Top Economics News

The new acting director general of the Swiss bank UBS, which replaces Oswald Grübel after the latter resigned in the wake of the scandal of unauthorized transactions, must now face the difficult task of setting back on their feet.

Saturday, Sergio Ermotti said that the case had uncovered an exposure "totally unacceptable" and said his priority would be to review the control procedures of the bank and conduct an internal investigation into heavy losses.

Sergio Ermotti, a Swiss Ticino aged 51, joined UBS in April from the Italian bank UniCredit.

According to the group's president, Kaspar Villiger, it would be a good candidate to permanently replace Oswald Grübel.

"We are aware of facing a difficult time externally, and this latest incident only makes more imperative still a reaction from us. Let us not, however, UBS is one of the best banks capitalized in the world, "said Sergio Ermotti.

Since the announcement of the losses on September 15, the title UBS has sold more than 10%.However, it has taken 4.8% Friday on hopes that the Board of Directors of the bank agrees major restructuring.

The internal investigation into the loss should result in a delay of 10 to 14 days, but because of external investigations, UBS will not necessarily reveal the findings, said Sergio Ermotti.

The Board asked the latter to accelerate the reduction of investment banking activities.The process must be detailed on November 17 in New York.

According to Kaspar Villiger, the future director of investment banking, Carsten Kengeter, is not threatened, the latter having already worked with a "great job" to limit losses from unauthorized transactions.

However, he did not mean to say if it would make a good candidate for Director General, who shall be provided with permanently within six months.

The current account deficit widened from France in July to 4.5 billion euros from 3.4 billion in June, preliminary figures show released Tuesday by the Bank of France.

The trade deficit in goods reached 6.7 billion, one billion more than the previous month.

Trade in services have in parallel a surplus of 1.2 billion, down slightly from June.

The balance of revenue reached 3.2 billion euros from 3.0 billion while the deficit on current transfers remained unchanged at 2.2 billion.

The financial account showed net outflows of direct investments of 8.5 billion euros from 6.2 billion in June.

French direct investment abroad stand at 4.3 billion, the Bank of France said in a statement, "while an exceptional operation makes the negative balance of foreign investment in France: the purchase by a French group of significant foreign participation. "

Portfolio investment recorded net inflows of 5.3 billion euros residents reduced their holdings of 16.0 billion while non-residents making sales of French securities to 10.7 billion.

Other investment posted a net outflow of capital limited to 5.3 billion from net outflows of 49.0 billion.

The exemption from taxation of capital gains on sale of property, excluding principal residence, will no longer only after 30 years, against 15 at present. From 1 February 2012, the exemption from taxation of real estate capital gains will be complete only after 30 years in prison.

First measure of austerity, the new method of taxation of capital gains, property was passed in the night from Tuesday to Wednesday. After a lengthy discussion of the implementing rules, MEPs adopted the exemption of real estate gains of second homes after 30 years of holding the property. The current system reduces the taxable gain on resale of 10% per year from five years of detention, where a full exemption after 15 years ..

The entry into force of the device has also been postponed to 1 February 2012 and not August 25, 2011.Which will result in a shortfall of 180 million euros this year. In the end, the measure will bring 2.05 billion euros in 2012 instead of the 2.2 billion expected previously.

The compromise, "a major effort" according to Valerie Pécresse, Minister for the Budget, is in fact a system of progressive discounts. A number of deputies to the UMP and the New Center, wanted to return to the detail and the regressivity of the system over time. Now it will be 2% for each year between 5 and 15 years in prison, 4% for each year beyond 17 years, 8% beyond 24 years to 30 years. That amendment, designed to "take into account inflation in the 80" results in "an additional cost of 30 million" annually, said Ms. Pécresse.

During the debate, Michel Bouvard (UMP) has highlighted the issue of those who have no residence, untaxed, and holder of a second home."We need to think about it" in the forthcoming Finance Bill 2012, the minister conceded.

The British authorities to fight against fraud are currently reviewing certain transactions by Deutsche Bank and Goldman Sachs, the Financial Times reported Monday.

The daily said that the investigation is part of a collection of evidence to determine whether certain financial institutions have fraudulently presented some financial stocks to their customers and counterparties is misleading.

The Serious Fraud Office (SFO) UK has spent the last two years to focus on sales of bonds backed by home loans (ABS) and their possible role in the financial crisis of 2008-2009.

Monday, fifteen minutes after the opening, the action Deutsche Bank lost 5.5% to 24.59 euros.The European sector index banks lost 3.31% to him, in reaction to the fact that the U.S. federal agency oversight of mortgage loans (Federal Housing Finance Agency, or FHFA) filed a complaint Friday against 17 major financial institutions for losses relating to bonds linked to subprime.

Deutsche Bank is already covered since Friday by a complaint from the U.S. federal agency oversight of mortgage (FHFA), which accuses 17 major international financial institutions for a total loss of $ 41 billion in bonds linked to subprime These loans granted without regard to the resources of borrowers.

Goldman Sachs, Bank of America, JP Morgan Chase or Societe Generale are among the other banks involved.

According to the FT, the British SFO also examines transactions Goldman Sachs, which said the file Timberwolf, an ABS fitted by the bank in 2007 and that U.S. authorities are also interested.

The SFO has not yet opened a formal investigation but has appealed for witnesses.

Neither Deutsche Bank nor Goldman Sachs were not immediately available for comment on the report.

Italy must complete structural reforms and implement the commitment made last month to reduce the deficit and make the economy more flexible, wants the President of the European Central Bank Jean-Claude Trichet.

In an interview published Friday by the financial daily Il Sole 24 Ore, the chairman of the ECB considers that the measures announced in Rome on August 5 is "extremely important".

Council President Silvio Berlusconi had promised then to bring the Italian budget balance for 2013.

"It is therefore essential that the stated objectives for the improvement of public finances are fully confirmed and implemented," said Jean-Claude Trichet.

The latter made no direct comment on the economic plan of 45.5 billion currently being debated in the Italian Parliament, merely to emphasize the importance of Rome to implement measures enhancing the entire national capacity in the medium and long term.

He however reiterated his call to the governments of the euro area to address the weaknesses of their economies and strengthen mutual surveillance and governance.

"The European states must correct the current situation," he said.

Asked about the prospects for creation of Euro-bonds common to all countries of the monetary union, he said that the European Financial Stability Fund (EFSF) already issued securities backed by the European authorities.

"The key message of the Board of Governors is a call for rapid implementation, full of decisions taken by Heads of State and Government of Europe July 21," said the president of the ECB.

Eurobonds are not the answer to the debt crisis in the euro area, said German Chancellor Angela Merkel.

"The Eurobonds are quite the wrong answer to the crisis of the moment," she said in an interview with the ZDF channel that is being broadcast on Sunday."They would lead us to a union of debt and not a union of stability."

The issuance of Eurobonds ("Eurobonds") would cost billions of euros in Germany each year, according to calculations by the German Ministry of Finance quoted by the weekly Der Spiegel.

"The first year it would mean 2.5 billion euros of interest in addition to the budget (Finance Minister) Wolfgang Schäuble and the second year costs would be twice as high," wrote Der Spiegel in extracts of its survey sent to the press.

After ten years the total cost would be 20 to 25 billion euros, according to the calculations of the Ministry of Finance.

Schäuble said for his part personally prepared to transfer sovereignty to Brussels to ensure the stability of the euro area over the long term but added that the euro area itself was not prepared for this eventuality.

"As a person, Wolfgang Schäuble would be ready (to delegate sovereignty to Brussels).The idea of ​​a European finance minister I have no problem, "he said in an interview published Sunday by the Welt am Sonntag.

"But as finance minister I say that it is our duty to solve problems here and now, and that as soon as possible based on existing contracts."

This idea of ​​a European finance minister is particularly recommended by the chief executive of Commerzbank Martin Blessing, in an interview with Welt am Sonntag.

"With the introduction of a fiscal union, Brussels must have the right to return of budgetary powers to countries that do not respect the rules, and to levy its own taxes and create a joint body to issue bonds," he said.

France and Germany are adamantly opposed to the idea of ​​issuing bonds on behalf of the entire euro area, as advocated many market professionals to put an end to the crisis of European sovereign debt .

"Most member states are not quite ready to accept the necessary limitations on national sovereignty, but believe me, it's a problem we can solve," he told the minister.

Schäuble will meet Finance Minister Baroin Tuesday at 8:00 GMT to discuss including the harmonization of corporate tax and the introduction of a tax on financial transactions.

He said Saturday that the countries of the euro area could issue Eurobonds scaffold as if they had a prior fiscal policy and common taxation or they could create inflation and destabilize the region.

Wall Street is divided sharply lower Wednesday after strong rebound yesterday, showing investors still worried about the state of the economy after the declarations of the Federal Reserve.

A few minutes after the opening, the Dow Jones yielded 2.79% (311.48 points) to 10,929.88 points, the S & P 500 fell by 2.73% (31.97 points) to 1140.56 , while the Nasdaq composite fell by 2.82% (70 points) to 2412.98 points.

Persistent fears about the economy and the deficit portend as the eve of a highly volatile trade.

"At this stage, investors dizzy," says Oliver Pursche, president of Gary Goldberg Financial Services. "We look forward to another highly volatile.

S & P has taken a decision resounding Friday: leave the first world power of the inner circle of the most reliable borrowers. Now the United States are nothing more than "AA +". To reduce the deficit, U.S. President Barack Obama largely agrees to cut public spending, including social, but demand for part-against higher taxes for the wealthy.

The rating agency Standard and Poor's lowered the rating Friday on the public debt of the United States, deprived of their "AAA" for the first time in history, citing the "political risks" facing the challenges of the deficit budget. S & P said in a statement it had lowered the rating a notch, the best possible, to bring it to "AA +".It also downgraded the outlook to "negative", which means that Standard and Poor's believes that the next time the note will change, it is to be lowered again.

It justified its decision with "political risks" to see the country taking insufficient measures against its budget deficit. For her, the political debate on these issues is not up to the problems caused by a debt of more than 14,500 billion. "The plan for balancing the budget on which Congress and the Executive have recently agreed is insufficient compared to what, in our view, would be needed to stabilize the dynamics in the medium term public debt" , said the agency, citing the law known as "control the budget" passed Tuesday.

The United States were rated "AAA" by Standard and Poor's since the creation of this agency in 1941.They remain in the other two major agencies, Moody's Dean (since 1917) and Fitch Ratings. The U.S. government has accused S & P based its decision on serious errors in calculations. "An appraisal contains an error of 2.000 billion dollars speaks for itself," he told a press spokesman for the Treasury Department. U.S. media said the government had severely challenged the projections of analysts of the agency after reviewing the findings of S & P. In vain.

The pitch was not easy to be taken to a U.S. agency."They have downgraded a bunch of European countries, and Europeans were bent on rating agencies: why you lower your bill and not the U.S.?" Fell on the Bloomberg TV channel economist Nouriel Roubini, who became famous for his dark predictions.

The loss of this seal of excellence is expected brutal impact on the financial markets, difficult to imagine right now. The U.S. Treasury is an undisputed reference: a standard cost of money, usually an instrument of "collateral" (guarantee) in a variety of transactions, and a refuge for investors in troubled times. "Uncertainty about the impact on the market is high," said recently the investment bank Goldman Sachs, exploring the potential consequences.The lowering of this note should indeed force investors to reassess risk widespread.

Standard and Poor's warned in April that it was considering lowering, given the persistently high budget deficit and rising public debt. The unfolding conflict of budget debates in the coming months, which culminated Tuesday in extremis on raising the legal limit of public debt, had only compare this perspective. John Chambers, President of the Evaluation Committee of S & P, said Friday on CNN that Washington could have prevented the lowering of the notes within the ceiling earlier. He said the responsibilities were shared by the Administration and Obama, but also to "the previous administration."

The first political reaction in Washington have shown just block pointed to by S & P.Mitt Romney, candidate for the Republican primary, has called the downgrade of American "latest victim of the failure of Obama's economic" and the Republican chairman of the House of Representatives as "a consequence of control spending in Washington in recent decades. " The Senate Democratic leader, Harry Reid, has instead called for "a balanced approach to deficit reduction," with spending cuts but also increases targeted taxes, it rejected the Republicans, under pressure ultra-conservative "tea party", in the recent discussions on the dates.

The S & P announcement came as the markets had closed for the weekend, but initial reactions are mixed from Asia.The Japan, the second holder of U.S. debt world, assured that his confidence in the U.S. Treasury and its strategy of purchasing these bonds were unchanged. France "with complete confidence in the strength of the U.S. economy," said Saturday told AFP the Minister of Economy Baroin. But China, by far the largest creditor of the world the United States, found that it was "now all rights to require the United States they are addressing their structural problem of debt."

The United States had their public finances sealed by the harsh recession that crossed their economy from late 2007 to mid-2009. Since then, economic growth has returned, but they are not able to restore the health of their public finances.According to estimates by the International Monetary Fund, they should acknowledge this year, with about 9% of GDP, the highest budget deficit of the G20 countries, except Japan. It is sixteen countries rated "AAA" by Standard and Poor's, four of the G7: Germany, Canada, France and Great Britain.

Microsoft has once again exceeded the expectations of Wall Street with the announcement of its quarterly results Thursday, thanks to strong sales of its Office suite and its XBox console.

The share price has a downward trend, however, investors feared that weak demand in the PC does not penalize the sales of Windows.

After those of Apple, Google and IBM, Microsoft results confirm the good health of the technology sector.

Microsoft has announced a net profit of 5.87 billion dollars, or 69 cents per share in earnings in the fourth quarter of fiscal, against 4.52 billion dollars and 51 cents a year earlier.

Analysts polled by Thomson Reuters I / B / E / S on average expected earnings of 58 cents.This is the ninth consecutive time that Microsoft beat the consensus by means of its quarterly results.

Turnover was up 8% to 17.37 billion dollars, where analysts expected 17.23 billion.

The increase in sales of software of the Office suite, XBox consoles and remote computer systems ("cloud computing").

KINECT scrambled ENTERTAINMENT INDUSTRY

The action Microsoft has fluctuated in after-hours trading following the release of these figures, eventually stabilizing at a level close to the closing price on Nasdaq, or 27.09 dollars.

Over the past twelve months, as Microsoft has gained 8% while the Nasdaq has generally appreciated by 30%.

Microsoft's business division, which launched last month the online version of the Office suite, saw its sales grow by 7% to $ 5.8 billion.

Division "server and tools", which sells software used for the services of "cloud computing", achieved a turnover of $ 4.6 billion, up 12%.

The entertainment industry, which sells game consoles and phones, saw its sales jump 30% to $ 1.5 billion, largely thanks to the XBox and its new Kinect motion detection.

In contrast, sales of the Windows division fell 0.8% to 4.7 billion.

Finally, the branch line service, which oversees the Bing and the MSN portal, saw its sales grow by 16.5% to $ 662 million.

However, this activity traditionally deficit Microsoft could reverse the trend and recorded a loss of 728 million dollars against 662 million a year earlier.

This result illustrates the heavy investment by Microsoft to compete with Google. Three fiscal years, this branch of Microsoft has lost a total of $ 6.5 billion.

The Republicans went on the offensive by presenting a bill to include the debt reduction in the Constitution. Barack Obama is opposed. To reduce the deficit, U.S. President Barack Obama largely agrees to cut public spending, including social, but demand for part-against higher taxes for the wealthy.

The White House assures believe again, but at 16 days of the deadline of August 2 to raise the legal ceiling of U.S. debt, no draft agreement between Democrats and Republicans seemed to be emerging Sunday. Republican leaders have not seen Barack Obama from their stormy negotiating session behind closed doors Thursday at the White House.Meanwhile, they decided to take the offensive in the House of Representatives where they should vote Tuesday their bill "cut, cap, balance."

On the agenda: "cut" dramatically spending of the federal state, "capping" them with 18% of gross domestic product (GDP) and vote a future constitutional amendment requiring the federal budget is to "balance" – the golden rule. If this piece of deficit reduction was voted the Republicans agree to raise the debt ceiling, said the influential Republican Senator Lindsey Graham on Sunday. "I am looking for a way to raise the ceiling of the debt, we must do, but we must first address the causes of this debt," explained Senator on CNN. "In exchange for these three things, we raise the ceiling of the debt."

If the text has no chance to get through the Senate to Democratic majority, Republicans intend to produce their voters a tangible proposal, which they accuse Barack Obama of never having done so. The President was immediately swept Friday the idea to include a balanced budget in stone of the constitution, calling such an approach of "posture politics". "We do not need a constitutional amendment to do our job," he said, before warning: "time is running out."

Sunday, the White House dispatched to the TV sets the budget director, Jacob Lew, with a timeout message: "There is still time for a big agreement" on reducing the deficit. But the adviser to Barack Obama remained vague on what the president was willing to accept to seal a deal with the Republicans."We need to reduce deficits of around 4,000 billion on 10, 12 years," recalled Jacob Lew. But "if it's not possible (…) we should go as far as possible," he said, without mentioning any figures.

The Treasury warned that beyond the August 2, unless an increase in the maximum legal debt by a vote of Congress, the U.S. will no longer honor their commitments and will cut, overnight, 40% of their expenses. This dangerously close to the default would cause panic on Wall Street. The maximum statutory debt, set at 14.294 billion dollars, was reached in May, and is bypassed, since only by short-term technical pirouettes. "If we do not limit the debt, we can not pay our bills in August," warned Jacob Lew.

Barack Obama was even more threatening last week, citing a possible freeze on pension payments to retirees and veterans: "I can not guarantee that these checks will be mailed on August 3 if we did not find a solution. It may have more money in the coffers. " Negotiating for weeks, both sides agreed to reduce the deficit, but differ on the method. Barack Obama largely agrees to cut public spending, including social, but demand for part-against higher taxes for the wealthy.

Republicans adamantly refuse to do, most sworn never to raise taxes. Without this, they say they will not vote to raise the ceiling on the debt."Unless the president gives up his absolute obsession to raise taxes, Republicans will not agree to anything that damages the economy," thundered Republican Senator Kyl Jonathan on ABC.