Thursday, October 25, 2012
Thursday, September 6, 2012
Hitler Clothing Store: Business Plan Epic Fail or Marketing Genius?
http://www.asiaone.com/News/AsiaOne%2BNews/Asia/Story/A1Story20120829-368474.html
What is
curious about the opening of this store involves a similar controversy six
years ago when a café in Mumbai opened with the name “Hitler’s Cross.” The owner refused to change the name because
he thought it was catchy and stated many of the same reasons as Shah
articulated above.
Although the article does not elaborate as to the type and the amount of press “Hitler’s Cross” received, one can surmise that it was fairly substantial in light of those involved in pressing (no pun intended) him (Israeli Embassy, Germany and U.S. Anti-defamation League) to finally give in. The story also doesn’t say if the café succeeded or failed but in my opinion it doesn’t take much to connect the dots as to why a business person would take drastic measures like this—free press and a lot of it.
In Shah’s case, did he really not know about Hitler? I’ll lay odds he knew about Hitler’s Café. One need only to look at the logo for clues. The type font and the colors used in the advertising: steel gray, red and white, look strikingly military. Perhaps if he were to have used orange, brown and blue (a bit more in keeping with western wear), he might be more believable. Perhaps if there were a cowboy hat over the i instead of a swastika, or if the environment for start-ups in India weren’t so brutal for entrepreneurial survival maybe we could take him at his word.
And then there is the matter of ethical implications. Yeah—where are they? And what is going on in India that there is an “unusual degree of respect” (according to the article) for Hitler and Mein Kampf? Granted, he could have paid for the design but then that raises a lot of other questions we don’t have time to consider in this summary. Instead, all this smacks of desperation and survival of the fittest tactics that with the roll of the dice one can imagine a name like Hitler landing on snake eyes. Daring, brilliant and stupid all wrapped in the same tootsie roll.
http://www.asiaone.com/News/AsiaOne%2BNews/Asia/Story/A1Story20120829-368474.html
They say that any kind of press is good press especially the
negative sort. That’s the first thing I thought of when reading about store
owner and entrepreneur Rajesh Shah opening a men’s western wear clothing store
named, “Hitler” complete with a colorful red swastika over the i. Could this be
a business plan epic fail or a brilliant marketing strategy?
Shah, who opened
the store on August 19 in Ahmedabad City in India, claims that he had no
knowledge of who Hitler was nor of the atrocities that he perpetrated on the
six million plus Jews in Europe during World War II and would only consider
changing the name if he were compensated for re-branding costs to recoup
potential losses from the money spent on the logo, business stationary, and the
hoarding.
Where was his business plan and who were his investors? Turns out he
sank about 150,000 rupees ($2700) into the start-up costs and wants to recoup
if forced to change. Yes I said forced to change.
Although the article does not elaborate as to the type and the amount of press “Hitler’s Cross” received, one can surmise that it was fairly substantial in light of those involved in pressing (no pun intended) him (Israeli Embassy, Germany and U.S. Anti-defamation League) to finally give in. The story also doesn’t say if the café succeeded or failed but in my opinion it doesn’t take much to connect the dots as to why a business person would take drastic measures like this—free press and a lot of it.
In Shah’s case, did he really not know about Hitler? I’ll lay odds he knew about Hitler’s Café. One need only to look at the logo for clues. The type font and the colors used in the advertising: steel gray, red and white, look strikingly military. Perhaps if he were to have used orange, brown and blue (a bit more in keeping with western wear), he might be more believable. Perhaps if there were a cowboy hat over the i instead of a swastika, or if the environment for start-ups in India weren’t so brutal for entrepreneurial survival maybe we could take him at his word.
And then there is the matter of ethical implications. Yeah—where are they? And what is going on in India that there is an “unusual degree of respect” (according to the article) for Hitler and Mein Kampf? Granted, he could have paid for the design but then that raises a lot of other questions we don’t have time to consider in this summary. Instead, all this smacks of desperation and survival of the fittest tactics that with the roll of the dice one can imagine a name like Hitler landing on snake eyes. Daring, brilliant and stupid all wrapped in the same tootsie roll.
One
thing is irrefutable and startlingly clear: his store captured the attention of
the Associated Press and was highlighted on Yahoo and with it the potential of
going viral. Not to mention, I am writing about it and will talk about in
class. What other business owner can claim that right now? And how much would
it take in advertising costs to get those legs? So if he changes the name soon
would the idea have been brilliant?
If he keeps the name, what does that say of
the ethics and cultural proclivities in India? Does that matter in this case?
What will it mean to have had succeeded and should we care? Could the same
problem arise here in the states? Would it look the same? I am not going to
open Pol Pot’s Underwear Store any time soon but what is important to
understand is our level of awareness of other cultures and what it would mean
to be insulting or offending to a group of people with deep wounds and tragic
histories.
A business plan would have been a great step in uncovering what one
needs to know. I really do wonder if Shah had one and if he did, why did it
matter more to take such an extreme step rather than to be sensitive to a
particularly delicate demographic? Of
course, he could be just telling the truth and is upset because now he has to
considering changing his presentation. Let that sink in for a bit.
Wednesday, July 18, 2012
Monday, February 13, 2012
Private Contractors to Build and Run UK Police Station
A night in the cells used to be spent courtesy of the boys in blue.
But from April private contractors will be building police stations and employing the staff to run them as well.
With police forces seeking savings in the face of the government’s austerity-led budget cuts, G4S, the world’s largest security company, has won the first contract in Britain to staff and build a police station. The deal, expected to be signed within days, represents the most radical outsourcing of law enforcement to the private sector yet.
The deal with Lincolnshire Police Authority will see G4S take over jobs formerly handled by police officers. In custody operations, for instance, uniformed sergeants with powers to arrest will always be on hand but G4S employees will do almost everything else, from accompanying offenders to their cells to carrying out drug testing.
Police representatives have already voiced misgivings. Simon Reed, vice-chair of the Police Federation, which represents rank and file officers, was cautious about the enterprise – pointing out that police force staff have an enshrined sense of public duty, whereas private employees may not.
“Our concern is the resilience of the companies doing this,” he said. “When we have national emergencies or unforeseen events, will they be able to bring their staff in to work long hours, regardless of what their contracts say?”
G4S says, however, that the deal will benefit frontline officers. Kim Challis, group managing director of the company’s government and outsourcing services division, said: “Not only does it support frontline policing, but it will help officers to make the best use of their time, allowing them to focus more on operational duties.”
The contract is worth £200m over 10 years with an option for a five-year extension. Other local police forces are considering similar partnerships this year.
As part of the contract G4S will build a new police station with a two-storey office complex and 30 cells on a “hub and spokes” model. This allows for additional cells to be added rapidly in the event of public disorder or a sports event that turns violent.
Just over half the force’s 900 civilian staff will transfer to G4S, while the remainder will be kept on as police employees alongside the 1,100 officers. New staff employed by G4S will undertake the security company’s seven-week training programme, which meets home office guidelines for custody workers.
The contract comes as police forces grapple with government-imposed funding cuts of about 20 per cent over four years. Barry Young, chairman of the Lincolnshire Police Authority, said the spending squeeze had brought the force to crisis point.
“The cuts left us with no choice but to look for drastic changes in the way we do things. We have always had some of the tightest funding conditions in the country and the [new spending settlement] meant it was imperative to close a huge funding gap.”
The force aims to make savings of £16m-£20m over the 10 years
Although police forces have already outsourced discrete parts of their operations to specialist companies, this is the most comprehensive deal yet. Last year it emerged that West Midlands police had contracted out some of their counter-terror operations to a team employed by G4S.
Ms Challis said “it was great to see a G4S concept coming to life”.
“The new police station is an integral element of our strategic partnership with Lincolnshire Police Authority. It’s a tangible way that we can deliver real savings to the authority, while providing police with the best facilities and technology available.
Copyright The Financial Times
But from April private contractors will be building police stations and employing the staff to run them as well.
With police forces seeking savings in the face of the government’s austerity-led budget cuts, G4S, the world’s largest security company, has won the first contract in Britain to staff and build a police station. The deal, expected to be signed within days, represents the most radical outsourcing of law enforcement to the private sector yet.
The deal with Lincolnshire Police Authority will see G4S take over jobs formerly handled by police officers. In custody operations, for instance, uniformed sergeants with powers to arrest will always be on hand but G4S employees will do almost everything else, from accompanying offenders to their cells to carrying out drug testing.
Police representatives have already voiced misgivings. Simon Reed, vice-chair of the Police Federation, which represents rank and file officers, was cautious about the enterprise – pointing out that police force staff have an enshrined sense of public duty, whereas private employees may not.
“Our concern is the resilience of the companies doing this,” he said. “When we have national emergencies or unforeseen events, will they be able to bring their staff in to work long hours, regardless of what their contracts say?”
G4S says, however, that the deal will benefit frontline officers. Kim Challis, group managing director of the company’s government and outsourcing services division, said: “Not only does it support frontline policing, but it will help officers to make the best use of their time, allowing them to focus more on operational duties.”
The contract is worth £200m over 10 years with an option for a five-year extension. Other local police forces are considering similar partnerships this year.
As part of the contract G4S will build a new police station with a two-storey office complex and 30 cells on a “hub and spokes” model. This allows for additional cells to be added rapidly in the event of public disorder or a sports event that turns violent.
Just over half the force’s 900 civilian staff will transfer to G4S, while the remainder will be kept on as police employees alongside the 1,100 officers. New staff employed by G4S will undertake the security company’s seven-week training programme, which meets home office guidelines for custody workers.
The contract comes as police forces grapple with government-imposed funding cuts of about 20 per cent over four years. Barry Young, chairman of the Lincolnshire Police Authority, said the spending squeeze had brought the force to crisis point.
“The cuts left us with no choice but to look for drastic changes in the way we do things. We have always had some of the tightest funding conditions in the country and the [new spending settlement] meant it was imperative to close a huge funding gap.”
The force aims to make savings of £16m-£20m over the 10 years
Although police forces have already outsourced discrete parts of their operations to specialist companies, this is the most comprehensive deal yet. Last year it emerged that West Midlands police had contracted out some of their counter-terror operations to a team employed by G4S.
Ms Challis said “it was great to see a G4S concept coming to life”.
“The new police station is an integral element of our strategic partnership with Lincolnshire Police Authority. It’s a tangible way that we can deliver real savings to the authority, while providing police with the best facilities and technology available.
Copyright The Financial Times
Saturday, February 11, 2012
ECB’s Draghi Can Play Pivotal Role in Solving Greek Crisis: View
What's disturbing about the article I am about to post is not so much the substance of it, which in my opinion is bad enough, but the assumptions readers will make regarding what is fair solely based on what is being reported.
In recent months, Greece has been painted as extremely irresponsible, self-centered opportunists, taking advantage of billions they were lent and too lazy to make necessary sacrifices
and too egotistical to make compromises among its political leaders.
What is not at center stage is Greece's existential right to control its own destiny.
Through fiscal manipulation and blackmail Greece has lost much of its autonomy in economic and political decision-making because of the debt it owes to the central banks and its private equity lenders.
The truth is Greece is being threatened by the Troika (ECB, IMF, and the EU) with the possibility of a horrifically messy default. Unless it imposes harsh austerity measures (as outlined by Troika) none of the bail out money will be released to keep schools open, hospitals operating, municipal services such as bus service, power, utilities, police, fire fighters, ambulances or the government functioning.
If Greece is allowed to default, the credit market will freeze solid, businesses will fail, no paychecks will be issued, currency value will tank, there will be a run on the banks and the nation will plunge into utter chaos and violence. Austerity does not look much better either. It would leave Greece totally bankrupt, steeped in poverty and starve its economy of any growth--throwing it deeper into recession and leaving it at the mercy and control of their creditors.
The main difference in outcome if Greece were to default is that it could potentially destroy the entire Eurozone and take with it the global economy.
Without a doubt, Greece has been put in an extremely humilating position and it sees no good options on the table to avoid any catastrophe.
Meanwhile in this article, the ECB has deemed itself the savior, the benevolent and kind friend making concessions for an ungrateful, overindulgent, self-centered nation. The truth is the Troika is using economic terrorism to secure power over Greece and the entire Eurozone. The problem is the positioning of the central banks over sovereign nations.
Without further adeiu:
European Central Bank President Mario Draghi has taken a decidedly more activist and creative approach than his predecessor, Jean-Claude Trichet, toward supporting the euro-area economy and propping up its banks. Now, he has an opportunity to take the initiative with Greece, the currency union’s sickest economy.
After weeks of wrangling, Greece is close to completing yet another inadequate deal to fix its finances. If all goes as planned, it will get as much as 100 billion euros ($132 billion) in debt relief from private creditors, and 130 billion euros in loans from the European Union and the International Monetary Fund to help cover its borrowing needs while it carries out austerity measures.
The stated goal: to lower the government’s suffocating net debt burden of more than 150 percent of gross domestic product to the slightly less suffocating figure of 120 percent of GDP by 2020 -- a level that would still leave it among the euro area’s most indebted.
Greece’s end of the bargain is extremely onerous. The government must reduce its annual primary budget deficit by about 7 percent of GDP, or more than 15 billion euros -- the equivalent of what it spends every year on social programs. With unemployment at more than 20 percent, industrial production down 11.3 percent in the last year and the economy expected to shrink 4.5 percent in 2012, the budget target all but guarantees that Greece will be back for another bailout, if it manages to avoid a descent into civil unrest.
Official creditors, such as the European Union and the ECB, have the power to increase Greece’s chances of pulling through. They hold about 40 percent of the country’s sovereign debt. If they agreed to take losses alongside private creditors, Greece’s net debt burden could be brought down to roughly 80 percent of GDP immediately. The move would halve the deficit reduction required of Greece, significantly improving its economic prospects and reducing the amount of new loans it would need from the EU and the IMF to stay afloat in the years ahead.
Here is where Draghi comes in. By various estimates, the ECB holds between 36 billion euros and 55 billion euros of Greek debt, much of it purchased on the open market at a deep discount to face value. According to Bloomberg News, euro-area officials have said the ECB is considering ways to give Greece a break on that debt, possibly in a deal that would involve selling it at cost to the European Financial Stability Facility.
This would be an excellent move: It would allow the EFSF to lighten Greece’s debt load and would point the way toward more official participation in a realistic solution to the crisis. It would also permit the ECB to avoid losses that could otherwise undermine its ability to keep buying the bonds of other troubled countries such as Spain and Italy.
Action from the ECB would be only a first step. European leaders, in particular German Chancellor Angela Merkel, face serious domestic political obstacles to providing debt relief. They might also believe that the more Greece is beholden to them, the more leverage they’ll have to press for further austerity measures. That approach carries a big risk of pushing Greece -- and possibly the global economy -- straight off a cliff.
In recent months, Greece has been painted as extremely irresponsible, self-centered opportunists, taking advantage of billions they were lent and too lazy to make necessary sacrifices
and too egotistical to make compromises among its political leaders.
What is not at center stage is Greece's existential right to control its own destiny.
Through fiscal manipulation and blackmail Greece has lost much of its autonomy in economic and political decision-making because of the debt it owes to the central banks and its private equity lenders.
The truth is Greece is being threatened by the Troika (ECB, IMF, and the EU) with the possibility of a horrifically messy default. Unless it imposes harsh austerity measures (as outlined by Troika) none of the bail out money will be released to keep schools open, hospitals operating, municipal services such as bus service, power, utilities, police, fire fighters, ambulances or the government functioning.
If Greece is allowed to default, the credit market will freeze solid, businesses will fail, no paychecks will be issued, currency value will tank, there will be a run on the banks and the nation will plunge into utter chaos and violence. Austerity does not look much better either. It would leave Greece totally bankrupt, steeped in poverty and starve its economy of any growth--throwing it deeper into recession and leaving it at the mercy and control of their creditors.
The main difference in outcome if Greece were to default is that it could potentially destroy the entire Eurozone and take with it the global economy.
Without a doubt, Greece has been put in an extremely humilating position and it sees no good options on the table to avoid any catastrophe.
Meanwhile in this article, the ECB has deemed itself the savior, the benevolent and kind friend making concessions for an ungrateful, overindulgent, self-centered nation. The truth is the Troika is using economic terrorism to secure power over Greece and the entire Eurozone. The problem is the positioning of the central banks over sovereign nations.
Without further adeiu:
European Central Bank President Mario Draghi has taken a decidedly more activist and creative approach than his predecessor, Jean-Claude Trichet, toward supporting the euro-area economy and propping up its banks. Now, he has an opportunity to take the initiative with Greece, the currency union’s sickest economy.
After weeks of wrangling, Greece is close to completing yet another inadequate deal to fix its finances. If all goes as planned, it will get as much as 100 billion euros ($132 billion) in debt relief from private creditors, and 130 billion euros in loans from the European Union and the International Monetary Fund to help cover its borrowing needs while it carries out austerity measures.
The stated goal: to lower the government’s suffocating net debt burden of more than 150 percent of gross domestic product to the slightly less suffocating figure of 120 percent of GDP by 2020 -- a level that would still leave it among the euro area’s most indebted.
Greece’s end of the bargain is extremely onerous. The government must reduce its annual primary budget deficit by about 7 percent of GDP, or more than 15 billion euros -- the equivalent of what it spends every year on social programs. With unemployment at more than 20 percent, industrial production down 11.3 percent in the last year and the economy expected to shrink 4.5 percent in 2012, the budget target all but guarantees that Greece will be back for another bailout, if it manages to avoid a descent into civil unrest.
Official creditors, such as the European Union and the ECB, have the power to increase Greece’s chances of pulling through. They hold about 40 percent of the country’s sovereign debt. If they agreed to take losses alongside private creditors, Greece’s net debt burden could be brought down to roughly 80 percent of GDP immediately. The move would halve the deficit reduction required of Greece, significantly improving its economic prospects and reducing the amount of new loans it would need from the EU and the IMF to stay afloat in the years ahead.
Here is where Draghi comes in. By various estimates, the ECB holds between 36 billion euros and 55 billion euros of Greek debt, much of it purchased on the open market at a deep discount to face value. According to Bloomberg News, euro-area officials have said the ECB is considering ways to give Greece a break on that debt, possibly in a deal that would involve selling it at cost to the European Financial Stability Facility.
This would be an excellent move: It would allow the EFSF to lighten Greece’s debt load and would point the way toward more official participation in a realistic solution to the crisis. It would also permit the ECB to avoid losses that could otherwise undermine its ability to keep buying the bonds of other troubled countries such as Spain and Italy.
Action from the ECB would be only a first step. European leaders, in particular German Chancellor Angela Merkel, face serious domestic political obstacles to providing debt relief. They might also believe that the more Greece is beholden to them, the more leverage they’ll have to press for further austerity measures. That approach carries a big risk of pushing Greece -- and possibly the global economy -- straight off a cliff.
Tuesday, February 7, 2012
Greece: Strike Protesters Burn German Flag Due to Forced Austerity Measures
Police used pepper spray against the protesters, who burned a German flag, during a brief flare-up of violence at the rally which was joined by some 25,000 people despite the heavy rainfall.
The generally peaceful rally, organized separately by general and communist trade unions, was called against widely reported plans by the government to slash the minimum wage and impose other drastic cuts.
Unions and employers have already rejected calls to cut the minimum wage, currently at 751euros per month, arguing that it would make the country's four-year recession even worse.
"This is a crime against the nation," Vangelis Moutafis, a top strike organizer at the country's largest union, the GSEE.
"They are driving wage-earners into absolute poverty. They are wiping out the unemployed and retired people ... They are selling off the state for nothing. This must not continue. It's a crime and it must be stopped now." (Athens News/gw)
Monday, February 6, 2012
Papademos postpones bailout meeting | Athens News
A meeting between Prime Minister Lucas Papademos and the leaders of the three political parties supporting his interim government has been postponed until Tuesday.
Later on Monday, Papademos will have another meeting with members of the EU-IMF troika mission in Athens to conclude negotiations on crucial chapters of the deal that are still not settled.
Earlier on Monday the government missed the noon deadline for responding to painful terms for a new EU/IMF bailout as patience in Brussels wore thin over drawn-out negotiations among its feuding political leaders.
The leaders of France and Germany told the government on Monday time was running out in talks on a broad debt restructuring deal and the country would only get bailout money from Europe if it lived up to its promise to deliver economic reforms in return.
"We want this accord," French President Nicolas Sarkozy said. "Greece's leaders have made commitments and they must respect them scrupulously ... Europe is a place where everyone has their rights and duties. Time is running out, it needs to be concluded, it needs to be signed."
He and German leader Angela Merkel held a news conference after an annual meeting of top government ministers from both countries where they kept pressure up on the interim government to meet reform suggestions set out by "the troika."
Contrary to earlier reports, an official from the finance ministry said "there is no deadline" for the interim government to say whether they accept the painful terms of a new bailout deal to avoid a messy default that could threaten the country's future in the eurozone.
He said the entire Government side had to agree terms of the rescue, which would be the second for Athens since 2010, with international lenders before the next meeting of the Eurogroup of eurozone finance ministers.
"The only deadline is to have a staff agreement for the second bailout and the agreement of the political leaders before Eurogroup," said the official, who requested anonymity.
No date has yet been set for the Eurogroup meeting, although it is expected this week.
Political leaders must agree on unresolved problems - including labour market change and shoring up domestic banks - to secure the 130bn euro rescue Greece needs by March or risk inflaming tempers in the European Union over what is seen as its dithering on implementing reforms.
Prime Minister Lucas Papademos said after five hours of talks on Sunday that party chiefs had agreed measures including wage cuts and other reforms as part of spending cuts worth 1.5 percent of gross domestic product.
But Pasok spokesman Panos Beglitis said a number of major issues demanded by the troika, representing EU, European Central Bank and International Monetary Fund lenders, remained unresolved.
"There are two big issues left – labour and banks ... those have been left for tomorrow," Beglitis said.
Beglitis made clear the leaders of the three parties had much to negotiate as the deadline nears, and must respond to the proposals by noon.
Domestic banks are up to their necks in junk government bonds now worth a fraction of their face value and two coalition parties - New Democracy and the rightwing Laos – have opposed any further spending cuts.
Now the coalition parties must respond to a working group of senior eurozone finance ministry officials who are preparing for a meeting of their ministers later in the week.
Big issues
Newspapers Ta Nea and Imerisia wrote on Monday, without naming their sources, that holiday bonuses in the private sector would be maintained but that the minimum wage would likely be cut to 600 euros from about 750 euros.
Ta Nea added that the European Union and IMF were also pushing for a 35 percent cut in supplementary pensions, another sticking point in the talks.
By late on Sunday, no meeting of the Euro Working Group had been formally scheduled for Monday but it could hold a conference call or schedule a face-to-face meeting at short notice, depending on the outcome of talks in Athens.
Alarmed by the prospect of yet more budget cuts, the country’s two main trade unions said they would call a 24-hour strike for Tuesday in protest against policies which they say have only driven the economy into a downward spiral.
Leftist and communist-affiliated groups will rally on Monday to march to parliament. (Reuters, AMNA, Athens News)
Later on Monday, Papademos will have another meeting with members of the EU-IMF troika mission in Athens to conclude negotiations on crucial chapters of the deal that are still not settled.
Earlier on Monday the government missed the noon deadline for responding to painful terms for a new EU/IMF bailout as patience in Brussels wore thin over drawn-out negotiations among its feuding political leaders.
The leaders of France and Germany told the government on Monday time was running out in talks on a broad debt restructuring deal and the country would only get bailout money from Europe if it lived up to its promise to deliver economic reforms in return.
"We want this accord," French President Nicolas Sarkozy said. "Greece's leaders have made commitments and they must respect them scrupulously ... Europe is a place where everyone has their rights and duties. Time is running out, it needs to be concluded, it needs to be signed."
He and German leader Angela Merkel held a news conference after an annual meeting of top government ministers from both countries where they kept pressure up on the interim government to meet reform suggestions set out by "the troika."
Contrary to earlier reports, an official from the finance ministry said "there is no deadline" for the interim government to say whether they accept the painful terms of a new bailout deal to avoid a messy default that could threaten the country's future in the eurozone.
He said the entire Government side had to agree terms of the rescue, which would be the second for Athens since 2010, with international lenders before the next meeting of the Eurogroup of eurozone finance ministers.
"The only deadline is to have a staff agreement for the second bailout and the agreement of the political leaders before Eurogroup," said the official, who requested anonymity.
No date has yet been set for the Eurogroup meeting, although it is expected this week.
Political leaders must agree on unresolved problems - including labour market change and shoring up domestic banks - to secure the 130bn euro rescue Greece needs by March or risk inflaming tempers in the European Union over what is seen as its dithering on implementing reforms.
Prime Minister Lucas Papademos said after five hours of talks on Sunday that party chiefs had agreed measures including wage cuts and other reforms as part of spending cuts worth 1.5 percent of gross domestic product.
But Pasok spokesman Panos Beglitis said a number of major issues demanded by the troika, representing EU, European Central Bank and International Monetary Fund lenders, remained unresolved.
"There are two big issues left – labour and banks ... those have been left for tomorrow," Beglitis said.
Beglitis made clear the leaders of the three parties had much to negotiate as the deadline nears, and must respond to the proposals by noon.
Domestic banks are up to their necks in junk government bonds now worth a fraction of their face value and two coalition parties - New Democracy and the rightwing Laos – have opposed any further spending cuts.
Now the coalition parties must respond to a working group of senior eurozone finance ministry officials who are preparing for a meeting of their ministers later in the week.
Big issues
Newspapers Ta Nea and Imerisia wrote on Monday, without naming their sources, that holiday bonuses in the private sector would be maintained but that the minimum wage would likely be cut to 600 euros from about 750 euros.
Ta Nea added that the European Union and IMF were also pushing for a 35 percent cut in supplementary pensions, another sticking point in the talks.
By late on Sunday, no meeting of the Euro Working Group had been formally scheduled for Monday but it could hold a conference call or schedule a face-to-face meeting at short notice, depending on the outcome of talks in Athens.
Alarmed by the prospect of yet more budget cuts, the country’s two main trade unions said they would call a 24-hour strike for Tuesday in protest against policies which they say have only driven the economy into a downward spiral.
Leftist and communist-affiliated groups will rally on Monday to march to parliament. (Reuters, AMNA, Athens News)
Denmark’s Credit Crunch Worsening as Retrenching Banks Spur Vicious Circle
Denmark’s credit crunch is getting worse as businesses accuse banks of withholding funds and the financial regulator warns that deteriorating asset quality may put more lenders out of business.
“When we ask our companies, small- and medium-sized, they say they are experiencing a credit crunch and it has become worse in the last month,” Karsten Dybvad, chief executive officer of the Danish Confederation of Industry, said in an interview in Copenhagen.
Dybvad’s group, which represents 10,000 Danish firms, wants the financial regulator to give banks more leeway in meeting capital requirements so they don’t call in loans and fuel a vicious circle that’s stifling the $300 billion economy. In a December survey of confederation members, two thirds said they had limited access to financing, while one in five said an absence of funds was the biggest obstacle for growth.
Three Danish banks, including Amagerbanken A/S (AMAG), failed last year after the FSA required them to restate bad loans, leaving them in breach of capital rules. Two of the failures pushed losses on to senior creditors and exacerbated a funding squeeze that’s frozen most of Denmark’s 120 banks out of debt markets.
Bank Failures
More lenders may collapse this year as Denmark’s regional bank crisis worsens, the Financial Supervisory Authority’s Director General Ulrik Noedgaard said in an interview last week. The FSA introduced stricter reviews of loan books last year, after finding banks understated writedowns, and has been enforcing the more rigorous standards through surprise audits.
The regulator today proposed that lenders tighten reporting standards further to reflect declining property values more accurately in loan portfolios.
According to Dybvad, banks are reacting by restricting credit and calling in existing loans. Even healthy companies are being denied credit, according to a Jan. 16 report by the Danish Association of Auditors.
“You have to do it more smoothly so that you don’t over- react,” Dybvad said. “There’s an increasing number of companies having difficulties financing their operations and also difficulties financing investments.”
Denmark’s 173-member all-share index lost as much as 1 percent today before trading 0.6 percent lower at 2:10 p.m. local time. Danish shares underperformed their European peers, with the Stoxx Europe 600 losing 0.4 percent.
Vicious Circle
The Organization for Economic Cooperation and Development warns an absence of credit may fuel a vicious circle in which businesses lack the funds to run their operations, leaving them unable to pay their debts.
“This in turn could worsen loan impairments in the corporate sector, putting pressure on the financial sector,” the Paris-based OECD said in a Jan. 26 report. “Some small banks are especially exposed to agriculture, which faces high debt, falling land prices and funding problems.”
Agricultural debt swelled 2.6 percent to 359 billion kroner ($63 billion) in 2010, the Danish Agriculture and Food Council estimates. Commercial farms have lost as much as half their value in some parts of Denmark, leaving 6 percent of the industry technically insolvent, according to the council.
Denmark is also struggling to recover from a property bubble that burst in 2007, throwing the economy into a recession and killing jobs. House prices fell an annual 8.5 percent in November as the gap between bid and ask prices widened. Prices will have slumped 25 percent by 2013 since the crisis started in 2007, the government-backed Economic Council estimates.
Bankruptcies
Loans to farming, construction and real estate made up 26 percent of total lending at the end of 2010 at banks with less than 50 billion kroner in working capital, according to a May report by the central bank. For the biggest banks, the corresponding figure was 16 percent.
Small- and medium-sized enterprises, including retailers and construction-related businesses, are now struggling to stay afloat. The number of bankruptcies rose to 511 in January, adjusting for seasonal swings, from 449 at the end of last year, Statistics Danmark said today. More companies went out of business in January than in any month since November 2010, official data show.
“As feared, it looks like the setback in Denmark’s economy is leaving its depressing mark on businesses,” Jes Asmussen, Svenska Handelsbanken AB’s chief economist in Copenhagen, said in a note.
Stagnant Economy
Annual retail sales fell for the fourth consecutive month in December while gross domestic product, which contracted in the third quarter, probably stagnated in the final three months of 2011, the confederation’s Chief Economist Klaus Rasmussen estimates.
Twin banking and housing crises have so far made little impression on investors in Denmark’s AAA rated government bonds, thanks to the country’s low debt ratio. State debt will stay within Europe’s 60 percent rule and be only 44.6 percent of gross domestic product in 2012, compared with an average of 90.4 percent in the euro area, the European Commission said Nov. 10.
Denmark’s government pays about six basis points less than Germany to borrow for 10 years, with the benchmark 2021 note yielding 1.87 percent at the end of last week.
Still, Denmark’s debt load has widened every year since 2007, unlike neighboring Sweden’s, where debt relative to GDP has narrowed every year since 2009 and will shrink again in 2013. Denmark has the highest household debt load in the world, at 310 percent of disposable incomes, Exane BNP Paribas estimates.
Banks Overreacting
Dybvad said banks are overreacting to the FSA’s stricter standards and preventing businesses from contributing to an economic recovery by denying them credit.
“The banks need to be more open, to study things in detail and to be careful before they just cancel credit lines,” he said. “Bank regulation must not be enforced as strongly and as fast as some proposals.”
European banks also face tougher capital requirements that threaten to curb lending to businesses and slow growth. European trade groups in January issued a joint letter to lawmakers urging them to take more time to overhaul bank regulations.
“If global financial conditions were to deteriorate further, leading to liquidity shortages, banks might restrict lending to the corporate sector,” the OECD said in its report on Denmark last month. “This would make it especially difficult for small and medium-sized enterprises, which already face stricter lending conditions, to access funding and would depress growth even further.”
“When we ask our companies, small- and medium-sized, they say they are experiencing a credit crunch and it has become worse in the last month,” Karsten Dybvad, chief executive officer of the Danish Confederation of Industry, said in an interview in Copenhagen.
Dybvad’s group, which represents 10,000 Danish firms, wants the financial regulator to give banks more leeway in meeting capital requirements so they don’t call in loans and fuel a vicious circle that’s stifling the $300 billion economy. In a December survey of confederation members, two thirds said they had limited access to financing, while one in five said an absence of funds was the biggest obstacle for growth.
Three Danish banks, including Amagerbanken A/S (AMAG), failed last year after the FSA required them to restate bad loans, leaving them in breach of capital rules. Two of the failures pushed losses on to senior creditors and exacerbated a funding squeeze that’s frozen most of Denmark’s 120 banks out of debt markets.
Bank Failures
More lenders may collapse this year as Denmark’s regional bank crisis worsens, the Financial Supervisory Authority’s Director General Ulrik Noedgaard said in an interview last week. The FSA introduced stricter reviews of loan books last year, after finding banks understated writedowns, and has been enforcing the more rigorous standards through surprise audits.
The regulator today proposed that lenders tighten reporting standards further to reflect declining property values more accurately in loan portfolios.
According to Dybvad, banks are reacting by restricting credit and calling in existing loans. Even healthy companies are being denied credit, according to a Jan. 16 report by the Danish Association of Auditors.
“You have to do it more smoothly so that you don’t over- react,” Dybvad said. “There’s an increasing number of companies having difficulties financing their operations and also difficulties financing investments.”
Denmark’s 173-member all-share index lost as much as 1 percent today before trading 0.6 percent lower at 2:10 p.m. local time. Danish shares underperformed their European peers, with the Stoxx Europe 600 losing 0.4 percent.
Vicious Circle
The Organization for Economic Cooperation and Development warns an absence of credit may fuel a vicious circle in which businesses lack the funds to run their operations, leaving them unable to pay their debts.
“This in turn could worsen loan impairments in the corporate sector, putting pressure on the financial sector,” the Paris-based OECD said in a Jan. 26 report. “Some small banks are especially exposed to agriculture, which faces high debt, falling land prices and funding problems.”
Agricultural debt swelled 2.6 percent to 359 billion kroner ($63 billion) in 2010, the Danish Agriculture and Food Council estimates. Commercial farms have lost as much as half their value in some parts of Denmark, leaving 6 percent of the industry technically insolvent, according to the council.
Denmark is also struggling to recover from a property bubble that burst in 2007, throwing the economy into a recession and killing jobs. House prices fell an annual 8.5 percent in November as the gap between bid and ask prices widened. Prices will have slumped 25 percent by 2013 since the crisis started in 2007, the government-backed Economic Council estimates.
Bankruptcies
Loans to farming, construction and real estate made up 26 percent of total lending at the end of 2010 at banks with less than 50 billion kroner in working capital, according to a May report by the central bank. For the biggest banks, the corresponding figure was 16 percent.
Small- and medium-sized enterprises, including retailers and construction-related businesses, are now struggling to stay afloat. The number of bankruptcies rose to 511 in January, adjusting for seasonal swings, from 449 at the end of last year, Statistics Danmark said today. More companies went out of business in January than in any month since November 2010, official data show.
“As feared, it looks like the setback in Denmark’s economy is leaving its depressing mark on businesses,” Jes Asmussen, Svenska Handelsbanken AB’s chief economist in Copenhagen, said in a note.
Stagnant Economy
Annual retail sales fell for the fourth consecutive month in December while gross domestic product, which contracted in the third quarter, probably stagnated in the final three months of 2011, the confederation’s Chief Economist Klaus Rasmussen estimates.
Twin banking and housing crises have so far made little impression on investors in Denmark’s AAA rated government bonds, thanks to the country’s low debt ratio. State debt will stay within Europe’s 60 percent rule and be only 44.6 percent of gross domestic product in 2012, compared with an average of 90.4 percent in the euro area, the European Commission said Nov. 10.
Denmark’s government pays about six basis points less than Germany to borrow for 10 years, with the benchmark 2021 note yielding 1.87 percent at the end of last week.
Still, Denmark’s debt load has widened every year since 2007, unlike neighboring Sweden’s, where debt relative to GDP has narrowed every year since 2009 and will shrink again in 2013. Denmark has the highest household debt load in the world, at 310 percent of disposable incomes, Exane BNP Paribas estimates.
Banks Overreacting
Dybvad said banks are overreacting to the FSA’s stricter standards and preventing businesses from contributing to an economic recovery by denying them credit.
“The banks need to be more open, to study things in detail and to be careful before they just cancel credit lines,” he said. “Bank regulation must not be enforced as strongly and as fast as some proposals.”
European banks also face tougher capital requirements that threaten to curb lending to businesses and slow growth. European trade groups in January issued a joint letter to lawmakers urging them to take more time to overhaul bank regulations.
“If global financial conditions were to deteriorate further, leading to liquidity shortages, banks might restrict lending to the corporate sector,” the OECD said in its report on Denmark last month. “This would make it especially difficult for small and medium-sized enterprises, which already face stricter lending conditions, to access funding and would depress growth even further.”
Romanian government resigns following protests | EurActiv
Romanian government resigns following protests | EurActiv
The Romanian government of Prime Minister Emil Boc resigned today (6 February), following more than 20 days of protests over austerity measures and the economic downturn in the EU newcomer.
Emil Boc said he took the decision in order "to defuse the social tension" and to protect the economic stability of the country, according to Romanian media. Boc, who is the leader of the Democratic Liberal Party (PDL) of President Traian Basescu, has been prime minister since 2008.
"We took difficult decisions thinking about the future of Romania […] I appeal on the maturity of the political class to pass quickly a new cabinet trough Parliament," he said. Although according to polls PDL has the support of only 18% of the population, this party has majority in Parliament.
However, the opposition made it clear that passing a cabinet trough Parliament was not an option.
Crin Antonescu, leader of the opposition National Liberal Party (PNL), called for early elections, as well as for the resignation of President Basescu.
"Boc's resignation means that the united opposition USL was right when it initiated various non-confidence votes […] There are two more steps that need to be taken: the resignation of President Basescu and early elections," Antonescu said. Basescu's term as President expires in 2014.
The Social-Liberal Union (USL) is an alliance between three opposition parties, the Social Democratic Party of Victor Ponta, and the centre-right alliance made up of the National Liberal Party of Crin Antonescu and the Conservative Party of Daniel Constantin.
According to polls, USL has the support of over 50% of the Romanians. USL leaders have agreed that in the case of early elections, Romania's next Prime Minister would be Victor Ponta, while Crin Antonescu would be the coalition's candidate.
Recently, the three USL leaders addressed a hearing, organized by the Socialists and Democrats and the liberal ALDE groups in the European Parliament and stated that democracy in Romania had been "suspended" under PDL rule.
The Social Democratic leader Victor Ponta pointed out the real problem for the country was in fact President Basescu.
"It should not be forgotten that the Boc government hasn't taken many decisions, really. Decisions were taken by President Basescu," he stated.
In the meantime, Basescu appointed Justice Minister Cătălin Predoiu, 44, as interim Prime Minister until a new cabinet is passed in Parliament. Predoiu has no political affiliation.
Recently Predoiu told the Brussels press that his country had made unprecedented efforts to reform its law enforcement system, suggesting that Bucharest wanted to see the EU monitoring mechanism put in place five years ago removed by the summer. The next progress report on Romania under the so-called Cooperation and Verification Mechanism (CVM), is expected to be published by the Commission anytime now.
The Romanian government of Prime Minister Emil Boc resigned today (6 February), following more than 20 days of protests over austerity measures and the economic downturn in the EU newcomer.
Emil Boc said he took the decision in order "to defuse the social tension" and to protect the economic stability of the country, according to Romanian media. Boc, who is the leader of the Democratic Liberal Party (PDL) of President Traian Basescu, has been prime minister since 2008.
"We took difficult decisions thinking about the future of Romania […] I appeal on the maturity of the political class to pass quickly a new cabinet trough Parliament," he said. Although according to polls PDL has the support of only 18% of the population, this party has majority in Parliament.
However, the opposition made it clear that passing a cabinet trough Parliament was not an option.
Crin Antonescu, leader of the opposition National Liberal Party (PNL), called for early elections, as well as for the resignation of President Basescu.
"Boc's resignation means that the united opposition USL was right when it initiated various non-confidence votes […] There are two more steps that need to be taken: the resignation of President Basescu and early elections," Antonescu said. Basescu's term as President expires in 2014.
The Social-Liberal Union (USL) is an alliance between three opposition parties, the Social Democratic Party of Victor Ponta, and the centre-right alliance made up of the National Liberal Party of Crin Antonescu and the Conservative Party of Daniel Constantin.
According to polls, USL has the support of over 50% of the Romanians. USL leaders have agreed that in the case of early elections, Romania's next Prime Minister would be Victor Ponta, while Crin Antonescu would be the coalition's candidate.
Recently, the three USL leaders addressed a hearing, organized by the Socialists and Democrats and the liberal ALDE groups in the European Parliament and stated that democracy in Romania had been "suspended" under PDL rule.
The Social Democratic leader Victor Ponta pointed out the real problem for the country was in fact President Basescu.
"It should not be forgotten that the Boc government hasn't taken many decisions, really. Decisions were taken by President Basescu," he stated.
In the meantime, Basescu appointed Justice Minister Cătălin Predoiu, 44, as interim Prime Minister until a new cabinet is passed in Parliament. Predoiu has no political affiliation.
Recently Predoiu told the Brussels press that his country had made unprecedented efforts to reform its law enforcement system, suggesting that Bucharest wanted to see the EU monitoring mechanism put in place five years ago removed by the summer. The next progress report on Romania under the so-called Cooperation and Verification Mechanism (CVM), is expected to be published by the Commission anytime now.
Farage: An unholy alliance of politicians and bankers vs. the people
This interview with Nigel Farage (MEP) was conducted in June of 2011 when protests on the streets of Athens were heating up. While we havent seen Greece default yet as is suggested in this video, we have seen the removal of Prime Minister Papandreou--a democratically elected leader, and the installation of his replacement, ex-European Central Bank executive, Papademous. His government has pushed deep and very painful austerity measures forcing its people to take huge cuts in pay and pensions in both the public and private sectors that have essentially pushed many into extreme poverty. Nigel Farage, a member of the European Parliment has fought tirelessly to argue that the Euro is unstable and will continue the downward spiral if the ECB, the IMF and the World Bank keep pushing for its survival forcing countries into austerity (Greece, Ireland, Portugal, Italy, Spain, Romania) in order to secure bail out money. He also clearly says that there is an unholy alliance between the central banks and politicians to create a united states of Europe regardless of what its citizens want. Greece has until March 20th 2012 when its bond comes do to secure 14Bn (Euros). Talks broke down when party leaders failed to reach an agreement. This morning the Romanian Government resigned due to public pressure regarding the IMF and its austerity impositions.
Saturday, February 4, 2012
Still Losing the War on Unemployment
Before we get excited about the current employment numbers this quarter, these figures omit several factors that impede a better and more sustainable outlook. While the numbers are markedly better than we've seen in recent months they leave out the demographic of the unemployed and those on the fast track of becoming unemployable. There are other aspects as well....for example, the holiday seasonal employment surge, this is an election year, and the ratio between the rise in job numbers vs. those who are still unemployed: 200,000 new jobs vs 5.5 million without employment for more than 27 months. We have a very long way to go and given that our manufacturing/production jobs have been outsourced to China and other Asian countries the outlook is still bleak.
Wednesday, February 1, 2012
'No Alternative' to EU Austerity Measures
This is a clearer explanation of what is taking place with Greece and the deal it is trying to arrange with their private investors. This is not about a solution, it is about buying time, "To kick the can further down the road." The fact is that Greece is completely insolvent and the EU commissioners as well as the ECB and IMF are buying time to allow Italy and Portugal to rebound with the austerity measures that they have already imposed. These measures will make it possible for Greece to have an "orderly" default and would be in the best interest of the entire Eurozone. If Greece were to default now, it would mean a "disorderly" default, meaning, a likely run on the banks, a banking credit freeze, and a collapse of the entire European Economy.
This is why we are seeing meeting after meeting with the leaders in the EU and the central banks. Desperate times call for desperate measures; in this case, austerity essentially means the people pay the price for government misdeeds and are forced to bail them out. Austerity also means higher taxes, deep wage cuts and massive job loss in the public sector. Tell me, how would you feel as a citizen if this happened to you in this country?
By the way, one of the deeply disturbing comments made here is the goal to deregulate both the labor and product markets. In my estimation, that is a very dangerous idea. While it might work well for the financial sector, it will not bode well for the average worker. What it means to deregulate labor is not explained here. It will be interesting if we hear more about this in the coming weeks. My guess is that it will be glossed over.
Note: I particularly like the interviewer in this segment. He asks the tough questions and does not let his guest get away with pat answers or cliche's. I wish we had more of this type of interviewing here in the U.S.
Monday, January 30, 2012
IMF Managing Director Christine Lagarde in Davos
Christine LaGarde, managing director of the International Monetary Fund (IMF) talks about what must take place in order to begin sorting out the economic upheavel in the Eurozone. Clearly the message is disturbing despite her calm and measured delivery of the tasks and challenges ahead. Even the IMF--the organization itself--admits to the need to raise funds in order to help stabilize the Eurozone and to keep its own liquidity protected. One gets the distinct impression that there is so much to do, with so little time to do it in, that it is only a matter of time before the precarious house of cards collapses. Even if they could stabilize the European economy, how long until the next bond payments come due and the central banking system and EU commissioners will have to go back to the drawing table to buy more time. Even more disturbing, the efforts to stabilize the economies of those countries close to default are now reluctantly, in some instances angrily, handing over their fiscal sovereignty to the ECB and the IMF. In essence, we are seeing a coup spearheaded by the financial sector reshaping the Eurozone.
Saturday, January 28, 2012
Wake Up Call
It took the crash of 2008 to wake me up and to motivate me to dig deep into the financial world to try and understand how interconnected we are to all the decisions and movements that are made within it. We are certainly far more aware of how insidiously money influences politics and how on a global scale the use of military and police action necessitates keeping certain power structures in place and creating stronger and more brutal barriers to ensure their existence. Libya is a powerful example of this. The reasons for the country's takeover, fueled by the west's indirect support of insurgents and removing Gaddafhi from power, had nothing to do with freedom and democracy as it was sold to the American public, but had everything to do with the control of oil, ensuring the stability of the balance of power and keeping the dollar as the only option for trade. We simply wouldn't be spending millions of U.S. tax payer dollars taking out a dictator if the major export of the country were flowers. I believe all of these elements are deeply interconnected and need to be studied both on their own merits and in the theatre where they converge. Issues like these including but not limited to central banking, international trade, cheap labor, military dominance, etc., I have long explored on FB (and I will continue to explore there) but I intend to take on more comprehensively here. If you are intrigued, I invite you to take on the challenge, open your heart and mind and join the conversation and the exploration.
My Mission Statement
Hello and welcome to my new blog. I am a graduate student studying the global economy, international business and how the influence of multinational corporations shape the fiscal and political policies of governments world wide. I believe the real news is to be found splayed in the business/financial sections of newspapers and on the news and financial websites. The financial world has a very specific and deliberate language that is constantly and purposefuly changing to create an opacity that is little understood among the masses in order to de-incentivize scrutiny. I believe however, that with a closer analysis, defining terms and using analogies that resemble how we experience economics we can get at a clearer more accurate account of the events occurring in our world today.
Economics is the life blood of what keeps daily life in motion and provides a seeming normalcy and continuity--a substructure that when all is well is barely noticed or felt. But once there are disruptions in the economic and monetary pipelines on a micro or macro level, such as bank credit freezes and the burst of the housing bubble through subprime lending in 2008, these events can cause catastrophic reverberations leading to devastating collapses in very short periods of time often effecting millions of people at once. We owe it to ourselves and our progeny to understand how the system works and how it changes.
I have created this blog in order to research trends, explore decisions made in fiscal policies both foreign and domestic, to observe and analyze geo-political events as it relates to global economics and more humbly, I am doing this to learn and put the pieces together for myself. I am studying to reach a certain level of expertise and proficiency in this field, but acknowledge that I will forever be a student as I take this journey. These are desperate times growing ever more chaotic....let's learn together and with any luck help change the world towards a greater economic equilibrium.
Economics is the life blood of what keeps daily life in motion and provides a seeming normalcy and continuity--a substructure that when all is well is barely noticed or felt. But once there are disruptions in the economic and monetary pipelines on a micro or macro level, such as bank credit freezes and the burst of the housing bubble through subprime lending in 2008, these events can cause catastrophic reverberations leading to devastating collapses in very short periods of time often effecting millions of people at once. We owe it to ourselves and our progeny to understand how the system works and how it changes.
I have created this blog in order to research trends, explore decisions made in fiscal policies both foreign and domestic, to observe and analyze geo-political events as it relates to global economics and more humbly, I am doing this to learn and put the pieces together for myself. I am studying to reach a certain level of expertise and proficiency in this field, but acknowledge that I will forever be a student as I take this journey. These are desperate times growing ever more chaotic....let's learn together and with any luck help change the world towards a greater economic equilibrium.
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