Five regulatory agencies are taking public comments on a proposed version of the so-called Volcker rule, which was included in the 2010 financial regulatory overhaul to ban deposit-taking banks from trading with their own money.

While foreign government bonds would fall under the rule as proposed, U.S. government debt would be exempt. Officials from Canada, Japan, and the United Kingdom have sent letters to the Treasury Department and regulators saying the measure would harm their ability to raise money.

]]> http://mybusinesssurveys.com/volcker-exemption-for-sovereign-debt-said-to-be-weighed-by-us-regulators-bloomberg/feed/ http://mybusinesssurveys.com/us-lawmakers-trade-blame-for-11-trillion-deficit-cbo-projects-for-2012-bloomberg/ http://mybusinesssurveys.com/us-lawmakers-trade-blame-for-11-trillion-deficit-cbo-projects-for-2012-bloomberg/#comments Wed, 01 Feb 2012 06:08:02 +0000 TheDoor http://mybusinesssurveys.com/us-lawmakers-trade-blame-for-11-trillion-deficit-cbo-projects-for-2012-bloomberg/ A report showing the government will run a budget deficit of more than $1 trillion for the fourth consecutive year inflamed a debate over the federal shortfall that

EU chiefs arrive in Brussels about 2 p.m. today to put the finishing touches on a German-led deficit-control treaty and endorse the statutes of a 500 billion-euro ($661 billion) rescue fund to be set up this year. Greece and its private creditors said Jan. 28 they expect to complete a deal in coming days after bondholders signaled they would accept European government demands for a bigger cut in their debt holdings.

Efforts to hold the 17-nation euro area together with bolstered fiscal rules and a stronger firewall are colliding with stalled progress in Greece, where the crisis began in 2009. To prevent a financial collapse, Greek bondholders have been pushed to cede more ground after agreeing in October to take a 50 percent cut in the face value of more than 200 billion euros ($263 billion) of debt.

]]> http://mybusinesssurveys.com/greek-debt-talks-risk-derailing-eu-summit-plan-bloomberg/feed/ http://mybusinesssurveys.com/spain-unemployment-hitting-nearly-1-of-4-workers/ http://mybusinesssurveys.com/spain-unemployment-hitting-nearly-1-of-4-workers/#comments Sat, 28 Jan 2012 19:52:01 +0000 TheDoor http://mybusinesssurveys.com/spain-unemployment-hitting-nearly-1-of-4-workers/ Spain’s brutal unemployment rate soared to nearly 23 percent Friday and closed in on 50 percent for those under age 25, leaving more than 5 million people _ or almost one out of every four _ out of work as the country slides toward recession.

Spain’s National Statistics Institute reported that 5.3 million people were jobless at the end of December, up from 4.9 million in the third quarter _ a jump in the unemployment rate from 21.5 percent to 22.9 percent in the fourth quarter.

For those under age 25, the rate hit a whopping 48.5 percent, and the institute also reported that Spain now has 1.6 million households in which no one has work.

The numbers didn’t surprise Spaniards, who are gearing up for another recession after the economy briefly surfaced from a crippling two-year downturn triggered by the 2008 credit crunch and a burst domestic real estate bubble that had supercharged Spain’s economy for nearly a decade.

Spain already has the highest unemployment rate in the 17-nation eurozone, where the average jobless rate is just above 10 percent. Ireland holds the No. 2 spot with 14.6 percent unemployment and had to take an international bailout last year.

Javier Pelayo, an unemployed construction worker begging outside a Madrid subway station, said he hasn’t had steady work for more than a year. He sat on a piece of cardboard with a handwritten placard reading: “For the love of God, help me feed my son.”

“They have evicted me from my house and I’ve come to the capital to see if my luck improves, but this is how you find me,” said Pelayo, 40, who moved to Madrid with his wife and son after losing five years worth of mortgage payments on his apartment because he couldn’t make the payments.

Even highly trained professionals have extreme difficulty find work, or anything that pays enough for them to make it on their own in Spain. Katia Linderman Matas, a biologist, said she’s looked for years for a job in Spain but will now search in Austria and Germany because she speaks German.

“(In Spain) you have to work nine hours instead of eight with bad conditions and the money isn’t enough for you to get by,” said Matas, 29. “If I wasn’t living with my mother, I don’t know what I’d be doing now.”

Spain was Europe’s top job creator until 2008, and began to emerge from recession at the end of 2010 but is now expected to head into a new one this quarter, and the average yearly salary is only about euro21,000 ($27,600).

Spain’s new center-right government said the bad unemployment news wasn’t a surprise and that an overhaul of labor laws aimed at spurring job growth will be put into place this month.

“It’s a negative report and one that will make the government work with greater intensity,” said Deputy Prime Minister Soraya Saenz de Santamaria.

The economy shrank 0.3 percent during the fourth quarter, and the Bank of Spain last month predicted the economy will contract 1.5 percent in 2012. Meanwhile, a survey of 4,576 businesses last week by Spain’s Chamber of Commerce showed only 3.7 percent expect to add new jobs in the first quarter of this year. The rest said they would keep employment the same or cut jobs.

Saenz de Santamaria said the unemployment news “will lead the government to accelerate the rhythm of reforms,” and experts said the government must make drastic labor law changes to make it easier for businesses to fire workers and negotiate with unions.

Under the current system, people who are laid off or fired must be paid between 20 to 33 days of salary per year worked, and companies can’t negotiate directly with their unionized workers because they must adopt wage deals set for entire sectors.

“(Companies) need strategic planning to match workers with the needs of the economy, but even if you reform the labor laws, it’s not going to jump-start employment immediately,” said Antonio Barroso, an analyst for the Eurasia Group consulting firm. “You need credit, you need the financial sector to improve.”

Other analysts think Spain might get a boost from looser labor reforms because most of Spain’s businesses have less than 100 employees.

“A lot of these businesses with say three or four workers might hire another person, or they could go from six workers to eight, but they are waiting for the government to make its moves,” said Francesc Pujol, an economics professor at the University of Navarra.

The government on Friday unveiled a budget-discipline law that will allow the government to impose penalties on debt-laden regional governments if they run deficits after 2020. Spain’s regions _ like states or provinces _ must bring their spending under control by that year or face possible fines of 0.2 percent of regional gross domestic product, said Finance Minister Cristobal Montoro.

Spain’s deficit for 2011 is expected to be 8 percent of national income, 2 points above the former Socialist government’s predictions. Prime Minister Mariano Rajoy acknowledged that regional government deficits, most of which are run by his center-right Popular Party, were responsible for 75 percent of the deviation.

Rajoy’s government is still committed to reducing the deficit to 4.4 percent in 2012 and down to the EU limit of 3 percent the following year, although with a recession looming, that pledge may prove very difficult to keep.

Since taking office Dec. 23, the government has approved austerity measures to rein in the country’s swollen deficit with euro8.9 billion ($11.5 billion) in spending cuts and euro6.2 billion ($8.2 billion) in tax increases.

With so much economic gloom in Spain, 24-year-old Anderson Heras was pondering heading back to his native Ecuador after working for years in Madrid as a waiter.

His most recent job offer was from a restaurant for 10 days per month on contract and the rest under the table in cash. A supermarket said it might hire him if he did a weeklong unpaid tryout.

Government unemployment office worker Iria Regueiros said most people seeking jobs have little hope and aren’t qualified enough to find work elsewhere in Europe.

“Spain has broken down,” she said. “I don’t see a common (European) market. We don’t share a common language, our qualifications aren’t governed by the same yardstick and in the end we are at the mercy of a system that’s been set up more for financial institutions than anything else.”

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Without special charges, United Continental Holdings Inc. says it would have earned $109 million, or 30 cents per share.

Analysts surveyed by FactSet had been expecting a profit of 13 cents per share.

Revenue rose more than 5 percent, to $8.93 billion, the same as analysts expected.

The company spent $170 million integrating the two airlines.

A year ago it lost $325 million because of integration costs. The companies closed the merger on Oct. 1, 2010.

Revenue for each seat flown one mile rose 8.2 percent as the company raised fares.

Source

Groups like the Muslim Brotherhood and their liberal and secular rivals differ over the goals of the revolution and the strategy to achieve them, in particular the relationship with the country’s interim military leaders.

Military generals led by Field Marshal Hussein Tantawi took over from Mubarak when he stepped down on Feb. 11, 2011. The ousted president is now on trial for his life on charges of complicity in the killing of hundreds of protesters during the uprising.

Volunteers from the Brotherhood, a fundamentalist group that won just under half of parliament’s seats in recent elections, were checking IDs and conducting searches of the thousands flocking to join the protests.

Other Brotherhood followers formed a human chain around a large podium set up overnight by the group. The Brotherhood loyalists were chanting religious songs and shouting, “Allahu Akbar,” or God is great.

In contrast, liberals on the other side of the square were chanting, “Down, down with military rule,” and demanding that Tantawi, Mubarak’s defense minister for nearly 20 years, be executed.

“Tantawi, come and kill more revolutionaries, we want your execution,” they chanted, alluding to the more than 80 protesters killed by army troops since October. Thousands of civilians, many of them protesters, have been hauled before military tribunals for trial since Mubarak’s ouster.

“We are not here to celebrate. We are here to bring down military rule. They have failed the revolution and met none of its goals,” said Iman Fahmy, a 27-year- old pharmacist who wore a paper eye-patch in solidarity with protesters shot in the eye by security forces during recent protests.

Fahmy was among several thousand protesters led by pro-reform leader Mohamed ElBaradei who were marching toward Tahrir Square from a neighborhood on the west bank of the river Nile. Several other marches were proceeding toward Tahrir, raising the possibility of a massive turnout at the square.

Unlike many of the demonstrators, ElBaradei, a Nobel Peace laureate, said that the immediate return of the military to the barracks was not a top priority.

“I don’t think that is the issue right now. What we need to agree on is how to exactly achieve the revolution’s goals starting by putting down a proper democratic constitution, fixing the economy, security and independent judiciary and media and making sure the people who have killed those people are prosecuted,” he told The Associated Press fast payday loan.

There were no army troops or police in Tahrir Square, birthplace of the 18-day, anti-Mubarak uprising that began on Jan. 25, 2011.

Liberal and left-leaning groups behind Mubarak’s ouster say that, except for putting Mubarak on trial, the generals have left the old regime largely in place. They say that the Brotherhood has tacitly accepted this, concentrating its efforts on winning parliamentary seats rather than working for the realization of the uprising’s goals _ social justice, democracy and freedom.

“You have the parliament, the marshal (Tantawi) is in power and the revolutionaries are in prison,” a man shouted at a Brotherhood supporter carrying the blue flag of the group’s political arm, the Freedom and Justice Party.

The Brotherhood is the largest single bloc in the new, 508-seat parliament, which held its inaugural session on Monday. The group’s supporters have mostly stayed away from recent protests demanding the military immediately step down, arguing that it was time for elections rather than street protests.

But the liberal and leftist groups maintain that the revolution must continue until remnants of Mubarak’s 29-year regime are removed from public life and government, and until those responsible for the killing of protesters are brought to justice.

“I am not here to celebrate. I am here for a second revolution,” said Attiya Mohammed Attiya, a 35-year-old father of four children who is unemployed. “The military council is made of remnants of the Mubarak regime. We will only succeed when we remove them from power,” said Attiya.

The Brotherhood’s election win came in the nation’s freest election in decades, held in stages over a six-week period starting Nov. 28. Another Islamist group, the ultraconservative Salafis, won about a quarter of the seats, while liberals and independents could only garner under 10 percent of the seats.

The Brotherhood was outlawed for most of the 84 years since its inception, subjected to repeated crackdowns by successive governments. Under Mubarak, hundreds of them were jailed on trumped-up charges.

“We are the political force that paid the heaviest price,” said Alaa Mohammed, a teacher and Brotherhood supporter. “Thanks to the military council, we had the cleanest elections ever, and the military protected the revolution.”

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Time is running out for Greece to reduce its debt by some euro100 billion ($129 billion) and avoid missing a vital bond repayment deadline. Talks between the country and representatives of banks and other investment firms to secure a deal hit an impasse over the weekend.

The deal would involve private creditors swapping their old Greek bonds for ones with a 50 percent lower face value. The new, lower priced bonds, would also have much longer maturities _ pushing repayments decades into the future _ and will pay a much lower interest rate than Greece would currently have to pay on the market.

It’s clear that Greece needs some form of deal soon _ it faces a euro14.5 billion ($19 billion) bond repayment on March 20, which it will be unable to afford if the bond swap doesn’t go through.

The Greek government and representatives for the private creditors said they are moving closer to a final deal. But any agreement also has to be signed off by the other 16 countries that also use the euro as their currency and the International Monetary Fund, who have made the deal a key condition of the country winning any further bailout loans.

Greece has been surviving on a first euro110 billion ($142 billion) batch of rescue loans since May 2010, which were conditioned on deep spending cuts and sweeping public sector reforms.

At the center of the debate is the interest rate that Greece will have to pay on the new, lower-valued bonds. The interest rate is key not only to determining the overall losses for the bondholders but also to whether the deal will work.

If the interest rate is too high, a second, euro130 billion ($168 billion) bailout for Greece may not be enough to put the country back on its feet. The other eurozone states and the IMF would have to provide more loans, but they are unwilling to do so.

But if they are too low, the losses for bondholders will become so high that it will be difficult to get them to agree voluntarily to a deal.

Dutch Finance Minister Jan Kees de Jager indicated that the eurozone may be moving away from its previous insistence that investors will not be forced to take losses.

“We’ve never pushed for a default, but we’ve never said it (a restructuring) must be voluntary,” de Jager said as he arrived for a meeting with his eurozone counterparts in Brussels no fax payday loans. “Our goal is a sustainable debt. It has our preference if it’s voluntary, but it’s not a precondition for us.”

Greece needs to secure a deal quickly if it wants to avoid a disorderly default on March 20.

“Given that any debt swap deal will involve a lot of lawyers, it is estimated that around 5 weeks are needed between agreement and the bond maturing to prevent default,” said Louise Cooper, markets analyst at BGC Partners. “This does not leave much wriggle room, although such pressure must focus the minds of all at the negotiating table.”

A forced restructuring would likely trigger payouts on so-called credit default swaps _ a contract traded between banks and other investment firms that want to insure against potential defaults. Because the market in CDS is obscure _ with no clear data on who would owe whom how much _ the eurozone fears that a payout could lead to turmoil on financial markets similar to what happened after the collapse of U.S. investment bank Lehman Brothers in 2008.

Although officials, including the French and Greek finance ministers, insisted that a deal was in the making, few expected a final agreement ahead of a key summit of EU leaders next Monday. De Jager suggested that negotiations may even drag on beyond that.

A Greek official said the government now hopes to make a formal offer on the bond swap to investors by Feb. 13. He declined to be named because talks are ongoing.

Greece’s economic problems kicked off Europe’s debt crisis more than two years ago and the continent’s inability to resolve its troubles have raised concerns about other highly indebted countries. But positive bond auctions in Spain, Italy and France last week have eased some concerns about the region’s bigger economies and have lifted stock markets and the value of the euro.

Ministers will also seek to put the finishing touches on their permanent bailout fund _ the euro500 billion European Stability Mechanism _ which is scheduled to come into force this year. They will also discuss a new intergovernmental treaty designed to keep eurozone countries from overspending.

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Treasurys that mature in 10 years returned about 16 percent in 2011. Longer-term Treasurys gained more than 20 percent.

But as these highly unusual gains have been reported in the media, people new to bond investing have been wondering how the phenomenal gains could have possibly happened when they shopped for bonds and found only disgustingly low interest rates. As one retiree wrote me: “I haven’t wanted to buy Treasurys because they are paying only 2 percent interest, and I’m not going to be able to live on 2 percent. So how could a person earn 16 percent on those Treasurys paying 2 percent?”

The answer goes to the heart of how investment gains, or returns, are calculated for bonds.

If, for example, a retiree were to go directly to the U.S. government and buy a fresh 10-year Treasury bond that is paying 2 percent interest, and he held it for the full 10 years, he would get paid the 2 percent interest he was promised each year. And that’s all he would get, not 16 percent.

On paper, if he had a brokerage statement for 2011, the 10-year Treasury bond he bought early in the year would have been worth about 16 percent more at the end of 2011. But it would have been a gain recorded on paper, not one the investor could spend unless he was willing to sell his bond at that higher price. But some investors do buy and sell bonds without waiting for them to mature. And if a person bought a 10-year Treasury bond at the start of the 2011 and sold it at the end of the year, he ended up with about a 16 percent return. That total return came from combining the appreciation on the price of the bond and the interest he collected during the year.

Likewise, if the person didn’t buy individual bonds but put money into a bond mutual fund that selected U.S. Treasury bonds, he would have seen at the end of 2011 that he probably gained more than 14 percent for the year. If at the point, he decided to remove his money from the fund, he actually would have captured the 14 percent gain. Money left in the fund could have gained or declined.

What happened in 2011 was unusual. And here’s how the gain occurred. At the beginning of 2011, people were expecting the economy to improve, and so yields on 10-year Treasurys were a little more than 3 percent payday loans. But as the year went on, investors became increasingly nervous as the economy started to look like it might go back into a recession. Consequently, nervous people piled into U.S. Treasurys for safety, and the combination of a lousy economic environment, a promise by the Fed to keep interest rates low and the popularity of Treasurys made yields slide to unusually low levels. By the end of the year they were paying just under 2 percent. That meant that bonds yielding 3 percent earlier in the year were much more valuable than those late in the year at 2 percent. So those early 3 percent bonds gained about 16 percent in value.

If this is confusing, as it is to many, just answer this simple question: If you were given a chance to earn 3 percent interest or 2 percent interest, which would you choose? Clearly, if you had a choice of two bonds that were equal in safety, you would want the one paying 3 percent, not 2 percent. So at a time when new bonds are paying about 2 percent and older bonds are paying 3 percent, people want those older bonds. If you happen to be holding those older 3 percent bonds, you will find that they will become extra valuable. If you decide to sell them, you will get back more money than you originally invested.

If you yearn for similar gains, keep in mind that a 16 percent return is not likely to happen this year. If interest rates keep falling because people fear recession, there could be another nice gain. But yields have fallen a lot. To go to zero percent this year, the world would probably have to go into a serious recession. Even at zero, the bond math would result in a gain of only about 16 percent, said Matt Tucker, a managing director of BlackRock’s fixed-income portfolio group.

It’s more likely that at some point in the future the bond math will work in the opposite direction. Interest rates will start climbing as the economy improves, and people will prefer rates of 3 or 4 percent that eventually become available. At that point, investors won’t like 2 percent anymore. And today’s bonds will lose, not gain, value. The question is when this will happen, and no one knows.

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The report - a detailed look by forecasting firm IHS Global Insight at employment and exports in the nation’s 367 metro areas - found the St. Louis region has added back just 37 percent of the jobs it has lost since its pre-recession peak. That ranks 203rd out of 367 metros.

But, the study also found that St. Louis fared pretty well last year, adding nearly 11,000 jobs in 2011, or 10.7 percent, the 39th fastest clip in the nation. IHS predicted St. Louis will return to peak employment in 2014 or 2015, about in line with many other metro areas in the Northeast and Midwest. Sun Belt regions - hit harder by the housing crisis - generally have longer to wait while energy-rich metros from the Dakotas to Texas could return to peak employment this year, if they haven’t already payday loans.

The Conference of Mayors - including St. Louis Mayor Francis Slay - is holding its annual meeting in Washington this week, and job-creation is high on the agenda.

A few other facts from the report:

The St. Louis metro area is home to 40 percent of jobs in Missouri. Median household income here has fallen 3 percent since 2007, to $50,900. Across all metros it has fallen 1.3 percent, to $47,000. In the first half of 2010 (the most recent data available), exports accounted for 8.6 percent of St. Louis’ economy. That’s higher than average and up from 6.2 percent in 2005.

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