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Category Archives: Financial 💷 💲 🏦

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INDIA: From Miracle to Mirage

13 Wednesday Jun 2012

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Financial 💷 💲 🏦, India, India and economy, poverty

If the world is to be believed, then India is finished.

Today, her external minister sought to reassure investors that things will be OK, despite grim reports about India’s economic growth rate from credit rating agency Standard & Poor’s.

There is even talk of downgrading the nation’s investment status to junk, the first of the so-called BRICs to get this treatment from Standard and Poor.

Speaking at 37th US-India Business Council in United States, external Affair Minister SM Krishna said: “India will restore investor confidence and regain economic momentum and growth.”

This, after Finance Minister Pranab Mukherjee “rejected” the Standard & Poor’s report.

A down grading to junk status will mean an increase in the overseas borrowing costs for Indian companies, and as a consequence diminish the country’s ability to attract foreign investment.

So, words of reassurance or defiance from her politicians will not be enough.

For too long now, corruption has plagued the state machinery and political set up.

Whilst, India could enjoy near double-digit growth from 2004 to 08, politicians could avoid the difficult questions, like where is all this money going, how it is helping to lift a country which is estimated to have a third of the world’s poor, and where according to a 2012 World Bank estimate, 47% of the total population falls below the international poverty line of US$ 1.5 a day.

Instead, those very politicians spent most of the time, arguing that growth was a miracle that would somehow take millions and millions out of poverty.

If you dared to ask how this would happen, you would be treated with silence.

Of course, India has great institutions – look at its Supreme Court, whose work against corruption is truly supreme, its IT firms which can boast some of the most creative problem solvers in the world.

But until, serious efforts are made to tackle the obvious poverty that plagues this nation of near two billion souls, all this will come to nothing.

And with slower growth, India will not be able to simply pretend the problem is not there, it will not be able to project all her problems onto her neighbour and rival, Pakistan.

Defiance, denial or reassurance are not cures.

For too long now, those who have hidden behind words such as “miracle” have simply been living in a mirage.

Posted by The Template News, Current Affairs and Sport Website | Filed under Analysis 🙌, Comment, Financial 💷 💲 🏦, International News, Politics 💼 🗳 🪖

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Spain’s Borrowing Costs hit Record High, as Hopes fade over Bailout

12 Tuesday Jun 2012

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Euro, Italy, PIIGS, Spain

Hopes that a European bailout to her banks would ease the pressure on the Spanish economy evaporated today as Madrid’s borrowing costs rose to their highest rate since the launch of the euro in 1999.

Spain’s benchmark 10-year bond yield is now at  6.81%, with Italy’s  10-year bond yield rising to 6.28%. The interest rates are seen as unsustainable in the long run for two countries weighed down by huge debts.

The Ratings agency Fitch has also downgraded the creditworthiness of 18 of Spain’s banks, after cutting its ratings on Spain’s two biggest banks, Santander and BBVA on Monday.

Posted by The Template News, Current Affairs and Sport Website | Filed under Financial 💷 💲 🏦, International News

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US Trade Deficit shrinks in April

08 Friday Jun 2012

Posted by The Template News, Current Affairs and Sport Website in Financial 💷 💲 🏦, International News

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US Deficit, US Trade Deficit

The US trade deficit – the difference between imports and exports – shrunk in April.

The US trade deficit now stands at $603bn for the year.

Overall, the trade deficit fell 4.9% to $50.1bn (£32.5bn), as exports saw their first decline since November with the deepening crisis in the eurozone hitting demand for goods, whilst imports also shrank because of weak domestic demand.

The Eurozone region accounts for almost a fifth of all US exports, however, exports to Europe were down 11.1% in April with a fall in exports of everything from commercial planes to industrial machinery.

A widening trade gap slows growth as it means the US is spending more on products made abroad than it is making on sales of domestically manufactured goods.

The trade data follows other weak US data, including flat service sector growth last month and the creation of fewer than expected jobs.

UK Manufacturing hits ‘Three Year Low’

01 Friday Jun 2012

Posted by The Template News, Current Affairs and Sport Website in Financial 💷 💲 🏦

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UK Economy, UK Manufacturing

Figures for this May indicate that the manufacturing sector in the UK turned in its worst performance for three years. The Markit/CIPS manufacturing Purchasing Managers’ Index had dropped to 45.9 –  down from 50.2 in April.  A reading below 50 indicates contraction.

According to the survey, manufacturers had cut back on output, employment, purchasing and inventories.

The index had fallen 4.3 points in May, the second-steepest fall in its 20-year history, with chemicals and plastics, electrical, mechanical engineering, textiles and clothing, and transport the sectors most affected.

Although manufacturing accounts for only 10% of UK GDP, some analysts say the disappointing figures will put more pressure on the Bank of England’s Monetary Policy Committee to restart its policy of quantitative easing – the process of buying up government and other securities to boost the money supply and promote institutional lending.

Gr-exit (or what to do with Greece)

21 Monday May 2012

Posted by The Template News, Current Affairs and Sport Website in Analysis 🙌, Comment, Europe 🇪🇺, Financial 💷 💲 🏦, International News, Politics 💼 🗳 🪖, UK

≈ 1 Comment

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david cameron, Distant Echoes, EU, Euro, Europe 🇪🇺, Eurozone, Gr-exit, Greece, Nayab Chohan, NayabChohanLIVE, Template News

ANALYSIS

You know that there’s a problem when reporters are asking any Greek citizen that appears on television how the next generation intends to behave, will they have learned that you can’t get something for nothing.

You know that there’s a problem when reporters point out that Greek doctors who are known to earn in excess of a million euros, file tax returns claiming that they earn just 14, 000 a year.

Here is a corrupt country blocking the arteries of Europe.

And you know that there’s a problem when another nation’s PM, namely our own David Cameron, frustrated at how Greek politicians have failed to form a government or to indicate whether they intend to implement the next round of austerity cuts to this already austerity battered country, warns Athens  that there are plans for a Greek exit out of the Eurozone.

But how realistic is such a prospect, how would any one have confidence in the Euro again, especially with Italy, Spain and Portugal all  suffering under the weight of debt – and lets not forget Ireland either.

To remove Greece would be a spectacular own goal, that would make the fall of Lehman Brothers look inspired.

For to remove Greece would be hari-kari – Europe may never recover its position in the world, a world where Asia is still potentially the future economic powerhouse.

If the fall of Lehman’s signalled the beginning end of New York as the economic capital of the world, then the exit of Greece will only serve to confirm the end of Europe with its capitals of Paris, Berlin and London.

No one will be able escape the consequences, no one that is who is from the West.

So what to do with Greece – it will have to remain, as a second tier Balkan state which is what was when it was admitted into the Euro on the advice of Goldman Sachs.

And what will that mean- that that nation’s sovereignty will suffer in the same way that the Ottomans had when they were declared bankrupt and were then forced to accept British and French bankers who monitored every aspect of their economy, granting loans on conditions.

In this case, of course those bankers will be German and will hopefully do a better job of curbing corruption and tax avoidance than their Anglo-Saxon cousins who were at the time meant to be helping the Sultan and his office of the Sublime Porte, but who were in reality further undermining the economic foundations of a genuinely multi-ethnic, multi-religious state.

👨 David Cameron Two Years On .. 🇬🇧

12 Saturday May 2012

Posted by The Template News, Current Affairs and Sport Website in Analysis 🙌, Breaking News 📺 🎙🗞, Comment, Financial 💷 💲 🏦, Politics 💼 🗳 🪖, UK

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Austerity, Cameron, Coalition, david cameron, Distant Echoes, Food banks, Nayab Chohan, NayabChohan, NayabChohanLIVE, Nick Clegg, Politics 💼 🗳 🪖, Template News

ANALYSIS

What a difference a day makes, or in this case a month or so.

As David Cameron and some one called Nick Clegg – where are you my friend? – celebrate two years since they appeared under the sun in the Downing St garden all smiles before the press,  the Conservatives are lurching from crisis to crisis.

Admitting that they got wrong when they scrapped the jets ordered by the last government for this country’s two aircraft carriers.

They did of course make a big issue of this at the time.

Gordon Brown’s government had mismanaged the economy and wasted public money and the spending £5bn on jets that this nation did not need proved their point.

Well, Britain hit double-dip recession territory within the time frame predicted by Brown  – that despite the radical cuts to the public sector announced by Chancellor George Osborne. This news opened the whole country’s eyes to the coalition’s claims to having a credible economic plan and they still want to have a go at welfare, education and health.

Don’t underestimate the magnitude of the defeat at the local elections – David Cameron did not win the general election outright and has just seen his party wiped out everywhere except in London, where the Mayor bucked the trend though he lost heavily in the London assembly.

So, as Jeremy Hunt faces calls to stand down against a backdrop of a Leveson inquiry that is appearing to be more damaging to Cameron and those former Murdoch employees around him, who include his Education Secretary Michael Gove, the question is what next on the rocky road to May 2015?

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☪️ The Greek Question

12 Saturday May 2012

Tags

Euro, Europe 🇪🇺, Greece, Ottoman Empire

ANALYSIS

During the Greek War of Independence, the Sultan who was blamed for many massacres was famously slow to accept defeat and thus allow the rebels their freedom.

Some seventy years later, when Greece was routed by an Ottoman army, the way was open for the reconquest of those lands.

The Sultan though showed no interest in doing so.

For by then, Greece like the other newly created Balkan states were a problem for everyone, including the very European states that had championed their cause.

Today, European Central Bankers are debating the merits of taking Greece out of the Euro, as politicians in Athens are trying to form a government.

Should they stay or should they go – there will be huge implications whatever route is taken, which is why those who make make decisions should like the Sultan also consider their long term implications.

http://www.bbc.co.uk/news/world-europe-18046280

Posted by The Template News, Current Affairs and Sport Website | Filed under Analysis 🙌, Breaking News 📺 🎙🗞, Comment, Financial 💷 💲 🏦, International News

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Britain in a Double-Dip Recession

25 Wednesday Apr 2012

Posted by The Template News, Current Affairs and Sport Website in Analysis 🙌, Breaking News 📺 🎙🗞, Comment, Financial 💷 💲 🏦, Politics 💼 🗳 🪖

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UK Economy

Britain’s economy shrunk by 0.2 percent in the first three months of 2012 taking it back into recession.

The Office for National Statistics blamed a sharp fall in construction output for the contraction.

A recession is defined as two consecutive quarters of contraction.  The economy shrank by 0.3% in the fourth quarter of 2011

The ONS said output of the production industries decreased by 0.4%, construction decreased by 3% and output of the service sector increased by 0.1%.

It added that a fall in public sector investment had contributed to the particularly large fall in the construction sector.

🗳 France and its upcoming election 🇫🇷

04 Wednesday Apr 2012

Posted by The Template News, Current Affairs and Sport Website in Analysis 🙌, Breaking News 📺 🎙🗞, Comment, Financial 💷 💲 🏦, International News, Politics 💼 🗳 🪖

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France and debt, France and elections, Francois Hollande, Nicolas Sarkozy

With Mitt Romney now emerging as the Republican party’s man to take on Barack Obama in America’s Presidential elections, how are we to read and understand what is going on France, where the first round for who will be President will take place on April 22, with the decider in May.

France is in trouble – it has been in this state since 1974, and the current candidates for the top job do not show any indication that they know how they will tackle public debt which currently stands at 90 percent of GDP, with public spending currently standing at 56 per cent of GDP.

Both front-runners, the Socialist Francois Hollande and Nicolas Sarkozy say they will tax the rich 75 per cent, something this is hardly going to encourage entrepreneurship or just as importantly create any confidence in the bond markets, where one ratings agency has already downgraded France’s AAA status.

So, how will the new President, assuming that it will be Hollande, the polls certainly think so, approach France’s new debt burden – denial is not an option, nor is playing the anti-immigration card anymore.

A period of austerity with cuts to public spending, will need to be backed with a more flexible tax plan, at a time when France’s old enemy across the channel has just cut the top rate to 45 per cent, where does the future President think the rich will leave their country for?

None of this will be welcomed politically, which is why it is important that the cuts are managed at a slower pace than they are over here, otherwise France will find that it will bequeathing a future generation with far less than it currently enjoys.

Cutting Child Benefit to the Wealthiest

23 Friday Mar 2012

Posted by The Template News, Current Affairs and Sport Website in Analysis 🙌, Breaking News 📺 🎙🗞, Comment, Financial 💷 💲 🏦, Politics 💼 🗳 🪖, Social Affairs

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Child Benefit, George Osborne

This Budget has made one huge mistake – perhaps not in financial terms, for the wealthiest can easily afford this cut, and definitely not politically for a country that is undergoing such a severe recession will welcome the rich losing a bit of money, but certainly morally.

All children born in this country are future citizens, and should thus be treated in the same way, irrespective of the wealth of their parents they are born into.

Child Benefit signalled – if only symbolically – that this country had a stake in every child born, a principle which is no longer there.

(Child Benefit will be reduced incrementally when someone in a household earns more £50, 000 – and at £60, 000 it will be removed completely, source The Financial Times, 22-3-12)

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