Skip to main content

Home/ Global Economy/ Group items tagged losing

Rss Feed Group items tagged

Filter: All | Bookmarks | Topics Simple Middle
Gene Ellis

Africa losing billions from fraud and tax avoidance | Global development | The Guardian - 0 views

www.theguardian.com/...dering-illicit-financial-flows

africa losing fraud tax development guardian

shared by Gene Ellis on 25 May 16 - No Cached
  • Africa losing billions from fraud and tax avoidance
  • In total, the continent lost about $850bn between 1970 and 2008, the report said. An estimated $217.7bn was illegally transferred out of Nigeria over that period, while Egypt lost $105.2bn and South Africa more than $81.8bn.
  • African Union’s (AU) high-level panel on illicit financial flows and the UN economic commission for Africa (Uneca).
  • ...3 more annotations...
  • Africa is losing more than $50bn (£33bn) every year in illicit financial outflows as governments and multinational companies engage in fraudulent schemes aimed at avoiding tax payments to some of the world’s poorest countries, impeding development projects and denying poor people access to crucial services.
  • Nigeria’s crude oil exports, mineral production in the Democratic Republic of the Congo and South Africa, and timber sales from Liberia and Mozambique are all sectors where trade mispricing occurs.
  • The bulk of Africa’s illicit transfers originated from west Africa, where 38% of all funds leaving the continent were generated. Profit-making activities in north Africa accounted for 28% of the flows, while southern Africa, central Africa and eastern Africa each made up about 10%, the report showed.
Gene Ellis

Could Europe lose Greece to Russia? - BBC News - 0 views

www.bbc.co.uk/...world-europe-31837660

shared by Gene Ellis on 24 Mar 15 - No Cached
  • Could Europe lose Greece to Russia?
Gene Ellis

Can Oregon save American health care? - 0 views

www.washingtonpost.com/...egon-save-american-health-care

oregon american health health care

shared by Gene Ellis on 18 Jan 13 - No Cached
  • Medicaid enrollment shrank by 46 percent as patients affected by the changes left the program — likely relegated to the ranks of the uninsured — between February and December 2003, according to research published in the journal Health Affairs.
  • Separate research has found that when Medicaid premiums rise by 1 to 5 percent of an uninsured family’s income, their odds of participating drop from 57 to 18 percent.
  • “For the last 30 years, both the private and public sector have done the same things to manage health-care costs,” said Bruce Goldberg, the Oregon Health Authority director who oversees the Medicaid program. “They’ve cut people from coverage, cut payment rates or cut benefits
  • ...8 more annotations...
  • St. Charles noted that 144 patients tended to use the emergency room the most. Taken together, they averaged 14.25 trips each over 12 months. These patients drove much of the area’s Medicaid spending.
  • The majority had unmet mental health needs, even though most had Medicaid, which provides mental health coverage.
  • It stationed community health workers in emergency rooms, who could help assess why patients had turned up.
  • Of the 144 patients in the study, only 62 percent agreed to work with a community worker on a plan for their care. The others proved difficult to track down or did not want to participate.
  • Emergency department visits fell by 49 percent. On average, the program generated about $3,000 in savings per patient.
  • “I’m reassured by people talking about the role primary care providers need to play,” said Ern Teuber, the clinic’s executive director. “Still, when we start talking specific dollars, the perception is there isn’t enough money to go around and that somebody has to lose.”
  • It’s a huge issue, and there’s no doubt that hospital business models are going to have to change,”
  • “Medicaid by itself isn’t enough to change things,” he said. “For a lot of hospitals, it’s maybe 7 percent of their business. We have another 600,000 people the state covers.
Gene Ellis

Suntech Power on Financial Brink - NYTimes.com - 0 views

www.nytimes.com/...-power-on-financial-brink.html

shared by Gene Ellis on 13 Mar 13 - No Cached
  • Suntech announced Tuesday that it was closing its factory in Goodyear, Arizona, at the cost of 43 jobs there. The factory put aluminum frames and electrical junction boxes on solar cells imported from China, so that the fully assembled solar panels would qualify for “Buy American” programs.
  • But China’s approach to renewable energy has proved ruinous, both financially and in terms of trade relations with the United States and the European Union. State-owned banks have provided $18 billion in loans on easy terms to Chinese solar panel manufacturers, financing an increase of more than tenfold in production capacity from 2008 to 2012. This set off a 75 percent drop in panel prices over the same period, which resulted in Chinese companies’ losing as much as $1 for every $3 in sales last year.
  • he United States has responded with tariffs of about 40 percent on solar cells and solar panels from China,
Gene Ellis

Cyprus adds to Europe's confusion - FT.com - 0 views

www.ft.com/...4a-11e2-a4fa-00144feabdc0.html

shared by Gene Ellis on 29 Mar 13 - No Cached
  • First, the eurozone does indeed have the capacity to do the right thing in the end, though not before first exhausting all the alternatives.
  • It protects the small deposits and imposes a rational resolution process.
  • Second, a euro is indeed not a euro everywhere.
  • ...6 more annotations...
  • A consensus on the principle that creditors, not taxpayers, should pay if a bank becomes insolvent does not yet exist across the eurozone. Does anybody imagine the German government would not rescue Deutsche Bank if it were in trouble? Of course it would.
  • The outcome in Cyprus underlines the fact that the value of a euro of bank liabilities depends on the solvency of the bank itself and the solvency of the government standing behind the bank. If both bank and state are insolvent, lenders are likely not only to lose a big proportion of their money outright, but to find that the rest is frozen behind controls,
  • Yet, as Guntram Wolff of Bruegel notes, a currency union with internal exchange controls is a contradiction in terms. Only the willingness of the European Central Bank to finance Cypriot banks without limit could end these controls in the near future. Will it be willing to act soon?
  • The ideal conclusion from the Cypriot imbroglio would be that all eurozone banks should have more capital.
  • A final lesson of this crisis is that what I have called the “bad marriage” that binds the eurozone members together has become worse.
  • Thus the eurozone limps on through crisis after crisis. Can – or will – this continue indefinitely? I do not know.
Gene Ellis

The Morality of Amorality in Foreign Policy by Robert Cooper - Project Syndicate - 0 views

www.project-syndicate.org/...of-amorality-in-foreign-policy

morality foreign policy policy robert cooper project syndicate

shared by Gene Ellis on 19 Dec 12 - No Cached
  • Foreign policy is about war and peace. If wars are fought on moral or religious grounds, no basis for restraint exists. After all, to call something evil is to invoke a moral duty to destroy it.
  • The Thirty Years War, fought over religion, laid waste to the Continent, killing one-third of Germany's population.
  • As the Romanian philosopher E. M. Cioran says: "Once man loses his faculty of indifference he becomes a potential murderer; once he transforms his idea into a God the consequences are incalculable."
  • ...1 more annotation...
  • The objective of amoral foreign policy is to sustain order in an anarchic international system by ensuring tolerance and pluralism among a number of independent actors.
Gene Ellis

George Soros: how to save the EU from the euro crisis - the speech in full | Business |... - 0 views

www.guardian.co.uk/...ave-eu-from-euro-crisis-speech

shared by Gene Ellis on 09 Apr 13 - No Cached
  • The crisis has also transformed the European Union into something radically different from what was originally intended. The EU was meant to be a voluntary association of equal states but the crisis has turned it into a hierarchy with Germany and other creditors in charge and the heavily indebted countries relegated to second-class status. While in theory Germany cannot dictate policy, in practice no policy can be proposed without obtaining Germany's permission first.
  • Italy now has a majority opposed to the euro and the trend is likely to grow. There is now a real danger that the euro crisis may end up destroying the European Union.
  • The answer to the first question is extremely complicated because the euro crisis is extremely complex. It has both a political and a financial dimension. And the financial dimension can be divided into at least three components: a sovereign debt crisis and a banking crisis, as well as divergences in competitiveness
  • ...37 more annotations...
  • The crisis is almost entirely self-inflicted. It has the quality of a nightmare.
  • My interpretation of the euro crisis is very different from the views prevailing in Germany. I hope that by offering you a different perspective I may get you to reconsider your position before more damage is done. That is my goal in coming here.
  • I regarded the European Union as the embodiment of an open society – a voluntary association of equal states who surrendered part of their sovereignty for the common good.
  • The process of integration was spearheaded by a small group of far sighted statesmen who recognised that perfection was unattainable and practiced what Karl Popper called piecemeal social engineering. They set themselves limited objectives and firm timelines and then mobilised the political will for a small step forward, knowing full well that when they achieved it, its inadequacy would become apparent and require a further step.
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Excellent point!
  • Unfortunately, the Maastricht treaty was fundamentally flawed. The architects of the euro recognised that it was an incomplete construct: a currency union without a political union. The architects had reason to believe, however, that when the need arose, the political will to take the next step forward could be mobilized. After all, that was how the process of integration had worked until then.
  • For instance, the Maastricht Treaty took it for granted that only the public sector could produce chronic deficits because the private sector would always correct its own excesses. The financial crisis of 2007-8 proved that wrong.
  • When the Soviet empire started to disintegrate, Germany's leaders realized that reunification was possible only in the context of a more united Europe and they were prepared to make considerable sacrifices to achieve it. When it came to bargaining, they were willing to contribute a little more and take a little less than the others, thereby facilitating agreement.
  • The financial crisis also revealed a near fatal defect in the construction of the euro: by creating an independent central bank, member countries became indebted in a currency they did not control. This exposed them to the risk of default.
  • Developed countries have no reason to default; they can always print money. Their currency may depreciate in value, but the risk of default is practically nonexistent. By contrast, less developed countries that have to borrow in a foreign currency run the risk of default. To make matters worse, financial markets can actually drive such countries into default through bear raids. The risk of default relegated some member countries to the status of a third world country that became over-indebted in a foreign currency. 
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Again, another excellent point!
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Not quite... Maggie Thatcher, a Conservative; and Gordon Brown, of Labour, both recognized this possible loss of sovereignty (and economic policy weapons they might use to keep the UK afloat), and refused to join the euro.
  • The emphasis placed on sovereign credit revealed the hitherto ignored feature of the euro, namely that by creating an independent central bank the euro member countries signed away part of their sovereign status.
  • Only at the end of 2009, when the extent of the Greek deficit was revealed, did the financial markets realize that a member country could actually default. But then the markets raised the risk premiums on the weaker countries with a vengeance.
  • Then the IMF and the international banking authorities saved the international banking system by lending just enough money to the heavily indebted countries to enable them to avoid default but at the cost of pushing them into a lasting depression. Latin America suffered a lost decade.
  • In effect, however, the euro had turned their government bonds into bonds of third world countries that carry the risk of default.
  • In retrospect, that was the root cause of the euro crisis.
  • The burden of responsibility falls mainly on Germany. The Bundesbank helped design the blueprint for the euro whose defects put Germany into the driver's seat.
  • he fact that Greece blatantly broke the rules has helped to support this attitude. But other countries like Spain and Ireland had played by the rules;
  • the misfortunes of the heavily indebted countries are largely caused by the rules that govern the euro.
    • Gene Ellis
      Gene Ellis on 09 Apr 13
       
      Well, yes, but this is an extremely big point.  If, instead of convergence, we continue to see growth patterns growing apart, what then?
  • Germany did not seek the dominant position into which it has been thrust and it is unwilling to accept the obligations and liabilities that go with it.
  • Austerity doesn't work.
  • As soon as the pressure from the financial markets abated, Germany started to whittle down the promises it had made at the height of the crisis.
  • What happened in Cyprus undermined the business model of European banks, which relies heavily on deposits. Until now the authorities went out of their way to protect depositors
  • Banks will have to pay risk premiums that will fall more heavily on weaker banks and the banks of weaker countries. The insidious link between the cost of sovereign debt and bank debt will be reinforced.
  • In this context the German word "Schuld" plays a key role. As you know it means both debt and responsibility or guilt.
  • If countries that abide by the fiscal compact were allowed to convert their entire existing stock of government debt into eurobonds, the positive impact would be little short of the miraculous.
  • Only the divergences in competitiveness would remain unresolved.
  • Germany is opposed to eurobonds on the grounds that once they are introduced there can be no assurance that the so-called periphery countries would not break the rules once again. I believe these fears are misplaced.
  • Losing the privilege of issuing eurobonds and having to pay stiff risk premiums would be a powerful inducement to stay in compliance.
  • There are also widespread fears that eurobonds would ruin Germany's credit rating. eurobonds are often compared with the Marshall Plan.
  • It is up to Germany to decide whether it is willing to authorise eurobonds or not. But it has no right to prevent the heavily indebted countries from escaping their misery by banding together and issuing eurobonds. In other words, if Germany is opposed to eurobonds it should consider leaving the euro and letting the others introduce them.
  • Individual countries would still need to undertake structural reforms. Those that fail to do so would turn into permanent pockets of poverty and dependency similar to the ones that persist in many rich countries.
  • They would survive on limited support from European Structural Funds and remittances
  • Second, the European Union also needs a banking union and eventually a political union.
  • If Germany left, the euro would depreciate. The debtor countries would regain their competitiveness. Their debt would diminish in real terms and, if they issued eurobonds, the threat of default would disappear. 
Gene Ellis

How Apple and Other Corporations Move Profit to Avoid Taxes - NYTimes.com - 0 views

www.nytimes.com/...ove-profit-to-avoid-taxes.html

shared by Gene Ellis on 03 May 13 - No Cached
  • It got so bad that late last year Starbucks promised to pay an extra £10 million — about $16 million — in 2013 and 2014 above what it would normally have had to pay in British income taxes. What it would normally have paid is zero, because Starbucks claims its British subsidiary loses money. Of course, that subsidiary pays a lot for coffee sold to it by a profitable Starbucks subsidiary in Switzerland, and pays a large royalty for the right to use the company’s intellectual property to another subsidiary in the Netherlands. Starbucks said it understood that its customers were angry that it paid no taxes in Britain.
  • “It is easy to transfer the intellectual property to tax havens at a low price,” said Martin A. Sullivan, the chief economist of Tax Analysts, the publisher of Tax Notes. “When a foreign subsidiary pays a low price for this property, and collects royalties, it will have big profits.”
  • it is especially hard for countries to monitor prices on intellectual property, like patents and copyrights.
  • ...1 more annotation...
  • The company makes no secret of the fact it has not paid taxes on a large part of its profits. “We are continuing to generate significant cash offshore and repatriating this cash will result in significant tax consequences under current U.S. tax law,” the company’s chief financial officer, Peter Oppenheimer, said last week.
Gene Ellis

Bringer of Prosperity or Bottomless Pit?: Top German Economists Debate the Euro - SPIEG... - 0 views

www.spiegel.de/...-debate-the-euro-a-685018.html

shared by Gene Ellis on 09 Jul 12 - No Cached
  • No, of course not. Today, we live in a currency zone that, despite everything, is significantly more stable than where the dollar or yen are used. The euro has brought growth and prosperity to Europe.
  • Actually, the euro was a mistake with particularly serious consequences. A monetary union requires its members to pursue the same policies and be similarly productive. The so-called convergence criteria were meant to ensure that this would happen. But -- as the dramatic developments in Greece are now showing -- they didn't.
  • Unfortunately, our fears have become a reality. The monetary union was launched with real self-deception.
  • ...14 more annotations...
  • The euro was sold to us as a modernization program for Europe, and we were also told that it would push the Community toward stability. But, in reality, it has drifted apart and become a truly unstable entity.
  • The euro was sold to us as a modernization program for Europe, and we were also told that it would push the Community toward stability. But, in reality, it has drifted apart and become a truly unstable entity.
  • There is no reason why the euro should be coming under pressure. The decision to introduce it was smart and far-sighted.
  • thanks to the common currency, it's no longer possible, for example, to wage speculative attacks on individual currencies. This eliminates a key disruptive factor that massively destabilized markets in the past.
  • Still, thanks to the common currency, it's no longer possible, for example, to wage speculative attacks on individual currencies. This eliminates a key disruptive factor that massively destabilized markets in the past.
  • Today, there are two blocs within the monetary union: a strong currency bloc in the north and a weak one in the south.
  • Starbatty: But that's exactly the problem! In the past, exchange rates served as a valve. Individual countries could control their economies by allowing their currencies to gain or lose value.
  • But that's exactly the problem! In the past, exchange rates served as a valve.
  • SPIEGEL: What would happen if the old currencies were reintroduced in the euro zone tomorrow? Bofinger: It would be a catastrophe. The German mark would have to appreciate significantly -- I'd say by 10 percent to 20 percent. Everything that we've worked so hard to attain in terms of competitiveness would vanish overnight.
  • What would happen if the old currencies were reintroduced in the euro zone tomorrow? Bofinger: It would be a catastrophe. The German mark would have to appreciate significantly -- I'd say by 10 percent to 20 percent. Everything that we've worked so hard to attain in terms of competitiveness would vanish overnight.
  • SPIEGEL: Would it have been better if all countries in Europe had kept their own currencies? Starbatty: Yes. A community can't function when it's made up of unequal partners who are supposed to behave as equals. With the euro, Germany has created an artificial competitive advantage for itself, which has enabled us to conquer markets all over the world.
  • Starbatty: Yes. A community can't function when it's made up of unequal partners who are supposed to behave as equals. With the euro, Germany has created an artificial competitive advantage for itself, which has enabled us to conquer markets all over the world.
  • Since 1995, there have been almost no appreciable wage increases in Germany, partly as a result of pressure brought on from increases in subcontracted labor. Politicians have done everything to relieve employers of the burden of paying social security contributions because we fell into this strange panic, believing we weren't globally competitive. With our economic policies, we placed too much of a lopsided emphasis on exports.
  • Politicians have done everything to relieve employers of the burden of paying social security contributions because we fell into this strange panic, believing we weren't globally competitive.
Gene Ellis

Bringer of Prosperity or Bottomless Pit? 'Putting the Virtuous in the Dock Rather than ... - 0 views

www.spiegel.de/...ebate-the-euro-a-685018-2.html

shared by Gene Ellis on 09 Jul 12 - No Cached
  • You should look at it more holistically. We wouldn't have been able to increase our exports if the other countries had behaved like us and had not increased their demand for an entire decade.
  • Excluding Greece from the union would be the completely wrong approach. Greece's problem is its inefficiency in terms of public finances. That can be corrected.
  • And you seriously believe that would help? Following that approach, the Greeks would save themselves to death, just as the Germans did in the early 1930s under then-Reich Chancellor Heinrich Brüning. What you expect the Greeks to do is Brüning squared. The real problem is that Greece shouldn't have been accepted into the monetary union in the first place.
  • ...8 more annotations...
  • In the German Council of Economic Experts, we proposed a consolidation pact, under which each country would be required to specify a fully verifiable path that it will follow as it puts its financial house in order. It wouldn't just be a solution for Greece; it would be for everyone.
  • Starbatty: In my experience, speculators are only successful when political promises diverge from economic reality, as has become clear in Greece.
  • Likewise, when it comes to assistance, I think we have a clear legal framework, according to which neither any member state nor the entire Union can be held liable for the debt of another member state.
  • But such a pact would be circumscribed to helping countries help themselves.
  • But government debt is still growing considerably. Doesn't this also increase the risk of inflation? Starbatty: That's what I assume. Inflation would be an elegant means of reducing debt, and many academics are discussing this scenario. But it becomes truly problematic when government bonds eventually lose their status as a safe haven. If China or Japan arrive at this conclusion and sell their bonds, a bubble could burst that is far more dangerous than any other bubble. If that happens, markets will plunge, and interest rates will shoot up.
    • Gene Ellis
      Gene Ellis on 09 Jul 12
       
      An important point:  the role of German policy in allowing 1.3 million short-term workers into the labor market, and its role in lowering the tax on labor.
  • its 1.3 million short-time workers do not find regular employment again,
  • The European Central Bank would never, ever contemplate using inflation to eliminate debt.
Gene Ellis

Euro zone could lose 4.5 million more jobs, UN agency warns - latimes.com - 0 views

www.latimes.com/...risis-20120711,0,2439850.story

shared by Gene Ellis on 12 Jul 12 - No Cached
  • The euro zone nations already have 3.5 million fewer jobs than they did before the financial crisis hit in late 2008, bringing the total number of unemployed to 17.4 million as of April, the organization said in a report issued Tuesday.
  • The unemployment rate hit an all-time high of 11.1% in May.
Gene Ellis

"Which Eurobonds?" by Jeffrey Frankel | Project Syndicate - 0 views

www.project-syndicate.org/...which-eurobonds-

jeffrey project syndicate

shared by Gene Ellis on 16 Jun 12 - No Cached
  • Any solution to the eurozone crisis must meet a short-run objective and a long-run goal. Unfortunately, the two tend to conflict.Illustration by Paul LachineCommentsView/Create comment on this paragraphThe short-run objective is to return Greece, Portugal, and other troubled countries to a sustainable debt path (that is, a declining debt/GDP ratio). Austerity has raised debt/GDP ratios, but a debt write-down or bigger bailouts would undermine the long-term goal of minimizing the risk of similar debt crises in the future.CommentsView/Create comment on this paragraph
  • it is hard to commit today to practice fiscal rectitude tomorrow. Official debt caps, such as the Maastricht fiscal criteria and the Stability and Growth Pact (SGP), failed because they were unenforceable.
  • The introduction of Eurobonds – joint, aggregate eurozone liabilities – could be part of the solution, if designed properly. There is certainly demand for them in China and other major emerging countries, which are desperate for an alternative to low-yielding US government securities.
  • ...12 more annotations...
  • But Germany remains opposed on moral-hazard grounds: a joint guarantee of Eurozone members’ liabilities would strengthen individual national governments’ incentive to spend beyond their means.
  • The German Council of Economic Experts has proposed a European Redemption Fund (ERF). The plan would convert into de facto 25-year Eurobonds the existing sovereign debt of member countries in excess of 60% of GDP, the threshold specified by the Maastricht criteria and the SGP.
  • But this seems upside down.
  • it offers absolution precisely on the 60%-of-GDP margin where countries will have the most trouble resisting temptation.
  • the main explanation for the absence of US moral hazard is that the right precedent was set in 1841, when the federal government let eight states and the Territory of Florida default.
  • Ever since 1841, the market requires that US states running up questionable levels of debt pay an interest-rate premium to compensate for the default risk.
  • Had the ECB operated from the outset under a rule prohibiting it from accepting SGP-noncompliant countries’ debt as collateral, the entire eurozone sovereign-debt problem might have been avoided.
  • the expansion in the US took place at the federal level, where spending today amounts to 24% of GDP, compared to just 1.2% of GDP for the European Union budget.
  • The version of Eurobonds that might work as the missing long-term enforcement mechanism is almost the reverse of the Germans’ ERF proposal: the “blue bonds” proposed two years ago by Jacques Delpla and Jakob von Weizsäcker. Under this plan, only debt issued by national authorities below the 60%-of-GDP threshold could receive eurozone backing and seniority. When a country issued debt above the threshold, the resulting “red bonds” would lose this status.
  • The point is that the enforcement mechanism would be truly automatic: market interest rates would provide the discipline that bureaucrats in Brussels cannot.
  • Of course, the eurozone cannot establish a blue-bond regime without first solving the problems of debt overhang and troubled banks. Otherwise, the plan itself would be destabilizing, because almost all countries would immediately be in the red.
  • But one thing seems clear. German taxpayers, whose longstanding suspicion of profligate Mediterranean euro members has been vindicated, will not be happy when asked to pay still more for the cause of European integration. At a minimum, they will need some credible reason to believe that 20 years of false assurances have come to an end – that this is the last bailout.
Gene Ellis

Gas Prices Moving Away From Link to Oil - NYTimes.com - 0 views

www.nytimes.com/...ing-away-from-link-to-oil.html

oil

shared by Gene Ellis on 10 Jan 14 - No Cached
  • That leaves buyers with enormous risk. Oil, which sold for as little as $10 a barrel in the 1990s, when some current contracts were agreed, now costs about $100 per barrel,
  • “Anyone with standard oil-linked contracts is likely losing money in Europe and specifically Italy,
  • Gas bought under such contracts can be 10 percent to 15 percent more expensive than gas bought at spot market prices, he said. Over the past year, Eni's gas and power unit has reported an operating loss of about €812 million, or $1 billion.
  • ...2 more annotations...
  • “These are not easy discussions,” Mr. Alverà said. “Most sellers are reluctant to sit down and give you big discounts. The more they wait the more they increase their profits.”
  • Still, analysts say it may take decades for Asia to switch from oil linkage to market pricing.
Gene Ellis

Crippled eurozone to face fresh debt crisis this year, warns ex-ECB strongman Axel Webe... - 0 views

www.telegraph.co.uk/...-ECB-strongman-Axel-Weber.html

shared by Gene Ellis on 24 Jan 14 - No Cached
  • Crippled eurozone to face fresh debt crisis this year, warns ex-ECB strongman Axel Weber
  • Harvard professor Kenneth Rogoff said the launch of the euro had been a "giant historic mistake, done to soon" that now requires a degree of fiscal union and a common bank resolution fund to make it work, but EMU leaders are still refusing to take these steps.
  • "People are no longer talking about the euro falling apart but youth unemployment is really horrific. They can't leave this twisting in wind for another five years," he said.
  • ...8 more annotations...
  • Mr Rogoff said Europe is squandering the "scarce resource" of its youth, badly needed to fortify an ageing society as the demographic crunch sets in.
  • "If these latent technologies are not realised, Europe will wake up like Rip Van Winkel from a long Japan-like slumber to find itself a much smaller part of the world economy, and a lot less important."
  • Pierre Nanterme, chairman and chief executive officer of Accenture, said Europe is losing the great battle for competitiveness, and risks a perma-slump where debt burdens of 100pc of GDP prevent governments breaking free by investing in skills and technology.
  • Mr Weber, who resigned from the Bundesbank and the ECB in a dispute over euro debt crisis strategy, said new "bail-in" rules for bond-holders of eurozone banks will cause investors to act pre-emptively, aiming to avoid large losses before the ECB issues its test verdicts. "We may see that speculators do not wait until November, but bet on winners and losers before that," he said.
  • Sir Martin said the eurozone is pursuing a reverse "Phillips Curve" - the trade off between jobs and inflation - as if it were testing "what level of unemployment it is prepared to tolerate for zero inflation".
  • Mr Rogoff said debt write-downs across the EMU periphery "will eventually happen" but the longer leaders let the crisis fester with half-measures, the worse damage this will do to European society in the end.
  • He said Europe is falling further behind as the US basks in cheap energy and pours funds into cutting-edge technology. "A lot is at stake. If in 12 to 24 months no radical steps are taken to break the curse, we might have not just five, ten, but twenty years of a low-growth sluggish situation in Europe," he said.
  • "People are no longer talking about the euro falling apart but youth unemployment is really horrific. They can't leave this twisting in wind for another five years," he said
Gene Ellis

Steel Industry Feeling Stress as Automakers Turn to Aluminum - NYTimes.com - 0 views

www.nytimes.com/...detroits-aluminum-diet.html

steel industry stress aluminum feeling

shared by Gene Ellis on 25 Feb 14 - No Cached
  • Steel Industry Feeling Stress as Automakers Turn to Aluminum
  • For nearly a century, Ford’s River Rouge factory and its neighboring steel mill have worked in close harmony
  • Now, they are trying to respond, making lighter, stronger steel in a bid to retain one of their most important customers, the automakers.
  • ...13 more annotations...
  • chief executive of Severstal North America, the United States subsidiary of Russia’s Severstal Group, which now owns the Rouge steel operations.
  • At Severstal’s Dearborn factory, for example, carmakers including Ford and others account for 70 percent of sales,
  • The shift to aluminum is gaining momentum. Automakers are under increasing pressure to meet strict new fuel-economy standards by 2025
  • United States Steel has invested $400 million in a joint venture with Kobe Steel of Japan to make advanced high-strength steel in a Leipsic, Ohio, factory expected to produce 500,000 tons annually.
  • Inside Severstal’s steel mill on a cold January day, hissing heavy machinery removed oxides from steel sheets, reducing their thickness to the equivalent of five human hairs.
  • These are headed for Mexico, to Navistar’s stamping plant there.Continue reading the main story
  • Steel makers argue that they still have advantages in price — aluminum can cost as much as three times more — and flexibility, both for the manufacturer and the mechanic who will be fixing the car.“When you build a mass-produced vehicle, you really need to think about the consequences of the supply chain and repair and insurance costs,” Mr. Dey said.
  • new federal fuel-efficiency standards that will require a fleetwide average of 54.5 miles per gallon by 2025, a significant boost from the roughly 25 m.p.g. that vehicles average today.
  • “Sometimes there is a push from the aluminum side, and they win over with a particular model, and steel tends to be the comeback kid, with more innovation,” said Felix Schuler, a Munich-based partner in the Boston Consulting Group’s metals and mining practice.
  • What seems certain is that ordinary steel is likelier to lose out to its new and improved cousin than to aluminum, Mr. Schuler said.
  • Novelis is investing nearly $550 million to upgrade plants in Oswego, N.Y., and Nachterstedt, Germany, and to build a new factory in Changzhou, China, to triple its capacity from a year ago to 900,000 tons annually.
  • Alcoa, the country’s biggest aluminum producer, is investing about $670 million in its Iowa, Tennessee and Saudi Arabia facilities.Continue reading the main story
  • “Henry Ford was a control freak, and he wanted to control as much of the manufacturing as possible,” Mr. Casey said. “He made the steel, he made the glass, he made the tires.”
  • Gene Ellis on 25 Feb 14
     
    "said"
Gene Ellis

U.S. Textile Plants Return, With Floors Largely Empty of People - NYTimes.com - 0 views

www.nytimes.com/...-textile-factories-return.html

plants floors empty

shared by Gene Ellis on 20 Sep 13 - No Cached
  • In 1991, American-made apparel accounted for 56.2 percent of all the clothing bought domestically, according to the American Apparel and Footwear Association. By 2012, it accounted for 2.5 percent. Over all, the American manufacturing sector lost 32 percent of its jobs, 5.8 million of them, between 1990 and 2012, according to Bureau of Labor Statistics data. The textile and apparel subsectors were hit even harder, losing 76.5 percent of their jobs, or 1.2 million.
  • Gene Ellis on 20 Sep 13
     
    Video & graphs of the US textile industry semi-recovery, what it means and what it doesn't
Gene Ellis

Ukraine crisis: Russian retaliation could hit Western mulitinationals - 0 views

www.cnbc.com/101614522

shared by Gene Ellis on 05 Feb 15 - No Cached
  • "There no doubt would be Russian retaliation," said Justin Logan, director of foreign policy studies at the Cato Institute. "Companies with money tied up in Russia would have a tough time getting it back out."
  • The White House said Friday that President Barack Obama and the leaders of Germany, the United Kingdom, France and Italy agreed after a conference call that they're ready to inflict targeted sanctions against Russia if Moscow es
  • The lion's share of foreign money in Russia is from major energy sector players like Shell, Exxon, and BP, said Fadel Gheit, senior energy analyst at Oppenheimer
  • ...8 more annotations...
  • Shell is working with Gazprom on natural gas extraction in Russia; Exxon has a multibillion dollar exploration partnership with Rosneft, a major oil producer controlled by the Russian government, and BP owns nearly 20 percent of Rosneft.
  • "Shell and Exxon have physical assets in Russia," said Gheit. "But pound-for-pound, BP has the biggest exposure in Russia." Although BP may have the most to lose from an economic tug-of-war between Moscow and the West, tough lessons that BP learned in Russia—through a defunct partnership with Rosneft called TNK-BP—also make BP best equipped for any future fallout, said Nicholas Spiro, managing director of Spiro Sovereign Strategy.
  • Spiro said that several German firms have also steeled themselves for possible fallout from friction between the Russia and the West. "German companies are huge here," said Spiro, naming BASF, energy firm RWE, and Siemens as companies with operations in Russia. BASF is working to finalize a deal with Gazprom that would give it a stake in Siberian oil fields; RWE has reached a preliminary deal to sell its natural gas subsidiary to Russian billionaires Mikhail Fridman and German Khan, and Siemens has a partnership with state-run railroad monopoly Russian Railways. Late last month, Siemens CEO Joe Kaeser made a trip to Moscow to meet with Russian President Vladimir Putin at his residence and voice support for a "trusting relationship" with Russian companies.
  • We know that if the West's resolve starts to crumble, it will almost certainly start in Germany,
  • "That's the canary in the coal mine."
  • "It starts with Germany and works its way down," said Hogan. "They have the most trade back-and-forth, and Germany gets the highest percentage of its energy from Russia."
  • Alcoa owns aluminum fabrication facilities in Russia, and Boeing has a design center in Moscow, as well as a joint venture with VSMPO-Avisma, the world's largest titanium producer.
  • Members of the Russian parliament have also proposed charging international payments companies like Visa and Mastercard with pre-emptive "security fees," with the stated aim of preparing for future financial disruptions.
Gene Ellis

Shifting energy trends blunt Russia's natural-gas weapon - The Washington Post - 0 views

www.washingtonpost.com/...3-a050-dc3322a94fa7_story.html

shared by Gene Ellis on 03 Mar 14 - No Cached
  • As clunky Soviet-era factories and mines have become more efficient or gone out of business, Ukraine’s domestic gas consumption has dropped nearly 40 percent over the past five years, cutting its imports from Russia in half, according to a report by Sberbank Investment Research.
  • Domestic consumption might drop further if Ukraine trims the generous subsidies it gives households using natural gas, although so few households are paying their bills that it might not matter. “People will go from not paying the lower price to not paying the higher price,” said Thane Gustafson, senior director of Russian energy for the consulting firm IHS CERA.
  • Even if residential customers paid up, the Ukrainian state energy company, Naftogaz, would lose money on those sales
  • ...7 more annotations...
  • “An inefficient and opaque energy sector continues to weigh heavily on public finances and the economy,” the International Monetary Fund said, noting that energy subsidies reached 7.5 percent of Ukraine’s GDP in 2012. “The very low tariffs for residential gas and district heating cover only a fraction of economic costs and encourage one of the highest energy consumption levels in Europe,” the IMF said in December.
  • Now, the upheaval of the past two weeks has thrown Ukraine’s gas strategy into greater confusion. “There is no government and there are no agencies to do business with,” said Simon Pirani, senior research fellow at the Oxford Institute for Energy Studies. “How high up the list of priorities it is is anyone’s guess.”
  • Even if the deals with foreign companies advance, Ukraine will need to import about half of its gas needs,
  • In 2012, many European industrial users and power plants switched to coal, and Russia agreed to renegotiate.
  • The link between gas and oil prices has been severed for about half of Russia’s gas sales.
  • Gazprom also agreed to eliminate contract clauses that said a country such as Germany could reship Russian gas only with Gazprom’s approval.
  • As a result, Ukraine ended up paying more than Gazprom’s customers in Germany, and last year Ukraine imported small quantities of natural gas from Germany and Hungary through pipelines in Slovakia and Poland, experts say. Germany buys gas from a variety of countries, but rerouted Russian gas has effectively been undercutting other Russian gas.
1 - 19 of 19
Showing 20▼ items per page