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  • Sherwin-Williams will acquire COMEX for $2.34 billion USD Cleveland, United States Sherwin-Williams Co (SHW.N), the top U.S. paint maker, said it will buy Mexico's leading paint company Consorcio Comex for about $2.34 billion ...
    Posted 12 Nov 2012, 14:10 by Meriposa World
  • Apple's iPhone 5 presented with a bigger screen but lacks surprise San Fransisco, California, United States of AmericaApple Inc's new iPhone goes on sale on Friday with a bigger screen and 4G wireless technology, as the company seeks to ...
    Posted 12 Sep 2012, 15:02 by Meriposa World
  • G-20 summit aims to boost sluggish global economic recovery Los Cabos, Mexico Leaders from the world's largest industrialized and emerging economies kick off the G-20 summit in Mexico on Monday with the aim of boosting a sluggish ...
    Posted 17 Jun 2012, 21:43 by Meriposa World
  • Spain offered up to 100 billion euros to stabilize banks Madrid, Spain Finance ministers of countries that use the common European currency on Saturday offered Spain a lifeline of up to 100 billion euros to stabilize its banks. Spain announced ...
    Posted 9 Jun 2012, 14:44 by Meriposa World
  • China's slowing inflation, output growth add stimulus pressure China's consumer prices rose the least in two years in May and industrial output and retail sales trailed estimates, adding pressure for more stimulus after the first interest-rate ...
    Posted 9 Jun 2012, 10:48 by Meriposa World
  • Spanish banks need 40 billion euro buffer: Monetary Fund New York, United States Several banks in Spain would need to raise capital buffers by a total of €40 billion to withstand another financial shock, the International Monetary Fund said ...
    Posted 8 Jun 2012, 22:21 by Meriposa World
  • Spain calls for new euro fiscal authority Madrid, Spain Spain, the latest combat zone in Europe's long-running debt wars, urged the euro zone to set up a new fiscal authority to manage the bloc's ...
    Posted 2 Jun 2012, 22:02 by Meriposa World
  • Nobel economist fears for the poorest Greeks Christopher Pissarides won a Nobel Prize in economics in 2010, but he hasn’t forgotten his roots in a modest, Greek-speaking village on the island nation of Cyprus. He ...
    Posted 31 May 2012, 00:19 by Meriposa World
Showing posts 1 - 8 of 8. View more »

Sherwin-Williams will acquire COMEX for $2.34 billion USD

posted 12 Nov 2012, 14:09 by Meriposa World   [ updated 12 Nov 2012, 14:10 ]

Cleveland, United States 

Sherwin-Williams Co (SHW.N), the top U.S. paint maker, said it will buy Mexico's leading paint company Consorcio Comex for about $2.34 billion, including debt, to tap into the rising demand in the region.

Shares of Sherwin-Williams were up 7 percent at $151.05 on the New York Stock Exchange on Monday.

The deal will significantly increase Sherwin-Williams' presence in markets where its store count is low, Chief Executive Christopher Connor said in a statement.

"There's an estimated housing deficit in the range of 9 million units, plus ongoing annual demand of 600,000 units, in Mexico," Connor said on a conference call. "So it's a pretty healthy market."

Sherwin-Williams has 135 stores in Mexico.

The U.S. company noted that 40 percent of Mexico's population is aged between 10 and 44, pointing to the strong growth potential in housing demand.

Comex, which sells paint and coatings through 3,300 outlets in Mexico, generated sales of about $1.4 billion in 2011.

About $1 billion of this comes from Mexico, Robert W. Baird & Co analyst Ghansham Panjabi said.

Comex acquisition will also boost Sherwin-Williams' presence in the U.S. West Coast and Canada.

"Coatings is still a consolidating industry. This is just a part of a natural consolidation cycle," Panjabi said.

GOOD FIT

Comex was founded as a family business in the 1950s by Jose Achar, a descendent of Syrian immigrants, who started mixing paints in a garage in Mexico City using a World War One mill.

The company is now the top paint manufacturer in Mexico and Central America.

"Sherwin Williams is obviously one of the leaders globally and they just found a very nice fit with a well-managed company," Panjabi said.

Sherwin-Williams, which sells Dutch Boy, Krylon, Minwax, Water Seal and its namesake brands, operates about 3,880 stores in the United States, Canada, Puerto Rico and Virgin Islands.

The company, which has a market value of about $14.5 billion, expects the deal to add modestly to earnings in the first year and more than $1 per share by the third year.

(Reporting by Ranjita Ganesan and Aditi Shrivastava in Bangalore; Editing by Don Sebastian), Reuters, November 12, 2012

Apple's iPhone 5 presented with a bigger screen but lacks surprise

posted 12 Sep 2012, 14:59 by Meriposa World   [ updated 12 Sep 2012, 15:02 ]

San Fransisco, California, United States of America

Apple Inc's new iPhone goes on sale on Friday with a bigger screen and 4G wireless technology, as the company seeks to maintain its edge over rivals such as Samsung Electronics Co Ltd and Google Inc.

The iPhone 5 met the expectations laid out by gadget geeks and tech analysts ahead of the unveiling on Wednesday, but offered few surprises to give Apple shares -- already trading near record highs -- another major kick.

"There is not a wow factor because everything you saw today is evolutionary. I do think they did enough to satisfy," said Michael Yoshikami, chief executive of the wealth management company Destination Wealth Management.

Other industry analysts turned quickly to speculating about what else was in Apple's product pipeline ahead of the crucial end-year holiday season, especially as the company stayed mum about an oft-rumored TV device or a smaller iPad.

"We would really like to see the iPad Mini in the product offering for the all important holiday quarter. They still have time," said Channing Smith, co-manager of the Capital Advisors Growth Fund. "As soon as we see that, we will have more conviction about the stock heading into the final quarter."

Shares in Apple ended the day up 1.4 percent at $669.79.

The latest iPhone comes as Apple faces new competition from Microsoft Corp, which is pushing its Windows Phone 8 operating system as a third alternative to Apple and Google's Android, the most-used mobile operating system in the world.

Analysts have forecast sales of 10 million to 12 million of the new iPhones in this month alone.

Apple has sold more than 243 million iPhones since 2007, and the device ushered in the current applications ecosystem.

But Samsung now leads the smartphone market with a 32.6 percent share followed by Apple with 17 percent, according to market research firm IDC. Both saw shipments rise compared to a year ago, with Samsung riding its flagship Galaxy S III phone.

Going on sale Friday from $199 with a data plan, the iPhone 5 will sport a 4-inch "retina" display, ability to surf a high-speed 4G LTE wireless network, and is 20 percent lighter than the previous iPhone 4S.

The iPhone 5 comes with Apple's newest "A6" processor, which executives said runs twice as fast as the previous generation. It will have three microphones and an 8 megapixel camera that can take pictures in higher resolutions.

It will hitch a ride on the three largest U.S. carriers -- Verizon Wireless, AT&T Inc, and Sprint.

One popular enhancement was improved battery endurance -- the iPhone 5's power core can support eight hours of 4G Web browsing.

"It has always been a major drawback on Android phones," said Yoshikami. "To have a thinner phone with a bigger screen with more battery life is a pretty impressive technology advancement."

Apple's annual events usually adhere to a set framework, but Chief Executive Tim Cook and his management team diverged from that script somewhat on Wednesday. Cook began the event by saying the company's notebooks now rank tops in U.S. sales, leading in market share in the past three months.

Then executives quickly introduced the iPhone 5 and its features, before moving on to a new line-up of iPods and ending the event with a rousing performance by rock band Foo Fighters.

Apple telegraphed many of the software changes to expect in iPhone 5 when it debuted iOS 6, its latest mobile operating system, in June.

The new iPhone will improve on the search capabilities of its Siri voice assistant and will use Apple's own mobile mapping service instead of Google's software. Other additions include turn-by-turn voice directions for navigation, and a new in-house app called "Passbook" that organizes a user's electronic airline tickets, movie tickets and restaurant loyalty cards.

Earlier, Cook told the audience that its apps store now has more than 700,000 on tap -- the industry's largest library.

Apple also is making headway in a corporate market that has been dominated by struggling Canadian smartphone maker Research in Motion . Cook said almost every Fortune 500 companies was testing or using its iPhones and iPads.

Reuters, September 12, 2012

G-20 summit aims to boost sluggish global economic recovery

posted 17 Jun 2012, 21:42 by Meriposa World   [ updated 17 Jun 2012, 21:43 ]

Los Cabos, Mexico 

Leaders from the world's largest industrialized and emerging economies kick off the G-20 summit in Mexico on Monday with the aim of boosting a sluggish global economic recovery.

Officially the summit will largely focus on one of the primary causes of the recovery's lethargy, a persistent weakness in the 17 countries that use the euro as their national currency.

Preparing for the meeting in the wake of parliamentary elections in Greece -- arguably the most troubled country in the eurozone -- White House officials expressed optimism that the new Greek government would remain committed to a solution that would keep the country in the European monetary union.

"As President Obama and other world leaders have said, we believe that it is in all our interests for Greece to remain in the euro area while respecting its commitment to reform," White House Press Secretary Jay Carney said in a statement responding to the election results.

A rocky election in Greece that would result in its departure from the eurozone was one of the greatest fears coming into the summit, and while that fear appears to have been averted for now, the United States still expects European leaders to lay out a plan for dealing with the effects of the distressed Greek economy moving forward.

"We expect to hear more of this in Los Cabos (Mexico), showing that they are fundamentally committed to evolving the euro area in a way that makes the monetary union much stronger by virtue of having a more banking union, more fiscal union, more political union," Treasury Under Secretary for International Affairs Lael Brainard told reporters in a briefing just days before the start of the summit.

Concrete commitments coming out of the summit are unlikely, but members of the Obama administration sounded hopeful that global leaders would leave Mexico with a united voice calling for growth.

"This isn't a meeting where we expect Europeans to make decisions about Europe," said Mike Froman, deputy national security adviser for international economics. "You'll have four out of 17 eurozone members there. You'll have five out of 27 European Union members there, plus of course (European Council President Herman) Van Rompuy and (European Commission President Jose Manuel) Barroso.

"So this is an opportunity -- and we'll be encouraging them to take this opportunity -- to lay out a vision of where they want to take Europe and the eurozone going forward, and how they want to address these issues. But this is not a meeting where we expect them to come and make decisions for all of Europe."

While avoiding an economic contagion is central to the G-20's formal mission, many eyes will also be trained on the first bilateral meeting between U.S. President Barack Obama and newly reelected Russian President Vladimir Putin.

Russia has recently blocked two resolutions in the U.N. Security Council targeted at putting a stop to Syrian President Bashar al-Assad's brutal attacks on civilians, deepening a divide that has darkened an otherwise resurgent relationship between the United States and its former Cold War foe.

Prior to the summit, U.S. Deputy National Security Adviser Ben Rhodes told reporters that the United States continues to work to get Russia to agree with its position that al-Assad must relinquish power.

"We've been working to get the Russians to come in line with, frankly, the broad international community," Rhodes said. "This is not just an issue between the United States and Russia, it's really an issue between the international community, on the one hand, that is expressing support for a real transition in Syria, and the Syrian government, which has, of course, resisted those steps.

"So we'll continue to work through that area of difference with the Russians because we believe that they can play a role, again, in pressing the Assad regime and supporting a political transition."

In addition to Obama's meeting with Putin on Monday morning, Obama also will meet with Chinese President Hu Jintao on Tuesday. The two leaders are expected to discuss China's role in ongoing talks with Iran over its nuclear program, as well as China's role in spurring growth.

By Adam Aigner-Treworgy and Dan Lothian, CNN, June17, 2012

Spain offered up to 100 billion euros to stabilize banks

posted 9 Jun 2012, 14:42 by Meriposa World   [ updated 9 Jun 2012, 14:44 ]

Madrid, Spain 

Finance ministers of countries that use the common European currency on Saturday offered Spain a lifeline of up to 100 billion euros to stabilize its banks.

Spain announced after a three-hour video conference call that it would become the fourth and largest nation to request assistance, but officials did not specify the size of the assistance fund.

Finance ministers from the 17 nations that use the euro later issued a statement saying Spain's formal request would come "shortly," and that up to 100 billion euros, $125 billion at the current exchange rate, would be provided from Europe's rescue funds. 

Spanish Economy Minister Luis De Guindos did not indicate how much of that Spain would accept. But if Spain accepts the full amount, that would be larger than previous bailouts for Portugal and Ireland, but still much smaller than that provided to Greece.

Portugal has received 78 billion euros, Ireland 85 billion and Greece about 240 billion.

By Lauren Frayer, Los Angeles Times, June 9, 2012

China's slowing inflation, output growth add stimulus pressure

posted 9 Jun 2012, 10:47 by Meriposa World   [ updated 9 Jun 2012, 10:48 ]

China's consumer prices rose the least in two years in May and industrial output and retail sales trailed estimates, adding pressure for more stimulus after the first interest-rate cut in three years.

Inflation slowed to 3 percent from a year earlier, the National Bureau of Statistics said yesterday, compared with the 3.2 percent median forecast in a Bloomberg News survey. Production increased 9.6 percent, lower than a projected 9.8 percent gain, and retail sales climbed 13.8 percent, the Beijing-based bureau said in separate statements.

The data add to concern global growth is stalling as Greece teeters on the edge of exiting the euro, Spain struggles to restore confidence in its banking system, and U.S. job growth weakens. Premier Wen Jiabao may introduce additional stimulus to protect a full-year growth target of 7.5 percent even as the nation wrestles with bad loan risks from local government debt.

"These data should defeat any remaining complacency that the policy response has been adequate to maintain steady growth," said Shen Jianguang, chief Asia economist at Mizuho Securities Asia Ltd. in Hong Kong. "More dramatic easing, especially in housing and local government financing vehicles is urgently needed and necessary to avoid a hard landing in the Chinese economy."

China customs data today may show exports and imports grew last month by less than the government's 2012 target of 10 percent. Overseas sales increased 7.1 percent from a year earlier while purchases rose 5.5 percent, according to the median estimates in Bloomberg News surveys of economists.

Credit Growth

Shen, who previously worked for the European Central Bank, said he expected at least one more reduction in interest rates and three cuts in banks' reserve requirements this year.

The People's Bank of China lowered benchmark lending and deposit rates by 25 basis points effective June 8, taking one- year borrowing costs down to 6.31 percent and the one-year savings rate to 3.25 percent. It also allowed banks more leeway to set their own interest rates.

The reserve ratio has dropped by 150 basis points, or 1.5 percentage point, in three cuts since November to spur credit growth and now stands at 20 percent for the biggest banks.

Chinese stocks fell June 8, capping the biggest weekly slide this year, after the central bank's rate cut added to concern the nation's economic slowdown is deepening. U.S. shares rallied, driving the Standard & Poor's 500 Index to its best weekly gain since December, amid speculation European and American central banks will join China in trying to spur economic growth.

'Benign' Outlook

Slowing inflation "is what gave the central bank the confidence to cut interest rates," said Liu Li-Gang, head of Greater China economics at Australia & New Zealand Banking Group Ltd. in Hong Kong, who accurately forecast the consumer-price reading. "Given the falling producer prices, China's inflation outlook remains benign and we expect another cut in banks' reserve requirements in June to boost slowing economic activities."

Stephen Green, head of Greater China research at Standard Chartered Plc in Hong Kong, forecasts two 25 basis-point reductions in benchmark one-year interest rates in the second half, assuming further weakness in economic data through July and continued "difficulties" in the euro area.

China's industrial production growth was below 10 percent for a second month in May, yesterday's data showed, the first time that's happened in three years. Power output rose at the second-slowest pace in three years excluding distortions caused by the timing of the Lunar New Year holiday.

Appliance Sales

Retail sales, which aren't adjusted for inflation, rose the least in almost six years, excluding the January and February holiday months. Growth in sales of home appliances slid to 0.5 percent compared with a 15.4 percent gain in May last year, after the government ended incentive programs.

Deliveries of passenger vehicles to dealerships by automakers including Toyota Motor Corp. and Honda Motor Co. rose 22.6 percent last month from a year earlier to 1.28 million units, the China Association of Automobile Manufacturers said in Beijing yesterday. The rebound came after deliveries fell 0.1 percent in May last year as Japanese automakers cut production after Japan's earthquake.

Fixed-asset investment, excluding rural households and not adjusted for inflation, rose 20.1 percent in the first five months, compared with the median economist estimate for a 20 percent gain. That was the weakest increase for a January-May period since 2001, according to previously released data.

'Sharp' Deflation

The producer-price index fell 1.4 percent in May from a year earlier, compared with the median estimate for a 1.1 percent drop. That's the third straight decrease and the longest stretch of declines since 2009.

"China's producers are seeing sharp deflation, pointing to a worrying lack of final demand," said Alistair Thornton, an economist at IHS Global Insight in Beijing. The decline in prices, combined with the "sharp" drop in the prices gauge in May's purchasing managers' index, "points to considerable sluggishness in domestic manufacturing activity" and should "act as a spur for the government to move more aggressively," he said.

Anhui Conch Cement Co., the nation's biggest cement producer, warned June 7 its first-half profit probably fell more than 50 percent as prices of its products "dropped significantly" due to slower growth in fixed-asset investment.

China's economy expanded 8.1 percent in the first three months from a year earlier, the fifth quarterly deceleration and the slowest pace in almost three years. Growth may slide to 7 percent to 7.5 percent this quarter, Lu Ting, head of Greater China economics at Bank of America Corp. in Hong Kong, wrote in a note yesterday.

"We expect the government to start and speed up more projects on the one hand and to make project financing easier" by cutting reserve requirements and interest rates, approving more corporate bond issuance and lifting lending restrictions, he said.

--Zhou Xin. With assistance from Ailing Tan in Singapore, Cynthia Li in Hong Kong, Penny Peng and Chua Baizhen in Beijing. Editors: Nerys Avery, John Liu

To contact Bloomberg news staff on this story: Zhou Xin in Beijing at xzhou68@bloomberg.net

To contact the editor responsible for this story: Paul Panckhurst at ppanckhurst@bloomberg.net

By Bloomberg News, Bloomberg, June 9, 2012

Spanish banks need 40 billion euro buffer: Monetary Fund

posted 8 Jun 2012, 22:21 by Meriposa World   [ updated 8 Jun 2012, 22:21 ]

New York, United States 

Several banks in Spain would need to raise capital buffers by a total of €40 billion to withstand another financial shock, the International Monetary Fund said in a report issued late Friday.

The report, which had been expected to be released Monday, came amid widespread speculation that Spain will ask the European Union for help in recapitalizing the nation's banks as soon as Saturday.

EU officials are eager to resolve the issue before a pivotal election in Greece on June 17, which could present another major turning point in the long-running European debt crisis.

But the Spanish government has said that it will not make a decision on its financial needs until after an external audit of the banking sector is completed later this month.

The IMF said it subjected Spanish banks to a stress test and found that most large banks are relatively healthy. But the group warned that "several" banks would need to raise buffers under the worst-case scenario.

The €40 billion figure is not a definitive estimate of the banks' capital needs. The IMF said banks would need to raise more capital depending on restructuring costs and loan adjustments that have yet to take place.

Any way you slice it, Germany wins

"Going forward, it will be critical to communicate clearly the strategy for providing a credible backstop for capital shortfalls -- a backstop that experience shows it is better to overestimate than underestimate," said Ceyla Pazarbasioglu, deputy director of the IMF's monetary and capital markets department.

Fitch ratings agency, which slashed Spain's credit rating Thursday, estimated that recapitalizing the Spanish banking sector could cost up to €100 billion.

The report was released as IMF managing director Christine Lagarde called on global policy makers to come together for the sake of the global economy and "get the job done."

"There is no mistaking that global risks are on the rise again," she said in a Friday speech in New York. "The euro area crisis continues to be the most immediate and most pressing threat, and there is the risk that conditions could get worse."

Key ingredient missing in Europe: A plan

While the euro crisis is the most immediate concern, she also warned that the U.S. economy could fall of a "fiscal cliff" if the nation's debt is not put on a sustainable path.

"European banks are at the epicenter of our current worries and naturally should be the priority for repair," she said. "But this does not mean we should overlook the broader implications of today's interconnected world."

Lagarde pointed to the recent disclosure by JPMorgan Chase (JPM, Fortune 500) that the largest U.S. bank by assets had lost at lest $2 billion on risky trades.

"There are still many questions surrounding JPMorgan's trading loss. Yet, they should be seen as a warning shot over the bow," she said. "It reveals that too much risk remains."

By Ben Rooney, CNN, June 6, 2012

Spain calls for new euro fiscal authority

posted 2 Jun 2012, 22:01 by Meriposa World   [ updated 2 Jun 2012, 22:02 ]

Madrid, Spain 

Spain, the latest combat zone in Europe's long-running debt wars, urged the euro zone to set up a new fiscal authority to manage the bloc's finances and send a clear signal to markets that the single currency project is irreversible.

Prime Minister Mariano Rajoy said the authority would also go a long way to alleviating Spain's woes which, along with the prospect of a Greek euro exit, have threatened to derail the single currency project.

It is not the first time a European leader has proposed creating such an authority but the problems and the size of Spain - a country deemed too big to fail - have prompted EU policymakers to hurriedly consider measures such as creating a fiscal and banking union ahead of a EU summit on June 28-29.

Germany, the paymaster of the euro zone, and others insist such a move can only happen as part of a drive to much closer fiscal union and relinquishing of national sovereignty.

Overspending in the regions and troubles with a banking sector badly hit by a property crash four years ago have sent Spain's borrowing costs to record highs and pushed the country closer to seeking an international bailout.

The risk premium investors demand to hold Spanish 10-year debt rather than German bonds rose to its highest since the launch of the euro - 548 basis points - on Friday.

The Spanish government, which has hiked taxes, slashed spending, cut social benefits and bailed out troubled banks, argues that there is little else it can do and the European Union should now act to ease the country's liquidity concerns.

In private, senior Spanish officials have said this could be done by using European money to recapitalise directly ailing banks or through a direct intervention of the European Central Bank on the bond market.

They have also said the euro zone should quickly move towards a fiscal union to complete its 13-year monetary union but Rajoy went a step further by making a formal offer.

"The European Union needs to reinforce its architecture," Rajoy said at an event in Sitges, in the north-eastern province of Catalonia. "This entails moving towards more integration, transferring more sovereignty, especially in the fiscal field.

"And this means a compromise to create a new European fiscal authority which would guide the fiscal policy in the euro zone, harmonise the fiscal policy of member states and enable a centralised control of (public) finances," he added.

No Taboos

He also said the authority would be in charge of managing European debts and should be constituted by countries of the euro zone meeting strict conditions.

Earlier this week, ECB President Mario Draghi said EU leaders should break away from the incremental approach that has failed to get ahead of the euro zone debt crisis for more than two years and quickly clarify their vision for the future of the currency.

Adding to growing pressure for dramatic policy action at this month EU leaders' summit, he warned that the ECB could not fill the policy vacuum.

Establishing a new authority could require a change in the EU treaties, a usually lengthy and politically painful process which requires ratification in all 27 member states of the bloc.

A spokesman for Olli Rehn, the EU commissioner in charge of economic and monetary affairs, s aid draft legislation d esigned to step up financial discipline in the euro zone, would create such a fiscal authority by granting new powers to the EU's executive.

"This would grant enhanced powers to the European Commision on fiscal surveillance, including allowing the sanctioning of countries," said Amadeu Altafaj.

"Even before a budget is drafted and reaches the national parliament, the Commission could ask for a revision of the budgetary plans if it considers this would not allow a country to meet its fiscal commitments, and thereby could endanger financial stability."

Germany has said further integration in Europe was required, including additional controls on national public finances, and was ready to consider revising the treaties if needed.

A day after Berlin supported giving Spain an extra year to cut its deficit down to the 3 percent of GDP threshold, Chancellor Angela Merkel said it should be possible for countries that violate fiscal rules to be sued in the European Court of Justice.

The idea is already part of a new "fiscal compact" signed by 25 EU states and which is due to come into force next year.

Several countries, including France, Austria and Finland, have already signalled they are not willing to give up their parliaments' budgetary powers.

Banking Union

Merkel also praised higher German wage deals and signalled flexibility on a financial transaction tax, in a sign she is open to new measures to boost growth in Europe.

The comments, at a conference of her Christian Democrats (CDU) in Berlin, show that she is ready to heed calls for Germany to do more for growth but wants other euro states to accept giving up sovereignty over their budgets in exchange.

"You can't ask for euro bonds, but then not be prepared to take the next step towards closer integration," she said.

In an interview with Greek newspaper Vima, Italian Prime Minister Mario Monti said while he believed common bonds in the 17-nation euro zone would become a reality they should not become a "licence to spend and burden others.

With the debt crisis now centred on Spain's teetering banking sector, talks are also under way on creating a banking union in the euro zone based on centralised supervision, a European deposit scheme and a central fund that would cope with failed lenders.

Germany's finance ministry said on Friday it was willing to consider this option in a mid-term perspective.

"NOT ON THE EVE OF THE APOCALYPSE"

Rajoy backed the idea on Saturday and said that the government would explain before the end of June how it would recapitalise Spain's banking sector, which is currently being reviewed by independent auditors.

Spain has picked the "Big Four" accounting firms KPMG KPMG.UL, PwC PWC.UL, Deloitte DLTE.UL and Ernst & Young ERNY.UL to carry out a full, individual audit of its ailing banks, a source with knowledge of the decision told Reuters on Saturday.

Moving away from pessimistic speeches in recent weeks, Rajoy said Spain would weather the financial storm by stepping up efforts to rein in public finances and by implementing structural reforms at national and European level.

"We're not walking on a bed of roses but we're also not on the eve of the apocalypse," he said.

By Julien Toyer, Reuters, June 2, 2012

(Additional reporting by Erik Kirchbaum and Andreas Rinke in Berlin and John O'Donnell in Brussels; Editing by David Cowell and Robin Pomeroy)

Nobel economist fears for the poorest Greeks

posted 31 May 2012, 00:12 by Meriposa World   [ updated 31 May 2012, 00:19 ]

Christopher Pissarides won a Nobel Prize in economics in 2010, but he hasn’t forgotten his roots in a modest, Greek-speaking village on the island nation of Cyprus. He was born in 1948. Although his father had a successful business selling materials for making clothes and other items for the home, Pissarides lived among people who scratched out a meager living as farmers. “Work on the fields would begin at dawn with mules and donkeys and end at sunset,” he recalled in his Nobel autobiography.

That sensitivity to the lives of the poor shines through in an interview that Pissarides gave today to Jennifer Ryan of Bloomberg News. He is talking about capital flight—the movement of euros out of Greece into bank accounts abroad. Capital flight increases the chance that Greece will be forced to abandon the euro. People who move their euros abroad are betting that if Greece does return to the drachma, they will be able to buy big piles of them with their euro stash.

“It’s the wealthy who will benefit because that’s who’s able to move their money abroad,” Pissarides tells Ryan. “Wealthy Greeks have already done it, whereas the small saver is not going to do it.”

Even the middle class is at a disadvantage to the rich, says Pissarides, who is a professor at the London School of Economics.

“Foreign banks do not always accept small deposits from non-residents even though they’re part of the euro system,” he says. “If you’re a small shop owner in Athens or one of the smaller towns, how do you find a foreign bank to open a foreign account, do you take your cash in hand and fly off to Italy or Switzerland or wherever? It’s not that easy.”

Read Pissarides’s Nobel autobiography and you sense where his concern for the poor comes from. Here’s an excerpt:

We were a happy family and I had a good upbringing. I have particularly fond memories of our family evenings at home before television, and our summers on the coast of Kyrenia and the mountains and valleys of Agros. I used to spend the time with my cousins, fishing in Kyrenia (mostly unsuccessfully) or playing in the riverbeds and springs of Agros. Cultivation in the village was still at subsistence level, in small plots, and occasionally we would stray into some vegetable patch or tomato bed, to be chased away by hard-working men and women in their traditional village clothes. Work on the fields would begin at dawn with mules and donkeys and end at sunset. On Sunday everything changed, as the whole village gathered at the church to pray, gossip and hold memorial services for their dead, distributing to everyone the traditional home made “kolliva” (boiled wheat with dried fruit, almonds and pomegranate seeds). Service in the Greek Orthodox Church was in the original Byzantine Greek of the bible, so I doubt whether anyone in the village, except perhaps the priest and the teacher, understood much. But it was certainly a great social occasion that I enjoyed very much. Watching how my relations who stayed behind in the village worked and how generous they were with their crops when we visited taught me a lot about family and inner well-being.

By Peter Coy, Bloomberg Businessweek, May 31, 2012

Coy is Bloomberg Businessweek's economics editor

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