Archive for the ‘Economy’ Category
January 26, 2011
http://www.weforum.org/
35 heads of state and over 2,500 delegates are expected to attend.
If the WEF’s guidelines are followed there will be at least one woman for every four men!!
http://blogs.ft.com/rachmanblog/2011/01/davos-trying-to-solve-the-worlds-problems-in-four-days/
The WEF Chinese delegation will total over 60 people this year and the Indian will again be significant with 130 delegates. India will be launching an India Inclusive campaign to stress the benefits of economic progress and the growth of a vibrant middle-class and average incomes, while minimising the political impact of increasing disparities in wealth, as the new entrepreneurs of India globalise their operations – Tata, Ambanis, Mittals, Mahindra, Bhartis, Godrejs are all names we are becoming increasingly familiar with on a world stage. Chinese participation is up fivefold in the last decade, Indian up fourfold.
The G20 is very well represented too. All countries have president/prime minister or ministerial representation here except Argentina, with the latter’s central banker as its representative.
Tags:Davos, World Economic Forum
Posted in Business, Economy, International Trade | Comments Off on DAVOS 2011 kicks-off today: 35 heads of state, 2500 delegates
January 26, 2011
The Telegraph reports:
Asian and Middle-East investors have thronged to buy the first issue of AAA-rated bonds by the eurozone’s new bail-out fund, marking a key moment in the evolution of Europe’s monetary union.
The auction of €5bn (£4.3bn) of five-year bonds to fund the first stage of the Irish loan package was nine times subscribed, reflecting appetite for bonds ranked with core German or French debt but offering higher returns. The yield was 2.89pc, compared with 2.31pc for Bunds.
The outcome was not in doubt after Japan said it would buy 20pc of this month’s total issue by the European Financial Stability Facility (EFSF), and China emerged as a white knight for EMU debt. Asian investors bought 38pc of the issue.
“It is the biggest order book ever. We will check before notifying the Guinness Book of Records but nobody can remember anything like that in the world,” said Klaus Regling, head of the EFSF. Ralf Umlauf from Helaba said the auction was “a step in the direction of a eurobond”.
The demand came from over 500 investors and totalled over $ 60 billion (about €45 billion).
Tags:China, Eurobond, European Financial Stability Facility, European Union, Japan, Middle-East, record demand
Posted in Economics, Economy, European Union | Comments Off on Euro bail-out bond: Asia to the rescue with record demand
January 18, 2011
The growing inflation in India and China is a clear signal of overheating in their economies and Goldman Sachs (who are credited with inventing the term “BRIC”) are reducing their exposure to the BRIC countries.
The BRIC countries (Brazil, Russia, India, China)
The Telegraph reports:
Goldman Sachs has issued a short-term alert on China and India as inflation rears its ugly head, advising clients to rotate into Wall Street and Old World bourses as a safer bet over coming months.
“We’re not as tactically positive on the BRICs as we have been,” said Tim Moe, the bank’s chief Asia-Pacific strategist, referring to the quartet of Brazil, Russia, India, and China.
“To be frank, we may have held on too long to our overweight position in China last year. We have decided that discretion is the better part of valour and have tactically reduced our weight. Asia is not in the sweet part of the cycle. The longer-term picture of Asia outperforming the US is taking a breather,” he said, speaking at a Goldman conference in London.
The cooling ardour for China is significant shift for the bank that invented the term BRICs and has been the cheerleader of the emerging market story over the past decade.
India is an even bigger worry, with yawning twin deficits, and overheating visible on all fronts. The nation’s central bank warned this week of “surging inflation”.
“India’s current account deficit is running at a record pace of 4.1pc of GDP and it is 100pc funded by short-term portfolio flows, which cannot be relied on indefinitely,” said Mr Moe, describing Mumbai’s bourse as “crowded”.
Read more….
Tags:BRIC, China, Goldman Sachs, India, Inflation risk
Posted in China, Economy, India | Comments Off on Goldman Sachs cools on China and India
January 13, 2011
Image via Wikipedia
The countries are considered among those dragging down the Eurozone but strong demand for Portugese bonds on Wednesday was followed by solid demand for those issued by Spain and Italy today. Earlier this week both Japan and China had pledged to buy the bonds in Europe. Both countries have large cash reserves and are probably attracted by the higher yields but are also making a political statement in supporting the Eurozone. China is on a charm offensive and wishes to be seen to be reaching out to Greece and Portugal.
BBC:
Spain has raised 3bn euros ($3.9bn; £2.5bn) in an auction of five-year government bonds. The average yield on the bonds was 4.542%, which was nearly one percentage point higher than the rate reached in the last auction in November. However, analysts had feared the yield would be even higher.
The debt sale, which follows a similar auction by Portugal on Wednesday, is soothing fears over the eurozone’s ability to service its debts. Michael Lister, strategist at West LB in Dusseldorf, said: “The figures look really good, it’s the perfect sequel to the Portugal auction yesterday.”
Wall Street Journal:
The Hong Kong dollar rose against the U.S. dollar Thursday as a successful bond auction in Portugal helped ease concerns about the euro zone’s debt problems, encouraging investors to shift funds from the U.S. currency to riskier assets.
Traders said gains in the local stock market will continue to boost demand for the Hong Kong dollar. They said they expect the U.S. dollar to trade between HK$7.7720 and HK$7.7780 Friday.
“Portugal’s bond auction temporarily eased concerns over European debt. Also, the U.S. dollar isn’t likely rise sharply ahead of (Chinese) President Hu Jintao’s visit to the U.S. next week,” said a senior trader at a Chinese bank. Hu plans to meet U.S. President Barack Obama in Washington on Jan. 19.
The Portuguese government sold EUR1.25 billion worth of bonds in an auction overnight, offering good news to investors worried an unsuccessful bond sale could signal tougher austerity measures in parts of the euro zone.
Financial Times:
Spain and Italy on Thursday followed Portugal by holding successful bond auctions, providing a glimmer of optimism in the eurozone debt crisis. Italy sold €6bn of five-year and 15-year debt while Spain issued €3bn in five-year bonds, but both countries were forced to pay higher interest rates than in previous auctions.
The three successful auctions this week from peripheral eurozone countries provide a small amount of breathing room in the crisis. But the elevated yields paid by all of them and their high funding needs mean that investors are still waiting for decisive action from European policymakers.
Italy sold €3bn of 15-year bonds at a yield of 5.06 per cent, up from 4.81 per cent at a previous auction in November. Likewise, the yield on €3bn of five-year debt rose from 3.24 per cent two months ago to 3.67 per cent. Both auctions were fully covered. Spain paid almost a percentage point more than it did in November with a five-year yield of 4.54 per cent.
Tags:Bond issues, Euro, Eurozone, Italy, Portugal, Spain
Posted in Business, Economy, European Union | Comments Off on Solid demand for bond issues by Spain, Portugal and Italy boost Euro
December 30, 2010
Kashi (Kashgar) and Hotan are major towns on the old Silk Road. To complete 488km of high-speed railway line in just 2 years of construction – even for China – must be some kind of a record.
From Xinhua News:
Kashgar Region: Hotan to Kashi
A railway linking Kashi and Hotan in northwest China’s Xinjiang Uygur Autonomous Region opened Thursday for cargo transportation, and passenger transport is expected to begin in June, according to a local official.
The railway, with a cost about 5.1 billion yuan (773 million U.S. dollars), covers 488.27 kilometers running through the south part of Xinjiang, an important section of the ancient Silk Road. The railroad is expected to have an annual freight volume of 15 million tons, and carry ten passenger trains every day, said Tang Shisheng, director of the Urumqi Railway Bureau. The Kashi-Hotan railway will help promote the development of Xinjiang’ s mining industry, tourism and agriculture, said Tang.
Construction of the railway began in December 2008.
The Ministry of Railways and Xinjiang regional government will invest 310 billion yuan to build more than 8,000 kilometers of railway in Xinjiang during the next 10 years.
Tags:Hotan, Hotan to Kashi high-speed railway, Rail transport, Xinjiang Uygur Autonomous Region
Posted in China, Economy, Engineering | Comments Off on 488km of high speed railway completed in 2years – must be China
December 30, 2010
50 Deutsche Mark banknote: image commons.wikimedia.org
As long as there is no economic and fiscal union in Europe, the Euro is going to be plagued by the inherent weaknesses of errant nations. The current economic weakness in Greece, Portugal, Spain and Italy and the political inability – or unwillingness – to deal with the simple financial housekeeping that any competent housewife would handle as a matter of course suggests that the fiscal union will never happen. Non-compliance with the stability rules by nations lead to few sanctions. This in turn leads to the question whether the Euro has any long term future in the absence of fiscal rectitude across all the participating nations.
100 Euro banknote from Germany
The weakness of the Euro has in fact helped to boost exports from Germany and the relatively strong growth in Germany is mainly export driven. Nevertheless many Germans are beginning to worry about the value of their Euro when this value is being diluted by the “less responsible” nations. Germans are remembering that “German” Euro notes are easily identifiable (as are the notes printed in the different countries). There are calls for the German government to maintain the value of the “German” Euro when the Euro loses value! (German Euro banknotes can be identified by their serial number, which will always start with the letter “X”.) It is already noticeable that money changers in Asia are beginning to check the country of origin of the Euro banknotes they are dealing with. I can imagine their future reluctance to deal with notes having serial numbers beggining with “Y” (which would be a note from Greece). Some are calling for the Euro to be separated into a “Northern Euro” and an “Olive Euro”. It is only a short step to different values appearing unofficially for Euros from different countries.
Der Spiegel reports on the growing calls for the return of the Deutsche Mark:
Surveys show that many Germans are worried about the future of the euro, but the country’s political parties are not taking their fears seriously. The number of grassroots initiatives against the common currency is increasing, and political observers say a Tea Party-style anti-euro movement could do well.
Rolf Hochhuth is campaigning against the euro — and his stage is Germany’s Constitutional Court. “Why should we help rescue the Greeks from their sham bankruptcy?” he asks. “Ever since Odysseus, the world has known that the Greeks are the biggest rascals of all time. How is it even possible — unless it was premeditated — for this highly popular tourist destination to go bankrupt?”In the spring, he joined a group led by Berlin-based professor Markus Kerber that has filed a constitutional complaint against the billions in aid to Greece and the establishment of the European stabilization fund, which was set up in May 2010. Hochhuth wants the deutsche mark back. “I don’t know if this is possible. I only know that Germany lived very well with the mark.”
It’s an opinion that suddenly places this nearly 80-year-old man in a rather unusual position, at least for him: on the side of the majority of Germans.
(more…)
Tags:Deutsche Mark, Euro, Germany, Northern Euro, Olive Euro
Posted in Business, Economics, Economy, European Union, Germany | 1 Comment »
December 2, 2010
King crabs are too successful as a species and therefore must be exterminated says the WWF. Biodiversity is threatened says the alarmist message! It will not be long before they start demanding the extermination of humans who are encroaching on other species.
Yngve Pedersen fishing for King Crabs: image SvD FOTO: BJÖRN LINDAHL
From Svenska Dagbladet (free translation):
They are large and are served as a delicacy all over the world. Along the windy Finnmark coast in northern Norway, they have become a welcome sideline providing a turnover of 100 million kronor just as a raw material. It does not help. Exterminate every single one, believes the World Widlife Fund.
We are talking about king crabs, giant crabs, originally from Kamchatka on the Russian Pacific coast. From 1961 to 1969 they were transplanted into the Barents Sea to provide the residents of Murmansk with more food sources. 2500 adult crabs were transported by air and the Trans-Siberian railroad, and were released into the sea.
The population of the Kola Peninsula was briefed by radio and all the fishermen were asked to inform the authorities if they found any crabs. Five years passed without any being found. But then in 1974 a fisherman caught a queen crab. The shell of that crab is still kept at the Polar Research Institute in Murmansk.
But in the early 1990’s, the number of crabs exploded. Today the Russian quota is 3.2 million crabs per year. In Norway, they catch just over 300 000 crabs. The problem is that the crabs are voracious and will eat almost anything they can find on the seabed.
The WWF has now reported Norway to the International Council on Biological Diversity and has demanded that the species be exterminated as an “alien” species and it has been blacklisted by the Council. “It is crazy to let the stock grow further. Nine out of ten species in the Varanger Fjord has disappeared, “says Nina Jensen of WWF Norway.
But Norwegian marine biologists at Havsforskningsinstituttet in Bergen think it is just an exaggeration. “It is not true that nine out of ten species have disappeared. But the crabs have significant negative consequences, but what we know about nature is that it will recover when the crabs have left the area”, said Jan H. Sundet.
The largest crabs can weigh seven kilos, but after the stock began to be taxed, the average weight remained at 3-4 kg. The maximum paid was 90 NOK per kg. Svenska Dagbladet followed crab fisherman Yngve Pedersen from Bugøynes, located in Finnmark about fifty km from the Russian border, as he brought up a large catch of crabs in the Varanger Fjord.
“I started to fish for crabs 1998. This year I have a quota of 2800 kilos, for which I get at least 50 kronor a kilo. So I earned 200 000 kronor on crab this year. Compared with other kinds of fishing, it is an easy job. A dead cod is placed on a hook as bait inside the large cage. The crabs crawl in and most are not able to crawl out again. An orange buoy marks the location of the cages and all that is needed is to hoist it up and empty it over the catch table. Injured crabs with missing claws are discarded. “It is perhaps 10-15 percent of them. But the claw grows back”, said Yngve Pedersen.
He himself has an ambivalent relationship with the crabs. “They do great damage to the nets when we fish cod and eat all the bait when fishing by line. But our crab quota is in a sense a compensation for that. But the crab are not at home here, so if it were possible to eradicate them I would not have anything against it. “But I do not think it is possible. The Russians do not have any such plans and new crabs arrive all the time. We may be able to reduce the stock so that it pays better to catch them, that’s all”.
Tags:extermination of species, King Crab, Norway, WWF Alarmism
Posted in Alarmism, Biodiversity, Economy, Environment, Wildlife | Comments Off on WWF wants every single King Crab to be exterminated!!
November 29, 2010
Sweden continues to show strong GDP growth and in the 3rd quarter of 2010 was significantly higher than the 5.2% forecast earlier by the Riksbank and reached “Asian” levels at 6.9%. Unemployment is down and expected to continue to reduce slowly and is currently at about 8%. The growth is primarily export led and exports to Asia and Latin America are particularly strong.
Freely translated from Svenska Dagbladet:
Today came the news that Sweden’s GDP landed at 6.9 percent for the third quarter of this year. The positive figure may accelerate interest rate increases. “It’s a really good figure. This is well above the Riksbank’s assessment “said Annika Winsth, chief economist at Nordea Bank. The Riksbank believed that the increase in GDP would end up at 5.2 percent for the third quarter and Nordea’s forecast was forjust 6.2 percent. This shows that Sweden’s economy is growing across the board, among households and businesses as well as in the state, according to Nordea’s chief economist Annika Winsth. “This means that there is still so much spare capacity left in companies, that there is a belief in the future. They dare to invest, “she says.
Robert Bergqvist, chief economist at SEB was surprised at the growth figure of 6.9 percent. “It’s a long way from what we thought. What strikes me is that the sun is shining so brightly in Sweden, while many countries in Europe have huge problems to contend with. Industry and employment have recovered remarkably quickly, although we are not 100 percent back yet”, he says. The main reasons for this is, according to Robert Bergqvist, that taxes and the krona exchange rate has made household purchasing power strong, helped the export industry and given strong public finances. The latter means that Sweden can avoid drastic tax increases, he says.
According to Annika Winsth Sweden’s economy is almost back to a “normal” economic level. “There is little left to do on the employment side “, she says. “We went stronger into the economic crisis than many other countries, and that means that we do not get hit as hard” she says.
Tags:3rd quarter 2010, Economic growth, Sweden GDP
Posted in Business, Economy, International Trade, Sweden | Comments Off on Swedish 3rd Quarter GDP growth up to “Asian” levels at 6.9%
November 22, 2010
Swedish P1 Radio had a broadcast this morning where wind turbine owners in southern Sweden were interviewed. Wind turbines in Southern Sweden operate at an average capacity of about 25% but when the wind blows in in Sweden it usually blows in Denmark as well. As Denmark builds more subsidised but intermittent wind turbines they become more dependant upon the import of hydro and nuclear power from Sweden and Norway.
It could be a dark future for wind power, at least for wind power owners in southern Sweden. As wind turbines multiply, the surplus power when the wind blows reduce prices and wind turbine revenues are reduced drastically.
The Marketing Director for Lunds Energi said that they had no plans for building any more wind turbines to add to the 6 small wind turbines they already had. There was no chance, he said, of the Danes importing wind power from Sweden when the wind was blowing for then they had their own power. And when the wind was not blowing and prices were better there was no power to sell!
Wind power plant in Lake Vännern. Foto: Fredrik Sandberg/Scanpix
Kjell Jansson, the Managing Director of Svensk Energi was also interviewed and pointed out that electricity could not be stored except as hot water. Therefore using surplus wind energy to store in heating systems was at best a partial solution but did not help the fact that industry and people needed electricity as electricity – and not just as hot water. Even the planned Danish solution of using surplus power to “charge up” heating systems for district heating as hot water or for “charging up” electric cars relied on having electricity – from nuclear and hydro power from Sweden and Norway – available to be imported for the Danish electricity system.
Therefore, he continued, when the wind did not blow in Denmark – and then usually did not blow over the whole of Scandinavia – the high electricity price was an advantage for the hydro and nuclear generators. In any case this would require much more investment in transmission systems and in hydro power generation.
But I can see a situation where Denmark will pay swingeing prices for imported electricity when the wind is not blowing and a cold wave is sweeping across Europe. And if it is a really severe cold wave then there may be no electricity available for import.
Tags:electricity prices, Energy, Energy storage, Sweden, wind power
Posted in Business, Economy, Energy, Environment, Sweden, Wind power | Comments Off on Bleak future for wind power generators in Sweden
The k2p blog 