Business And Personal Finance

Poul Thomsen, the head of IMF mission in Greece, will have to recognize that slow the pace of fiscal consolidation since the recession is more severe than expected. The head of IMF mission to monitor the recovery of Greek finances, Poul Thomsen (here in Athens November 19, 2011) The head of IMF mission to monitor the recovery of Greek finances, Poul Thomsen, acknowledged errors in the control of the country for two years and called for fewer budget cuts and further liberalization, in an interview published Wednesday. "The budgetary adjustment was based on an exaggerated tax increases, we should have put more emphasis on cost containment is the one area where we could have been more convincing to the government "said the IMF representative, when asked about possible errors of the IMF by the Greek daily Khatimerini." Although much remains to be done, Greece has made good progress, "he said, claiming to understand the discomfort of the Greek opinion against criticism blaming the downturn on the country or accusing him of being unable to recover. "We should be more careful to ensure that we send a balanced message when we say that the program is off the rails," he said. But "reform and the effort required (…) have lost their momentum, we must find her," he ajouté.Poul Thomsen was recognized "worried" at the worsening of the recession-induced these measures. "We need to slow down the pace of fiscal consolidation and advance much faster in the implementation of reforms." He reiterated that among them, he supported measures to wage cuts in the private sector, as expected IMF boost the economy via a gain in competitiveness, but rejected by the Greeks as being at risk of stopping further consumption and activity. Poul Thomsen in particular called for a reduction in the minimum wage, red rag to the unions, stating that 'to 751 euros gross per month was 35% higher than that of Portugal, and from 20% to that of Spain. Despite reservations Greek on these requirements, he found that the negotiations that led to the side its counterparts Commission and European Central Bank with the government to complete the new plan for the country's recovery will be concluded "very shortly, within a few days."Target these days of sharp attacks in the Greek press as too inflexible and challenged him as in the IMF because of the failures encountered by the first bailout of Greece, Mr. Thomsen also emphasized working in full agreement with colleagues at the IMF.

The OECD slashed its growth forecast Monday for the 2012 United States and the euro area, urging G20 leaders to act quickly to restore confidence and avoid a severe contraction in developed economies.

In a note issued in anticipation of the G20 summit on 3 and 4 November in Cannes, the Organization for Economic Cooperation and Development cut its 2012 growth forecast for the euro area to 0.3% against 2.0% in May and 1.8% against 3.1% for the United States.

She called on G20 leaders to take "bold" to calm market turbulence and show that they can implement structural reforms address the debt crisis.

The OECD estimates that deteriorating financial conditions of the order of that seen during the crisis of 2007-2009 could result in loss of up to 5% of gross domestic product (GDP) of some OECD economies of 'By the first half of 2013.

Conversely, if the measures announced at the EU summit last Wednesday are effectively implemented and that can restore confidence, growth could be better than expected, judge the OECD.

For all G20 countries, the OECD now expects growth of 3.8% in 2012 and 4.6% in 2013, but it will be pulled up by the emerging markets including China (+ 8.6% in 2012 and 9.5% in 2013).

Eviction announced by Pierre-Henri Gourgeon Air France-KLM and the takeover of the group by its president Jean-Cyril Spinetta, could be a lifesaving shock to the Franco-Dutch company, hit by financial indicators in the red and controversial management of the disaster of the Rio-Paris.

In this scenario mentioned in the press Monday, Juniac Alexander, former chief of staff Christine Lagarde, not only would the management of Air France, a decision that was already widely expected, but is positioned to take forward direction General of the entire Air France-KLM.

A spokesman for the group declined to comment, confirming only holding a board in the afternoon and the likely release of a statement later in the day.

Pierre-Henri Gourgeon became Group Chief Executive in January 2009, while Jean-Cyril Spinetta, architect of the merger between Air France and KLM, retained the presidency.

The shelving of Pierre-Henri Gourgeon reached in just over three months after its renewal in early July for a four-year term by the shareholders of the group by an overwhelming majority.

"It's a shock. It is a little surprised because Air France is not a company that used to act like that.However, it is rather good news for Pierre-Henri Gourgeon not really good news to analysts, "said one analyst who requested anonymity.

Around 24:15, the title gained 4.4% to 5.753 euros.It has fallen 62% since the beginning of the year, bringing its capitalization to only 1.7 billion euros, underperforming both the largely German Lufthansa and IAG, an entity formed by the merger of British Airways and the Spanish Iberia.

Pierre-Henri Gourgeon and pay the price for its management of the company, which the French state holds 15.7% stake, which is too much debt, too slow to react and too wasteful, including labor costs well above those of its competitors.

According to press reports, Pierre-Henri Gourgeon Juniac Alexander would have required the newly created position of Chief Executive Officer of Air France as Jean-Cyril Spinetta supported the candidature of Lionel Guerin, CEO of Transavia France.

The catastrophe of the Rio-Paris flight in June 2009, the third serious accident suffered by Air France in a decade, has also raised questions about the technical training of its pilots, after publication of the interim report of the Investigation Bureau and Analysts (BEA).

He who led the PS group in the Senate for seven years was elected by his peers Saturday President of the Upper House of Parliament. He promises to respect the opposition. Jean-Pierre Bel, an elected Ariège, 59, was elected on October 1 by his peers first socialist president in the history of the Senate.

Jean-Pierre Bel, an elected Ariège, 59, previously unknown to the general public, was elected the first Saturday in October by his peers first socialist president in the history of the Senate and became the same time the second character of the Republic. President of the Socialist Group in the Senate since 2004, he burst onto the front of the stage with the unusual shift to the left of the second chamber of Parliament during the renewal Senate last Sunday.Candidate of the new Senate majority PS, PCF, PRG, EELV, he was elected on the first ballot by 179 votes against 134 votes for President outgoing UMP Gérard Larcher, and 29 votes for the former Secretary of State François Fillon, Valérie Létard, centrist candidate. Jean-Pierre Bel got seven votes more than the absolute majority of votes cast in the individual and secret vote in the gallery.

After receiving félications Gerard Larcher, Jean-Pierre Bel delivered his first address as president. "We also heard the deep anger" of the territories of the Republic "for" have been stigmatized, disoriented, perhaps abandoned their face immense difficulties, "he said. He announced the meeting" soon "to States General of elected officials.'s voice choked with emotion, he paid tribute to his family, and communist resistance, and its southwestern region."We will not go into some sort of bastion," "I'll never be there to serve a clan or a Customer: I want always to turn to the collective interest," promised the sixth President of the Senate since the beginning of the Fifth Republic. He called for a "refurbished bicameralism in which the opposition will be respected." It could well be left to the right as President of the Committee on Finance.

François Rebsamen likely chairman of the PS in the Senate

The first task the new president will also get on with the new governance of the Senate, a site not easy given the narrowness of his majority, 177 elected, two more than the majority. No political group will not hold its own. He expressed support for lowering the threshold for the creation of groups of 15 to 10 senators, as claimed by the 10 senators EELV.This may allow the RDSE (mostly PRG), which had 16 members to survive the departure of its three senators on the right, including Jean-Marie Bockel (GM), who joined the centrist group. It will also order of battle group PS with a new president should be the senator and mayor of Dijon, François Rebsamen.

Prime Minister Francois Fillon has asked "to meet him at Matignon in the coming days." During their telephone conversation, Mr Fillon told him "that he wished the government and the Supreme Assembly to work in a climate of responsibility." Martine Aubry welcomed her as a "great day" for the Republic and "victory rally" of all those "who want to change in our country."For the Mayor of Lille, "the election of a Socialist President shows the frustration of elected officials in the field who are tired of being despised by the outgoing President and see every day our Republic a little damaged." François Hollande, a favorite of the primary PS, said he was also "happy" with the election of his "friend" to the presidency of the Senate, seeing "the consecration of the story of a man who gave a portion of his life to activism. "

Liberal Institute Coe-Rexecode proposes to merge the debts of countries rated "AAA" in the euro area, to eliminate differences in rates between the German and French bonds. This solution would also double the capacity of loans to countries facing difficulties.

To stem the crisis in the euro area, the French Institute of Economic Studies Coe-Rexecode Monday advocated the creation of "eurobunds" which would involve the merger of the debts of many countries "comparable" in the area, which France and Germany. Considering the creation of unrealistic eurobonds, often mentioned in recent months, the institute, near the business, suggests the creation of "eurobunds" with "merger for the debts of seven comparable countries in the euro area as are Germany, France, the Netherlands, Belgium, Austria, Finland and Luxembourg. "

The merger could lead to a large pool of securities, nearly 5,000 billion, a priori rated AAA by rating agencies, is the highest rating possible, pleaded Michel Didier, president of Coe-Rexecode, during a press conference. It would have the advantage of eliminating the spreads between the German and French bonds, he said. Moreover, such a "fire power" would "have a strong base of potential loans to the peripheral countries" beyond the potential 500 billion of loans from the European financial stability. Which, according to Coe-Rexecode, is likely to cut short the threat of contagion from the debt crisis.

Subsequently, "there would still address the problem of divergences in competitiveness" within the euro area, insisted Michel Didier.Considering the current stock market crisis "clearly European," the institute said that the problems of public funding can be resolved, thanks in part to the European plan adopted July 21, which is "appropriate". But "other scenarios are much worse now possible," he warns. "A sovereign default would lead to poorly controlled behavior very restrictive economic actors (reports of investment projects, increase household savings rate …) and lead to a true European recession," said the institute.

Release published Wednesday the details of the debt of French local authorities have signed 5500, the report said, toxic loans from the bank Dexia Credit Local (DCL) between 1995 and 2009.

The daily said that based on a confidential file of the bank, writes that DCL had distributed 25 billion euros for its customers at the height of the "bubble".As estimated by the bank, the additional cost of these loans was estimated at 3.9 billion euros at end 2009, reports Liberation.

"The bank common that ruined 5000", as Libération, which published on its website (www.liberation.fr) a map of the communities adhering toxic loans from Dexia.

Release cites the example of Antibes, which would have borrowed 60 million and 21 million would pay in addition to that amount, or department of the Loire, which is expected to repay 22 million in excess of 96 million toxic loans.

Dexia declined to make immediate comment but a spokesman said the bank did not rule upon "appropriate action in the interests of Dexia and its customers."

The pan-European Euro Stoxx 50 index gained 2.29%, but its implied volatility index remains at levels close to those recorded in August despite a decrease of 4.86% on Wednesday.

"The configurations of the lowest values ​​make you want to buy for those who like to put in front of the trend. Oversold is strong, with significant support.Within the European indices, banks once again accuse the largest declines due to exposure to sovereign debt.We also see that the volatility particularly for banks, "said Benedict Peloille, equity strategist at Natixis.

The real estate industry has accused the only sector down (-0.72%), penalized by several downward revisions of earnings estimates by analysts for several days.

However, the automobile (5.08%), including the Frankfurt Motor Show opens its doors to the public from September 15 to 25 after two days reserved for the press, the best performing European sector, supported in particular by redemption with it, the sector still showing a decline of more than 31% since July 22.

The relative optimism of investors has resulted in a marked rise in the performance of the German government bond (Bund) to 10 years to around 1.88% against 1.79% the day before closing. The other safe haven, gold, for its part has given up 0.88% to 1,817.15 dollars per ounce.

The euro, which was passed under $ 1.36 in the morning, rose against the greenback around 1.3706 dollars (0.17%).

The media group News Corp. and movie has awarded its CEO Rupert Murdoch and son James of large increases in wages, but James said Friday waive his bonus, highlighting the controversy the illegal wiretapping of British tabloid News of the World.

The annual premium, announced Friday, would have increased the compensation of James Murdoch to 73%. His father, aged 80, received a 47% increase, bringing its total earnings to $ 33.3 million.

James Murdoch was to receive a payment of 17.9 million, with the bonus of six million. He will receive 11.9 million.The premium for his father is 12.5 million.

Vice President Chase Carey has seen its fee increase by 16% to $ 30.2 million.

As head of international affairs, James Murdoch is under fire from the media and the public since the revelation of the scandal at New Plays of the World July 4.

That same day, two longtime directors have announced their intention to leave the board. This is Thomas Perkins, who turns 80 this year, and Kenneth Cowley, 76. Jim Breyer, 50, will seek election to the board.

James Murdoch said he would consult with the Compensation Committee "to see if any premium might be appropriate at a later date."

Citigroup reported Friday an increase of nearly 24% of its net profit in the second quarter to 3.34 billion dollars (2.36 billion euros) against 2.7 billion a year earlier.

The third U.S. bank by assets shows a profit of $ 1.09 per share against $ 0.90 a year earlier, while economists surveyed by Thomson Reuters I / B / E / S were expecting $ 0.96 .

This is the sixth consecutive quarterly profit for Citigroup, which benefited from the injection of 45 billion dollars in federal aid to lift themselves out of U.S. financial crisis.

Since the U.S. government in December sold its last share in the bank, its chief executive Vikram Pandit has attempted to show that he intended to turn the page and it was possible to resume growth.

But the recovery has been difficult this year for most U.S. banks, because of poor returns on the forehead of trading on the bond market and a volatile market that has weighed heavily on results.

Citigroup said that its net banking income in the second quarter fell by nearly 7% over the previous year, standing at $ 20.6 billion, which is beyond the consensus of 19.89 billion.

The bank said it had benefited from a decline in loan losses over the second quarter of 2010.

"They control many of their problems, but they are not yet out of the woods," said Matt McCormick, portfolio manager at Bahl & Gaynor Investment Counsel.

Citigroup won the title almost 3% to 40.15 dollars in pre-market transactions.

The spectrum of U.S. investment bank continues to be called to warn against the failure of the country. But how non-payment of Greece could it lead to a new global financial meltdown? L'Expansion. Com you do the drawing. Greece in the storm

Be afraid. Be very, very afraid. That's essentially the message of the ECB when Jean Claude Trichet warned that failure to Greece cause a chain reaction to Lehman Brothers. U.S. authorities had believed in September 2008 that they could leave the failing investment bank subordinated to the lead … They had no idea that his fall would shore financial markets. Thus, some fear that the failure of a small country like Greece, which represents only 2.6% of GDP in the euro area and 4% of its accumulated deficits, could also have dire consequences globally.For the channels of contagion are many …

The domino effect on other "weak links"

If Greece fails, it means that the bailout failed. Investors conclude that the plans for other fragile states could be just as ineffective. So they start to sell their government bonds en masse Portuguese and Irish. It blew up the interest rates charged to these countries, which consequently even harder to refinance, which increases in a self-fulfilling prophecy mechanism usually markets, the chances that these countries will also default.

According to calculations by Dexia AM quoted by Le Monde, the cumulative financing needs of Greece, Portugal and Ireland reached 201 billion euros for the next 24 months.The European emergency fund and the IMF – which can reach up to 750 billion euros – can cope. Except that investors are so their attention on countries with intermediate risk: Spain, Italy and Belgium. By adding Spain, the amount of passes needs to 523 billion euros. But contagion to Italy more than doubled the borrowing requirement (1123 billion) and is the European emergency fund is insufficient. Nothing prevents these countries to fail and leave the euro area to find a more competitive currency.

European banks sink

Not only the Greek banks, force-fed up to 45 billion euros of public good, are collapsing, but the German and French banks, which hold 10 and 15 billion euros of Greek debt, wipe also heavy losses. Not to mention the exposure to the private sector.For French banks have also taken stakes in companies and massive Greek banks. Taking into account the public and private debt, the French banking sector is by far the most exposed in Europe with 44.3 billion euros.

But that's nothing compared to the consequences of failure to Spain, the French banks that have lent the equivalent of 9% of French GDP, the Dutch banks 16.4% of GDP of the country and the Portuguese 13 %, according to economist Charles Calomiris of Columbia University.

The interbank market is flu

More European banks are making losses on their claims, most other banks are reluctant to lend on the interbank market. Moreover, according to British newspaper The Telegraph, Barclays and Standard Chartered have begun to reduce the amount available to lend to banks in the euro area.Result, Spanish banks, unwelcome in the interbank market, crowd more than ever to stop the ECB from which they borrowed 53 billion euros in May, an amount up 26% from the previous month. More generally, the poor health of European banks results in a credit crunch and then a new recession.

U.S. banks affected

If European banks are those that are directly exposed to the debt of the weaker, the U.S. banking and insurance are not necessarily spared. Above Bank of America, Morgan Stanley and Goldman Sachs, who sold to European banks CDS as insurance against default risk "PIGS". According to the financial blog The Street Light, the United States are exposed to the Greek debt to the tune of $ 41.4 billion and therefore as much to lose from a defect that the Greek EU.

The saviors of last resort have disappeared

In 2008, banks on the brink had been imploring the assistance of states. Not this time: these states are now indebted to the neck, attacked by the markets and put on a diet. And to whom these states can they turn? The ECB, savior of last resort to which the euro is to survive so far, will hardly be in a good position if Greece fails, it will be busy as its losses on its portfolio in Greek bonds, estimated at 45 billion euros …