Top Economics News

The rapid increase of the debt crisis in the euro area threatens the credit ratings of all European states, warned Sunday the U.S. rating agency Moody's. Moody's in New York.

In a "special comment" on European countries published Sunday, Moody's says it still considers that the euro area will maintain its unity without any fault as that of Greece, but notes that even this' scenario 'positive' carries consequences very negative for the notes "of European countries. The U.S. rating agency, recently warned that France could lose its "triple A" allowing it to borrow at favorable rates in the markets, and clearly indicates that no country, even among those considered most solids, such as the Netherlands, Austria, Finland or Germany, is immune to a lowering of note.

Other countries may need help

While countries such as Italy and Hungary have more and more difficult to obtain financing at rates viable markets, Moody's wrote that "the political momentum to implement an effective solution to the crisis could n ' be found after a series of shocks, which could lead more countries to be deprived of access to funding markets for an extended period. " The agency is referring to countries like Ireland, Greece, Portugal or Hungary, which have benefited from one or more financial rescue from the European Union or the International Monetary Fund. She said other countries may need to use this kind of solution if the EU fails to quickly find an adequate response to the crisis, these countries would then most likely lowered their rating to that of a investment "speculative."

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European shares fell sharply Monday in volume again, failure of U.S. lawmakers to agree on reducing the federal deficit and a warning from Moody's about the "triple A" of France with weighed on investor sentiment.

In Paris the CAC 40 yielded 3.41% at 2894.94 points.

Olympus still has the title fell 6.81% Friday, the market value of the Japanese and melted with about 50% since last Friday, the day he announced the dismissal of its chief executive Michael Woodford.

Investors have pushed the action and the manufacturer of cameras and optical instruments of precision to a low of two and a half years, adding to even more pressure on the group to be explained on unusually high consulting fees paid in connection with an acquisition and revealed by the ousted leader.

Olympus acknowledged Wednesday it had paid $ 687 million (498 million) in financial advisors in the purchase of the British manufacturer of medical equipment Gyrus.

These fees represent a third of the price of the acquisition, whereas traditionally they account for only 1% or 2% of the value of a transaction, according to a PriceWaterhouseCoopers study commissioned by Michael Woodford.

POLICE PROTECTION

The latter told Reuters on Thursday it had filed for protection under the British police after submitting new information to investigators British anti-fraud regarding fees.

In the data transmitted to the authorities by Michael Woodford, a former investment banker from Japan appears to be the central figure in the matter of fees.

According to these documents, Hajime "Jim" Sagawa was the owner of AXIS, a financial services company little known American who received the exorbitant fees reported by Michael Woodford.

Olympus, which denies any impropriety, said the fees had been paid to its subsidiary AXIS Axam Investments, a company registered in the Cayman Islands, including Hajime Sagawa was a member of the Board, the report of PricewaterhouseCoopers.

Reuters visited the home of the latter, a former Nomura banker, only to find that his wife, who assured that her husband had done nothing wrong.

INVESTIGATION OF SESC JAPAN

Michael Woodford has also written to the Securities and Exchange Surveillance Commission (SESC), the authority of the Japanese financial markets, asking him to consider the case Olympus.

An investigation by the SESC could take months. Financial Services Minister Shozaburo Jim said the policeman of the financial sector would work, but refused to comment on individual cases.

"Olympus has clearly withheld information to investors. And even if she is not guilty of actions contrary to law, management has breached its obligations vis-à-vis shareholders.It should take responsibility, "said Shigeo Sugawara, manager of Sompo Japan Nipponkoa investments in Asset Management.

Olympus may have to spend significant impairment likely to weaken its balance sheet. And even if, according to manager, many candidates would be interested in the instruments of precision optics group, no one would touch it before the case is improper fees paid.

The company is now worth some $ 4.5 billion.

Brokers have suspended their coverage of Olympus as key shareholders and require that the group be made public links between management and its financial advisors.

A few days after the piracy suffered by Areva, Paillou Patrick, the patron of the National Security Information Systems, was called to order hexagonal businesses and governments. He said protection systems are "permeable" and "abandoned." A participant of the Chaos Communication Congress, held in Berlin in December 2010.

Computer protection systems administration and French companies are they permeable? In any case, the conviction of Patrick Pailloux, the executive director of the National Security Information Systems (ANSSI). He called to order Friday in Monaco these companies and administrations judging their systems "in danger". "The situation can not remain as it is, information systems are in danger and we sometimes feel they were abandoned to their fate," said Mr Pailloux.

In his closing conference on security and information systems of Monaco, which were held from October 5 to 7, he was willing to cite any company. But the speech comes just days after French nuclear giant Areva has admitted being the victim of a cyber attack. The hackers had required the intervention of the ANSSI agency attached to the General Secretariat of Defence and National Security, a service of prime minister. Areva has ensured that the attack was focused on "non-critical information and not on sensitive information."

"We are far from the account. The situation everyday reality on the ground, is that our information services are often porous, and that malicious actors have benefited greatly.We often security loincloth, who does not eat bread and that ultimately does not bother anyone "insists the director general of ANSSI. And to prevent him:" we must take back control of our own systems, it no fatality, it's possible because it is not that difficult. We must mobilize to ensure that safety rules are followed. "

Dexia shares on the stock market plunged Monday after the decision of the rating agency Moody's placed the debt rating of the Franco-Belgian bank on negative watch.

Moody's justified its decision by concerns about the liquidity of the group while the refinance market conditions remain very tight.

A Dexia spokesman declined to comment on the decision of the agency.

On Tuesday, Fitch Ratings had already announced that it lowered its rating.

At 11:15, Dexia signed the worst performance of the European sector index banks – down by 4.11% – a decrease of 8.43%.

The announcement Sunday that Greece would not take the objectives of fiscal consolidation has aroused the distrust of investors and markets.

The decision by Moody's is also involved as speculation about the future of Dexia in full swing.

The institution admitted consider options to strengthen its balance sheet but has ruled out any split in the group.

Finance ministers Belgian and French are to meet Monday night and Tuesday as part of the European meetings of the Eurogroup and tell the Ecofin.

If some press reports indicate that Baroin and Didier Reynders must address the issue, a spokesman said it no special meeting was scheduled between the two men.

Scenarios ranging from the sale of assets to a breakdown of the group were mentioned in the press in recent days.

Dexia, which was saved from bankruptcy in fall 2008 after the collapse of U.S. bank Lehman Brothers, in the second quarter 2011 loss of four billion euros, the heaviest in its history.

Faced with strong pressure on financial markets and fears of a relapse of the economy in recession, the Federal Reserve prepares to influence long rates to support economic activity, an action similar to that conducted in the years 60 and then christened "Operation Twist".

With an eye on the sinking of the crisis of sovereign debt in Europe and another on an unemployment rate fails to fall below 9% in the U.S., the Fed, whose monetary policy committee meets Tuesday and Wednesday, is expected to gradually change the composition of its balance sheet in order to increase the share of long-term securities.

While interest rates in the short term are close to zero and that the balance was weighted by purchasing debt securities for more than 2.000 billion dollars without conclusive effect on the economy for now, the Fed should look to support new ways of focusing on its balance sheet on the long-term bonds at the expense of short titles.

"The signal that the Fed is still active in supporting growth," said Michelle Meyer, economist at Bank of America Merrill Lynch.

A series of disappointing economic indicators were dampened hopes for an accelerated growth in the second half in the United States, after a first half of the year without momentum.

U.S. growth was 1.0% annual rate in the first half and representatives from the Fed announced a downward revision of economic forecasts.

The weaker growth outlook in the summer had led the Federal Reserve chairman Ben Bernanke to announce at the end of last month that the work of the Monetary Policy Committee would take place over two days in September rather than alone.

United States, the loss of the AAA, announced August 6 by the rating agency Standard & Poor's in light of the political divisions in the consolidation of public finances, caused a shock to business confidence and households.

In August, the U.S. economy has not created any employment and retail sales stagnated.

CONSENSUS

At the same time the crisis of sovereign debt in the euro area has increased and the lowering surprise a notch by S & P notes short and long term of Italy, still on negative watch by Moody's, fueled fears of contagion fueled by the situation in Greece.

Other central banks have inflected their monetary policy to reflect the deteriorating global economic environment during the summer.

The European Central Bank kept its rates unchanged last week and reported at least a pause in the recovery cycle that began in April.The central banks of Canada, South Korea and Indonesia among others have given to tighten monetary conditions.

Within the Fed, the consensus of the members of the Monetary Policy Committee seems to have shifted in favor of a change in the balance sheet structure, the total reached 2800 billion, to lengthen their maturity.

The objective of this initiative is to influence long rates to lower the cost of housing finance for households and investment for businesses.

Further reducing long-term rates, the Fed could also encourage investors to look to assets with better returns theory, such as stocks or corporate bonds.

Representatives from the Fed could consider more radical alternatives such as targeting a level of employment, growth or price beyond the current target inflation while the booking if the economy were to deteriorate significantly.

Representatives of the Fed, however, divided on the need for further action.Any further easing, even the simple extension of the maturity of the balance sheet, should be rejected by three members of the Monetary Policy Committee as was the case Aug. 9, when the Fed had decided to extend until at least mid- 2013 the period during which it would keep interest rates at a very low level.

If Ben Bernanke will be keen to get the widest possible consensus on any new initiative, economists do not expect that dissenting voices are a barrier to action.

In addition, dissemination of minutes at 18:00 GMT of the last meeting of the Federal Reserve, August 9, will tell if the leaders of the central bank were unanimous on the decision to keep interest rates near zero for at least two years.

Values, The News International title fell by 1.76% on opening. Counsel for the media empire of Rupert Murdoch are investigating the journalistic practices of all the British newspapers of the group, reported sources familiar with the matter.

The Tokyo Stock Exchange ended higher Monday as shy after erasing some of its gains, the markets showing a moderate enthusiasm at the prospect of becoming prime minister Yoshihiko Noda of Japan.

The Nikkei gained 53.57 points (0.61%) to 8851.35 points and the Topix, broader took 2.76 points (0.37%) to 758.83, after falling briefly negative territory.

The Minister of Finance Yoshihiko Noda, the preferred candidate of the business, was selected by the Democratic Party to power to become the next head of government of the archipelago, ahead of the second ballot Trade Minister Banri Kaieda.

"Noda has a reputation for being a supporter of fiscal reform and want higher taxes, so the short-term reaction to his qualification for the second round was somewhat negative for the stock markets," said Koichi Ogawa, head of portfolio management at Daiwa SB Investments.

"When Noda was finance minister, he earned a reputation as a fiscal conservative, so his election could be a negative factor weighing on the shares," Judge Nagayuki Yamagishi of Mitsubishi UFJ Morgan Stanley Securities."But we do not believe that the shares will be greatly affected by changes in the political situation."

Investors remained cautious pending the release of employment figures in the United States in August, scheduled for Friday after the Federal Reserve chairman Ben Bernanke has failed Friday to announce new decisions boost growth but left the door open to further easing.

Aozora Bank the title jumped more than 5% after the Australian Financial Review reported that Australia and New Zealand Banking Group looking to buy the bank or its Japanese counterpart unlisted Tokyo Star Bank.

For its part, KDDI gained 3.05%.The Nikkei newspaper reported on Saturday that the phone operator has exceeded for the first time his rival Softbank (1.96%) in terms of smartphone sales in July in consumer electronics stores.

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.

Saint-Gobain will acquire 351 million euros for the British network Build Center and the French subsidiary of British group Brossette distribution of building materials Wolseley.

These two acquisitions represent a contribution of over one billion euros in turnover, Saint-Gobain said in a statement.

The acquisition of Build Center, No. 4 of the general logistics of building materials in Britain, involves an amount of 165 million euros, including the purchase of a property portfolio of 86 sites, says Saint -Gobain in a statement.

Saint-Gobain also said to be entered into exclusive negotiations to buy the company Brossette in Wolseley, a distributor of plumbing and heating, plumbing France.This acquisition is for an amount of 186 million euros.

These operations will be subject to the approval of competition authorities.