" Labour productivity fell to its lowest level in 40 years in October while there was no significant change in employment, says the latest Adcorp Employment Index.
"While no significant changes in all kinds of jobs - formal, informal, permanent and temporary - were seen during October, South Africa's labour productivity fell to its lowest level in 40 years," Adcorp said.
Labour productivity growth - a leading indicator of job creation - had been negative throughout 2011.
"This negative trend in labour productivity suggests that adding more workers does not necessarily translate into material increases in business output," said Adcorp labour market analyst Loane Sharp.
The index for October shows employment dropped slightly in the mining (-7.8 percent), construction (-7.0 percent) and manufacturing (-4.5 percent) sectors on an annual basis.
These losses were countered by job increases in wholesale and retail trade (4.4 percent) and financial services (three percent).
"Reflecting good underlying conditions in the consumer sectors, employment of clerks (+3.3 percent) and service workers (+2.7 percent) grew steadily, as did domestic work (+5.8 percent)."
For the first time this year, government job creation was essentially static, Sharp said.
Labour productivity was at its lowest level since the early 1970s.
"... One of the problems with the assessment of labour productivity in South Africa, is that it is measured according to 'output per worker' thus attributing all output to workers."
Sharp said it would be more accurate to consider capital equipment, technology, land, and other production factors in determining productivity.
Labour productivity growth in 2011 was negative, at minus one percent.
"This may well explain why, when real GDP rose by 6.6 percent after the 2008/9 global financial crisis, employment rose a meagre 2.6 percent," Sharp said.
"While GDP figures for the third quarter of 2011 are not yet available, we expect them to confirm the worrying declining labour productivity growth trend in this country."
Sharp said labour productivity is a critical indicator of employment.
"When adding workers yields greater output (ie when labour's value-added is positive), employers have an incentive to employ more workers," he said.
Adcorp was not expecting a sustained increase in employment until at least the second half of next year. "
REF : FIN24.COM
Thursday, 10 November 2011
Shares drop as Italy nears brink
Shares drop as Italy nears brink: Asian stocks fell about 3% after soaring Italian borrowing costs stoked fears that the country's debt crisis will overwhelm its financial defences.
Singapore - Asian stocks fell around 3% on Thursday after soaring Italian borrowing costs stoked fears that the debt crisis in the euro zone's third biggest economy will overwhelm its financial defences, raising the risk of a break-up of the currency area.
The euro was steady, after suffering its biggest daily drop in 15 months on Wednesday, while industrial commodities such as copper and oil softened on worries of renewed recession. European shares were set to extend the previous day's losses.
Asian credit spreads blew out as the deepening crisis in Europe sapped investor appetite for risk, while safe haven assets such as Japanese government bonds were in demand.
"Whatever they come up with, it doesn't avoid a European recession," said Su-Lin Ong, senior economist at RBC Capital Markets in Sydney.
"The question now is just how deep it will be and whether this is going to bleed over into the banking system, because that is much more significant."
Finance sector hammered
Tokyo's Nikkei share average fell 2.9%, while MSCI's broadest index of Asia Pacific shares outside Japan lost 3.5%, with the financial and industrial sectors hammered hardest.
Hong Kong's Hang Seng Index, the Asian market that has tended to be most susceptible to European developments in recent months, was the biggest regional loser, falling 4.5% as banks such as HSBC led losses.
Financial spreadbetters expected Britain's FTSE 100 to open down 1.5%, while Germany's DAX and France's CAC-40 were called down 1.7%.
Italy has, for the time being, replaced Greece as the biggest source of concern in Europe's two-year-old debt crisis.
Italian 10-year bond yields rose above 7% on Wednesday, a level most market economists consider unsustainable for financing debt of more than €2 trillion.
A pledge by Italian Prime Minister Silvio Berlusconi to stand down failed to reassure bond markets that Rome has the will to bring its debts under control, and moves by two major clearing houses to raise the level of collateral needed for holders of Italian debt pushed the country near breaking point.
European and US stocks fell steeply on Wednesday in response, with Wall Street shares losing more than 3%. S&P 500 futures traded in Asia were up slightly on Thursday.
Too big to bail
Ireland and Portugal were both forced to seek aid soon after their 10-year bond yields topped 7%, but a rescue for Italy would be on a different scale and Europe's bailout fund is widely considered inadequate for the task.
The European Central Bank (ECB), considered the only institution capable of repelling the bond market attacks, bought Italian bonds in substantial amounts on Wednesday, but is reluctant to go further to force down yields.
"The markets were basically in a panic yesterday and the only thing that can give the euro at least a temporary respite is quick action from the ECB to lower Italian yields," said Koji Fukaya, chief currency strategist at Credit Suisse in Tokyo.
While many outside Europe are calling on the ECB to take a more active role, as other major central banks do, in acting as lender of last resort, Germany remains implacably opposed to what it views as a threat to the central bank's independence.
In a sign of the depth of fear gripping European capitals, EU sources told Reuters that French and German officials had held discussions about a eurozone split.
The single currency was steady around $1.3540, after tumbling around 2% on Wednesday.
The dollar was also steady against a basket of currencies, after surging in the previous session as investors scurried for safety, while yields on 10-year Japanese government bonds fell 1 basis point to 0.965%.
In Asian credit markets, spreads widened around 13 basis points on the Asia ex-Japan iTraxx investment grade index, a gauge of risk appetite.
Concerns about flagging demand knocked London Metal Exchange copper down 2.4%. US crude oil edged down to $95.70 a barrel, while Brent crude dipped a touch to around $112.26.
"We've moved from a low-growth scenario to one where there is a real threat of recession in the eurozone, and that's weighing on oil markets," said Ric Spooner, chief market analyst at CMC Markets in Sydney
Ref : FIN 24.com
Singapore - Asian stocks fell around 3% on Thursday after soaring Italian borrowing costs stoked fears that the debt crisis in the euro zone's third biggest economy will overwhelm its financial defences, raising the risk of a break-up of the currency area.
The euro was steady, after suffering its biggest daily drop in 15 months on Wednesday, while industrial commodities such as copper and oil softened on worries of renewed recession. European shares were set to extend the previous day's losses.
Asian credit spreads blew out as the deepening crisis in Europe sapped investor appetite for risk, while safe haven assets such as Japanese government bonds were in demand.
"Whatever they come up with, it doesn't avoid a European recession," said Su-Lin Ong, senior economist at RBC Capital Markets in Sydney.
"The question now is just how deep it will be and whether this is going to bleed over into the banking system, because that is much more significant."
Finance sector hammered
Tokyo's Nikkei share average fell 2.9%, while MSCI's broadest index of Asia Pacific shares outside Japan lost 3.5%, with the financial and industrial sectors hammered hardest.
Hong Kong's Hang Seng Index, the Asian market that has tended to be most susceptible to European developments in recent months, was the biggest regional loser, falling 4.5% as banks such as HSBC led losses.
Financial spreadbetters expected Britain's FTSE 100 to open down 1.5%, while Germany's DAX and France's CAC-40 were called down 1.7%.
Italy has, for the time being, replaced Greece as the biggest source of concern in Europe's two-year-old debt crisis.
Italian 10-year bond yields rose above 7% on Wednesday, a level most market economists consider unsustainable for financing debt of more than €2 trillion.
A pledge by Italian Prime Minister Silvio Berlusconi to stand down failed to reassure bond markets that Rome has the will to bring its debts under control, and moves by two major clearing houses to raise the level of collateral needed for holders of Italian debt pushed the country near breaking point.
European and US stocks fell steeply on Wednesday in response, with Wall Street shares losing more than 3%. S&P 500 futures traded in Asia were up slightly on Thursday.
Too big to bail
Ireland and Portugal were both forced to seek aid soon after their 10-year bond yields topped 7%, but a rescue for Italy would be on a different scale and Europe's bailout fund is widely considered inadequate for the task.
The European Central Bank (ECB), considered the only institution capable of repelling the bond market attacks, bought Italian bonds in substantial amounts on Wednesday, but is reluctant to go further to force down yields.
"The markets were basically in a panic yesterday and the only thing that can give the euro at least a temporary respite is quick action from the ECB to lower Italian yields," said Koji Fukaya, chief currency strategist at Credit Suisse in Tokyo.
While many outside Europe are calling on the ECB to take a more active role, as other major central banks do, in acting as lender of last resort, Germany remains implacably opposed to what it views as a threat to the central bank's independence.
In a sign of the depth of fear gripping European capitals, EU sources told Reuters that French and German officials had held discussions about a eurozone split.
The single currency was steady around $1.3540, after tumbling around 2% on Wednesday.
The dollar was also steady against a basket of currencies, after surging in the previous session as investors scurried for safety, while yields on 10-year Japanese government bonds fell 1 basis point to 0.965%.
In Asian credit markets, spreads widened around 13 basis points on the Asia ex-Japan iTraxx investment grade index, a gauge of risk appetite.
Concerns about flagging demand knocked London Metal Exchange copper down 2.4%. US crude oil edged down to $95.70 a barrel, while Brent crude dipped a touch to around $112.26.
"We've moved from a low-growth scenario to one where there is a real threat of recession in the eurozone, and that's weighing on oil markets," said Ric Spooner, chief market analyst at CMC Markets in Sydney
Ref : FIN 24.com
Wednesday, 9 November 2011
Moody’s downgrades SA rating - negative
This Article I read from FIN24.com is so well written and covers the full story of the reasons for the downgrade there is nothing further I can add.
I have quoted this story:
Enjoy !!
"Ratings agency Moody’s downgraded the outlook on South Africa’s ratings on Wednesday due to worries that political pressure from unions and black voters wanting greater economic redress for the ills of apartheid could erode the country’s finances.
Moody’s put South Africa’s A3 rating on negative from stable and said there was “growing risk that the political commitment to low budget deficits and the ability to keep within current debt targets could be undermined by popular pressures”.
In its three-year fiscal policy framework unveiled last month, the Treasury said the budget deficit for this year would be higher than previously anticipated at 5.5 percent while weak growth would result in lower revenues.
The rand extended its losses after the outlook downgrade, falling more than two percent to a session low of 7.9720 against the dollar.
Government bonds also weakened, with the yield on the 2015 bond up 10 basis points to 6.47 percent while that on the 2026 note climbed 11.5 basis points to 8.295 percent.
South Africa’s fiscal accounts were in surplus for two years before the recession in 2009 but swung back into deficit as the government spent more to counter the effects of a global slowdown.
More than a million people lost jobs in the recession, and millions of the poor are becoming increasingly disillusioned with the ANC government , raising the risk of social instability.
Investors unsettled
Moody’s said the ANC’s “unwillingness to definitively reject demands from certain segments of the political spectrum for more activist policy interventions was harmful to South Africa’s economic prospects”.
Investors have been unsettled for two years by talk from the ANC’s youth wing to nationalise mines. The ANC has said nationalisation is not government policy but has not dismissed it out of hand.
Absa Capital said a ratings downgrade was unlikely to ensue unless the political noise became a reality.
“Calls for a greater state involvement in the economy and for a larger push on redistribution are being made very loudly from some parts of the ANC sphere, but it remains far from clear as to what changes in broad policy, if any, might be agreed in the course of 2012,” it said in a note.
“We do not believe that a ratings -- rather than outlook -- downgrade is likely until more clarity on the outcomes of these policy debates is delivered.” "
REF: Fin 24.com 9/11/11
I have quoted this story:
Enjoy !!
"Ratings agency Moody’s downgraded the outlook on South Africa’s ratings on Wednesday due to worries that political pressure from unions and black voters wanting greater economic redress for the ills of apartheid could erode the country’s finances.
Moody’s put South Africa’s A3 rating on negative from stable and said there was “growing risk that the political commitment to low budget deficits and the ability to keep within current debt targets could be undermined by popular pressures”.
In its three-year fiscal policy framework unveiled last month, the Treasury said the budget deficit for this year would be higher than previously anticipated at 5.5 percent while weak growth would result in lower revenues.
The rand extended its losses after the outlook downgrade, falling more than two percent to a session low of 7.9720 against the dollar.
Government bonds also weakened, with the yield on the 2015 bond up 10 basis points to 6.47 percent while that on the 2026 note climbed 11.5 basis points to 8.295 percent.
South Africa’s fiscal accounts were in surplus for two years before the recession in 2009 but swung back into deficit as the government spent more to counter the effects of a global slowdown.
More than a million people lost jobs in the recession, and millions of the poor are becoming increasingly disillusioned with the ANC government , raising the risk of social instability.
Investors unsettled
Moody’s said the ANC’s “unwillingness to definitively reject demands from certain segments of the political spectrum for more activist policy interventions was harmful to South Africa’s economic prospects”.
Investors have been unsettled for two years by talk from the ANC’s youth wing to nationalise mines. The ANC has said nationalisation is not government policy but has not dismissed it out of hand.
Absa Capital said a ratings downgrade was unlikely to ensue unless the political noise became a reality.
“Calls for a greater state involvement in the economy and for a larger push on redistribution are being made very loudly from some parts of the ANC sphere, but it remains far from clear as to what changes in broad policy, if any, might be agreed in the course of 2012,” it said in a note.
“We do not believe that a ratings -- rather than outlook -- downgrade is likely until more clarity on the outcomes of these policy debates is delivered.” "
REF: Fin 24.com 9/11/11
Monday, 7 November 2011
Why are the Oppenheimers selling De Beers interest & they leaving the ship (SA) ??
After reading up on this matter & listening to Mr Oppenheimer speaking about this on my Favourite financial show "MONEY WEB" on Friday I have other idea's
Diamond price was at it's highest a few months ago past 2008 price. July 2011
Now it has come down considerably since then.
Mr O said that this deal was done with Anglo's in the last 3 & 1/2 weeks ago.
The value was not based on prior values.
Anglo's have tried to purchase the family interest on a few occasion's.
"Nicky Oppenheimer, the De Beers chairperson who also represents the Oppenheimer family interests, said the decision to sell was tough."
How can a decision on this magnitude be made in 3 & 1/2 weeks
That for me was an indication that things are not what they seem.
Fin 24.com reports very interestingly:
" “The sudden decision by the Oppenheimer family to sell its 40% stake in De Beers to diversified global miner Anglo American $5.1bn (R40bn) has raised questions about the impact of nationalisation talk on investment.
Eskom chief economist Mandla Maleka said: “Anglo American has for years been unsuccessful in its attempt to buy the stake from the Oppenheimers.
One wonders whether the Oppenheimers are selling the stake due to commercial reasons or if there was pressure coming from certain quarters, like the nationalisation debate.” ”
Eskom chief economist Mandla Maleka said: “Anglo American has for years been unsuccessful in its attempt to buy the stake from the Oppenheimers.
One wonders whether the Oppenheimers are selling the stake due to commercial reasons or if there was pressure coming from certain quarters, like the nationalisation debate.” ”
The company has been run by the family directly for over 80 years.
Sir Ernest , Harry O and Nicky O.
Between them De Beers was built into a global diamond empire that currently sells about a third of the world’s rough diamonds.
This has even caught the National Union of Mineworkers (Num) off guard,they are scrambling to meet with Mr Oppenheimer on why his family was pulling out.
This has even caught the National Union of Mineworkers (Num) off guard,they are scrambling to meet with Mr Oppenheimer on why his family was pulling out.
Num has issues with the family on Social Responsibility over the years and this to them makes it even worse.
The family divesting shows a lack of confidence in the local mining industry considering they played a big role in developing the industry.
Even Num feel that "Nationalisation issues" are the order of the day.
I feel that, ANCYL & running of the country may be the reasons.
The Family have been over the last five years reducing interests in Anglo's which was also started by Sir Ernest & JP Morgan. Left 1.9%
Per MD of the family investment company E Oppenheimer & Son Group the family has “no intention at this stage” of further reducing its holding,
This needs to be seen.
If the money is not directed back into this country in one large investment then it will have no effect on the currency according to the IDC.
If it comes slowly it will not have any effect on the rand.
I think that this action shows the chickens are not coming home to roost & If these people who have always backed & I feel still do to a certain respect one must sit up & think seriously !!
Thursday, 3 November 2011
Euro Heavy Weights test Greece’s Membership
European leaders for the first time raised the prospect of the euro area splintering, choosing to treat Greece’s December referendum on the terms of a bailout package as an in-or-out vote on the debt-stricken nation’s future in the currency union.
Led by Germany and France, Europe’s economic and political anchors, the euro’s guardians yesterday cut off financial aid for Greece until a vote they said would be on Dec. 4 or Dec. 5 determines whether it deserves a fresh batch of loans needed to stave off default. Greece’s Finance Minister Evangelos Venizelos said the bailout should be implemented without delay and that his nation’s euro membership can’t depend on a referendum.
"The referendum will revolve around nothing less than the question: does Greece want to stay in the euro, yes or no?" German Chancellor Angela Merkel told reporters after crisis talks hours before a Group of 20 summit set to begin today in Cannes, France. French President Nicolas Sarkozy said Prime Minister George Papandreou’s government won’t get a "single cent" of assistance if voters reject the plan.
The hardball tactics open the door for a nation to leave the currency bloc that at its setup in 1999 capped Europe’s progression from war to prosperity and was declared "irrevocable" by its founding fathers. Polls show most Greeks object to the austerity required for aid, yet more than seven in 10 favor remaining in the euro, a survey last week of 1,009 people published in To Vima newspaper showed.
Unilateral Decision
Papandreou triggered the confrontation with this week’s unexpected, unilateral decision to hold a poll on the additional budget cuts demanded as conditions for a second aid package. His finance chief said in an e-mailed statement that "internal political balances and the future of individuals and political parties of this country is not what matters. What matters is to save and recover the country through the only doable process which is included in the decision of Oct. 26."
"Greece’s position within the euro area is a historic conquest of the country that cannot be put in doubt," Venizelos. "This acquis by the Greek people cannot depend on a referendum."
Greece’s Nov. 1 announcement, which was designed to force the opposition to back the fiscal cuts, sent Europe’s stocks, currency and bonds tumbling. It came less than a week after leaders worked through the night in Brussels to establish a new plan to help Greece pay its bills, ring-fence Italy and recapitalize banks.
Until the ballot, an already delayed aid instalment of 8 billion euros ($11 billion) will remain on hold, Merkel and Sarkozy said in a late-night appearance in an auditorium better known as the home of the Cannes film festival.
Papandreou, summoned to the French resort with his hold on power weakening at home and subject to a confidence vote tomorrow, defended his decision. Greece "needs a wider consensus" for the bailout demands and will choose to stay in the euro, he told reporters at a separate briefing.
The Greek premier declined to say how the referendum will be worded, saying it "is not the moment" to give the exact language, only that "the question is not just about a program, but do we want to be in the eurozone."
EU treaties make no provision for a country to exit the currency, and the European Central Bank’s legal department said in December 2009 that an expulsion "would be so challenging, conceptually, legally and practically, that its likelihood is close to zero."
A decade since Greece fudged fiscal data to win entry to the euro and two years after it triggered the crisis by revising its budget numbers, successive rounds of tax increases and cuts to wages and pensions have deepened a recession now in its fourth year. The economy will contract 5.5 percent this year and 2.5 percent next, according to its 2012 budget. Unemployment reached 16.5 percent in July.
"The reality is the eurozone is telling Greece look, either you’re in or you’re out," said Jacob Funk Kirkegaard, an economist at the Peterson Institute for International Economics in Washington. "Beggars can’t be choosers and you’re going to have to make a decision."
Regaining Control
While leaving the euro would allow Greece to regain control of exchange and interest rates, a September report by economists at UBS AG said its new currency would drop 60 percent, and local borrowing costs would jump at least 7 percentage points, imperiling the balance sheets of banks and companies.
Departure from the European Union would cause trade to fall by half even with devaluation. The cost would be as much as 11,500 euros a person in the first year outside the euro and 4,000 euros in following years, according to UBS.
Merkel and Sarkozy also pledged to step up work to prevent Greece’s travails, now exacerbated by a month-long political campaign, from spilling over to the rest of the 17-country euro area.
Finance ministers will accelerate plans to boost the firepower of the 440 billion-euro rescue fund, the two said. On Oct. 27 euro leaders agreed to use leverage to get the fund’s clout up to 1 trillion euros and told banks to raise 106 billion euros by the end of June to fortify their capital.
‘We Are Steeled’
"We are steeled," Merkel said. The EU decisions aimed at bolstering the euro "have to be carried out more quickly. We must have clarity more quickly. Then we will be in a position to have an appropriate response that’s good for the euro, regardless of how the Greek referendum turns out."
German banks held $12.4 billion in Greek government bonds on June 30, according to the Bank for International Settlements. That excludes 7.2 billion euros in Greek government bonds held by FMS Wertmanagement GmbH, the "bad bank" of Germany’s nationalized Hypo Real Estate Holding AG.
French banks lead the group of Greek creditors among foreign banks with overall claims of $55.8 billion, including $10.7 billion in sovereign debt, according to the BIS. The overall figure for French banks is inflated by $43.5 billion in lending to companies and households, mainly because of Credit Agricole SA’s Greek division, Emporiki Bank SA.
In a sign such hopes will be dashed as the turmoil mounts, Chinese Vice Finance Minister Zhu Guangyao said yesterday it’s now "too soon" for his country, holder of the world’s largest currency reserves, to contribute.
"The Cannes summit will likely take us back to the G-20 as crisis manager, but against a backdrop where the unity that had been the hallmark of the G-20 has already begun to fray," said Daniel Price, who helped organize the 2008 summit for President George W. Bush and is now managing director at Washington-based Rock Creek Global Advisors LLC.
Parts from Ref : Simon Kennedy in Cannes at skennedy4@bloomberg.net ; James G. Neuger in Cannes at jneuger@bloomberg.net
Led by Germany and France, Europe’s economic and political anchors, the euro’s guardians yesterday cut off financial aid for Greece until a vote they said would be on Dec. 4 or Dec. 5 determines whether it deserves a fresh batch of loans needed to stave off default. Greece’s Finance Minister Evangelos Venizelos said the bailout should be implemented without delay and that his nation’s euro membership can’t depend on a referendum.
"The referendum will revolve around nothing less than the question: does Greece want to stay in the euro, yes or no?" German Chancellor Angela Merkel told reporters after crisis talks hours before a Group of 20 summit set to begin today in Cannes, France. French President Nicolas Sarkozy said Prime Minister George Papandreou’s government won’t get a "single cent" of assistance if voters reject the plan.
The hardball tactics open the door for a nation to leave the currency bloc that at its setup in 1999 capped Europe’s progression from war to prosperity and was declared "irrevocable" by its founding fathers. Polls show most Greeks object to the austerity required for aid, yet more than seven in 10 favor remaining in the euro, a survey last week of 1,009 people published in To Vima newspaper showed.
Unilateral Decision
Papandreou triggered the confrontation with this week’s unexpected, unilateral decision to hold a poll on the additional budget cuts demanded as conditions for a second aid package. His finance chief said in an e-mailed statement that "internal political balances and the future of individuals and political parties of this country is not what matters. What matters is to save and recover the country through the only doable process which is included in the decision of Oct. 26."
"Greece’s position within the euro area is a historic conquest of the country that cannot be put in doubt," Venizelos. "This acquis by the Greek people cannot depend on a referendum."
Greece’s Nov. 1 announcement, which was designed to force the opposition to back the fiscal cuts, sent Europe’s stocks, currency and bonds tumbling. It came less than a week after leaders worked through the night in Brussels to establish a new plan to help Greece pay its bills, ring-fence Italy and recapitalize banks.
Until the ballot, an already delayed aid instalment of 8 billion euros ($11 billion) will remain on hold, Merkel and Sarkozy said in a late-night appearance in an auditorium better known as the home of the Cannes film festival.
Papandreou, summoned to the French resort with his hold on power weakening at home and subject to a confidence vote tomorrow, defended his decision. Greece "needs a wider consensus" for the bailout demands and will choose to stay in the euro, he told reporters at a separate briefing.
The Greek premier declined to say how the referendum will be worded, saying it "is not the moment" to give the exact language, only that "the question is not just about a program, but do we want to be in the eurozone."
EU treaties make no provision for a country to exit the currency, and the European Central Bank’s legal department said in December 2009 that an expulsion "would be so challenging, conceptually, legally and practically, that its likelihood is close to zero."
A decade since Greece fudged fiscal data to win entry to the euro and two years after it triggered the crisis by revising its budget numbers, successive rounds of tax increases and cuts to wages and pensions have deepened a recession now in its fourth year. The economy will contract 5.5 percent this year and 2.5 percent next, according to its 2012 budget. Unemployment reached 16.5 percent in July.
"The reality is the eurozone is telling Greece look, either you’re in or you’re out," said Jacob Funk Kirkegaard, an economist at the Peterson Institute for International Economics in Washington. "Beggars can’t be choosers and you’re going to have to make a decision."
Regaining Control
While leaving the euro would allow Greece to regain control of exchange and interest rates, a September report by economists at UBS AG said its new currency would drop 60 percent, and local borrowing costs would jump at least 7 percentage points, imperiling the balance sheets of banks and companies.
Departure from the European Union would cause trade to fall by half even with devaluation. The cost would be as much as 11,500 euros a person in the first year outside the euro and 4,000 euros in following years, according to UBS.
Merkel and Sarkozy also pledged to step up work to prevent Greece’s travails, now exacerbated by a month-long political campaign, from spilling over to the rest of the 17-country euro area.
Finance ministers will accelerate plans to boost the firepower of the 440 billion-euro rescue fund, the two said. On Oct. 27 euro leaders agreed to use leverage to get the fund’s clout up to 1 trillion euros and told banks to raise 106 billion euros by the end of June to fortify their capital.
‘We Are Steeled’
"We are steeled," Merkel said. The EU decisions aimed at bolstering the euro "have to be carried out more quickly. We must have clarity more quickly. Then we will be in a position to have an appropriate response that’s good for the euro, regardless of how the Greek referendum turns out."
German banks held $12.4 billion in Greek government bonds on June 30, according to the Bank for International Settlements. That excludes 7.2 billion euros in Greek government bonds held by FMS Wertmanagement GmbH, the "bad bank" of Germany’s nationalized Hypo Real Estate Holding AG.
French banks lead the group of Greek creditors among foreign banks with overall claims of $55.8 billion, including $10.7 billion in sovereign debt, according to the BIS. The overall figure for French banks is inflated by $43.5 billion in lending to companies and households, mainly because of Credit Agricole SA’s Greek division, Emporiki Bank SA.
In a sign such hopes will be dashed as the turmoil mounts, Chinese Vice Finance Minister Zhu Guangyao said yesterday it’s now "too soon" for his country, holder of the world’s largest currency reserves, to contribute.
"The Cannes summit will likely take us back to the G-20 as crisis manager, but against a backdrop where the unity that had been the hallmark of the G-20 has already begun to fray," said Daniel Price, who helped organize the 2008 summit for President George W. Bush and is now managing director at Washington-based Rock Creek Global Advisors LLC.
Parts from Ref : Simon Kennedy in Cannes at skennedy4@bloomberg.net ; James G. Neuger in Cannes at jneuger@bloomberg.net
Wednesday, 2 November 2011
Financial Bail out Greece to be told to keep in line
Very Ineresting reading from the bloomberg wires !!
European leaders racing to prevent their week-old debt crisis strategy from unravelling convene emergency talks today to tell Greece there is no alternative to the budget cuts imposed in the bailout plan.
Greek Prime Minister George Papandreou, his hold on power weakening, was summoned to Cannes on the eve of a Group of 20 summit where he will hear from French President Nicolas Sarkozy that the "only way to resolve Greek debt problems" is through a deal hammered out last week in a six-day crisis-management marathon.
Papandreou triggered the latest upheaval in the two-year- long crisis by abruptly announcing on Oct. 31 a parliamentary confidence vote and his desire to hold a referendum on the rescue pact. Global stocks, the euro and bonds of debt-strapped countries tumbled yesterday as concern of a disorderly Greek default mounted.
"Uncertainty and fear is palpable," Marc Chandler, chief currency strategist at Brown Brothers Harriman & Co. in New York, said by e-mail. "The political cost of the economic austerity does not appear fully appreciated by policy makers or investors."
Papandreou will join a group at about 8:30 p.m. comprising Sarkozy, German Chancellor Angela Merkel, European Central Bank President Mario Draghi, International Monetary Fund Managing Director Christine Lagarde as well as European Union authorities, according to a statement from Sarkozy’s office.
People ‘Perplexed’
Japanese Finance Minister Jun Azumi said today in Tokyo that "everyone is perplexed" by Greece’s referendum decision and that the issue will be discussed at the Cannes summit.
Italian Prime Minister Silvio Berlusconi, under pressure to cut Europe’s second-biggest debt load, convened a special meeting of advisers late yesterday to discuss budget-cutting plans. Like Sarkozy, Berlusconi held crisis talks with Merkel yesterday. His key cabinet ministers will meet today to draft measures for the country’s financial stability legislation, the Italian news agency ANSA said, citing government officials.
Italy and France’s 10-year borrowing costs climbed to the highest levels relative to benchmark German bunds since before the creation of the euro in 1999. Bund yields fell the most on record, with the securities outperforming all their euro-area peers, as investors sought the safest assets. Greek two-year yields climbed to a record high 87.28 percent.
A day after MF Global Holdings Ltd. filed for bankruptcy after bets on European sovereign debt backfired, financial stocks fell with Morgan Stanley sliding as much as 12 percent in New York trading.
Europe ‘Surprised’
P
apandreou’s announcement, which Sarkozy said "surprised all of Europe," threatens to overshadow a Nov. 3-4 Group of 20 summit in Cannes, France. European leaders had designated the talks as a stage to present their plan to stamp out the crisis and end the threat to the global economy.
"The referendum will be a clear mandate and strong message within and without Greece on our European course and our participation in the euro," Papandreou told his ministers in Athens late yesterday, according to an e-mailed transcript.
It will "ensure this course in the most decisive way".
EU officials had hoped to use the Oct. 27 rescue agreement, which includes renewed commitments to fiscal austerity as well as new rescue resources, to anchor their economic agenda at the G-20 summit and secure support from their counterparts. Now, officials meeting as the confidence vote plays out in Athens will be called on to assess the deal’s -- and the euro’s -- future, especially if Papandreou’s government falls and Greece comes under more pressure to default or leave the common currency.
Rescue Fund
European leaders agreed to boost the European Financial Stability Facility’s firepower to 1 trillion euros ($1.4 trillion), set aside 100 billion euros for Greece and provide 30 billion euros in collateral for a debt swap that will give Greece’s investors new, lower-risk bonds at 50 percent of the existing bonds’ face value.
The deal to reduce Greece’s debt load will do nothing to aid the country’s recovery from recession, opposition New Democracy leader Antonis Samaras said on Oct. 27. Papandreou’s majority meanwhile slipped as his support narrowed to 152 lawmakers in the 300-deputy parliament amid a party rebellion.
‘Profound’ Risks
Whether the EU’s plan would succeed "was a matter for debate. But at least there was a plan," Yiannis Koutelidakis of Fathom Financial Consulting in London, said in a note yesterday. "The risks engendered by this move are profound for the euro in general, not just for Greece as the expulsion of any one member state would critically undermine the Economic and Monetary Union."
Such uncertainty "will likely block any" governments outside the euro-area from stumping up cash for its reworked rescue fund as the continent’s leaders would like, said Jacques Cailloux, chief European economist at Royal Bank of Scotland Group Plc. While Brazil and Russia have signalled a willingness to help, Chinese officials say they want more details.
A lack of outside assistance will leave the ECB under pressure to keep buying the bonds of stressed states, Cailloux said. Today’s meetings are Draghi’s first on the international stage since he took over the ECB presidency yesterday from Jean- Claude Trichet and come a day before he chairs a meeting of the ECB’s Governing Council for the first time.
While Nomura Holdings Plc economist Jens Sondergaard said he expects the ECB to leave its benchmark rate at 1.5 percent this week, the "adverse market reaction" to Greece’s referendum call leaves a one-in-three chance of a 25 basis point reduction.
Ref :
Reporters on this story: Rebecca Christie in Brussels at rchristie4@bloomberg.net ;
Simon Kennedy in Paris at skennedy4@bloomberg.net
Editor responsible for this story: James Hertling at jhertling@bloomberg.net
European leaders racing to prevent their week-old debt crisis strategy from unravelling convene emergency talks today to tell Greece there is no alternative to the budget cuts imposed in the bailout plan.
Greek Prime Minister George Papandreou, his hold on power weakening, was summoned to Cannes on the eve of a Group of 20 summit where he will hear from French President Nicolas Sarkozy that the "only way to resolve Greek debt problems" is through a deal hammered out last week in a six-day crisis-management marathon.
Papandreou triggered the latest upheaval in the two-year- long crisis by abruptly announcing on Oct. 31 a parliamentary confidence vote and his desire to hold a referendum on the rescue pact. Global stocks, the euro and bonds of debt-strapped countries tumbled yesterday as concern of a disorderly Greek default mounted.
"Uncertainty and fear is palpable," Marc Chandler, chief currency strategist at Brown Brothers Harriman & Co. in New York, said by e-mail. "The political cost of the economic austerity does not appear fully appreciated by policy makers or investors."
Papandreou will join a group at about 8:30 p.m. comprising Sarkozy, German Chancellor Angela Merkel, European Central Bank President Mario Draghi, International Monetary Fund Managing Director Christine Lagarde as well as European Union authorities, according to a statement from Sarkozy’s office.
People ‘Perplexed’
Japanese Finance Minister Jun Azumi said today in Tokyo that "everyone is perplexed" by Greece’s referendum decision and that the issue will be discussed at the Cannes summit.
Italian Prime Minister Silvio Berlusconi, under pressure to cut Europe’s second-biggest debt load, convened a special meeting of advisers late yesterday to discuss budget-cutting plans. Like Sarkozy, Berlusconi held crisis talks with Merkel yesterday. His key cabinet ministers will meet today to draft measures for the country’s financial stability legislation, the Italian news agency ANSA said, citing government officials.
Italy and France’s 10-year borrowing costs climbed to the highest levels relative to benchmark German bunds since before the creation of the euro in 1999. Bund yields fell the most on record, with the securities outperforming all their euro-area peers, as investors sought the safest assets. Greek two-year yields climbed to a record high 87.28 percent.
A day after MF Global Holdings Ltd. filed for bankruptcy after bets on European sovereign debt backfired, financial stocks fell with Morgan Stanley sliding as much as 12 percent in New York trading.
Europe ‘Surprised’
P
apandreou’s announcement, which Sarkozy said "surprised all of Europe," threatens to overshadow a Nov. 3-4 Group of 20 summit in Cannes, France. European leaders had designated the talks as a stage to present their plan to stamp out the crisis and end the threat to the global economy.
"The referendum will be a clear mandate and strong message within and without Greece on our European course and our participation in the euro," Papandreou told his ministers in Athens late yesterday, according to an e-mailed transcript.
It will "ensure this course in the most decisive way".
EU officials had hoped to use the Oct. 27 rescue agreement, which includes renewed commitments to fiscal austerity as well as new rescue resources, to anchor their economic agenda at the G-20 summit and secure support from their counterparts. Now, officials meeting as the confidence vote plays out in Athens will be called on to assess the deal’s -- and the euro’s -- future, especially if Papandreou’s government falls and Greece comes under more pressure to default or leave the common currency.
Rescue Fund
European leaders agreed to boost the European Financial Stability Facility’s firepower to 1 trillion euros ($1.4 trillion), set aside 100 billion euros for Greece and provide 30 billion euros in collateral for a debt swap that will give Greece’s investors new, lower-risk bonds at 50 percent of the existing bonds’ face value.
The deal to reduce Greece’s debt load will do nothing to aid the country’s recovery from recession, opposition New Democracy leader Antonis Samaras said on Oct. 27. Papandreou’s majority meanwhile slipped as his support narrowed to 152 lawmakers in the 300-deputy parliament amid a party rebellion.
‘Profound’ Risks
Whether the EU’s plan would succeed "was a matter for debate. But at least there was a plan," Yiannis Koutelidakis of Fathom Financial Consulting in London, said in a note yesterday. "The risks engendered by this move are profound for the euro in general, not just for Greece as the expulsion of any one member state would critically undermine the Economic and Monetary Union."
Such uncertainty "will likely block any" governments outside the euro-area from stumping up cash for its reworked rescue fund as the continent’s leaders would like, said Jacques Cailloux, chief European economist at Royal Bank of Scotland Group Plc. While Brazil and Russia have signalled a willingness to help, Chinese officials say they want more details.
A lack of outside assistance will leave the ECB under pressure to keep buying the bonds of stressed states, Cailloux said. Today’s meetings are Draghi’s first on the international stage since he took over the ECB presidency yesterday from Jean- Claude Trichet and come a day before he chairs a meeting of the ECB’s Governing Council for the first time.
While Nomura Holdings Plc economist Jens Sondergaard said he expects the ECB to leave its benchmark rate at 1.5 percent this week, the "adverse market reaction" to Greece’s referendum call leaves a one-in-three chance of a 25 basis point reduction.
Ref :
Reporters on this story: Rebecca Christie in Brussels at rchristie4@bloomberg.net ;
Simon Kennedy in Paris at skennedy4@bloomberg.net
Editor responsible for this story: James Hertling at jhertling@bloomberg.net
Tuesday, 1 November 2011
TAX SUBMISSIONS TO SARS
Dear All
Please note as non provisional tax payers (in summary persons earning a only salary income no other income and not a Company or Trust) who are registered with SARS for e-filling but submitt there tax returns by 25th November 2011. An queries give me a shout for assistance.
Steven
Please note as non provisional tax payers (in summary persons earning a only salary income no other income and not a Company or Trust) who are registered with SARS for e-filling but submitt there tax returns by 25th November 2011. An queries give me a shout for assistance.
Steven
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