and French finance ministers plan to split off the firm's riskiest assets into a "bad bank" and remove its French local government lending operations.

So how did Dexia get into this mess?

Origins

Dexia was created in 1996 when Credit Local de France merged with Credit Communal de Belgique.

The company combined France and Belgium's biggest municipal lenders providing finance for spending on schools, public transport, street lighting and other locally controlled budgets.

It also included a retail branch network in Belgium and a private banking unit in Luxembourg.

The aim was to strengthen the business ahead of the euro's launch in 1999. The single currency's introduction was expected to increase competition across the bloc's banking sector.

Over subsequent years, Dexia continued to expand. It took control of the Italian lender Crediop, Belgium's Artesia Banking Corporation, the Israeli bank Otzar Hashilton Hamekomi and Turkey's DenizBank. It also formed a joint venture with the Royal Bank of Canada combining their institutional investor services units.

The first bailout

Dexia's bigger-is-better strategy first came unstuck in 2008. The collapse of the US investment bank Lehman Brothers caused lenders worldwide to become wary of lending to each other.

Attention focussed on Dexia's loss-making US asset management and bond insurance unit, FSA. It had been caught out by the sub-prime mortgage crisis.

In June that year, Dexia had been forced to announce that it was providing a $5bn credit line to the subsidiary, but the sum was still dwarfed by the unit's distressed assets.

Finding itself unable to borrow placed Dexia in an impossible situation. It relied on being able to take out short-term loans to finance the longer term credit it offered public authorities.

On 30 September 2008 the governments of Belgium, France and Luxembourg announced they were taking control of the business with a 6.4bn euro bailout funded by the three governments and the firm's existing shareholders.

According to France's finance minister Christine Lagarde, there had been a risk that Dexia "would not make it through the day, which would have represented a systemic risk for the stability of the financial system".

The move in 2008 had been supposed to put the business on safe ground, yet three years later Dexia requires a second rescue.

Eurozone debt crisis

While problems in the US prompted the first intervention, the eurozone debt crisis is at the root of Dexia's current difficulties.

The firm has 3.4bn euros ($4.5bn, ￡2.9bn) of exposure to Greek government bonds. Analysts estimate it has a further 17.5bn euros of exposure to sovereign debt issued by Italy, Spain, Portugal and other troubled eurozone economies.

In spite of all this, Dexia passed July's banking stress tests carried out by the European Banking Authority.

This happened because the bank had a core tier one capital ratio of 10.3%.

The measure weighs up a bank's top-notch assets against its more risky holdings and is used to gauge its financial strength. Dexia's score put it well above the 6% threshold demanded for a clear pass.

So on 15 July, the bank issued a press release headlined "2011 EU-wide stress test results: no need for Dexia to raise additional capital".

The problem is that the tests did not take into account a scenario in which Greece might default on its bonds.

Dexia has written down the value some of its long-term Greek holdings by 21%. However, some speculate that creditors may ultimately have to absorb a 50-60% loss.

While the bank should have enough capital to absorb such writedowns, analysts are worried about the knock-on damage to other investments owned by the bank that would be caught up in the turmoil.

"Of course, the Greek exposure is a consideration," says Pierre Lambert, a banking analyst at Keefe Bruyette & Woods.

"But the key catalyst today is its freeze of access to market short-term liquidity.

"Dexia relies on short-term funds, which are renewed on a rolling basis. But the access to those funds is no longer there because of market concerns about its exposure to the euro periphery and the requirement of higher collateral."

Record loss

Dexia had made efforts to clear its balance sheet of risky assets.

Dexia's corporate motto is "Short term has no future"

In May, it announced plans to sell off low quality US mortgage-backed securities and other loans.

At the time, investors applauded the decision, but it came at a cost. Dexia had to mark down the value of the assets by 3.6bn euros.

That propelled the bank to a record loss in its second quarter. Furthermore, worries remain about what is left on its books.

"Back in 2008 the bank reclassified over 100bn euros of trading assets as loans, which had the effect of it not having to mark them to market value," says Simon Maughan, a banking commentator at MF Global.

"Its view was that if it held them to maturity they would be paid back, but the outcome has been very different. And these legacy assets have only been partly addressed."

In August, Dexia's chief executive said that it should return to profit in its third quarter, but the firm was already on some analysts' danger lists.

On Monday, the ratings agency Moody's warned it was considering cutting the firm's credit score, saying that the bank was finding it increasingly hard to source funds.

Dexia's shares closed more than 10% lower on the news before falling as much as a further 37% on Tuesday after details leaked of a crisis board meeting.

That evening, France and Belgium announced plans for a second rescue.

Why it matters

Guaranteeing Dexia's loans puts extra pressure on Belgium and France's finances, but the rescue has wider implications.

The stress tests' failure to highlight Dexia's vulnerability calls into question how many other European lenders are at risk.

Until the debt crisis is resolved, the issue of contagion remains.

As Andrew Bell, chief executive of Witan Investment Trust puts it: "You can put a firebreak around Greece, but as soon as the markets start worrying about the solvency of big countries like Spain and Italy and possibly even France eventually, at that point the amount of debt held by a wider range of banks is so much greater."

Dexia is also a reminder of the financial system's interconnected nature.

The bank plays a key role in helping some US states and cities raise funds. Concerns about its health have caused their borrowing costs to rise.

Breaking up Dexia may offset the dangers posed by its collapse, but it also serves as a warning that the debt crisis can cause unforeseen damage so long as it remains unresolved.

View the original article here

Qantas boss threatened in job row

AppId is over the quota
AppId is over the quota
5 October 2011 Last updated at 07:33 GMT Mr Joyce has received a threatening letter about his role in the dispute Qantas says its chief executive, Alan Joyce, has received a threatening letter related to its current industrial dispute.

The letter comes amid a row between the Australian airline and unions on a restructuring and outsourcing plan that could lead to job cuts.

But officials from two unions have raised doubts about the authenticity of the letter, saying that it was not clear who sent it.

Police are investigating the matter.

According to reports in the Australian media, the letter went on to read: "The unions will fight you... Qantas is our airline, started and staffed by Australians, not foreign filth like you."

Irish-born Mr Joyce has been Qantas' chief executive since November 2008.

Luke Enright of Qantas confirmed to the contents of the letter to the BBC, though he refused to comment further on the matter.

Unions' anger However, the Transport Workers Union (TWU) and Australian Licensed Aircraft Engineers Association (ALAEA) accused the airline to turning the issue into a public relations exercise.

"We are unsure whether it came from an angry employee, or it may have been fabricated by the Qantas management to gain sympathy from the public," Steve Purvinas, federal secretary of ALAEA, told the BBC.

TWU's national secretary, Tony Sheldon, said: "This is an unsubstantiated piece of correspondence, that was either created by Qantas or sent by any of its 35,000 employees or people outside the company."

They said the airline had been losing public support because of its plans to restructure its business and relocate jobs outside Australia and as a result, it was trying to garner public sympathy using such tactics.

"The question here is, did they go to the police first or the media," TWU's Mr Sheldon said. "They released the letter to the media even before their staff knew about it."

Flights cancelled

The airline and the union members have been involved in a dispute that has seen Qantas' services being disrupted.

Last month, Qantas cancelled 28 flights, while another 27 were delayed after ground staff stopped work for four hours at all major Australian airports.

The union members have been striking against the planned restructuring that will see the airline's operations expand in Asia.

Qantas has also announced plans to launch two new airlines, including a budget carrier based out of Japan. At the same time, Singapore and Malaysia are being talked about as potential hubs for the other venture.

There have also been concerns that the outsourcing of certain jobs could result in as many as 1,000 job cuts in Australia.

View the original article here

Tatas suffer India land setback

AppId is over the quota
AppId is over the quota
28 September 2011 Last updated at 08:09 GMT Tata Motors was forced to abandon its Nano plant in 2008 after violent protests by villagers A court in India has ruled that West Bengal's state government acted legally in reclaiming land where Tata Motors wanted to build its low-cost Nano car.

The 1,000-acre plot of land was acquired in 2006 by the state's former communist government and leased to the company for 99 years.

The new state government took back the land in June to return it to farmers.

Tata challenged the move in the high court in Calcutta and is expected to take its appeal to the Supreme Court.

The BBC's Rahul Tandon in Calcutta says that the case has been closely followed across India, which needs to free up land for industry if it wants to continue its economic growth.

But many farmers say that cannot happen at their expense, our correspondent says.

The high court ordered Tata Motors to remove all equipment from the factory at Singur, near Calcutta, within two months.

It ruled that the company was entitled to ask for compensation if any needed to be paid.

After months of violent protests, the company pulled out of West Bengal last year and shifted production to a new plant in the state of Gujarat.

In May, the Trinamul Congress party led by Mamata Banerjee trounced West Bengal's long-serving communist government on the promise that she would restore the land to the farmers.

In June, West Bengal passed a law that would allow its return to them.

The state government started handing back the land, a move which was challenged in the Supreme Court. It directed the government to suspend the return of land until the high court in Calcutta had ruled on the matter.

View the original article here

Agency workers set for new rights

AppId is over the quota
AppId is over the quota
29 September 2011 Last updated at 23:05 GMT Some workers only remain in jobs on a short-term basis Agency workers are set to gain additional rights in pay and benefits under new rules that come into force on Saturday.

Workers will gain similar rights to full-time staff once they have completed 12 weeks of service doing comparable work.

Business groups have suggested the changes could cost firms up to ￡2bn a year.

There are an estimated 1.4 million agency workers in the UK.

Rights

Various legal protections are already in place for agency workers, as they are with full-time and part-time staff. They include the minimum wage and basic holiday rights.

Under the new European rules, which come into force in the UK on 1 October, agency workers will be allowed to use some of the same facilities as staff.

For example, from the first day of employment, they can use a creche, canteen or transport services. They will also be entitled to information about internal vacancies at the company they are working for, and to be given the opportunity to apply for them.

Continue reading the main story

If employers do not get their house in order the financial implications could be serious”

End Quote James Wilders Dickinson Dees After 12 weeks in the same role with the same employer, agency workers will be entitled to the same employment and working conditions as permanent staff. These include pay, overtime, shift allowances, holiday pay and bonuses not attributable to individual performance, as well as maternity rights.

However, agency workers will not be entitled to all the same benefits, such as occupational sick pay, redundancy pay and health insurance.

The rules are being brought in after long negotiations between unions and the government.

A survey of agency workers for the TUC found that some felt they were missing out on holidays, pay and overtime payments.

However, some business groups such as the Forum for Private Business suggested that the new rules would make the labour market less flexible and that job creation and recruitment would suffer.

Cut-off

There have been fears that some agency workers will simply be laid-off after 11 weeks so they do not benefit from the increased rights.

A company must not employ these workers again for another six weeks.

However, if a pattern emerged of an employer repeatedly only having 11-week jobs, then an individual could take a case to tribunal where fines of up to ￡5,000 could be handed out.

"These penalties are for each individual agency worker taken on. If employers do not get their house in order the financial implications could be serious," said James Wilders, from Dickinson Dees law firm.

Options for employers could include creating its own bank of temporary staff. They could offer a cash sum which they felt covered the extra benefits that should be available.

Alternatively, workers could be employed as a member of permanent staff by an agency, which paid individuals each month, then offered them to employers.

View the original article here

A lost decade for investors?

AppId is over the quota
AppId is over the quota
27 September 2011 Last updated at 07:46 GMT By Gemma Godfrey Investment committee chairman, Credo Capital Gemma Godfrey: there is an investing "sweet spot" Over the past 10 years, investors have experienced a stark divergence of fortunes, with some making substantial amounts of money whilst others have suffered losses.

Timing, picking the right investments and employing the right strategy have determined their fate.

When investing, timing can be crucial. You make money if you buy something when it is cheap and sell it when it is perceived to be more valuable. If you buy the same object when its price is high, making a profit will be that much harder.

In the run up to the year 2000, investors bought shares in technology companies to such an extent that values predicted firms would make unrealistic profits. This 'bubble' burst and the stock market fell. September 2001, the start of our 10 year period, lies within this period of selling. Therefore, together with the fall from the financial crisis in 2008, losses were enough to offset the substantial gains achieved in the seven years between these events.

Investing in the 'sweet spot'

An initial investment of ￡100 in the FTSE 100 (the index of the 100 largest companies listed in the UK), would have fallen in value by 4%, returning only ￡96 all these years later.

This return hides a huge divergence of fortunes. Firstly, when choosing the size of the firm in which to invest, there appears to have been a 'sweet spot' for medium-sized firms in the FTSE 250 (the next 250 companies after the largest 100 listed on the London Stock Exchange) - small enough to grow substantially, but large enough to have weathered the storms.

Secondly, the sector. The shares of companies selling basic materials almost tripled in value over the past decade, in contrast to those of financial firms, which lost half the initial investment. The belief driving these moves was that certain materials (for example copper and iron) have become harder to mine and produce, making their producers more valuable. In contrast, banks have suffered from loan defaults, bankruptcies and increased regulation, which have all hurt profits.

Thirdly, the geographic focus. Whilst investing in UK, US or European companies on the whole produced meagre returns or losses, investing in the developing markets of China, Russia or Brazil generated astounding returns; Brazil stands out with a gain of 578%.

Basic Materials outpaced the FTSE 250, while the FTSE 100 did better than financial shares Reinvesting is key

Short-term investment decisions have had as much of an impact as choosing where to place money for the longer term.

During our investment timeline, many companies regularly paid a portion of their profits to shareholders, so-called dividends. How an investor used this payment strongly dictated how much money they made.

If it was re-invested back into the stock market it continued to generate returns, if it was put into their bank account it did far less.

The MSCI World Equity index - boosted by reinvesting returns, lagging when taking out the money Wealth of opportunity

There are other assets an investor could have bought apart from shares, some of which performed far better and greatly enhanced the amount of money made over this period.

Lending to governments or companies in developing countries proved highly profitable, with relatively large interest payments made to the lender (i.e. the investor) until the loan was repaid.

Another interesting investment was property, which in general provided investors with highly attractive returns over the past decade, even after the sharp correction during the recent recession.

Finally, hedge funds, like investors, have had a mixture of fortunes. With focus on different markets, some have made staggering returns whilst others are still nursing losses.

Interestingly, it has not been worthwhile to bet on a falling market. Money managers lost money if they focused solely on making a profit when certain investments fell in value.

Unsurprisingly, fund managers with investments in emerging markets (like Brazil, Russia and China) almost tripled their initial investments.

When investing, during the past decade it paid to be particular.

Brazil was the top performer; hedge fund investments in emerging markets were runner up; government bonds did well; the S&P Global Property index provided returns; UK stocks were lagging

Gemma Godfrey is a quantum physicist, former hedge fund manager and now chairman of the investment committee of wealth management firm Credo Capital.

The opinions expressed are those of the author and are not held by the BBC unless specifically stated. The material is for general information only and does not constitute investment, tax, legal or other form of advice. You should not rely on this information to make (or refrain from making) any decisions. Links to external sites are for information only and do not constitute endorsement. Always obtain independent, professional advice for your own particular situation.

View the original article here

Firms fear energy price hikes

AppId is over the quota
AppId is over the quota
4 October 2011 Last updated at 04:09 GMT By Gerry Northam Reporter, File on 4 Energy-intensive industries have seen gas and electricity bills soar Despite government hopes that manufacturing will lead the UK recovery, there are fears some energy-intensive industries may be forced to leave the UK as prices rocket.

Davin Bates is standing at the cool end of a tunnel kiln watching racks of cups and sugar bowls trundle out ready for glazing.

As we peer fifty feet in to the bright orange centre, he tells me that the internal temperature is well over 1000 degrees centigrade.

Then he breaks the bad news about his gas bill.

Davin is a management accountant at one of Stoke-on-Trent's remaining successful potteries, Steelite. It is a sprawling village of redbrick buildings employing 650 people which produces half a million pieces of crockery a week.

There are seven kilns in all. Keeping them fired up was costly enough last year.

But this year Davin has faced a 55% rise in the cost of gas. The firm's electricity bill has also gone up by 17%.

Tough decisions

"We find it difficult to pass on these costs to our customers," says Davin.

He says profits are therefore getting squeezed and the company's future plans are in jeopardy: "Investment will have to be looked at, because this is coming off the bottom line," he adds.

Across the whole sector, energy bills are driving managers to make tough decisions.

At the British Ceramic Confederation, Dr Laura Cohen has watched factory after factory close - and she identifies high energy costs as a major problem.

She knows that other companies have moved production overseas.

"We heard only a few weeks ago that one firm has transferred all of their manufacturing to China," she says. "Energy costs are a significant part of that."

It is a trend which is not confined to the long-troubled Potteries. Other parts of the country are hit too.

The huge chemical industry, which contributes ￡30m a day to the British economy, is also suffering.

At the family firm of Thomas Swan in County Durham, enormous sealed vats of chemicals are heated and stirred to make specialist powders and liquids for niche hair dyes, printing and cleaning products.

Managing director Harry Swan, a great-grandson of the founder, has steered the company through the recession and now finds himself hit by electricity and gas bills of almost ￡1m.

His plant uses 28,000 megawatt hours of energy a year. Even before the latest round of price rises, his extra energy costs this year were equivalent to a month's profit. He is dreading the next bill.

For the Chemical Industries Association, chief executive Steve Elliott fears British job losses could be imminent: "There will come a moment when people say enough is enough," he says.

"There will only be one direction of travel - out of the UK."

There could be worse to come.

Industries have been totting up the cost of government and European initiatives to promote a low-carbon economy, the so-called "green taxes", and some say their additional bill will run into the millions.

'Tipping point'

Cemex UK runs the biggest cement plant in the country, based on the outskirts of Rugby. It is not averse to the idea of a green economy. In recent years it has moved away from dependence on coal alone.

It now also burns chippings from old tyres and a fuel made from minced-up household waste. But the company is worried about the impact of coming green taxes.

Director Andy Spencer estimates that they will increase his annual energy costs by ￡12m.

What most concerns Cemex is that other countries will not impose similar new taxes on their cement producers. His prices would then struggle to compete on world markets.

So Andy Spencer's thoughts are already turning to the possibility of switching production out of the UK to Cemex plants abroad, particularly in Egypt.

"I can foresee a time when economically it makes more sense to do that and I don't think that time is far away," he says.

"We are very committed to the UK, but there is a genuine concern that we could reach that tipping point where the economics don't stack up to produce domestically in the UK."

This seems at odds with the government's goal of rebalancing the economy in favour of manufacturing industries. The Chancellor George Osborne has called for "a march of the makers".

Andy Spencer sees that march hitting a roadblock. "We know we need to make the transition to a green economy," he says.

"But it must not come at the price of exporting our domestic energy intensive industries."

No blank cheques

The Energy Secretary Chris Huhne says there is little the government can do about some energy price rises.

"How much of this is due to the fact that these businesses are very reliant on world market factors? We've had a 27% increase in the gas price on world markets over the year to August," he says.

"Now with the best will in the world, I can't do anything about that."

But he argues the government's reform of the electricity market will reduce prices for business and domestic consumers alike.

He is working on plans to announce special help for high-energy industries later this year, and says that in 2020 the net effect of the government's energy and climate change policies will be to reduce bills across the board.

But he is sceptical of some complaints on green taxes.

"I don't accept that some of the stories we are hearing about green taxes are correct. There are some ludicrously inflated and exaggerated claims," he says.

"I do not want to see even the most energy-intensive industries leave the UK, that would be madness.

"But am I writing blank cheques to anybody who says they've got a problem? No."

File on 4 is on BBC Radio 4 on Tuesday 4 October at 20:00 BST and Sunday 9 October at 17:00 BST. Listen again via the Radio 4 website or download the podcast.

View the original article here

UK's AAA rating confirmed by S&P

AppId is over the quota
AppId is over the quota
3 October 2011 Last updated at 13:23 GMT The news from S&P is likely to be welcomed by Chancellor George Osborne Ratings agency Standard & Poor's has confirmed the UK's AAA credit rating.

S&P said that despite sluggish growth, the UK's "diversified" economy and "flexible" fiscal and monetary policy would enable it to weather a slowdown.

The news will be welcomed by Chancellor George Osborne, who on Monday told the Conservative Party conference that he would not change economic course.

S&P said its AAA rating could be re-evaluated if the government weakened its resolve to reduce public debt.

An AAA rating is the highest possible. Any downgrade would raise Britain's borrowing costs, and also provide ammunition for the coalition government's opponents.

'Lacklustre' Continue reading the main story

The official assumption that the private sector will quickly step in to replace the withdrawal of public spending may prove optimistic, especially given weakening external demand”

End Quote S&P In an announcement, S&P said it had "affirmed its AAA long-term and A-1+ short-term sovereign credit ratings on the UK. The outlook remains stable."

It said the decision reflected the country's "wealthy and diversified economy, fiscal and monetary policy flexibility, and relatively adaptable product and labour markets".

S&P added: "In addition, we view the UK as having deep capital markets with strong demand for long-dated gilts by domestic institutional investors.

"There is also demand from non-residents for sterling-denominated UK government debt, which provides some diversification to the UK's investor base."

The agency said, however, that the UK's recovery has been "lacklustre".

It added: "The official assumption that the private sector will quickly step in to replace the withdrawal of public spending may prove optimistic, especially given weakening external demand."

The decision to hold the UK's rating comes just over a month after S&P shocked the markets with its first ever downgrade of US debt, cutting it from AAA to AA plus.

View the original article here

Climate 'could hit Canadian GDP'

AppId is over the quota
AppId is over the quota
29 September 2011 Last updated at 23:19 GMT Current federal estimates say climate change will cost Canada about $5bn a year by 2020 Negative effects of climate change could cost Canada the equivalent of 1% of its GDP by 2050 and 2.5% by 2075, a government-backed report has said.

Damage could reach C$41bn ($20bn; ￡27bn), estimates say, depending on global emissions, the economy and population growth.

Higher temperatures could kill forests, flood low-lying coastal areas and spread disease, the report said.

The panel denied that Canada would gain from global warming.

"Climate change presents a growing, long-term economic burden for Canada," said Canada's National Round Table on the Environment and the Economy (NRTEE).

'Strong, stable, responsible'

In a 162-page report, measures proposed included enhanced forest fire protection, pest control and an effort to foster the growth of climate-resilient trees.

The panel also recommended limiting construction in in low-lying coastal areas vulnerable to flooding, and developing technologies to limit pollution and slow ozone accumulation.

It said climate-related costs to Canada could increase from C$5bn in 2020 to between C$21bn and C$43bn by 2050.

These figures depended on co-ordinated global action to limit warming to 2C by 2050, the report said.

The findings of the panel were seized on by opposition politicians who believe the Conservative government should be doing more to confront the threat of global warming.

"Our coastal communities, our forestry industry, and the health of Canadians will all suffer unless we take action right now," said Laurin Liu, of the New Democrats, Canada's main opposition party.

"This out-of-touch government has produced no plan to deal with the impact of climate change," he added.

But Environment Minister Peter Kent said Canada needs "a strong, stable, environmentally responsible ... government to take care of the environment, and that is exactly what we are doing".

The report also said Canada had much to gain from an international, Kyoto-style treaty focussing on cutting carbon emissions beyond 2012.

View the original article here

AUDIO: Euro fund 'like a Ponzi game'

AppId is over the quota
AppId is over the quota
30 September 2011 Last updated at 16:11 GMT Help

The euro bailout fund cannot work because already indebted countries like Spain and Italy are contributing to it.

That's the view of Satyajit Das, author of "Extreme Money - Masters of the Universe and the Cult of Risk".

Speaking to the BBC's Mike Johnson, Mr. Das, a derivatives trader in Sydney for 30 years, said the European Financial Stability Facility is like 'a ponzi game', and that Europe's financially troubled countries will end up borrowing from themselves.

Transcript is below

Satyajit Das: What they have been trying to do is replace the lenders. So because the commercial lenders, which is banks and investors, will no longer buy debt issued by Greece, Ireland or Portugal and increasingly are questioning Spain and Italy, they had to find somebody else to give them the money. The problem is who is going to give them the money?

So they have patched together this European Financial Stability Fund which is a very tenuous process, because it doesn't have any money either, but it's guaranteed by a bunch of countries. But the problem here is that those countries themselves are in need of the money from the funds. It's almost a surreal secularity.

Then there is now the suggestion which was foisted on the Europeans by Timothy Geithner, the U.S. Treasury's Secretary that they ought to take the European Financial Stability Fund and the catch phrase being leverage. So we take a vehicle which doesn't have any money backed by dodgy guarantees, but then they will go and borrow even more money. So, basically, it's almost like a Ponzi game on a large scale.

Mike Johnson: It's an extraordinary thing to get your head around. Let me just get this clear, what we are going to have is a situation where countries which are on the verge of bankruptcy are going to be borrowing money effectively from themselves?

Satyajit Das: That's exactly what's going to happen. I will give you the picture. The European Financial Stability Fund is guaranteed by a whole bunch of countries including, interestingly enough, Spain and Italy. Spain and Italy between them make up 30% of the guarantee of the European Financial Stability Fund.

Now what they are going to do is then the European Financial Stability Fund is going to borrow from the European Central Bank, which has also obviously got support from Spain and Italy, and then lend the money to Spain and Italy. It's almost self dealing raised to an art form. It's abstraction on a level of money which is almost incomprehensible.

Mike Johnson: And is there anyone out there who think this is actually going to work?

Satyajit Das: The only people I think who think that are the politicians in Brussels and a few policymakers because to be very honest they don't have any solutions, and they are now playing almost confidence games to try to actually convince people that this will work. And ultimately it won't work because it all boils down to a simple fact.

At the end of the day, if you are going to do the shuffling of debt, you are going to have to have somebody who is good for the debt and we all know who that is, it is Germany. So they have to actually step up and their taxpayers, their savings have to be used to prop up these other countries. Now the body politic in terms of voters aren't willing to do that.

Mike Johnson: You think Germany, the German people will run out of patience with all of this before long, do you?

Satyajit Das: Well, before they run out of patience, they will run out of money because in the end if you actually look at the amount needed just to get through the next two or three years, if you take Greece, Ireland, Portugal, Spain and Italy, they have maturing debt. This is debt they have issued, about $1.5 trillion between now and the end of 2013.

So all of that money has to be found and at the end if Germany and France and the stronger countries start to take on that burden, their own credit worthiness will be called into question. And if they lose their triple-A ratings, well then the whole game starts to unravel yet again, and it's very difficult to see this having what could be called a happy ending.

If you liked this, why not sign up for the World Business Report podcast here

View the original article here