The International Monetary Fund said Britain requires further monetary easing to boost the economy and Chancellor of the Exchequer George Osborne should consider budget stimulus including temporary tax cuts.
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Rating agency Moody’s downgraded 16 Spanish banks on Thursday, the latest sign of distress in Europe.
Among those downgraded were giants Banco Santander and BBVA, the country’s two largest banks. Moody’s cited concerns about the banks’ exposure to Spain’s faltering economy and the "reduced" ability of the Spanish government to support them in a crisis.
"The Spanish economy has fallen back into recession in first-quarter 2012, and Moody’s does not expect conditions to improve during 2012," the agency said.
"Moreover, the real-estate crisis that began in 2008 is ongoing, and unemployment has risen to very high levels, with rising risks to white-collar employment (in addition to extremely-high youth unemployment) affecting the outlook for banks’ household lending."
The downgrades come amid mounting concern about a potential Greek exit from the euro, and the implications this could have for other fiscally troubled nations like Spain and Italy. Greece, currently operating with a caretaker government, could leave the euro should anti-austerity parties triumph in elections next month.
Earlier Thursday, Moody’s downgraded Spanish regional governments in Catalunya, Murcia, Andalucia and Extremadura because they are using massive amounts of debt to fund their operations and are unlikely to meet the financial target set by Spain’s central government.
Overall, Spain has pledged to cut its national deficit to 5.3% of GDP, but last week, the European Commission forecasted that the country would fail to meet that goal, instead hitting 6.4% of GDP. Spain announced roughly $35 billion in budget cuts earlier this year.
Credit downgrades are a worrisome sign to investors and can often cause a country’s borrowing costs to rise. The yield on Spain’s 10-year bond has spiked in the last two weeks, and now sits around 6.3%, its highest level since November.
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Congress will weigh in on the news that JPMorgan Chase lost $2 billion on complex trades intended to hedge against economic risk, and that the losses could mount.
The Senate Banking Committee on Monday announced future oversight hearings, including one that will look into the trading losses at JPMorgan Chase from a regulatory angle. Lawmakers plan to question regulators, not JPMorgan Chase (, Fortune 500) officials.
Sen. Bob Corker, a Tennessee Republican, was the first to call for a hearing on Friday.
"Clearly the losses posted by JPMorgan are significant, and as policy makers we should understand in detail what has transpired," Corker said in a letter to Banking Committee chairman Tim Johnson, a South Dakota Democrat.
House Financial Services Committee and House Oversight Committee staff members said they had no plans yet to hold hearings yet.
The JPMorgan controversy comes a little less than two years after a big push for Wall Street reform led to the passage of the Dodd-Frank Act.
On Friday, two senators who helped craft the Volcker Rule — a new, not-in-effectpart of Dodd-Frank that bars banks from making trades for their own profit-chasing purposes — denounced JPMorgan’s trades.
JPMorgan CEO Jamie Dimon said last week that the faulty trades would have been allowed under the Volcker Rule, named for former Fed chief Paul Volcker, since the rule appears as though it will allow for economic hedging free instant credit score.
However, Democratic senators Jeff Merkley of Oregon and Carl Levin of Michigan, said they intended the law to ban the kind of trades that JPMorgan Chase traders made. They plan to push regulators to write and enforce a strict ban on so-called proprietary trading and hedging against economic forces.
"The law very clearly already excludes this activity," Levin said in a call with the media on Friday. "It specifically says that every single position that you take as a hedge has got to be tied to a specific risk arising from another specific position. Now, that’s about as clear as you can write. So the regulators are now hopefully going to implement the law as written."
The news has even drawn angry accusations from the political field. Elizabeth Warren, a Democratic candidate for U.S. Senate in Massachusetts, has called Dimon to step down from his position as a board member of the New York Federal Reserve.
"This is about accountability," Warren told CNN’s "Starting Point" on Monday. "Jamie Dimon not only is CEO of JPMorgan Chase, he holds this position of public trust, advising the New York Fed on how to regulate risk for these large financial institutions like his own financial institution,"
Hundreds of Japanese are marching and waving “No nukes” banners to celebrate the last of this nation’s 50 nuclear reactors switching off.
The crowd at a Tokyo park Saturday said they were not concerned about government warnings of power shortages.
One of three reactors at Tomari nuclear plant in the northern island of Hokkaido is going offline for routine maintenance checks.
After last year’s March 11 quake and tsunami set off meltdowns at Fukushima Dai-ichi plant, no reactor stopped for checkups has gone back up personal business card. Japan requires new tests on withstanding quakes and tsunamis, and it needs local residents’ approval to restart reactors.
Germany’s finance minister says he’s confident a German-backed pact enforcing more fiscal discipline among European governments will be ratified despite new political uncertainty.
Wolfgang Schaeuble said that the treaty “will be ratified in all countries, I have no doubt about that.”
French Socialist Francois Hollande, who led in the first round of president elections Sunday, has called for renegotiating the pact.
Meanwhile, the Netherlands faces early elections after its minority government collapsed over a failure to agree on austerity measures needed to bring the country’s deficit within EU-stipulated limits.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
BERLIN (AP) _ Germany mounted a spirited defense of its pro-austerity stance on Tuesday, with both Chancellor Angela Merkel and her foreign minister calling for a continued drive for fiscal discipline across Europe in spite of the latest bout of political uncertainty.
Investors took fright of the 17 countries that use the euro Monday on concerns that the so-called fiscal compact of strict austerity and deficit controls agreed by European leaders earlier this year was beginning to unravel.
French Socialist Francois Hollande edged ahead with a narrow lead in Sunday’s first round of presidential elections with a pledge to renegotiate the pact to give greater emphasis to growth over austerity. Meanwhile, the Netherlands faces early elections after its minority government collapsed over a failure to agree on austerity measures.
On top of this, Spain _ which is currently going through a harsh program of cuts and tax increases _ announced it was entering a recession and a survey of purchasing managers across Europe pointed to a contraction in the region’s economy.
Merkel didn’t specifically mention the fiscal pact in a speech in Berlin but noted that, in its early years, West Germany ran up barely any debt. She said that “today, we have to get back to that situation.”
“One can talk about how we do it … but to act as though it were an imposition to get by with what we are earning, (to say) we will carry on carting around the rucksack with debt _ no one will accept it from us, in any European country,” Merkel said.
“I want to say clearly, it is not the case that we say saving solves every problem but, if you at home talk about how you want to shape your life tolerably, then one of the first conditions is that you somehow get by with what you earn,” she said.
Germany’s budget deficit is well under the limit of 3 percent of gross domestic product that eurozone countries are supposed to observe, but its total debt amounts to 81.2 percent of GDP _ well above the official 60 percent limit.
Germany and France, under incumbent President Nicolas Sarkozy, have piloted rescue efforts for other eurozone countries as the region has been swept up in a succession of debt crises over the past two years. Berlin has insisted on an often-criticized emphasis on budget discipline and cuts.
Merkel pushed hard for other European countries to agree to the fiscal compact, designed to limit government overspending, and 25 national leaders signed it earlier this year.
Foreign Minister Guido Westerwelle said Tuesday that “we agreed on the pact after long negotiations. It is necessary.”
“What we have agreed on in Europe to overcome the debt crisis is agreed and it holds. It will not be made dependent on election results,” he said. “Governments act for their countries and not for themselves.”
It isn’t yet clear when the German Parliament will vote on the pact, which needs a two-thirds majority in Parliament.
That means it needs the support of the main center-left opposition Social Democratic Party, which wants the government to agree to introduce a financial transaction tax _ though leaders have stopped short of saying that is a condition.
Merkel’s government aims to get the fiscal pact passed before the summer. Social Democrat leader Sigmar Gabriel has argued that a vote could take place later.
China may first relax controls on borrowing costs and widen the
The United Nations hopes to have 30 cease-fire monitors in Syria next week and plans are already being made for the deployment of up to 300, a spokesman for international envoy Kofi Annan said Friday, as France called on the international community to prepare for the possible failure of the increasingly fragile peace deal.
Seven observers are on the ground and another two will arrive on Monday, said Annan’s spokesman.
“During the course of next week we hope that those that we are seconding from missions in the area who can move quickly will be there and we will make the numbers up to 30,” Ahmad Fawzi told reporters in Geneva.
The preliminary agreement between Syria and the United Nations on the deployment of U.N. observers says they will have freedom to go anywhere in the country by foot or by car, take pictures, and use technical equipment to monitor compliance with the cease-fire engineered by Annan.
But the issue of using helicopters and aircraft will likely dominate discussions in the coming days, Fawzi told The Associated Press.
The larger contingent of up to 300 also still needs to be approved by the U.N. Security Council.
“As soon as the Security Council adopts a resolution authorizing up to 300 monitors on the ground, we will be ready to deploy very, very rapidly,” Fawzi said.
“We are preparing for the deployment because we feel that it is going to happen sooner or later because it must happen,” he added
In France, Foreign Minister Alain Juppe called on the international community to live up to its responsibilities and warned that if Annan’s peace plan “doesn’t function, we have to envisage other methods.”
U.N. Secretary-General Ban Ki-moon accused Syrian President Bashar Assad on Thursday of failing to honor the peace plan that went into effect a week ago payday loan.
Juppe said on France’s BFM television that his country would support a U.S.-backed proposal for a U.N. arms embargo and other tough measures against Syria.
The peace plan is “the last chance before civil war. … We don’t have the right to wait,” he said.
Juppe hosted U.S. Secretary of State Hillary Rodham Clinton and other diplomats in Paris on Thursday to try to work out options for Syria.
Annan’s diplomacy succeeded in getting Russia to back the monitoring mission, but Syria’s ally continues to resist more forceful measures.
“The Russian position is in the process of evolving,” Juppe said without elaborating.
U.N. chief Ban told the Security Council on Thursday that the situation remains “highly precarious,” citing an escalation of violence including “shelling of civilian areas, grave abuses by government forces and attacks by armed groups.”
That view was echoed by Annan’s spokesman.
“The situation on the ground is not good, as we all know,” Fawzi said. “There are casualties every day. There are incidents every day. And we have to do everything we can to stop what’s going on. The killing, the violence in all its forms.”
The observers, who report to Annan daily, will have freedom to install temporary observation posts in cities and towns, to monitor military convoys approaching population centers, to investigate any potential violation, and to access detention centers and medical centers in coordination with the International Committee of the Red Cross and Syrian authorities, the agreement says.
______
Angela Charlton in Paris contributed to this report.
Ever known a woman who drives a forklift?
Neither has Melinda Barbaglia. She has yet to meet one, even though she and her sister sell, service and stock replacement parts for forklift trucks.
“They didn’t teach Forklift 101 at Webster University,” said Barbaglia, who holds a graduate degree in marketing from the school.
A recent Post-Dispatch story that detailed how other cities are outpacing St. Louis in the growth of businesses owned by women struck a chord, for obvious reasons, with Barbaglia. She agrees that female entrepreneurs have been held back by a shortage of support from state and local governmental interests. And she can also make an argument that, to a lesser degree, a male-dominated business community is slow to lose its grip.
At the same time, Barbaglia, her sister Teresa Pippen and mother, Linda, can make a pretty strong case for the ability of a business owned and operated by women to flourish in a good ol’ boy network.
Of the two sisters, Melinda was the one without a single intention of joining C&B Lift Truck Service — the company their father, Charlie, started from scratch 36 years ago.
Degree in hand, Melinda was about to launch a career in pharmaceutical sales when her father suggested he could use an extra hand at C&B.
She reported to work soon after and has been there ever since.
Charlie Barbaglia ran C&B up till the day he and the family celebrated his 60th birthday in 2005.
“He must have thought it was a retirement party, because he never came back to work,” laughs Linda Barbaglia.
“So, I said, ‘I guess we’re on our own, girls.’”
Fortunately, Melinda and Teresa were already immersed in the business.
Melinda, the “take charge” extrovert, applied her education by working the sales and marketing end.
To compensate for the absence of Forklift 101 in the Webster course catalog, Melinda indoctrinated herself in the nuances of pneumatic tires, monotrol transmissions and liquid petroleum to the point that she’s qualified to serve as an instructor in the mandatory safety courses OSHA demands of forklift operators.
Teresa, an introvert with a communications degree from Maryville University, was more than happy to handle bookkeeping and the office side of the business.
C&B’s seven other employees (including service manager Charlie Pippen, the service manager) are all men.
The Barbaglias admit that running a business in what remains a man’s world is not always easy.
For starters, not to stereotype, neither sister plays golf.
As for the other topic that breaks the ice among men — such as sports — the lifelong St. Louisans by necessity can be semi-conversant should the conversation turn to the fortunes of the Cardinals, Blues or Rams. But don’t expect them to tell you how many Detroit Tigers Bob Gibson struck out in the 1968 World Series. The vast majority of the company’s male clients “take their jobs very seriously,” Melinda said.
“They just want their forklift fixed,” Teresa added.
But some of them can be flirtatious, Melinda said.
A lot of years remain before the sisters retire. Melinda is 42 and Teresa is 36.
Still, looking ahead as she cradled Melinda’s 3-month-old daughter Abigail, Linda Barbaglia is fairly sure the second generation of Barbaglias to run C&B Fork Lift Truck Service will be the last.
Linda says the business that has sustained her family for 36 years is fast moving toward the day that favors neither male nor female — when robots take the wheel.
QUOTE OF THE WEEK
“I was offered an unpaid internship at a law firm but turned it down. If you can’t pay me $10 an hour, you don’t deserve to be in business. The job market makes me feel like stabbing myself in the face. - Adrienne Delibert, unemployed college graduate
Source: The New York Times
BY THE NUMBERS
37 percent of U.S. companies vet job candidates through social networking sites.
15 percent of U.S. employers prohibit the practice.
Source: CareerBuilder
FINAL WORD
“… While my Facebook page is private, my friends do include plenty of people I’ve worked with or for, or might hope to work with or for in the future. I also take it as given that any potential future employer or reference would use all the available tools to check me out – including finding out who we know in common via social networks.
And I think the effects can be subtle: Future employer X calls colleague Y to ask about me; colleague Y checks Facebook to get the latest….and instead of a link to a story I’m proud of, or even a video I find funny, he finds a photo of me and my baby boy making snuggly faces.
Whether he’s consciously wondering when, if ever, I’m going back to work or how dedicated I’ll be when I get there, I’ll never know. But I’d rather not wonder.” - Janet Paskin on a possible pitfall of TMI.
Source: The Wall Street Journal
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