Archive for April, 2009
Raising capital Faurecia began
Faurecia has launched a capital increase of approximately 455 million euros to increase capital and improve its liquidity. In a release issued Tuesday, the automotive supplier said it will be the price of 7 euros per share, which reflects a discount of 34% based on the closing share Faurecia of 24 April 2009. 8 The group will issue new shares for 3 old. “The proceeds from the capital increase will be allocated to working capital requirements net consolidated to approximately 250 million euros and the balance, improving the liquidity of the group and the optimization of its cost of financing, “announces the automobile.
Secured transaction
The operation, carried out with retention of preferential subscription rights of shareholders, is guaranteed by the main shareholder, Peugeot SA. It undertakes “to agree as irreducible up to all of its rights and actions which are not subscribed for irreducible and reducible by other investors.” The subscription period for new shares, listed and traded on Euronext Paris, begins Thursday and ends on May 12 included. It is open to the public in France. The settlement is expected May 26 At 12:15, the title of Faurecia fell 3.71%.
Adapt the business to the economy
The capital increase is in the “Challenge 2009″ which includes a program of cost reduction of 600 million euros and secure funding. It is the second step, after the facilities for payment of 1633 million euros granted to Faurecia on 10 April. These provisions related to a credit of 1 170 million, a loan of Peugeot SA of EUR 250 million and an additional credit of 213 million euros a syndicate of French banks. “By adapting the business to the economic situation of the automobile industry for 2009, Faurecia is to have an effect at the time of resumption of growth and position itself as a player in the consolidation of the market,” said release. The group recorded a turnover falling by 38.1% in the first quarter of this year, compared to the same period last year. He had shown a net loss of 547.8 million euros in 2008.
Right of reply of the sub-committee
The sub-committee communication and Press forum for the consolidation of peace in Congo-Brazzaville (Palais des Congrès de Paris, 4 April 2009), gives the lie as a focus on the allegations required by griot Youss, with respect to the organization committee of the forum, during an online interview given last week.
At the same time, through this development, we want to enable all those who, from near or far, have heard the performance by the griot Youss the forum for the consolidation of peace, to have a more objective and less partisan.
Like a wise man who is listening before acting, we wanted to let the imagination of everyone of us speak in the maze of confusion and cacophony found here and there. This period, we have a duty to intervene and give the true version of events. Why react to such a bunch of lies? Simply because, we all remain committed to democratic values, provided we are severe against those who distort the facts in order to satisfy their selfish interests, and their personal glory. We go out of our reserves because there were too many things said and too many falsehoods proliférées against the organizers, the Congolese people as Youss. Yet we remain committed to democratic values which include among other things, freedom of expression. But, however, freedom of expression is not synonymous with libertinism in the information.
Here is our version of events:
In fact, Youss has never been invited by the Organizing Commission of the Forum. He has been through Elion, an artist living Blois who contacted the team of organizing a forum for the April 4.
So the latter, not the members of the collective, which the griot Youss association with this event in order to accompany him on stage. The two arrived a day earlier in Paris and without the agreement of the collective. Their requirements were to obtain from the organization of the forum, a stamp of 2 000 while all the other musicians, not the least, that offered their services, either free or at a nominal amount. This was the case with the choir “World of gospel, musicians Extra Musica or the comedian Phil Darwin.
The organizing committee has rejected this offer. Faced with this refusal, Youss and his accomplice threatened to destroy the materials board, or rather to besmirch his image if they are not selected for the event tomorrow. Despite these threats, the rejection of the collective eventually convince Mr. Elion to abdicate and leave the seat. Decided to Cavaler alone, the griot Youss made the choice on the podium of the forum and beg the community to remember while regretting the threatening and aggressive attitude of his mentor. However, taking advantage of the departure of Elion, some very touching words spoken and deep by the griot Youss in favor of their cause, have finally convinced some members of the collective.
Regarding the criticism that has issued Youss Elion, his mentor, we prefer to choose to retain to preserve friendly relations between probably the two artists.
Indeed, had argued Youss fiber personal and patriotic pride in referring to 4 arguments.
First, he had taken the risk to announce in his city, Poitiers, through posters, participation in the forum after Elion gave him guarantees. Do not go on stage was a disavowal, a setback for him in the city.
Secondly, he wished to have included the event of the forum, held at the Palais des congrès de Paris, on his CV for the remainder of his career and it would be ensured the promotion of his next album.
Third, it was the Congo as well as other musicians, and he shut the doors of Congress was not encouraging for all Congolese artists, like himself, in need of recognition.
And four, he was ready, on his own behalf, to revise the stamp leaves to take a nominal amount. His proposal was 300 €. Thanks This is the person who throws Youss stigma, which is sensitive to their concerns, spoke of his own, on his behalf with other members of the extension so that it is 200 € granted. Thus, taking this argument to which no one could remain indifferent, the collective has decided to go on stage.
As for the care here is the exact statement of expenditure incurred on his behalf. Contrary to what he said, he received: 1. the sum representing the cost of his hotel + meals, is € 110 (awarded on Friday evening April 03). The hotel where Youss spent the night of 03 to 04 April and he described with bitterness is the Hotel Ibis Porte d’Italie. 2. payment of his return ticket (Poitiers-Paris, Paris-Poitiers) or € 110 (awarded the sale the evening of April 03). Note that Youss and will require the day after the forum, 100 € the Minister Thierry MOUNGALLA, in addition to the promise made by the Minister to pay his ticket, which amounted to € 120. 3. His stamp of € 500, received barely finished his performance on Saturday 04 April.
In the end, the griot Youss therefore pocketed € 720 of the committee organizing the forum, Minister of € 100 Thierry MOUNGALLA, a total of 820 €. Compared with the announced amount (€ 50) during his interview, one can easily understand that we are light years from reality.
After this review details, we are able to put us in front of several questions.
How is our griot presented so far as a committed artist can engage in a noble struggle as that of peace making in the public Congolese humbly working for peace? How can he display such extraordinary financial demands while patriotism demand sacrifice? Indeed, so entrenched in its dealings with the money he withdrew willingly to a zero real stamp received 500 euros instead of 50. Why has not released details of the arrangement with the organizing committee in rejecting his acolyte Elion?
The contract provides that benefits when a benefit has been provided for a price (agreed in advance), the contract is perfect. What in the name of the griot Youss would be fun to call, after its delivery, to any member of the group he met in the corridors of the hall that could be described as gratuities, bribery?
Finally, another issue we torments the mind of the benefit, the relationship between Youss and members of the collective and the hubbub around it has been: if the organizers were so embarrassed, embarrassed by the presence or Youss songs, they have agreed to pay the stamp Youss which, moreover, had not been a written contract but an oral agreement based on self-confidence? If both players were stunned, the exhibitor Thierry Moungalla, Minister of the Republic, would have agreed to pay from his pocket a contravention of Youss, in addition to the € 100 that he has graciously donated?
Given this clarification, which is serious, who is not? In all cases, the scene is thus set, we want everyone to be his opinion and impartially on the character of Youss.
Significant consolidation of Cac 40
The Paris Bourse started the week on profit taking. First victims of this wave of early retirement, banking values. In New York, Bank of America has published its quarterly results. The car is empty. At 14 hours, the Cac 40 lost 2.54% to 3013 points.
After six consecutive weeks, the Paris Bourse, like its European counterparts, consolidates. At 14 hours, the Cac 40 lost 2.5% and is approaching the threshold of 3000 points. Published by Bank of America quarterly results better than expected, had no influence on the market. No more than the latest developments in the rapprochement between Sun Microsystems and Oracle. The offer comes as an approved unanimously by the Board of Directors of Sun Microsystems. The amount of the transaction amount to $ 7.4 billion.
In New York, Bank of America saw its net profit more than tripled to reach 4.2 billion in first quarter (1.2 billion one year earlier). It has been boosted by the trading activities of Merrill Lynch, acquired in September 2008, but also the added value generated by the sale of a stake in China Construction Bank ($ 1.9 billion).
At 14 hours, the Cac 40 was down 2.54% to 3013 points in a limited sales volume of 1.15 billion traded on the components of the index. In London, the Footsie yields 1.24% to 4042 points and in Frankfurt the Dax lost 2.48% to 4561 points. In New York, the June futures contract on Dow Jones plaice 101 points to 7987.
On the oil front, the barrel of U.S. light crude lost $ 2 to 48.33 while many people have to recall that the global economy remains shaky despite some signs of inflection of the recession. On the foreign exchange market, the euro fell to 1.2959 dollar, the lowest for two months, weakened by divisions within the ECB on monetary policy.
With the exception of Dexia, which continued its bull rally (4.09% to 4.32 euros), banks suffer profit taking. Credit Agricole lost 5.88% to 10.31 euros, BNP Paribas 4.59% to 38.60 and Société Générale 2.03% to 38.70.
EADS drops 5.81% to 9.68 euros, still weakened by uncertainties about the future of military transport aircraft A400M while London might abandon the program.
Car manufacturers are also subject to clearances. Renault yields 7.84% to 22.21 euros and Peugeot, which must publish its quarterly revenue Wednesday, decreased 9.25% to 17.55. U.S. General Motors is ready to cede anything to the control of its European subsidiary Opel-Vauxhall, according to the Financial Times.
GDF Suez declining 3.44% to 24.27 euros. The German E. ON may relinquish some of it holds 20% Nord Stream, which builds the future gas pipeline linking Russia to Germany via the Baltic, the french group, reports the weekly Wirtschaftswoche. The latter adds that E. ON would “be ready” to sell 4.5% of its stake in GDF Suez.
Carrefour plaice 1.83% to 28.66 euros. The group made an offer on the Russian Seventh Continent in February highlighting the latter 958 million, Reuters reported, citing banking sources close to the negotiations.
Sanofi-Aventis gaining 1.60% to 42.99 euros. The pharmaceutical industry is in turmoil following the announcement of the acquisition of laboratory dermatological Stiefel U.S. by GlaxoSmithKline for the UK 3.6 billion.
Finally, Thales lost 1.91% to 29.78 euros. The electronics group of defense plans to divest its stake in Camelot, the operator of the British national lottery, reports the Sunday Telegraph. The Sunday newspaper said that the four principal shareholders of Camelot, which hold 20% stake, want to sell their participation.
Artprice.com: ready to resume its flight?
Volume, MACD, Exponential Moving Average 2, Force Index, Weighted Moving Average 30 (blue), 13 exponential moving average.
Artprice.com is a medium-term uptrend. Having broken its resistance at 3.44 euros, the title had joined the resistance of 4.40 euros in plenary and then slowed up to join his support to 3.44 euros and its upward trend line. It was then that the title was attacked recently in the resistance of 4.4 euros he crosses closing. Since then, the consolidation. The upward MMe13 is now very close, the strength index is about to resume its signal line … One can expect a further rise in the course until 5.44 euros.
Fiat / Marchionne: Chrysler priority
“I confirm that Fiat continues its policy of seeking alliances and confirm that I see no obstacles to reaching an agreement with Chrysler. It is our priority.” Sergio Marchionne, in conference call responding to questions from analysts, said the “mutual benefits” related to “carry enough technology to Chrysler – said the CEO – in exchange for a share of the manufacturer.” “We talked a lot with the U.S. government and all parties involved in Chrysler,” he said, ruling out Fiat puts money into Chrysler. “We are committed to giving cash, to give financial support,” he said.
In the still ongoing negotiations on the agreement, the managing director of Fiat has called “a milestone in the landscape of an industry that is rapidly changing,” Marchionne has also ensured that seek to “get the most for both Fiat and for Chrysler. ” The agreement, which must be signed by the end of April, the company provides torinese acquire an initial 20%, which may be increased up to 35% if they achieve certain targets and it is a call option on a further 16% be exercised within 7 years. Fiat may not be in control of Chrysler until the loan from the U.S. Treasury will not be fully repaid.
Approached the indiscretions of the press regarding an interest in Fiat Opel (General Motors group), Marchionne said not to have to announce anything: “Nothing is fixed. We have direct talks with Opel.” Marchionne reiterated that, given the “structural imbalance between demand and supply globally, we need a realignment in the field, which is” a very painful adjustment. Fiat will be part of the consolidation taking place. We are open to have dialogues with all manufacturers “to reach” a minimum of 6 million units. “
Enhanced the Library-Municipal Emeroteca Ostra
“The municipal administration has enhanced the Library-Municipal Emeroteca” Joseph Tanfani “with a project which aims to stimulate, through the expansion, above all, the fund literature for children, dissemination and the use of books, promote the reading of books and knowledge of contemporary children’s reading, but also organize events for the animated reading books. ”
A talk is Massimo Bello, Mayor of Ostra Vetere, regarding the “Open A Book” dall’Assessorato studied the Cultural Heritage and funded entirely by a contribution of 3,000 euros paid by the Foundation of Cassa di Risparmio di Jesi.
With this project, the Administration has identified and purchased new books, organized days of “lively reading in the library in order to encourage in children the love for books and reading and has promoted the” Festival of the Book “for kids to offer young people the knowledge of what the market offers in relation to contemporary literature.
The Library of Ostra Vetere was also enhanced by the municipality by establishing dell’Emeroteca with the daily reading of newspapers and periodicals, with linking to SBN System (Polo Bibliotecario Nazionale), with the expansion of Opening with the upgrading of internet.
The benefits expected from the project, funded by the Fondazione Cassa di Risparmio di Jesi, were to stimulate and consolidate the reading for children who attend the school, encourage reading through the integration of children with difficulties based on the fact to different cultures, strengthen the teaching offer of school libraries through the promotion of the library, to promote the conscious use of the facilities of a public library and increase the loan librarian, to promote knowledge of contemporary literature for children, through the conduct of the festival of the book. The municipality of Ostra Vetere Library has a public reading that preserves a wealth of literature about eight thousand volumes, including those of the old fund and the fund today.
By Francesca cake Office Studies Aletti Gestielle SGR
The production is expected to fall further after the five previous consecutive substantial corrections. Orders have recorded 12 falls short in the last 14 months and the manufacturing PMI has remained largely below the threshold of 50 in the last 8 months, recording a record low in January. The sector remains in crisis, more in fact the manufacturing sector, particularly penalized by the sharp drop in exports caused by the slowdown in demand in major trading partners.
ECB Monthly Bulletin (April 9)
In the Monthly Bulletin of April will be shown the scenario expected by Governing Council which led to the 25 bp cut in interest rates in the April 2 meeting. Side growth, the ECB expects a contraction in economic activity in 2009, which should show only a modest recovery in 2010. With regard to price, the inflation rate could become negative trend towards the middle of 2009 to return to accelerate towards the end of the year, but remained below 2% in 2010. The risk is sull’outlook growth over inflation are balanced.
Decision of the BOE Monetary Policy (April 9). March 5: 0.50% Forecast: 0.50%
The BOE should leave rates unchanged at 0.50%. Despite the expectations are for a contraction in economic activity in 2009 and the drop in inflation below target, rates are already at a very low level and was already specified in the statement that when the rates are close to zero, further reductions are less effective in terms of transmission to markets and the impact on demand and inflation. This was introduced simultaneously QE with the purchase of assets for a total of 75 bln GBP. In this meeting, the BOE would announce an expansion of its asset value, the Government had approved a limit for such purchases of 150 bln GBP.
U.S. Trade Balance for February (April 9). January: – $ 36.0B Forecast: – $ 33.4B
We expect a further narrowing of the trade deficit. Imports of goods would have to record a sharp correction, reflecting the weakness of domestic demand and partly also the fall in oil prices (-5.2% mom in February on average). Exports should also undergo a correction, but probably higher, because of the sharp slowdown in key export markets for U.S. exports.
Prod ind. French February (April 10). January: -3.1% mom, -13.8% yoy Forecast: -0.8% mom, -14.6% yoy
The production is expected to further decline after the steep fall in January, reaching a record and the fifth decline in the last six months. The decline should be more pronounced in manufacturing, which is undergoing a deep crisis. The car segment, in particular, has had bad results in spite of state aid granted to the major car manufacturers, as evident from the registrations recorded in February (-14.8% yoy).
WHAT ‘SUCCESS THE LAST WEEK
Eurozone: strong correction in inflation in March. March: 0.6% yoy
From the preliminary estimate of the harmonized CPI for March show a further sharp slowdown in inflationary pressures in the Eurozone 0.6% yoy (from 1 .2% yoy in February). The figure, below the consensus estimate, the lowest since the start of the series in October 2001. This is the fourth month in which the trend growth of consumer prices stood at below 2% yoy. The result implies a trend growth of the dynamics of the monthly consumer prices of 0.4% mom, after 0.4% mom registered in February. Up to today have contributed to the German harmonized CPI (-0.2% mom, 0.4% yoy) and the Harmonized Italian (1.1% mom, 1.0% yoy). In addition, the decrease of 0.57% mom of Belgian national CPI in March (from which we estimated a corresponding -0.6% mom in the harmonized index), the -0.1% yoy CPI Harmonized Spanish (as of March prior to corresponding to a cyclical variation of 0.1% mom according to our estimates) and the rise of Slovenian national CPI (1.0% mom, 1.8% yoy). Eurostat does not provide breakdown by the publication of the flash-estimate, from the details of the German Laender CPI circulated last week showed that Germany, in short, inflationary pressures have been declining in the wake of lower prices for food, energy dell’household (favored by the strong correction dell’heating price of oil) and component transportation (facilitated by the correction in the price of fuel). It ‘been the same since the popular Italian national, who has recorded 0.1% mom (the trend has slowed to 1 .2% yoy from 1 .6% yoy in the previous month). The Harmonized Index cyclical quickened at short, recording 1.1% mom to 0.2% mom in February. Instead, the harmonized index trend has shown a slowdown to 1.0% yoy from 1.5% yoy. From the breakdown of national data shows that on a monthly basis, the modest acceleration of inflation was in line with the modest growth in prices of food (0.1% mom), clothing and footwear (0.1% mom) and hotels and restaurants ( 0.1% mom). A downward push is coming from the correction in the prices of component transport (-0.4% mom) and housing, water and electricity (-0.2% mom), while a rise in prices was registered by the component alcohol and tobacco (1.0% mom).
U.S.: Consumer confidence still near historic lows. March: 26.0
The confidence of U.S. consumers has been a modest rebound, but remain close to minimal. Today, recording a modest rise to 26.0 from 25.3 in February (the minimum was always after the takeover in 1967). With today’s gave the moving average to three months the index falling to 29.6 from 33.8, less than ever. The summary of the decline reflects the deterioration of the component of the current situation (from 22.3 to 21.5, at least since 1982), while there was an expectation of improvement (from 27.3 to 28.9). The figure is in line with what is implied by the results reported by the consumer sentiment index released by the Michigan University, rose in March with the final figure from 56.3 to 57.3. The detail in the aggregate shows that the deterioration in the perception of current conditions is due to both components of business conditions and employment. In fact, increased the proportion of responses that define the work as “hard to get” (from 46.9% to 48.7%, up from February 1992). At the same time, has remained unchanged, the share of those who define the conditions of employment as “plentiful” (to 4.6%), and thus worsen the spread of the labor market ( “plentiful” – “hard to get”) to -44.1 from -42.3%%, into negative territory continuously from February 2008 and the lowest since February 1992. Worrying signs are emerging also from the perception of current business conditions. Indeed, the percentage of respondents who define “good” business conditions fell from 7.0% to 6.8% and was increasing the percentage of respondents believe the opposite (from 50.5% to 51.1%). A less marked pessimism has emerged from some members of the sub-index of expectations. Faced with an increase in the percentage of those who propose an improvement in business conditions (from 8.5% to 9.1%) is in fact decreased the proportion of respondents expecting a decline (from 40.7% to 39.1%). Regarding the expectations for the employment context, is moderately increased the percentage of respondents optimistic about the prospects of employment (from 6.8% to 7.1%) and the percentage of respondents believe the opposite (from 47.0% to 42.6% in March) . Appear instead worsened income expectations, a decrease (from 7.9% to 7.5%) of respondents expecting an increase of their income, compared to a stabilization (from 24.0% to 23.9%) of those who fear a decline in income . Disappointing indications have emerged from the responses relating to the purchase intentions for the next semester. Indeed, there is a decline in intentions to purchase a car (3.9% from 4.7%) of housing (2.0% from 2.3%) and major household appliances (from 24.0% to 25.0%). As for expectations of inflation one year from consumers, in March there is a stabilization at 5.9%. The result reported by the U.S. consumer confidence is overall still disappointing and shows a continued weakness in consumer confidence, which weigh the substantial deterioration of the labor market, the deep recession and the ongoing credit crunch. The only hope for a more substantial improvement in confidence over the coming months could be the materialization of the first effects of the various fiscal stimulus plans launched by Obama.
Modest upward dell’ISM manufacturing. March: 36.3
The manufacturing ISM rose to 36.3 from 35.8 in February, registering the third consecutive increase since 32.9 in December, at least since 1980. The index remains in the area of contraction for the fourteenth month running and below the threshold of 41.2 (indicating contraction of the U.S. economy and not just in manufacturing) for the sixth month running. This means that the recession the U.S. economy continued in March, but the contraction of the manufacturing sector may have eased slightly. The comments collected dall’ISM show however a very low demand. In the pharmaceutical industry have been reduced levels of stocks, and is expected to return to rise over the next 4-6 months. In the machinery sector is the concern that customers are not paying for the merchandise that has already been delivered. As in the report in December and February, even in today’s go back to having none of eighteen subsectors of manufacturing records growth. A good indication is the stabilization of inflationary pressures, with the index of prices paid rising to 31 from 29. The level of manufacturing in March dell’ISM corresponds to annualized growth of real GDP of -1.5% qoqa, stronger than our growth forecast for 2009 as a whole. Production: the index of production rose in March to 36.5 from 36.0 in February, remaining below 50 per share on the seventh month running, but bouncing by more than ten points in the last three months, after which in December was the lowest recorded since the detection in 1948. The seasonality factor was moderately restrictive, and 1004 has lowered the result adjusted to 1 tenth compared to NEI. Wind fields covered by the survey, two have reported expansion of production in January. New Order: the index of new orders reported today a sharp rise to 41.2 from 33.1 in February. Remains in contraction area continuously from December 2007. The seasonality factor was restrictive, 1057, dropping 2.3 points to the result compared to NEI. For new orders, six sectors reported expansion in February. For the next few months, with seasonal factors restrictive until May, we should witness a further deterioration in the coming months. Employment: The employment index rose to 28.1 from 26.1 in February, when it registered its lowest since the survey. Our forecast for the payrolls of the manufacturing sector is on Friday-650k. The seasonality factor was moderately restrictive, 1014, removing nine tenths growth nsa. For jobs, no industry has reported growth in March. Stocks: The index on inventories remained under 50 share for the ninth month running, down from 32.2 today to 37.0. A single sector reported growth in inventories in March. Prices: The prices paid component of today has seen a modest increase to 31 from 29 after that in December was the lowest since June 1949. It relieves so at least some of the concerns of deflation, while inflation is still a problem.
ECB: cut of 25 bp and the announcement of non-standard measures in May. April 2: 1.25%
During the meeting held today in Frankfurt, the Governing Council of the ECB decided to cut rates 25 bp to 1 .25% lead. With this decision, interest rates were cut a total of 300 bp on 8 October 2008. Today’s decision was made taking into account the expectation that inflationary pressures remain weak in coming months, reflecting the sharp correction in prices of commodities and the sharp economic slowdown in both the Euro and the rest of the world. The macroeconomic data diffusi recently confirmed that the global economy, including the Euro, is experiencing a sharp contraction. Both the overall demand than the euro will be very weak in 2009, while there will be only a gradual recovery in 2010. At the same time, indicators of inflation expectations over the medium to longer term remain firmly anchored in line with the objective of the Governing Council to keep inflation close to but below 2% over the medium term. Following the decision, the Governing Council expects that price stability will be maintained over the medium term, thus supporting the purchasing power of households in the euro area. The Governing Council will continue to keep inflation expectations anchored in line with the definition of price stability, supporting a level of sustainable growth and employment and contributing to financial stability. As a result, continue to “monitor very closely” the development of all the variables in coming weeks. Regarding the economic analysis, reflecting the impact of turmoil in financial markets, economic activity has weakened substantially in the Euro, as domestic demand has contracted in connection with the global slowdown. The macroeconomic data and survey available suggest that economic activity remained weak in the Euro in early 2009. The Governing Council is expected that the application is comprehensive domestic record a decline in 2009, but you should gradually resume in 2010. The fall in commodity prices in place since 2008 is supporting the real disposable income and thus consumption. In addition, both the demand that foreign domestic should start to benefit from the effects of tax incentives and measures taken to restore the functioning of the financial system both inside and outside the Euro. The risks sull’outlook growth are balanced. On the one hand, there may be positive effects stronger than anticipated, due to the correction in the prices of commodities and actions of monetary and fiscal policy undertaken. On the other hand, there are concerns related to a stronger impact on the real economy of the turmoil in financial markets, of possible adverse developments related to global imbalances, protectionist pressures. As regards price developments, according to the preliminary estimate by Eurostat in March, inflation fell to 0.6% yoy from 1 .2% yoy in February. The significant slowdown in inflation since the headline reflects the correction of prices of commodities on a global level in recent months. But are emerging signs of a more widespread inflationary risks. The base effects resulting from past commodity price increases should play an important role in the dynamics of short-term. The Governing Council is therefore expected that inflation rates may become negative towards the middle of the year and that should go back to climb towards the end of 2009. The volatility of inflation in the short term is not relevant for monetary policy. Considering the period relevant for monetary policy, the trend rate of inflation should remain below 2% in 2010, reflecting mainly the weakness of demand in the Euro is that the rest of the world. Available indicators for inflation expectations over the medium to longer term remain firmly anchored in line with the mandate of the Governing Council to keep inflation at a level below but close to 2% over the medium term. Sull’outlook The risks of inflation are balanced. These risks are linked by a side all’outlook economic activity and prices of other commodities. Speaking of the monetary, the latest findings confirm the high volatility of developments in M3 and its components. Looking beyond this volatility, the rate of monetary expansion in the Euro has continued to decelerate markedly, and supports the assessment of the reduction of the upside risks to inflation over the medium term. The dynamic developments in M3 reflects the responses of investors to the intensification of financial market turbulence, but also the impact of recent reductions in interest rates. Concerning fiscal policy, a credible commitment to fiscal consolidation that respects the terms of the Stability and Growth Pact in order to maintain confidence in the sustainability of public finances, which is important both for economic recovery is to support the growth of long period. The countries subject to excessive deficit procedures must comply with the recommendations of ECOFIN to correct their deficits. In regard to structural reforms, the Governing Council welcomes the commitment of the European Council to make full use of the Lisbon strategy for growth and jobs in the current situation. E ‘therefore essential that governments support measures so as not to distort competition and to avoid delaying necessary structural adjustments. It ’so important to avoid protectionist measures. During the Q & A, Trichet stressed that today’s decision, as happened last month, was not unanimous but a majority but did not specify what were the other options discussed. The President of the Governing Council has explained that one of the motivations that are behind the cut of 25 bp (instead of 50 bp) is to maintain the corridor between the main refinancing operations rate and the deposit facility rate by 100 bp. Trichet also said not to rule out further cuts the refi rate, while it expects the deposit facility rate can not suffer further reductions, as it is currently at 0.25%. This means that in the future could be a narrowing of the corridor between the refi rate and the deposit facility rate. As for the deflation risk, Trichet is to know how this is very low for the Euro thanks to the ECB, which has anchored inflation expectations. A number of questions on the subject, Trichet has made it known as the ECB is further decided to introduce alternative measures of monetary policy (beyond those already under way based on building its own budget) to alleviate the problems in the credit market. The president has not told anything about how these maneuvers, and has only stated that the meeting of May will be given all the details. Some of the alternative measures that will be announced in the May meeting could be the extension of the maturity of lending up to 12 months (as stated by Weber during a speech). The ECB has also kept open the possibility of further cuts the refi rate in the coming months, at the same time narrowing the corridor to keep the deposit facility rate to 0.25%.
Nonfarm payrolls for March. March-663K
The figure for payrolls in March does not carry particular innovations than they have seen in past months and confirms the intensification of the recession in progress with considerable difficulty for the U.S. labor market. Indeed, today others are lost 663K jobs and given the current jobs lost in total since the recession amounted to 5.126K, the worst annual performance since 1945, when, with the end of the war, emerged from the labor force the six million women who entered in previous years to replace the men work in manufacturing facilities. Of these more than five million unemployed, almost three quarters have lost their jobs over the past six months. There is hope that the scale of job losses is reduced in the coming months, when the first package of tax incentives should begin to see the effects from summer. This is the fifteenth consecutive monthly decline. Simultaneously, in the review of routine monthly all’aggiustamento due to seasonal factors, has been revised downwards the figure for January to -741 (maximum loss of jobs by September 1983) to be -655, while the figure for February was unchanged. The revised total for January and February was so-86K, which has further exacerbated the weakness of the data consists of March. The slowdown is also evident from the growth medium of the last months: in fact, over the last twelve months the average growth in employment was-399K, while in the last six months has been of-618K and in the last three months of-684K. The employment picture is confirmed similar traits and even worse than that observed in previous recessions. Indeed, the figure today, as well as those seen in the last year, is not sufficient to ensure growth in the coming months and is therefore compatible with further weakness in preparation for the American growth and a deep and prolonged recession. In fact, we expect growth still largely negative in Q1 2009 (our current forecast is for growth between 5% and -4.5%). Traditionally, labor market affects the minimum number of months after the official end of each recession. Since the current recession is not yet signs of being close to the end, the losses in the labor market will continue for several months. Particular concern continues to be the dynamics of employment in the private sector, fell today for the fifteenth consecutive months, recording the after-655K-653K in February, for a total loss to date of 5295K jobs. Overall, the figure of March saw a few surprises, with most of the areas that show a typical pattern of recessions:
- Manufacturing: down 161K-169K after February. Since the recession of the manufacturing sector has lost 1.5 million jobs. In particular, those employed in the car dropped to 18K units in March after K +1 units in February, but it was in turn followed by the loss of 70K units in January due to the closure of many plants;
- Construction: here the total fell to 126K-107K after February. As for the subsector of the construction of buildings, now the total of the residential sector fell against the 18K-15K in February, while those employed in non-residential sector fell against the 15K-13K in February. At this point the recession, the magnitude of losses in non-residential sector now seem to have matched those of the residential sector, given the strong reluctance of banks to grant loans for projects of commercial real estate;
- Professional and Business Services: Here the total fell to 133K-178K after the February and -151 in January. In the second half in 2008 the sector had lost an average of 78K jobs per month. Much of this weakness is attributable to the Temporary Help, fell after the 72K-77K in February. This suggests how the next few months should see significant further weakness in the labor market, since this component is considered a leading indicator of trend in payrolls as a whole;
- Retail: here the total dropped after the 48K-51K in February, during the sixteenth consecutive monthly decline. Until now, the loss of seats idi work in this area have been more than twelve months following the start of both the recession of 2001 than that of 1990/1991. Indeed, since the beginning of the recession, the retail sector has lost 675K jobs;
- Education and Healthcare: this component, however continues to be the only (along with the Federal Government) to record positive results, driven by demographic trends. Today recorded a total +8 K +22 K after February. It seems to register the largest increases during recessions. In the second half of 2008 this sector has registered an average growth of 40K per month and over the past six months has seen an average growth of 32K units per month.
The household survey showed today, a result in sharp deterioration, probably even worse than seen nell’Establishment survey. Indeed, today’s unemployment rate rises to 8 .5% .1% from 8 February and the maximum from October 1983. The unemployment rate has risen by more than three percentage points since early 2008 and will rise further this year before they hit the peak in early 2010. The number of unemployed rises today to 694K units, while the labor force fell by 166K (with a participation rate dropped to 65.5% from 65.6%) which, combined with a decline of 861K in Civilian Employment, has led to the unemployed Household survey mentioned above. Over the last twelve months the number of unemployed rose Household survey a total of 5 million. In addition, long-term unemployed (unemployed for at least 27 weeks), increased by 265K units in March, reaching a total of 3.2 mln. Over the last twelve months the number of long-term unemployed rose to 1.9 mln in total. The aggregate hours worked in the private sector fell by 1 .0% mom, twelfth consecutive monthly decline, while the hours worked in manufacturing fell by 2.1% mom sixteenth consecutive monthly decline.
MOODY’S CONFIRMS A to E DOUBLE ITS STATE TITLES
The rating “Aa2″ by Moody’s on Italy and the Italian State bonds is firmly in evidence of a crisis. The worst and longest recession since World War has not scratched the double “A” Italian, which translates into a high degree of reliability of the state in its ability to repay all debts on time and in full. Assigned by Moody’s to Italy in May 2002, after seven years this “Aa2″ maintains outlook “stable” under the “Italian economic strength very high,” and when “the weight of debt and structural problems of the country.
These are the main concepts contained in the report on Italy published today by Moody’s, the credit rating agency that assigns the highest rating to the credit standing of the Italian State, a step above the “AA-” by Fitch and two steps above the “A +” by Standard & Poor’s.
The analysis on the risk-country is an event that is part of the routine activities of rating agencies, however the timing of this report on Italy – a document 11 pages long full of numbers, forecasts and estimates that affect all aspects of life economic, political, social and financial status of the country – allows Moody’s, in the context of a crisis characterized by an impressive degree of unpredictability, to give his answers to the concerns of traders and investors holding more than 1,400 billion BoT, CTZ, CCT and BTP and is constantly questioning the ability of Italy to keep its rating while those of other European states are solid substandard (Ireland, Spain, Portugal, Greece), or threatened by relegation. As for Moody’s, therefore, for now the “Aa2″ is with solid prospects for medium-term stable.
This report on Italy is signed by four analysts weight: Alexander Kockerbeck (senior credit officer and analyst, first for the Italian sovereign rating), Dietmar Hornung (senior analyst), Kristin Lindow (Regional credit officer for Europe and Africa) and Pierre Cailleteau (managing director). The analysis focuses on four major areas that contribute to the allocation of a rating, according to the methodology of this agency, with assignment to a level chosen from among five very high, high, moderate, low, very low. Thus the “Aa2″ Italian economic strength has a “very high”, an institutional “high”, the financial strength of the government “high” risk of exposure to adverse events “low.”
Here are the main contents of the judgments of Moody’s
Economic strength – very high but with an economy in recession
• The economic strength of Italy is very high by virtue of the size and diversification of the economy and the income per capita of Italians. Moody’s points out that Italy is the seventh in the world economy and the fifth volume exporter of manufactured goods (automotive, aerospace and defense, precision engineering, petrochemical, firearms, electricity, fashion, luxury, maintenance), and has a very dynamic tourist industry.
• For Moody’s, the economic strength of Italy is weakened by the gradual loss of competitiveness: Italy in the last decade has increased “only” at an average rate of 1, 2 per cent. DLI also costs and financing of public debt absorb much of the savings of the country.
• The black market is widespread, it is not detected statistically, and therefore makes it difficult to estimate the true national wealth, according to Moody’s.
• Despite the reforms of recent years, the dynamics of economic growth continue to be hampered by numerous failures: the import of energy, the high tax burden (made heavier by the widespread tax evasion), a sluggish productivity growth. Moody’s also highlights of aggravating the high cost of labor per unit of product “despite the low wage levels which in turn affect consumption.”
• The decline in international competitiveness of Italian products is accompanied by a fairly strong increase in production costs since 2001. The Italian industrial structure dominated by small and medium enterprises are capable of great flexibility and recognizing the Moody’s analysts, but is simply the ability to innovate: this is holding back growth in the chain of products with high added value to address the competition from emerging Asian economies that have low wage costs.
• The inefficiency of bureaucracy obstruct economic policy and improvement of the infrastructure gap, especially in the south of the country where there remains the problem of organized crime.
• Moody’s also provides a contraction of the Italian economy in 2009 and attributes this decline to the recession, not only globally but also to the fragility at the national level: among them the lack of consumer confidence and precarious conditions of work of the younger population .
• A positive factor highlighted in the report is the low level of indebtedness of individuals and the high saving rate of households: this reduces the risk of “deleveraging (debt reduction), in contrast is impacting negatively on the prospects for growth many other industrialized countries. Moody’s cites as a point in favor of private funding of the fact that in Italy there are between 30 (MEF) and 70 (Confindustria) billion of claims by companies against the state.
• The room for maneuver of fiscal policies for the Government is limited by the overall situation, the economic crisis and the size of the stock of public debt. Moody’s cites the 44 billion euro in the recent package of government measures to stimulate them, recalling, however, that in part were already provided by the 2009 Budget. The challenge for government is to support the industrial base in the north of the country, the most affected by the crisis, and improve the flow of bank credit to enterprises. ” The report makes clear that the Italian banks have been less affected by international financial crisis (convervativo business model), but remain exposed to credit deterioration caused by the recession: are evaluated positively in this regard the Tremonti-bond (which increases capacity for banks to provide credit), the extension of the Deposit and loans, incentives for car, new investments in infrastructure of the state.
• According to Moody’s Italian banks have limited exposure and highly fragmented in Europe.
• The credit rating agency does not provide that the Italian will be asked to intervene with emergency plans massive rescue of banks (as has happened instead in the USA, Ireland, the United Kingdom Ed.). However, Moody’s is at pains to point out that any saving on the Italian banking system from the state would jeopardize the dynamics of public debt, which gives the government leeway narrow.
Institutional strength. High but the governance and the judiciary are major shortcomings.
• Among the major challenges for Italy relaunched by-Moody’s report remains the improvement of the bureaucracy in the south, considered a must to speed the development of the Region.
• Increased efficiency of the judicial system is also needed: the too long duration of the processes is an obstacle to the application of contractual rights.
• Moody’s points out a weakness of the Italian administrative system, including with regard to immigration policy, which has failed to promote integration “and resulted in new social tensions. “A far-sighted policy is important in a country like Italy that has to face the decline of the population.”
• Another peculiarity of the Italian system, according to Moody’s, continues to be one of strong tensions between government and judiciary, from the time of Hands Clean and Tangentopoli.
• How the current government, Moody’s points out that the coalition enjoys a strong majority in the House and Senate, a “big difference” compared to the previous Prodi government. The current opposition, according to Moody’s is relatively weak after the resignation of Walter Veltroni: despite the formation of the Democratic Party, “the continuing internal disputes.”
Financial strength of the Government. High but still weighs the public debt
• The main factor that prevents it to get a promotion in the rating from “Aa2″ is the high level of public debt above 100% of GDP combined with the lack of economic dynamism and a declining population.
• Between 1970 and 1990, the Italian public debt has also increased due to the condominium. The debt / GDP has improved to ensure the entry into the monetary union in the 90’s and has decreased from 120% to 104% in 2004, but this impulse to the improvement was weakened after the accession to the euro. The improvement in the Italian public has not kept pace with that of other states with high public debt, such as Belgium. Of the primary surplus has fallen from around 6% in 2000 to almost zero in 2005 to fall to 1% of nominal GDP this year and will remain below 3% until 2011. Moody’s to this level of primary surplus is not enough to offset the interest charges on debt close to 5% and a low rate of growth of GDP.
“It is possible that interest rates will increase due to higher spreads demanded by the market for the securities of the State”. In addition, the report points out that this year must renew Italy 300 billion in debt maturities, which must be added 60 billion of new securities issues of state in a primary market of government bonds in the euro already very crowded.
• The deficit / GDP Italian this year will more than 4% and will stabilize at at least 3% in the next two years: this will increase by 8% debt / GDP, which was traveling at 106% in 2008. The deterioration of the cyclical dynamics of public debt in Italy during this crisis is a result of falling tax revenues and increased government spending, two trends in line with what Moody’s expected to happen in other countries. According to the estimates of this relationship, the consolidation of public finances in Italy will resume in 2011, but only if growth were to come back in positive terrain after a recession of over 3% this year and a stagnation in 2010.
• According to Moody’s the way to the improvement of public finances and control the dynamics of public debt remains that of the containment of public spending, given that growth prospects are not good. In this context, the process of fiscal federalism according to Moody’s may help to increase the degree of accountability and quality of public spending, but the transfer of responsibilities from central to local needs to be accompanied by stricter control of public finance.
• The crisis pushes Italy towards un’alteriore pension reform, the more necessary. According to Moody’s, the Italian pension system must be reformed because it is a chapter of expenditure to 15% of GDP is already among the highest in the industrialized countries. The reform of the retirement age may free up resources that should be allocated to help the younger generation to find a stable job. For Moody’s the problem of unemployment or underemployment of young people is serious.
• As the debt / GDP, is expected all’111% in 2009 from Moody’s, well above the average of 72% estimated for the Eurozone. Also in terms of percentage of the revenue of the State, the debt / GDP in orbit at an altitude of around 240%, well above the average of 170% for the euro zone in 2010. The high public debt absorbed in Italy, with the burden of interest, over 10% of annual tax revenue against 6.7% on average nell’Eurozona. But the vulnerability caused by the debt is reduced, even according to Moody’s, the low rate of private debt.
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Flaherty urged major economies to act quickly
Finance Minister of Canada, Jim Flaherty, called on Saturday, the major world economies to rapidly implement their promises to consolidate their banking systems and to move ahead with their rescue plan for the first signs of recovery are maintained.
Jim Flaherty was in Washington Saturday, where he met his colleagues and the governors of central banks of most industrialized countries on the planet.
He said that for economic reasons and to rebuild trust, it was necessary that all these countries, including Canada, fulfill their promises quickly.
Flaherty said he was particularly encouraged by the initiatives undertaken by the United States to improve their banking system failure. He indicated that this was a condition “sine qua non” to the global recovery.
According to him, the United States are committed to the May 4 broadcast certain information about the assessments that the U.S. Federal Reserve was subjected to 19 of its largest banks. Washington also announced that it will replenish the capital of banks in difficulty.
“I appreciate their actions after, let’s, a period which was rather long,” said Minister of Finance, who added that Germany had announced similar measures.
The U.S. Federal Reserve announced Friday that the government of the United States was ready to help banks that have passed his “test of tension” and have been deemed vulnerable if the global recession worsened suddenly.
The Federal Reserve said it would not fall on 19 U.S. banks, which hold their own half of the loans granted by the U.S. banking system, even if they were poorly at the end of the examination conducted by the federal agency.
Before their arrival in Washington, Mr. Flaherty and the governor of the Bank of Canada, Mark Carney, had openly criticized the United States and some European countries, for their slowness to restore confidence and solvency of their banking systems. Mr. Carney had said earlier this week that the delay darkening its predictions for the world economies as well as in Canada and it would likely a recession quarter (three months).
The ministers gathered in Washington said they were encouraged to know that the worst of the greatest economic crisis since the Great Depression was now behind them, even though the recovery looked long and discreet. They also stressed the need for collaboration and action.
But tensions have nevertheless emerged between the countries present, particularly on the difficulty of raising additional funds of U.S. $ 500 million for the International Monetary Fund to help the poorest countries.
