Defining Prosperity Down
By PAUL KRUGMAN, The New York Times
Published: August 1, 2010
I worry that those in power, rather than taking responsibility for job creation, will soon declare that high unemployment is “structural,” a permanent part of the economic landscape – and that by condemning large numbers of Americans to long-term joblessness, they’ll turn that excuse into dismal reality.
…
We’re told that we can’t afford to help the unemployed – that we must get budget deficits down immediately or the “bond vigilantes” will send U.S. borrowing costs sky-high. Some of us have tried to point out that those bond vigilantes are, as far as anyone can tell, figments of the deficit hawks’ imagination – far from fleeing U.S. debt, investors have been buying it eagerly, driving interest rates to historic lows. But the fearmongers are unmoved: fighting deficits, they insist, must take priority over everything else – everything else, that is, except tax cuts for the rich, which must be extended, no matter how much red ink they create.
The point is that a large part of Congress – large enough to block any action on jobs – cares a lot about taxes on the richest 1 percent of the population, but very little about the plight of Americans who can’t find work.
Monday Business Edition is an Open Thread
1 Greek truckers end week-long strike
by John Hadoulis, AFP
Sun Aug 1, 3:48 pm ET
ATHENS (AFP) – Greek truckers on Sunday called off a week-long strike that stranded thousands of travellers and nearly dried up fuel around the country at the peak of the busy tourism season.
“We have decided, by narrow majority, to suspend the strike,” the head of the Greek truck owners confederation, George Tzortzatos, told reporters after a union meeting that lasted over three hours.
“Transporters will be back at the steering wheel as of tomorrow,” he said. |
2 Greece struggles to restock fuel as strike continues
AFP
Sat Jul 31, 11:20 am ET
ATHENS (AFP) – Greek authorities struggled to restore fuel supplies on Saturday after failing to break a six-day trucker strike that has disrupted travel at the peak of the busy tourism season.
Military trucks and petrol company vehicles were employed to alleviate the fuel shortage as over 30,000 lorry and tanker truck operators sat out a government requisition order to return to work on pain of prosecution.
Officials said the situation was improving in the main cities of Athens and Thessaloniki, but shortages were still reported on many holiday islands and destinations in northern Greece where thousands of tourists are stranded. |
3 Greek tourism reels from fuel shortage, strikes
by John Hadoulis, AFP
Sat Jul 31, 11:35 pm ET
ATHENS (AFP) – Disaster has struck Greece’s crucial tourism industry at the peak of a summer season badly needed by its recession-hit economy with a national fuel shortage compounding weeks of on-off work unrest.
A strike wave against austerity policies, a violent May protest in which three people died in a firebombed bank and unionist action targeting cruise ships and flights have made for a calamitous season, operators say.
And additional disruption caused to tens of thousands of travellers by the fuel holdup caused by a trucker walkout could not have come at a worse time for a sector which makes up nearly a fifth of the troubled Greek economy. |
4 China’s manufacturing contracts in July: HSBC survey
by Fran Wang, AFP
2 hrs 36 mins ago
BEIJING (AFP) – Manufacturing in China contracted for the first time in 16 months in July, an independent survey showed Monday, lifting Chinese shares on hopes that policymakers will refrain from any new tightening moves.
The HSBC China Manufacturing PMI, or purchasing managers index, fell to 49.4 last month from 50.4 in June — its first drop below the neutral 50 threshold since March 2009, the bank said.
A reading above 50 means the sector is expanding, while below 50 indicates an overall decline. |
5 UAE to suspend key BlackBerry services
by Ali Khalil, AFP
Sun Aug 1, 3:19 pm ET
DUBAI (AFP) – Gulf business hub the United Arab Emirates said Sunday it will halt key BlackBerry services that breach laws and raise security concerns, a move Saudi Arabia may follow according to unconfirmed reports.
The UAE suspension would kick in on October 11 and last until a legal solution was reached, the Telecommunications Regulatory Authority (TRA) said in a statement on its website.
It said the decision was taken “after failing to make progress in repeated attempts to make BlackBerry services compatible” with the Gulf state’s legislation. |
6 Some clouds clear ahead of ECB rate decision
by William Ickes, AFP
Sat Jul 31, 11:41 pm ET
FRANKFURT (AFP) – The European Central Bank governing council might breathe a sigh of relief this week as no potential disaster hangs over its monthly meeting for the first time in a while.
The main ECB interest rate is sure to remain at a record low of 1.0 percent for the 16th month running and governors can take a summer break in the wake of some positive economic indicators and amid relative calm on financial markets.
Recent ECB meetings have been held as the Greek debt crisis festered, record one-year bank loans were coming due or markets braced for the results of stress tests on European financial institutions. |
7 Debate on death and taxes heats up as billionaires fall
by Rob Lever, AFP
Sat Jul 31, 11:00 pm ET
WASHINGTON (AFP) – The question of death and taxes has risen to the fore in Washington as the demise of prominent billionaires has underscored a fluke which allows big estates to escape taxes, but only for this year.
Highlighting the conundrum has been the death of wealthy Americans including oil tycoon Dan Duncan and New York Yankees baseball owner George Steinbrenner, who can pass on their fortunes to heirs with no taxes. Duncan’s fortune was estimated at nine billion dollars and Steinbrenner’s at 1.1 billion by Forbes magazine.
If they had died in 2009 or 2011, their estates would have paid huge amounts of taxes to the US Treasury. The heirs avoided the tax man because a law enacted in 2001 under president George W. Bush phased out the estate tax entirely in 2010. |
8 Soaring e-book sales speak volumes
by Peter Brieger, AFP
Sun Aug 1, 1:54 am ET
HONG KONG (AFP) – After years of lurking in the literary wilderness, the e-book market has exploded with online retailer Amazon.com’s digital volumes recently overtaking sales of their hardcover counterparts.
The increase in sales has come as Amazon slashes the price on its Kindle device amid heavy competition from Apple’s multi-purpose iPad and e-readers from Sony and bookstore giant Barnes & Noble.
Underscoring the growth, Hong Kong’s massive book fair, an annual event attended by almost one million people, wrapped up last week with visitors exposed to a brand-new section: digital reading. |
9 US growth slows fueling fears over recovery
by Andrew Beatty, AFP
Sat Jul 31, 5:29 am ET
WASHINGTON (AFP) – US economic growth slowed dramatically in the second quarter, the government has said, stoking fears that the recovery is losing steam and fueling a fierce political debate over how to respond.
Gross domestic product (GDP) growth fell back sharply to 2.4 percent in the second quarter, the Commerce Department said, slamming the brakes on an already tepid rebound and painting a bleak picture of the road ahead.
“The post-recession rebound is history,” said Bart van Ark, chief economist for The Conference Board, a leading business research group. |
10 IMF lowers Spain growth forecast, warns of ‘fragile’ rebound
AFP
Fri Jul 30, 2:54 pm ET
WASHINGTON (AFP) – The IMF on Friday lowered its 2011 growth forecast for the Spanish economy to 0.6 percent from the 0.9 percent it foresaw in April and warned the recovery “is likely to be weak and fragile.”
“The particular challenges facing Spain will likely make the recovery slower and more fragile than in the euro area,” the IMF said in its latest report on the country’s economy.
The International Monetary Fund’s growth forecast for Europe’s fifth-largest economy for next year was lower than the 1.3 percent expansion predicted by the Spanish government, which is under pressure to close its public deficit. |
11 Building boom transforms Mozambique, but not for poor
by Johannes Myburgh, AFP
Sun Aug 1, 12:03 am ET
MAPUTO (AFP) – Heavily pregnant Adelaide Mangwel balances 18 kilos of prawns on her head as she slowly descends the crowded ferry that carried her across Maputo Bay to sell her seafood in Mozambique’s capital.
It’s a daily journey that could be made easier as a bridge spanning the bay goes under construction later this year, part of the 1.5 billion dollars (1.2 billion euros) that Mozambique is pouring into rebuilding its war-shattered infrastructure over the next five years.
“It will help. I won’t have to wait for a ferry,” the 29-year-old says. |
12 HSBC and BNP profits beat view after bad debts tumble
By Steve Slater and Lionel Laurent, Reuters
20 mins ago
LONDON/PARIS (Reuters) – HSBC (HSBA.L)(0005.HK) and BNP Paribas (BNPP.PA), two of Europe’s top three banks, beat earnings forecasts after bad debts fell sharply, more than offsetting slowing investment banking growth.
The two banks showed a dip in investment banking income in the latest quarter, but more than made up for that with lower losses on personal and corporate loans as broad economic conditions improved.
Half-year profits for HSBC, Europe’s biggest bank, hit $11.1 billion, more than double the $5 billion of a year ago and above the average forecast of $9.1 billion from eight analysts polled by Thomson Reuters. |
13 China’s Geely completes Volvo buy
By Fang Yan and Alison Leung, Reuters
56 mins ago
BEIJING/HONG KONG (Reuters) – China’s Geely on Monday completed its purchase of Ford Motor Co’s (F.N) Volvo unit, marking China’s biggest acquisition of a foreign car maker and reflecting the nation’s rapid rise in the auto world.
Zhejiang Geely, parent of Hong Kong-listed Geely Automobile (0175.HK) said on Monday it paid $1.3 billion in cash and issued a $200 million loan note to Ford. That represents $300 million less than the earlier headline of $1.8 billion, but Ford said it would get a further “true-up” payment later in the year.
With the deal now done, the real challenge for Geely will lie ahead as it aims to restore Volvo to long-term profits. Volvo Cars posted revenue of $12.4 billion in 2009 by selling 334,000 cars, but it recorded a pretax loss of $653 million. |
14 China slows to cruising speed as Europe perks up
By Andy Bruce and Alan Wheatley, Reuters
50 mins ago
LONDON/BEIJING (Reuters) – Manufacturing in China shrank in July for the first time since March 2009 while it perked up in the euro zone, according to surveys that underscored the unevenness of the global economic recovery.
Global stock markets rose on Monday, viewing a declining Chinese manufacturing purchasing index as the signal of a desired slowdown rather than the harbinger of a slump, with strong results from two of Europe’s top banks adding to the positive tone.
Investors also looked ahead to equivalent U.S. factory data due later on Monday for further signs that the recovery in the world’s biggest economy might be stalling, three days after second quarter output numbers there came in below forecasts. |
15 Singapore ex-BP employees seek to set aside search order
By Yaw Yan Chong and Luke Pachymuthu, Reuters
Mon Aug 2, 12:17 am ET
SINGAPORE (Reuters) – Six former BP employees sued by the oil major for breach of contract in Singapore have applied to the court to set aside a search order that had allowed BP’s lawyers to seize their personal computers, mobile phones and thumb drives, court documents showed.
Documents filed with the Singapore High Court by the defense last Thursday alleged that the orders against them were oppressive and had been for “unlawful or illegitimate reasons.”
The filings highlight the manner of the execution of the seizure by BP, in particular, the seizure of mobile phones and laptops used by the six former employees’ spouses and children, the search of the handbag of the wife of one of them and the search of one former employees’ son’s school book folder. |
16 BP’s well plug nears, Dudley to visit Russia
By Tom Bergin, Reuters
1 hr 11 mins ago
LONDON (Reuters) – BP Plc Chief Executive-designate Bob Dudley will fly to Moscow this week to meet government officials and BP’s oligarch partners in its Russian venture as the oil giant prepares to plug its blown out Gulf of Mexico well for good.
It will be Dudley’s first visit to Russia since he was forced to flee the country in 2008, citing a campaign of harassment by its billionaire partners in the TNK-BP joint venture of which he was CEO.
BP has since settled its dispute about control of TNK-BP and the venture remains a key part of BP’s portfolio, representing a quarter of total production and over 10 percent of profits. |
17 Have jobs become a leading indicator?
By Pedro Nicolaci da Costa, Reuters
Sun Aug 1, 3:00 pm ET
WASHINGTON (Reuters) – Employment, it turns out, may not be such a laggard after all.
The job market, often described as reacting in slow-motion to shifts in the pace of economic growth, may actually be a pretty solid indicator of the United States’ prospects.
That means a double-dip U.S. recession cannot yet be completely ruled out, particularly since economists believe Friday’s payrolls report for July will show a second straight month of net job losses. |
18 BNP sees market upturn, Q2 beats forecasts
By Lionel Laurent, Reuters
Mon Aug 2, 5:02 am ET
PARIS (Reuters) – BNP Paribas (BNPP.PA), France’s biggest listed bank, trumped second-quarter profit expectations on Monday and said the market environment would improve in the third quarter as investor confidence in Europe’s banks rises.
Net profit jumped 31 percent thanks to lower loan provisions and strong retail banking, offsetting volatile financial market conditions that hit investment banking, BNP said.
The performance underlined an improving but still challenging macroeconomic environment in BNP’s key euro zone markets, pointing the way to more growth in retail, Chief Executive Baudouin Prot said in a statement. |
19 BlackBerry users in UAE and Saudi may have services cut
By Tamara Walid and Souhail Karam, Reuters
Mon Aug 2, 12:11 am ET
DUBAI/RIYADH (Reuters) – More than a million BlackBerry users may have key services in Saudi Arabia and the UAE cut off after authorities stepped up demands on smartphone maker Research In Motion for access to encrypted messages sent over the device.
BlackBerry’s Messenger application has spread rapidly in the Gulf Arab region but because the data is encrypted and sent to offshore servers, it cannot be tracked locally.
“Certain BlackBerry services allow users to act without any legal accountability, causing judicial, social and national security concerns,” the United Arab Emirates’ Telecommunications Regulatory Authority (TRA) said in a statement. |
20 AP analysis: US economic stress heads back up
By MIKE SCHNEIDER and JEANNINE AVERSA, Associated Press Writers
2 hrs 24 mins ago
After easing for four months, the nation’s economic stress worsened in June because more bankruptcies in the West and foreclosures outside the Sun Belt outweighed lower unemployment, according to The Associated Press’ monthly analysis of conditions around the country.
The setback halted a drop in month-to-month stress readings that had begun in February. In May, economic stress had declined from the previous month in 33 states. And in April, stress fell in every state but two.
But in June, bankruptcy rates rose in Utah, California, Colorado and Idaho. Higher foreclosures spread to the Midwest, particularly Illinois. This occurred even as foreclosures eased in states that have suffered most from the housing bust, such as Arizona, California, Florida and Nevada. |
21 China’s Geely completes acquisition of Volvo
By JOE McDONALD, AP Business Writer
1 hr 3 mins ago
BEIJING – Geely Holding Group completed its acquisition of Ford Motor Co.’s Volvo unit Monday in a $1.5 billion deal that gives the small-but-ambitious Chinese automaker a global brand and huge management challenges.
The legendary Swedish automaker is China’s biggest foreign auto acquisition and an unusually large deal for a private Chinese company.
Industry analysts say 13-year-old Geely, barely known abroad, will face a struggle in integrating the two corporate cultures and turning around Volvo Cars, a perennial money-loser in a country with strong labor unions. |
22 Humana 2Q net income rises 21 percent on premiums
By BRUCE SCHREINER, Associated Press Writer
1 hr 11 mins ago
LOUISVILLE, Ky. – Health insurer Humana Inc. reported a 21 percent upswing in second-quarter profit Monday as another strong performance in its lucrative government segment, led by its growing Medicare Advantage business, was backed by a big improvement in its commercial sector.
Based on surging first-half results, the Louisville-based company raised its net income-per-share expectations for the full year to a range of $5.65 to $5.75, compared to a prior range of $5.55 to $5.65.
Analysts expect $5.71 per share, on average. |
23 Shops grapple with fallout from group coupons
By MARK D. CARLSON and EMILY FREDRIX, Associated Press Writers
2 hrs 4 mins ago
CHICAGO – Local shops nationwide are pulling in thousands of new customers with group coupons online, but the deals can sometimes work too well, turning marketing into a game of retail roulette.
Some of the nail salons, restaurants and other small shops that have sold the coupons have risked both new and existing business as they struggled to handle the surge in clients.
For Crystal Nail Salon in Chicago, ratings at web sites like Yelp.com tumbled as owner Phu Bui struggled to serve up the 5,100 manicure-pedicure combinations he sold in June for 65 percent off. |
24 Junk bonds: Savvy investment or fool’s gold?
By DAVE CARPENTER, AP Personal Finance Writer
1 hr 59 mins ago
CHICAGO – A sideways stock market has investors searching for other places to make a decent return on their money. And junk bonds, for better or worse, are starting to look like gems to many.
The appeal is easy to understand.
Junk bonds, known more politely as high-yield bonds, are bonds with very low credit ratings that corporations pay more interest on so they can attract investors. As of last week, they were yielding 8.34 percent, down from 9 percent earlier in July. |
25 Gulf crews prepare to start plugging well for good
By GREG BLUESTEIN, Associated Press Writer
1 hr 44 mins ago
NEW ORLEANS – Engineers on the Gulf of Mexico hoped to begin work Monday on a plan to to shove mud and perhaps cement into the blown-out oil well at the seafloor, making it easier to end the gusher for good.
The only thing keeping millions more gallons of oil out of the Gulf right now is an experimental cap that has held for more than two weeks but was never meant to be permanent.
The so-called “static kill” attempt carries no certainty, and BP PLC engineers still plan to follow it up days later by sending a stream of mud and cement into the bottom of the mile-deep underground reservoir through a relief well they’ve been digging for months. |
26 La. fishermen wrinkle their noses at ‘smell tests’
By JASON DEAREN, Associated Press Writer
2 hrs 31 mins ago
ON THE GULF OF MEXICO – Even the people who make their living off the seafood-rich waters of Louisiana’s St. Bernard Parish have a hard time swallowing the government’s assurances that fish harvested in the shallow, muddy waters just offshore must be safe to eat because they don’t smell too bad.
Fresh splotches of chocolate-colored crude, probably globules broken apart by toxic chemical dispersants sprayed by BP with government approval, still wash up almost daily on protective boom and in marshes in reopened fishing grounds east of the Mississippi River.
When shrimp season opens in a couple of weeks and fisherman Rusty Graybill drags his nets across the mucky bottom, he worries that he’ll also collect traces of oil and dispersants – and that even if his catch doesn’t smell, buyers and consumers will turn up their noses. |
27 Administration report sees $8B in Medicare savings
By RICARDO ALONSO-ZALDIVAR, Associated Press Writer
1 hr 47 mins ago
WASHINGTON – The new health overhaul law will start producing savings for Medicare right away, and over time add 12 years of solvency to the program’s giant trust fund for inpatient care, the Obama administration says in a report to be released Monday.
Medicare will save about $8 billion by the end of next year, and $575 billion over the rest of the decade, the report said.
Release of the analysis comes ahead of the official annual financial checkup for Social Security and Medicare from the program’s trustees, expected as early as this week. It provides support for the administration’s position that the health care law secures and strengthens health care for seniors. |
28 SPIN METER: Program risks $30B to save weak banks
By DANIEL WAGNER, AP Business Writer
Sun Aug 1, 4:52 pm ET
WASHINGTON – People are fed up with bank bailouts that risk taxpayer billions. The government’s apparent solution: call them something else.
Congress is at work on a new program that would send $30 billion to struggling community banks, in a process similar to the huge federal bailouts of big banks during the financial crisis. This time, money is more likely to disappear as a result of bank failures or fraud.
Two weeks ago, President Barack Obama declared an end to taxpayer bailouts when he signed a sweeping overhaul of financial rules. In his weekly radio and Internet address on Saturday, he described the new bailout program as “a common-sense” plan that would give badly needed lending help to small-business owners to expand and hire. |
29 Study claims conventional ag limits greenhouse gas
By DAVID MERCER, Associated Press Writer
Mon Aug 2, 3:11 am ET
CHAMPAIGN, Ill. – Advances in conventional agriculture have dramatically slowed the flow of greenhouse gases into the atmosphere, in part by allowing farmers to grow more food to meet world demand without plowing up vast tracts of land, a study by three Stanford University researchers has found.
The study, which has been embraced by many agricultural groups but criticized by some environmentalists, found that improvements in technology, plant varieties and other advances enabled farmers to grow more without a big increase in greenhouse gas releases. Much of the credit goes to eliminating the need to plow more land to plant additional crops.
The study’s authors said they aren’t claiming modern, high-production agriculture is without problems, including the potential for soil degradation through intense cultivation and fertilizer runoff that can contaminate fresh water. |
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