Top Economics News

Greece has one last chance to stay in the euro area and must make a "maximum effort" to avoid being brought back several decades, warned Wednesday the central bank Hellenic.

Painting a picture severe the nation's finances, the Bank of Greece said that the failure to achieve its fiscal targets, delays in implementation of reforms and strong economic contraction had questioned his recent claims about the sustainability of the country's debt.

"The country must avoid at all costs further delays or deviations from objectives; every effort is needed to do better than the targets," said the Bank in its interim report on monetary policy.

"The current situation is the most critical period of Greek history of the postwar period. What is at stake is whether the country will remain within the euro area."

The new prime minister, Lucas Papademos, promised to push reforms forward, although he met a mixed support for the main parties and trade union opposition to the new austerity plan which he has committed.

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.

Equity markets have appeared hesitant and versatile throughout the session. The European equity markets ended in a disorganized, while at the same time, Wall Street also hesitated between increases and decreases.

Investors have welcomed the drop in bond yields Italian and Spanish through purchases of securities by the European Central Bank in the secondary market.

Traders also mention the idea that the ECB would lend the International Monetary Fund (IMF) to assist countries in the euro area.

But operators remain skeptical, however.

Core values ​​to take on Wall Street Thursday.

* Chevron announced Thursday a 3.8% increase in its quarterly dividend, which will reach 81 cents per share.

* RAYTHEON published adjusted earnings of $ 1.39 per share for the third quarter and a turnover of 6.13 billion, against a consensus Thomson Reuters I / B / E / S of 6.38 billion of dollars.

* Procter & Gamble announced Thursday an increase in sales in the first quarter of fiscal year and an earnings per share in line with analysts' expectations.

With $ 21.9 billion, the revenue exceeds the consensus Thomson Reuters I / B / E / S, which included 21.53 billion dollars.

Earnings per share was announced at $ 1.03, as expected.Turnover was up 14% to $ 1.68 billion (1.66 billion expected, on average).

* BMC SOFTWARE, which develops business software, announced an adjusted earnings per share of 87 cents against 81 cents expected for the second quarter of fiscal year.

Revenues also exceeded expectations, with 556.3 million against $ 540.4 million expected.

* AETNA – The third group American Health Insurance has reported a profit higher than expected for the third quarter due to a small number of claims.

Earnings excluding items rose to $ 1.40 per share.Analysts on average expected $ 1.15.

Net income stood at 490.4 million dollars against 497.6 million a year earlier. The turnover, however, fell 0.7% to 8.48 billion dollars.

* LAZARD – The investment bank saw its net profit fall by 2% in the third quarter versus the same period in 2010 due to lower revenue from business advisory and asset management.

Net income was $ 62.7 million, or 49 cents a share, against $ 64 million (51 cents) a year earlier.

Industrial production in France rose by 0.5% in August after rising 1.8% in July, against 1.5% in the first estimate, show statistics released Monday by INSEE.

Manufacturing output, which is to say, but including non-energy food, rose 0.7% after rising 1.8% the previous month, against 1.4% initially estimated.

Economists polled by Reuters on average expected a 1% drop in industrial production in August.

At three months, "the production is increasing (2.2%) in electrical, electronics, computers and machines and relatively stable in the other positions," said INSEE said in a statement.

Parallel to the industrial sector, construction activity rose 3.2% in August after rising 0.3% the previous month, against 0.1% originally announced.

The Health Minister urged to sign the mutual agreement on the reimbursement of excess fees by the end of the week, in which case the government "take responsibility". The Minister of Labour and Health Xavier Bertrand

The Health Minister Xavier Bertrand on Tuesday reaffirmed that if by the end of the week did not sign the mutual agreement on the reimbursement of excess fees in certain specialties, parliamentary and government "take responsibility". "I prefer appeasement rather than confrontation," assured the minister of LCI considering that "it is the interest of patients that we take care in an organized and excess fees in certain medical specialties ".

According to Xavier Bertrand, mutual initially had agreed to the project and "bang, because there was the tax on contracts managers, they tell us no.""We need that before the end of the week, there is a meeting to see if it's yes or no, and if yes, when," he said. Without mutual agreement, "the government and parliament take their responsibilities." "We need a clear agreement," he said.

The medical convention signed in July between GPs and health insurance provides for an optional area in which said tariff would fall practitioners who agree to limit their fees, conditional relief from their charges.Les additional reimbursement to patients overruns capped nationally.

They have until September 30 to sign the agreement but they want to continue the discussions, including consideration of regional disparities in rates charged by practitioners.Mutuals are also unhappy with the increase in the tax on their contracts, health caring and responsible decision in the austerity plan.

It would be more optimistic. But this week, what looked like vile premonitions markets began to be realized. Back to the bad news that destabilized the stock markets. A trader at the New York Stock Exchange, September 22, 2011. The Fed and the IMF say they fear a recession

If grants are all black is that they painted a very grim future. The IMF had laid the groundwork earlier this week by revising down its forecast strong global growth, and considering the "worst case scenario", a recession in major developed countries that would eventually weigh on emerging markets.While the IMF does not make his case a priority – rather table it is growing very soft, the risk has become more consistency Wednesday with what the Fed's emphasis on "continuing weakness" of the labor market United States and the "significant risks" associated with "pressure on global financial markets." This pessimism was immediately stunned the markets. And the more they learned that private sector activity in the euro area was recorded in September, its first decline in two years. And that manufacturing activity had declined in China. If even the Middle Kingdom began to fail …

The failure of Greece is similar

Athens is back to the wall. For the loan of 8 billion euros of its creditors and avoid failure in October, Greece has agreed to a new "social massacre" which includes a tax on income from 416 euros per month.Moreover, the second aid plan in advance of July 21 at idle. Europe seems unable to speed up, as shown by the peak in Poland last weekend. And despite the talk of intentions, the scenario of the failure seems inevitable. Greek media have raised the idea on Friday the government to cancel 50% of the debt. Which would lead to a loss of 25 billion euros for Greek banks, most of which have just been degraded by Moody's. The announcement was immediately denied by the government. Until when?

Standard & Poors downgraded the debt rating Italian

This is a first for the boot, Standard & Poor's downgraded the rating on Monday of the Italian debt. This decision did not sway the markets, which expected, but investors fear the domino effect.Growth prospects of the country are particularly likely to be sealed by the new austerity plan of 54.2 billion euros. In turn, Moody's announced that it would degrade Italy "in the coming months." Rome is not the only "lame duck" of Europe. Portugal, already qualified for a loan of 78 billion euros, is in trouble after the discovery of an undeclared debt 1, 68 billion euros. As for Slovenia, she saw the note be degraded by Moody's on Friday. Only Ireland, recovering, doing well with the announcement Thursday of a 1.6% growth in the second quarter. Rare enough to be highlighted …

Brussels acknowledges the need to recapitalize banks

After weeks of procrastination, public authorities have come to settle international: Some European banks will be recapitalized.After Christine Lagarde, who launched the attack late August, the EU has abdicated this week. The IMF, which recommends that banks can recapitalize directly from EFSF, it is estimated that 300 million bill from the Greek crisis for the banking sector. According to the British press, 16 banks have failed those tests fail to stress – be in the viewfinder of EBA (EBA). But the French, who are yet in the heart of stock market panic, would not be affected. Such as Germany and Spain, France is reluctant to inject new funds to banks on the pretext that they are not facing a crisis of solvency but liquidity. If, as apprehensive markets, Greece is lacking, and that Italy and Portugal a restructuring of their debt, they will not escape.

The United States deplored the European fiscal discipline

The more one goes into the crisis and is more visible: the states are powerless to solve the problems because they are unable to agree. For weeks, markets expect strong political positions. Instead, the summits are linked together without any serious decision is taken. Just this week, the Ministers of Finance of the euro area have found themselves in Poland, and Washington for the opening dinner of the G20 finance. But each time, markets would have found that the more anxious. In addition to the severe lack of European governance, the divisions seem more and stronger on one side and across the Atlantic. The United States to Europe including blaming his fiscal discipline, almost incompatible with the maintenance of growth. A conundrum that nobody wants to decide.Not even the IMF, very poor matchmaker. On Thursday, Christine Lagarde has merely conceded to each other, supporting Barack Obama's plan for employment (447 billion), and commending the efforts of countries involved in the decrease of budget deficit …

Operation Twist Fed is pschitt

The markets had placed too much hope in the meeting of the Fed's Sept. 20. They had been dreaming that her boss, Ben Bernanke, went out of his hat and decisive action to support the U.S. economy. Whereby they have had the formalization of the launch of Operation Twist. This is for the Fed to exchange $ 400 billion in Treasury bonds against short-term securities with longer maturities. The objective of this hocus-pocus giant is to influence the rate of long-term interest to encourage business investment and private individuals.Problem, it is an indirect incentive does not offer assurance of effectiveness. In addition, if the technique is clever, it reveals above all the lack of leeway for the Fed can not lower its rates or already virtually zero, or purchase of new Treasury bills. In other words, after the operation Twist, the U.S. central bank is disarmed. What is worrying the markets.

Volkswagen sales have increased strongly in July, the group said that its growth prospects remain in line with its forecasts.

The economic downturn does not seem to have a material impact on the activities of the German, European leader in the automobile.

"The Volkswagen Group maintained its growth trajectory due to its strong lineup," said the sales manager Christian Klingler in a statement.

Retail sales in July rose 16.3%, marking an acceleration from the pace through the first seven months of the year (14.4%).

China, Volkswagen's largest market by volume, has increased sales by 16.4% between January and July.Over the same period, sales in Central and Eastern Europe grew by 28.7%, and the United States of 21.4%.

But with a limited increase in German GDP to 0.1% in the second quarter, but the group could soon be in trouble in its home market, where one in three cars sold is a brand owned.

Global stock markets fall Tuesday, down for the tenth straight session and lost 20% since early May, while gold steals record after record, the great volatility of markets prompting investors to accelerate the removal of risky assets.

The MSCI World Index, however, reduced its losses at midday, while still yielding 0.9%.

This rout, fueled by the fear of a relapse of the global economy and exacerbated by the loss of the "triple A" United States, increasing pressure on the Federal Reserve meets on Tuesday.The markets expect further quantitative easing to stimulate the economy.

European shares drop 2%.

As in previous days, the volumes are very important, representing nearly 90% of their daily average the last three months on the FTSEurofirst 300 by mid-day.On the DAX in Frankfurt and the CAC 40 in Paris, the volumes exceeded the average.

The plunge on Wall Street, who accused the scope of the deterioration of the American note and lost more than 5% Monday, was already distraught Asian markets.

In Tokyo, the Nikkei ended below 9000 points, after falling close to its lowest intraday hit in mid-March after the earthquake and tsunami.

More bad news fueled risk aversion in Asia, inflation in China emerged as stronger than expected in July.

In this context, gold has crossed the 1,778 dollars per ounce, and its price now exceeds that of platinum, traditionally higher because of its rarity.

Another safe haven, the Swiss franc has burst new caps against the euro and the dollar. The dollar hit a record low at 0.7359 francs on the platform EBS, while the euro fell to 1.0475 francs.

Fears of another recession like the previous days weigh on oil prices, losing more than two dollars a barrel.

Only about appeasement, bond yields in Italy and Spain continued to relax, investors expecting further redemptions of debt in both countries by the European Central Bank.

France and Belgium are likely to be in turn under pressure."In the end, Italy and Spain are out of the game, so we'll watch them on the side of Belgium and France – countries that are unprotected," warns another trader.

French bond yields climbed to 10 by 7.5 basis points on the session at 3.22%, the worst performance among the countries of the euro area.

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.