03.21.10
Posted in All, hot news, money, top, world of money tagged economics, events, money, political, world at 6:12 am by carydalton
ATHENS (AFP) – The financial crisis rocking Greece has brought into focus the warped reality of the country's civil service, where a long tradition of political perks has bred fiscal disaster, analysts say.
Packed with political supporters of governments past and present — and often operating on its own rules — the Greek civil service has gorged itself to such a degree that even its nominal masters have trouble deciding where to start trimming waste.
"Nobody, not even the prime minister, can say how many civil servants there are," says Constantinos Michalos, head of the Athens Chamber of Commerce and Industry, one of Greece's main business lobby groups.
"We calculate 1.2 million people including contract workers. The civil servants' union says 700,000. The finance ministry says 800,000," he said.
In addition to trying to sort out the mess by reforming its wage registry, the Socialist government of George Papandreou this month said all state staff would see 12-percent cuts in benefits and 30-percent cuts in holiday pay.
The Socialists are trying to tame a debt of nearly 300 billion euros (409 billion euros) fueled by a public deficit that grew to 12.7 percent of output last year, more than four times the allowed EU limit of three percent.Related article:Greek drama reveals a more euro-cautious Germany
According to the Greek interior ministry, the number of permanent civil servants grew by over 28,000 people between 2006 and 2008.
Michalos, a former general secretary at the finance ministry, considered a honeypot among state offices, has no shortage of state-sector excess stories.
"Cleaning ladies and press officers at the finance ministry receive double the pay of their colleagues at other ministries," he notes.
"In parliament, staff work for 12 months but receive 16 (month) salaries."
"And civil servants get bonuses for dressing well and reporting to work on time," he said.
"This monster was created by politicians," political commentator Stefanos Kassimatis wrote in liberal Kathimerini daily this week.
"They buckled under union pressure and kept on awarding privileges until it eventually escaped their control completely no fax payday loans."
The union representing civil servants, Adedy, says that bonuses, which can account for nearly half of total state staff pay, are essential to bolster its members' nominal salaries which are "the lowest in Europe."
According to Adedy, civil servants make 1,350 euros (1,800 dollars) on average. The minimum wage in Greece is 740 euros.
"There are anachronistic distortions to protect various groups or woo potential voters," said Yiannis Stournaras, general director of the Foundation for Economic and Industrial Research, a private think-tank.
"In public hospitals alone, the absence of proper accounting leads to a waste of 1.5 billion euros a year."
"(Greeks) had hoped that the day of reckoning would come later. In the end, it came sooner because of the financial crisis," he added.
Papandreou has pledged to use the crisis to clean up decades of corruption and mismanagement at the civil service.
Studies have repeatedly shown that the Greek public sector is a graft haven with tax offices, urban planning departments and hospitals the worst offenders.
And the problem is getting worse according to corruption watchdog Transparency International, whose local branch this month reported a 50-million-euro rise in bribes last year to 790 million euros (one billion dollars).
The average bribe was 1,355 euros in the public sector and 1,671 euros in the private sector, chiefly involving private clinics, banks and lawyers, according to the study, carried out by Public Issue for TI Greece.
"The Greek civil service is the field where the crisis is at its most evident," Theodore Pelagidis, a professor of economics at Piraeus University and co-author of a new book on corruption, told AFP.
"But it is not the cause of the problem," he argued.
"The whole way the economy is organised is deplorable … the country has learned to live off EU funds, shipping and tourism proceeds — basically, money falling from a helicopter without being generated locally."
Greek debt throws spotlight on civil service excess
Hot News: TaxWatch: Tax Q&A on withholding, and spouses who live apart
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03.16.10
Posted in .com, hot news, money, top, world of money tagged financial, news, newsreports, people, writing at 7:18 am by carydalton
SAN FRANCISCO (MarketWatch) — Lehman Brothers Holdings Inc. and 22 affiliates filed a bankruptcy plan Monday to repay creditors of the failed brokerage firm.
“The proposed plan represents a fair economic resolution for all Lehman creditors and will accelerate recoveries to creditors,” said Bryan Marsal, chief executive and chief restructuring officer of Lehman Brothers Holdings, in a statement.
Has Wall Street dodged the bullet?
Senate Banking Chairman Christopher Dodd unveils details of a bill aimed at overhauling financial regulation. The News Hub discusses the impact on Wall Street. Plus, WSJ’s Darren Everson joins the News Hub to discuss this year’s brackets for the NCAA tournament and potential upsets in the making.
The plan also tries to avoid “unnecessary, extended and expensive litigation that could adversely impact recoveries to creditors,” Lehman Brothers added in its filing fast cash without a hassle. Yet the firm will likely object to many claims and fight with creditors over what they’re owed, according to Dow Jones Newswires.
Lehman collapsed in September 2008 in the largest bankruptcy in history, triggering the worst financial crisis since the Great Depression. The firm faces about 65,000 claims from creditors totaling about $875 billion.
The plan, filed with the U.S. Bankruptcy Court in Manhattan, comes on the 18-month anniversary of Lehman’s demise; Monday marked the deadline for filing the plan.
Lehman and affiliates file bankruptcy plan
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03.06.10
Posted in .com, hot news, money, top, world of money tagged All, blogs, events, money, opinion at 3:12 pm by carydalton
LONDON (MarketWatch) — Anglo-Swiss mining firm Xstrata gained ground on Friday after a deal to sell its Prodeco assets in Columbia to shareholder Glencore, a move that helped the metals sector to advance in the British stock market.
Xstrata shares climbed 2.5% after it said Glencore International will exercise its option to acquire its Prodeco coal operations in Columbia.
Under the option agreement, Glencore, which holds more than 34% of Xstrata, will pay Xstrata at least $2.25 billion in cash upon completion of the sale.
“Glencore’s decision to exercise its option provides Xstrata’s shareholders with a robust cash return on the initial purchase price and provides additional financial flexibility as Xstrata’s capital expenditure program ramps up to deliver 50% volume growth by 2014,” said Xstrata CEO Mick Davis.
Analysts at MF Global noted: “Prodeco was Glencore’s asset contribution during the [Xstrata] rights issue last year, when the metals trader did not have the cash to participate.”
They believe that the deal will take Xstrata’s net debt/EBITDA ratio back below 1 times which “should allow the group to spend more on capital expenditure or even mergers and acquisitions.”
They added: “investors in that context could focus on Lonmin once more, of which Xstrata already owns 24.65%.” Platinum miner Lonmin rose 1.8%.
Overall, the FTSE 100 index rose 0.4% to 5,550.99 on Friday and other European shares also advanced. U.S. stock futures were pointing to mild gains ahead of key jobs data due out later. See Europe Markets. Read more on jobs.
“News flow from Japan is overshadowing the final trading session of the week, though we expect that will change in a few hours when the U.S. employment report for February is published,” said Kenneth Broux, economist at Lloyds Corporate Markets.
On Friday, there was speculation that Japan will ease monetary policy through April in order to push down short-term rates. The BOJ’s policy board is expected to discuss such steps at a two-day meeting starting March 16, Japanese business daily Nikkei reported cash advance. Read more on BOJ.
Banks were higher in London trading, with Standard Chartered shares up 2.4% and HSBC Holdings up 1%.
Still, shares of advertising giant WPP / declined 0.7%. Its fiscal-year net profit was broadly flat at 437.7 million pounds, compared to 439.1 million pounds a year ago. Sales rose 16.1 to 8.68 billion pounds.
WPP said that 2010 should be a more stable year although “there is no marked growth as yet.”
Shares of British American Tobacco declined 0.4% to 2,309 pence.
It was downgraded to neutral from outperform at Credit Suisse with the broker saying it sees limited upside to its new target price of 2,350p following a recent strong performance for the firm’s shares. It raised 2010 and 2011 earnings per share forecasts for the firm by 4%, mainly to reflect recent sterling weakness.
“At current levels, we would favor Imperial Tobacco and Philip Morris International , which should also deliver robust earnings growth in 2010 as pricing - the industry’s main P&L lever - remains good,” the broker said.
Outside the top index, United Business Media shares jumped 10%.
The media firm posted 2009 profit after tax of 81.8 million pounds, from 82.7 million pounds last year and also resolved its “decade-long dialogue” with the U.K. tax authorities following the sale of its regional newspapers business in 1998.
“We have agreed to make a payment of 46.5 million pounds in settlement of this and a number of other tax issues. This, together with the resolution of a number of other tax matters, has resulted in a release of 135.2 million pounds of our previous tax creditor,” the firm said.
Michael Page International shares fell 1.7%.
The recruitment firm’s 2009 net profit fell to 12.4 million pounds, from 97.3 million pounds recorded at the same point last year. Revenue declined to 716.7 million pounds, from 972.8 million pounds last year.
London Markets: British shares up as miners, banks rise
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03.02.10
Posted in .com, All, Free blog Tips, business, top tagged campaign, finance, markets, personal, reviews at 6:00 am by carydalton
FORT WORTH, Texas – Natural gas and oil producer Quicksilver Resources Inc. posted a fourth-quarter profit of $32.5 million, or 19 cents per share, Monday as revenue grew, compared with a loss a year earlier, when it recorded several charges.
A year earlier, the company lost $467 million, or $2.79 per share.
The results, which beat Wall Street’s expectations, sent Quicksilver’s shares up 50 cents, or 3.4 percent, to $15.42. The stock has traded the past 52 weeks at $3.98 to $16.59.
Excluding one-time items, the company earned $47.3 million, or 27 cents per share, up from an adjusted profit of $39.3 million, or 23 cents per share, a year earlier home kerosene heaters.
Revenue rose 12 percent to $234.1 million from $208.9 million.
Analysts, on average, were expecting a profit of 25 cents per share on sales of $217.4 million, according to a poll by Thomson Reuters.
For the full year, Quicksilver posted a loss of $557.5 million, or $3.30 per share, compared with a loss of $378.3 million, or $2.33 per share, a year earlier.
Adjusted earnings were 86 cents per share for 2009.
Revenue rose to $832.7 million from $800.6 million.
Quicksilver reports profitable 4Q, shares climb
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02.27.10
Posted in hot news, money, news, online, top tagged blogs, campaign, politics, reviews, work at 6:36 pm by carydalton
NEW YORK (Reuters) – Consumer sentiment was weaker in February, as Americans grew more impatient with the government's gridlock over efforts to stimulate jobs, a survey released on Friday showed.
While not fearful of another spike in layoffs, consumers have turned more gloomy about their job and income prospects, according to the Thomson Reuters/University of Michigan's Surveys of Consumers.
"Consumers have been getting more impatient with the slow progress of the stimulus program, and confidence in the Obama administration's economic policies has begun to wane," Richard Curtin, director of the surveys, said in a statement.
The survey's overall index of consumer sentiment was at 73.6 in February, down from 74.4 in January and below the 74.0 forecast by analysts polled by Reuters. The preliminary February reading was 73.7.
The gauge of current economic conditions was at 81 personal humidifier.8 for the month, up from January's reading of 81.1. This compares with 84.1 in the preliminary figures and 82.0 predicted by analysts.
The survey's barometer of consumer expectations weakened to 68.4 in February from 70.1 in January. It fell short of the 69.9 forecast by analyst but it did improve from the preliminary figure of 66.9.
The index of consumers' 12-month economic outlook fell to 80 from 84 in January, but it was up from 79 in early February.
The survey's 1-year inflation expectations eased to 2.7 percent in February from 2.8 in January, while the five-to-10-year inflation measure slipped to 2.7 from 2.9 a month ago.
(Reporting by Richard Leong and Caroline Valetkevitch, Editing by Chizu Nomiyama)
Consumer sentiment weakens in February
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02.23.10
Posted in All, hot news, money, news, top tagged All, blogs, life, marketing, political at 1:48 pm by carydalton
Filed at 2:06 a.m. ET
* Forecasts lower beer consumption in many regions in 2010
* Price increases set to be less than in 2009
* 2009 operating profit 2.095 bln euros vs forecast 2.10 bln
(Adds details, background)
BRUSSELS, Feb 23 (Reuters) - Heineken NV , the world’s third-largest brewer, forecast lower beer consumption in many regions, limited price increases and few cost benefits this year after reporting 2009 results broadly in line with expectations.
Heineken, like other brewers, suffered from recession-conscious consumers drinking less beer in 2009 but succeeded in pushing through price increases.
“The global economic environment will continue to lead to lower beer consumption and down-trading in a number of regions in 2010,” Heineken said in a statement on Tuesday.
The Dutch company, whose chief brands are Heineken and Amstel, Europe’s No.1 and No.3 beers, said it was committed to maintaining or increasing prices and would continue to pass on excise duty rises to consumers.
However, it said that price increases would not be as steep this year as they were in 2009.
The likely fall in raw material costs per hectolitre due to a temporary decline in the price of brewing barley would be offset by higher energy costs, rising advertising rates and increased marketing costs.
It would continue to drive through its three-year total cost management plan, which yielded 155 million euros in savings to operating income its first year in 2009 easy fast payday loans.
Heineken said that earnings before interest, tax (EBIT), and one-offs rose by 14 percent on a like-for-like basis to 2.095 billion euros ($2.85 billion) in 2009. The average forecast in a Reuters poll of 14 analysts was 2.10 billion euros.
That came despite a 5.4 percent fall in underlying consolidated beer volumes. A 4.5 percent improvement in pricing and sales mix translated into a 0.2 percent drop in revenue. Cost cutting then explained the profit increase.
World No.2 SABMiller said last month that its underlying beer volumes were flat in the last three months of 2009 as consumer demand in emerging markets offset declines in Europe, North America and South Africa.
Heineken’s pain has been greater than its peers given that some 70 percent of the Dutch brewer’s operating profit comes from the more sluggish European and North American markets.
Heineken bought Scottish & Newcastle with Carlsberg for 7.8 billion pounds ($12.06 billion) in 2008, chiefly getting the British assets.
However, it is set to boost its emerging market presence to 40 percent by buying the beer business of Mexico’s FEMSA. [ID:nLDE60A0DL]
Carlsberg also reports 2009 results on Tuesday. ($1=.7340 euros) ($1=.6469 pounds)
Heineken Sees Difficult 2010
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02.21.10
Posted in .com, business, money, shortly, top tagged campaign, economics, financial, news, writing at 4:06 pm by carydalton
BERLIN – The Cockpit pilots union offered Saturday to meet with the chief of Lufthansa AG to try to head off a four-day strike beginning Monday that could cause headaches for thousands of travelers.
The union offer to meet with Lufthansa Chief Executive Wolfgang Mayrhuber came after Germany’s transport minister urged the two sides to return to talks and avoid a strike that could damage the country’s economy.
Lufthansa has said it is willing to talk, but not without conditions. It was not immediately clear if the meeting would take place.
Lufthansa has already canceled some 600 flights ahead of the strike and is scrambling to rebook travelers on partner airlines or trains.
“Lufthansa is doing everything in its power to inform its customers as soon as possible and offer them alternative travel options,” the company said on its Web site.
Travelers who are unable to reschedule are being reimbursed for their tickets, it said guaranteed pay day loans.
The airline, Germany’s largest, estimates the strike could cost it as much as euro100 million ($135.19 million).
The union is urging some 4,500 pilots who fly for Lufthansa, Lufthansa Cargo and Germanwings to walk off their jobs from February 22-25 to press the airline for increased job security.
Cockpit accuses the airline of outsourcing more and more flights to pilots employed by other companies, who work for less pay and under worse conditions.
Also Saturday, German Transport Minister Peter Ramsauer warned the strike could seriously damage the German economy.
“It can not be that the largest German air fleet is grounded for four days,” Ramsauer told the Bild am Sonntag weekly.
___
On the Net:
http://www.lufthansa.com
Pilots offer to talk with Lufthansa before strike
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02.13.10
Posted in All, economic, hot news, news, top tagged All, campaign, life, opinion, personal at 11:12 pm by carydalton
The global coal industry is in the midst of a permanent structural shift in the form of the emerging dominance of the Asia-Pacific region.
China and India are at the heart of the transformation, firmly placed as the world's No. 1 and No. 3 biggest coal producing nations, respectively. (The U.S. is No. 2.)
And demand in the world's two most populous nations is growing rapidly.
India's imports of thermal coal, used in power generation, rose 60% in 2009 to 57 million tons. China shifted to a net importer last year to the tune of 70 million tons of thermal coal, despite large domestic resources of the black rock.
Both countries are also experiencing a spike in demand for metallurgical coal, a main ingredient of steel, as their economies continue to mushroom.
At the end of January, Peabody Energy (NYSE:BTU - News) said it is expanding a mine in Australia at a cost of $70 million to boost capacity by 1 million tons within several years to meet growing demand for metallurgical, or met coal, used by steel companies in China, India and other Asian nations.
"China and India have permanently changed the seaborne metallurgical and thermal coal market landscape," CEO Gregory Boyce said. Peabody enjoyed a 37% increase in Australian coal shipments in the second half of 2009.
Alpha Natural Resources (NYSE:ANR - News) said it sees much strength in the metallurgical markets in 2010. It raised its metallurgical shipment guidance by about 1 million tons, to 11 million to 13 million tons for this year.
Meanwhile back in the U.S., the enormous stockpiles of coal racked up by utilities during the depths of the recession are starting to shrink after extremely cold weather in December and January.
According to U.S. utilities, which use coal to generate nearly half of America's electricity, roughly 50 to 60 gigawatts of coal will go offline over the next 10 years or so.
The U.S. will need to replace that energy, and renewables such as solar, wind, small hydro, modern biomass, geothermal and biofuels are one of the paths to take to fill that void.
1. Business
IBD's Energy-Other group includes any energy source that is not oil or natural gas. The group's 800-pound gorilla is coal.
Coal mining, especially underground, is a capital- and labor-intensive business. It is also a very high fixed-cost business.
Electricity demand has been the primary value driver for thermal and steam coal for a long time, with steel being the other big driving force.
In 2009, the U.S. produced 1.08 billion tons of coal, mined primarily from four major coal basins with smaller ones spread across the country. The four are the northern and central Appalachian basins, the Illinois basin and northern Wyoming's Powder River Basin.
Peabody is the largest U.S. coal miner, producing 215 million tons last year. It is the only U.S.-based company in the group with international mining operations, in this case Australia.
Arch Coal (NYSE:ACI - News) is the second-largest company in the group; Alpha Natural Resources moved into the No. 3 slot with last year's acquisition of Foundation Coal for $1.4 billion in stock. Consol Energy (NYSE:CNX - News) and Massey Energy (NYSE:MEE - News) are fourth and fifth, respectively.
The U.S. is capable of generating roughly 1,000 gigawatts of electricity per year. Coal generates some 325 gigawatts, natural gas kicks in 400 and nuclear makes up another 100, according to Brian Gamble, an analyst at Simmons & Co. The rest, he says, is split between hydropower, solar, wind, geothermal and biomass.
"The segment of the U.S. power grid that is made up of renewables is quite small," Gamble said. "It is a growing market, albeit from a small base, but we don't expect solar, wind or any other renewable to gain significant market share for some time."
The group includes several solar companies, including Chinese firms like Trina Solar (NYSE:TSL - News) and Suntech Power (NYSE:STP - News).
First Solar (NMS:FSLR) is the largest U.S.-based solar company by market share. Other American firms include Real Goods Solar (NMS:RSOL), GT Solar International (NMS:SOLR) and SunPower (NMS:SPWRA).
While multinationals such as GE (NYSE:GE - News) and Siemens (NYSE:SI - News) have made a strong push into wind power, those diversified industrial giants are listed in other stock groups. In the Energy-Other group, Danish company Vestas Wind Systems (OTCBB:VWDRY.ob - News) is the largest wind-power company.
Ormat Technologies (NYSE:ORA - News) and U.S. Geothermal (AMEX:HTM.a - News) operate plants of geothermal energy, power generated from heat stored in the Earth payday advance.
Name Of The Game: It's simple: produce and supply coal, wind, solar, hydropower and other renewables to fulfill the world's energy needs, which are expected to grow rapidly over the next 20 to 30 years, says Michael Dudas, an analyst with Jefferies & Co.
2. Market
U.S. utilities are the biggest customers for coal producers and renewable energy alike.
Steel makers are the next biggest consumers of coal.
The entire coal market, which is dominated by the publicly traded miners and small mom-and-pops, is estimated at roughly north of $52 billion. The U.S. is expected to produce 1.07 billion tons of coal this year, with public coal companies churning out more than half that output.
The renewables market is a bit tougher to size as the adoption of these alternative energies is still in early phases. But rough estimates for the global wind and solar market is roughly $100 billion, with 70% of that produced by wind. The U.S. wind market is roughly $20 billion, according to Simmons' estimates.
3. Climate
The biggest issue facing the coal industry is permits being held up by the Environmental Protection Agency that are needed to continue producing coal. Environmentalists contend coal mining is destroying landscapes where these basins are located.
"The problem here is that we are going to experience energy usage growth of 50% over the next 25 years, and we can't do it without coal, which is one of the cheapest forms of energy," Dudas said.
Coal stockpiles rose last year as demand fell. Businesses were forced to close and shutter production, while consumers used less heat to save on their energy bills, Dudas says.
"Coal producers will have to manage their output and in some cases shut mining operations down until the stockpiles begin to decline, which has already begun," he said.
Last week, U.S. industry executives from the wind, solar, hydropower, geothermal and biomass sectors pushed for a federal renewable energy standard, which would set a percentage of how much energy must come from renewable sources in the U.S.
The group wants an extension of tax incentives and said stimulus funds powered most renewable expansion last year. President Barack Obama has urged Congress to set a national standard that would require 25% renewable power by 2025.
A federal standard, which they say will foster economic growth and create jobs, could spur these industries at a time when China is moving swiftly into alternative energy production.
4. Technology
Most technological advances in this industry group have occurred in renewables.
For example, ethanol producers, such as BioFuel Energy (NMS:BIOF) and Pacific Ethanol (NMS:PEIX), use corn oil extraction technologies to produce the biofuel.
Companies such as Hy-Drive Technologies provide natural gas or hydrogen-generating systems for diesel and commercial fleets.
And FuelCell Energy (NMS:FCEL) makes stationary fuel cells, which electrochemically produce electricity directly from hydrocarbon fuels for commercial, industrial, utility and government customers.
Solar power companies have to be tech-savvy to generate electricity from sunlight. This can be direct as with photovoltaics, or indirect as with concentrating solar power, where the sun's energy is focused to boil water, then used to generate power.
5. Outlook
Over the next decade, coal plant retirements will take roughly 50 to 60 gigawatts of coal generation offline.
The U.S. will need to replace that lost energy, and renewables are the answer, Gamble says.
"It will take a mix to fill the void, and there will be a shift, but renewables won't fill that need overnight," he said. "In order to make this happen, there will have to be additional infrastructure built, which becomes an expensive proposition no matter how you slice it."
Nuclear, natural gas and renewable energy can each fill part of that role, but additional coal assets must be built in the meantime.
Upside: The world has unquenchable thirst for energy as emerging economies continue their rapid growth and populations in developed nations continue to swell. That demand should fuel business for traditional sources like coal as well as renewables.
Risks: Another recession could further sap demand for coal, which could increase stockpiles and restrain mining operations. Also, tougher regulation in the U.S. would make starting new projects difficult.
A Renewed Sense Of Energy
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02.12.10
Posted in Free blog Tips, economic, money, news, top tagged economics, economy, finance, marketing, newsreports at 11:12 am by carydalton
RIGA, Latvia — The tiny Baltic states have pursued closer integration with Europe with enormous zeal. But the price of monetary union may be giving them pause.
Economists and ordinary citizens alike are watching the protests rumbling through the streets of Athens and the slow response to Greece’s problems coming out of Brussels.
“Countries like Estonia and Latvia were once desperate to get in,” said Alf Vanags, director of the Baltic International Center for Economic Policy Studies in Riga. “The euro is not looking so attractive now.”
Latvia has been on track to adopt the euro in 2014, as has Lithuania, with Estonia eyeing its inclusion by 2011.
These governments have reason to fear that, like Athens, they will be caught in a vise: unable to pay for expensive social programs demanded by citizens while staying within the euro zone’s debt limits.
Enthusiastic for years about adopting the euro, Latvia had undertaken painful austerity measures. Even as the global economy contracted, the government slashed spending. The program included cuts of 50 percent or more in the salaries of public-sector employees and a 40 percent reduction in hospital budgets.
The result, many economists say, has been deepening unemployment and the worst recession of any country in the 27-nation European Union.
Latvia’s gross domestic product has declined by an estimated 24 percent since the recession began — a steeper drop than America’s during the Great Depression.
To keep a faltering country’s economy in line with the euro “is a tall and very unpleasant order,” Mr. Vanags said.
One of the constraints of joining the euro zone would be that Latvia would be unable to devalue its currency by printing more money. The current members of the euro zone that are weaker, like Spain and Portugal, are feeling such constraints now.
Despite some negative effects, devaluations have helped many countries over the years, giving a lift to their economies by making foreign goods more expensive and domestic goods more attractive.
Latvia has already taken some steps that limit its ability to bolster its economy. Since 2004, the Latvian central bank has pegged its currency, the lat, to the euro, to prepare for adhering to the common currency.
In 2008, Latvia accepted austerity as a condition of a bailout led by the International Monetary Fund that allowed it to remain on track to adopt the euro. After sharply cutting salaries in the public sector, the government encouraged the private sector to do the same. The policy, in fact, worked to balance the trade deficit. But the country is now being severely hurt by the very policies needed to get into the euro zone.
Andris Liepins, deputy minister of economy in Latvia, said in an interview that Latvia remained committed to a currency peg and to adopting the euro short term personal loan. “Greece’s problems are temporary,” he said. “Greece needs the same reforms as Latvia.”
The austerity programs imposed by the I.M.F., Mr. Liepins said, would help Latvia’s economy restructure over the long term, by cutting health care outlays and encouraging companies to become more efficient. Devaluing the currency would help only in the short term, he said. It would also push more homeowners to default on their mortgages, which are often denominated in foreign currencies. “We would lose competitiveness as an economy,” he said.
The policies should be judged three or four years from now, he said, when policies like encouraging outsourcing has made companies more competitive while creating opportunity for new small business.
Latvia’s economy contracted an extraordinary 18 percent in 2009, according to preliminary figures. If the number holds, it would mark the sharpest contraction in the world, though it followed what was widely regarded as an unsustainable burst of growth just before the global crisis.
Casting about for ways to raise cash during the crisis, the Latvian government grasped at times at unconventional methods.
In January, it auctioned off a ghost town along with an abandoned Soviet radar base called Skrunda-1 for 1.5 million lats ($2.89 million).
A Russian company bought it.
The economy began growing slowly in the fourth quarter of last year. Rating agencies also noted an improved outlook on the country’s creditworthiness.
Still, the government’s reliance on layoffs and deep wage cuts has not been popular.
But the response has been more measured in the Baltic countries so far than in Greece, struggling with public employee strikes and protests.
Slava Ushakov, who had a small business, sympathizes with the employees of the Greek government. When his business failed in the recession, Mr. Ushakov took a job chipping ice from city sidewalks under a government work program.
When he slipped and broke a rib, his already meager pay was docked for the days that he had missed. So now he comes to work injured. “I just wrapped it,” Mr. Ushakov said, lifting his sweater and gingerly touching bandages.
The work program, designed by the World Bank and partly financed by the European Union, pays Mr. Ushakov 100 lats ($192) a month. Still, the jobs are coveted, in a sign of the depth of troubles in Europe’s most recession-plagued economy.
“I am still working every day,” Mr. Ushakov said. He added that these days in Latvia, “if you want to buy a chicken, you have to think pretty highly of yourself.”
With Greece’s Woes, Nations Rethink Push Into Euro Zone
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02.11.10
Posted in .com, All, money, online, top tagged economics, finance, marketing, newsreports, writing at 5:48 am by carydalton
BRUSSELS — The crisis in Greece brought Europe’s leaders together on one issue Wednesday: The need for emergency action to keep the problem from infecting Europe’s other weak economies. But an accord on who will take the lead — and how — appeared uncertain.
European officials face greater urgency to devise a bailout for Greece after fears its government might default caused a recent slump in financial markets worldwide.
A phalanx of European leaders put on a unified show of support ahead of a Thursday summit meeting in Brussels, where the heads of all European Union governments and the finance ministers of the 16 countries that use the euro are scheduled to appear. Together with the president of the European Central Bank, Jean-Claude Trichet, the officials agreed Wednesday that they could no longer allow uncertainty about the future of Greece — and the euro zone — to disturb global investors.
“The point of no return has been passed,” said one diplomat involved in negotiations over a possible European bailout of Greece. “We have to do something or announce something.”
But some officials said the meeting might achieve little more than a political statement, leaving details to be worked out later by finance ministers.
German officials also insisted that no formal decision had been made.
Stocks on Wall Street fell Wednesday, partly on worries that European politicians may not find a quick resolution to the crisis.
A crucial point in the discussions is whether the government in Athens should be offered loan guarantees or given additional loans to help meet a looming debt payment, or whether there should be a pledge to buy Greek government bonds should the need arise. Investors like the concept of having one or several creditworthy nations, like Germany, guaranteeing the debts of a poorer nation, although such a move would be largely without precedent.
Germany and France are expected to have to take the lead on any emergency solution, especially after European officials rejected allowing Greece to go the International Monetary Fund — which often provides financial aid to emerging markets — for help. Going to the fund is considered a highly undesirable option for any of the 16 countries that use the euro currency. President Nicolas Sarkozy of France and Chancellor Angela Merkel of Germany intend to hold a joint news conference after the summit meeting.
It is “no longer considered an option not to act,” said a French official involved in the talks.
Officials are worried about the “moral hazard” of any Europe-backed solution for Greece: If one country is bailed out by the others, investors will expect a similar response should other weak economies that use the euro, including Portugal and Spain, fall into serious trouble.
And then there are questions about how to apply any commitments so that the weaker governments would be pressured to deliver painful economic overhauls freecreditreport.
The talks, which included a discussion of what steps Greece might be required or even forced to take to deal with its own financial problems, came as Greek citizens demonstrated in protest against austerity measures so far announced by the government, which many market participants think are far from adequate.
“At this junction they will have to support Greece,” Simon Tilford, chief economist at the Center for European Reform, said of Europe’s politicians. “If you have encouraged the markets to believe that support is forthcoming and then it is not, we will see a backlash” in financial markets.
Though Mr. Tilford said the markets would ideally like to see some form of guarantee extended to Greek loans, he added that this would probably be too much for the government in Berlin. The most likely outcome was a loan facility extended on condition that changes were undertaken by the government in Athens. It would also need to apply to other countries facing similar ills.
Jean Pisani-Ferry, director of the Bruegel research institute in Brussels said that whatever officials decide Thursday, it was important to lay out markers — including what assistance they would take, what would activate it and who would provide it — so that markets could understand how aid would be given.
The summit meeting Thursday was called by Herman Van Rompuy, president of the European Council, to try to draw up a longer-term economic strategy for the European Union to modernize its economy by 2020, an agenda that has been overshadowed by the euro zone debt crisis.
Stocks rose across most of Europe on Wednesday, with the euro-zone benchmark Dow Jones Euro Stoxx 50 index gaining 1.2 percent. The euro slipped as conflicting comments from European leaders showed the bloc was still moving hesitantly toward concrete measures. The 16-nation currency traded at $1.3733 late Wednesday in Europe.
Greek government debt rallied for a second consecutive day, with the yield on the government’s benchmark 10-year bond — which spiked as high as 7.2 percent on Jan. 28 — dropping at one point below 6 percent for the first time in a month. Italian, Irish, Spanish and Portuguese bonds also gained. The cost of insuring government debts against default through credit default swaps also fell.
Charles Diebel, head of European rate strategy at Nomura International, said a default was not imminent in Greece. But without European Union support Greek bond yields will rise so high that Athens would find it very difficult to sell debt when it needs to refinance in a few months.
“It’s a question of confidence, not fundamentals,” Mr. Diebel said.
Nicholas Kulish contributed reporting from Berlin.
Europe Agrees to Aid Greece, but Is Unsure of How to Help
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02.09.10
Posted in All, Free blog Tips, economic, money, top tagged All, blogs, financial, people, world at 5:35 pm by carydalton
LINCOLNSHIRE, Ill. – Zebra Technologies Corp. made a profit in the fourth quarter, free of the one-time expenses that left it with a loss a year ago.
The company, which makes bar code and plastic card printers, also offered a first-quarter forecast above Wall Street expectations.
Its shares rose 7 cents to $27.41 in midday trading.
Zebra earned $17.6 million, or 30 cents per share, in the three months ended Dec. 31. It lost $117.4 million, or $1.88 per share, a year ago, when the company booked hefty charges related to restructuring and the falling value of its assets.
Zebra said the latest results included 3 cents per share in restructuring costs.
Revenue slipped 4 percent to $222.5 million from $232.6 million a year ago best payday advance.
Analysts polled by Thomson Reuters, who typically exclude one-time costs, expected lower earnings of 25 cents per share and lower revenue of $206.6 million.
Full-year earnings came to $47.1 million, or 79 cents per share, compared with a loss of $38.4 million, or 60 cents per share, in 2008. Revenue fell to $803.6 million from $976.7 million.
Zebra said it expects a first-quarter profit of 25 cents to 32 cents per share, including 2 cents worth of restructuring charges. It expects sales of between $217 million and $230 million.
Analysts expected 26 cents per share and $203.7 million.
Zebra posts 4Q profit of $17.6 million
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02.08.10
Posted in .com, money, shortly, top, world of money tagged finance, newsreports, opinion, politics, world at 5:18 am by carydalton
NEW YORK – Betty White plays football, babies talk about “milkaholics” and a house made of Bud Light cans falls slowly apart. It must be the Super Bowl — or at least the advertising showcase that entertains amid the gridiron action.
The commercials from such advertisers as Anheuser-Busch and Coca-Cola got off to a funny start Sunday night on CBS.
Villanova marketing Professor Charles R. Taylor said the light-hearted tone is working this year because the ads still manage to tell people what the brands stand for. That marks a turn from last year, when some ads took a more somber tone amid the still-deepening recession.
Not every commercial was strictly humorous. Automaker Toyota aired several ads before and after the game to reassure worried owners after its recalls connected with accelerator problems.
A commercial by conservative Christian group Focus on the Family, perhaps the most-discussed ad leading up to the game, hinted at a serious subject, although it, too, had a punchline. Heisman Trophy winner Tim Tebow and his mother talk about her difficult pregnancy with him — implying an antiabortion message, because she had been advised to have an abortion for medical reasons — but ended with Tebow tackling his mom and saying the family must be “tough.”
Taylor said he had been disappointed in at least the past five Super Bowls in terms of the effectiveness of ads in connecting with products, but this year he’s pleased. Advertisers pay dearly for the airtime — from $2.5 million to more than $3 million per 30 seconds — and marketers say ads work best when they focus on the product, as well as entertaining.
He cited a commercial by tiremaker Bridgestone featuring men carrying a whale in the back of their truck, and another by Dove launching its new men’s skin-care line. They were winners, he said, because they manage to entertain while telling people about the brands. The ad for Dove tells the story of boy growing into a man and the signal events in a man’s life.
“So far from what I’ve seen I’m quite positively impressed, more than I thought I would be,” he said.
A first Super Bowl ad by Google — which rarely advertises on television — told an affecting story of a budding relationship through a series of Google searches, beginning with “study abroad” and “how to impress a French woman” and ending with “churches in Paris” and “how to assemble a crib personal business card.”
That was one of the few strong ads this year, said Laura Ries, president of marketing consulting firm Ries & Ries outside Atlanta.
She figured people would most likely end up talking about the game between the New Orleans Saints and the Indianpolis Colts — which was close until the waning minutes — rather than ads. Often, it’s the other way around.
“It’s very, very difficult to be entertaining in a place like the Super Bowl and have a connection to your brand,” she said. “The home runs here are few and far between.”
Other highlights include a series of ads by restaurant chain Denny’s, which showed chickens nervous about all the eggs they’d have to lay when the company gives out free Grand Slam breakfasts again this year.
A top topic on Twitter was “green police” — the name of an ad by carmaker Audi pushing its new diesel-fueled vehicle the TDI. Using word play on Cheap Trick’s “Dream Police” — “Green” police officers deal with people making questionable environmental decisions. A man is arrested for choosing a plastic bag at the grocery store, for example.
But not all ads were winners.
Taylor said an ad by Boost Mobile, Sprint’s prepaid cellular phone service, didn’t work because it depended too heavily on the 1985 Chicago Bears’ “Super Bowl Shuffle,” a reference that could be too old for the brand’s buyers.
An ad by Kia for its Sorento SUV will be remembered for its story of a whimsical joyride taken by children’s toys — but people won’t likely remember the brand behind the ad, Ries said.
Celebrities weren’t as plentiful in this year’s Super Bowl. Notable sightings include Charles Barkley rapping for Taco Bell, Betty White and Abe Vigoda playing football for Mars’ Snickers brand and Beyonce for low-price television brand Vizio.
A promotion for CBS’ “Late Show with David Letterman” was memorable because its punchline was spoken by Jay Leno, whose show will again be squaring off with Letterman in the fall.
Letterman, sitting on a couch with Oprah Winfrey, says “This is the worst Super Bowl party ever.”
Leno replies that Letterman’s “just saying that because I’m here.”
Super Bowl ads: Betty White, Bud Light, big laughs
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02.07.10
Posted in Free blog Tips, money, online, shortly, top tagged All, life, money, opinion, personal at 3:00 am by carydalton
SHORTLY after Sept. 11, 2001, a soon-to-be familiar figure appeared in the news media. He was a young Muslim who wanted nothing more than to strap on a belt laden with explosives and blow himself up in an area crowded with infidels. He thought his reward would be eternity in paradise with 72 virgins.
But was he truly the face of Islamic terrorism? Eli Berman, a professor of economics at the University of California, San Diego, says otherwise in “Radical, Religious, and Violent: The New Economics of Terrorism” (M.I.T. Press, 300 pages).
“The pious Jihadist, programmed with an ideology of hate to be a human guided missile, or dreaming of virgins in heaven, makes for compelling news broadcasts and emotional sound bites, but in concept does not stand up to scrutiny,” he says.
Professor Berman has written an engaging book that brings new insight to an extremely polarizing subject. He argues that many terrorists are actually more rational than we might like to think. And that, of course, is a chilling notion.
The author is neither a pacifist nor an apologist for terrorists. He says, however, that if we stop looking at them as cartoon characters, we may do a better job of deterring them. In his view, we need to understand the economic forces that govern their behavior.
Professor Berman says that some of the most effective and resilient groups with terrorist links are in some ways economic clubs, run by “radical altruists.” He puts Hamas, Hezbollah and the Taliban (the United States has tied all three to terrorism) in this category. Some of these militant soldiers of Islam may sometimes commit atrocities. But Professor Berman contends that they genuinely want to help their members. They raise money from foreign governments — or, in the case of the Taliban, by selling opium — and provide social services and jobs to adherents.
The author notes that in South Lebanon, Hezbollah operates two private hospitals and a number of schools. It collects garbage, provides water and even manages an electricity grid. He says the Taliban operate 13 “guerilla law courts” in Afghanistan where locals can have disputes resolved.
Granted, the Taliban’s underground judicial system may not be as expensive to operate as a hospital or a garbage pickup service, but it has the same effect of forging a tighter bond of between the operation and its constituents.
However, Professor Berman writes, radical Islamic groups extract sacrifices from their members that have economic consequences. Families are encouraged to have lots of children, and the women are less likely to get jobs and have money to spend.
Professor Berman says that these organizations also prefer that their members send their children to Islamic schools, whose graduates are less likely to obtain jobs that pay them enough money to explore the market and its temptations cashadvance. Indeed, he says, these are some of the ways that radical believers ensure that their followers remain loyal.
Now there have been many so-called terrorist groups. But most of them don’t last because the authorities find someone who will give them information, which short-circuits the activities of the groups.
Professor Berman points out that Israeli security forces had little trouble shutting down the Jewish Underground, a less tightly organized group linked to terrorist acts, because its members were more willing to become informants than many of their Islamic peers. Al Qaeda does not offer social services, he says, and it has had more trouble historically with disloyal members.
So what does Professor Berman think should be done to put terrorists out of business? He says we need to do more to stop their revenue streams. He recommends that we discourage gulf states from contributing money to Hamas and cut off the Taliban’s inflows of cash from illegal activities.
In Professor Berman’s opinion, the United States needs to compete by offering the same kind of social services in Iraq and Afghanistan, though he concedes that terrorist groups will do everything to stop such efforts. He says aid providers must be protected — and he concedes that this will be expensive. But he points out that we are already spending billions of dollars on domestic security.
“In the long run,” Professor Berman writes, “those constructive approaches may well be cost-effective for the United States and other developed countries that are subject to international terrorism, because they are potentially sustainable.” In other words, they could be good investments.
Professor Berman is shrewd enough not to repeat the left-wing fallacy that terrorism itself is a product of economic deprivation. He seems reluctant, however, to explore why Islam is such a breeding ground for these practices.
He says the rise of militant Islam is just another wave of religious extremism, the likes of which have occurred throughout history. As he points out, the peace-loving Mennonites belong to a branch of Christianity that was once considered radical and dangerous.
Then again, today’s terrorists may soon get their hands on a nuclear device. Would Mennonites of old have detonated it? We don’t know. But Professor Berman’s “radical altruists” might.
Off the Shelf: Terrorism and the Pocketbook
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