Posts Tagged ‘Economic’
(CBS News)
Last October, a US intelligence report to Congress revealed that foreign economic espionage worth billions of dollars is being driven by China and Russia and represents a significant and growing threat to the nations prosperity and security.
The Internet has accelerated and amplified economic vulnerabilities given the ease of digital access to mass amounts of data, low barriers of entry to cyber intrusion, and the useful cloak of online anonymity. But this threat to our national economic security isnt confined to cyberspace.
In the interconnected global environment, economic power, access to resources, and cutting edge technologies are defining both power and vulnerabilities. China and Russia have already demonstrated their willingness to engage in a new geo-economic game. Its one the United States needs to learn to play quickly.
During a diplomatic spat last year with Japan, China suspended its export of rare-earth minerals – necessary for key high-tech manufactured items like hybrid engines and solar panels. China has also used its undervalued currency, subsidies, and the weight of its market – both current and future – to demand local content and partnership concessions from foreign companies.
The resulting transfer of technology and marginalization of multinational companies has allowed Chinese companies to take larger chunks of the global solar, wind turbine, and high-speed rail markets. At the same time, Chinese infrastructure and extraction projects in Africa, Central Asia, and Latin America are facilitating Chinese access to both raw materials and political influence.
Russia hasnt hesitated to play the game either, using its oil and natural gas resources to exert political pressure while padding the Kremlins coffers. In 2006 and again in 2009, Russia shut off natural gas supplies to Europe through Ukrainian pipelines to extract concessions from the Ukraine and put political pressure on a rival. Russia – through Gazprom – has also followed an acquisition pattern of plugging the holes of alternate channels of energy supply to Europe in the Balkans, Poland, and perhaps now in Greece.
The United States is unprepared to play this new geo-economic game. Our current approach to economic security abroad reflects a reticence to meld political and economic interests, something Secretary of State Clinton has begun to highlight. This underscores a long-standing structural divide between national security policies and the role of the US private sector in the international commercial and financial system.
The most egregious examples are in Iraq and Afghanistan. American blood and treasure have been spent to establish security and functioning economies, but American companies and interests are often left on the sidelines as Chinese, Russian, and other countries companies profit from oil, mineral, and other sectors.
US economic reach and influence has been taken for granted as a function of the free trade paradigm that the United States helped establish and the competitive advantages of US companies against foreign competitors. This is now in jeopardy, with not only economic advantage but international influence at risk.
As the Venn diagram of economic and national security overlaps ever more exactly, the United States should craft a deliberate strategy that aligns economic strength with national security interests.
Needed: National economic security lens
The intelligence community should prioritize collection and analysis to focus on the global landscape through this national economic security lens. Our homeland security enterprise should be focused less on defending against specific actors and more principally on protecting and building redundancies in the key infrastructure and digital systems essential for national survival. Law enforcement and regulators should have access to beneficial ownership information for investments and companies formed in the United States.
International alliances should be recast to ensure key resource and supply redundancy, while trade deals should be crafted to create new opportunities for influence and economic advantage. The proposed Trans-Pacific Partnership trade accord endorsed by President Obama is a major step in the right direction. We should reconsider doctrines of deterrence – to account for the challenges of attribution in cyberspace as well as the opportunities of entanglement in a globalized environment that would make it patently unwise for countries to try to weaken the United States.
We should view the relationship between government agencies – like the Overseas Private Investment Corporation and US AID – and the private sector as core to the promotion of US interests, creating alliances based not just on trade and development but on shared economic vulnerabilities and opportunities.
In doing this, we must reaffirm our core principles. We are neither China nor Russia, nor should we create structures that move us toward a state authoritarian model. On the contrary, we should remain the vanguard of the global free trade, capitalist system, while preserving the independence of the private sector and promoting ethical American business practices. We should not retreat from the globalized environment we helped shape but instead take full advantage of the innovation and international appeal and reach of American business and technology.
In the 21st century, economic security underpins the nations ability to project its power and influence. The United States must remain true to its values but start playing a new, deliberate game of geo-economics to ensure its security and take advantage of rapidly emerging vulnerabilities and opportunities.
Bio: Juan C. Zarate is a senior adviser at the Center for Strategic and International Studies. He was the first Assistant Secretary of the Treasury for Terrorist Financing and Financial Crimes and served as the Deputy National Security Adviser for Combating Terrorism (2005-2009). The opinions expressed in this commentary are solely those of the author.
Business leaders hope to score economic development because of big games
Posted by: Admin
January 24th, 2012 >> Economic
New OrleansThe back to back big football games are not just helping to fill local hotels and restaurants, they are attracting influential people to the city. And local business leaders hope to score some new economic development opportunities in the process.
Outside a prominent Poydras Street high-rise building a Saints themed sculpture of a dog was being delivered. The dog will have a conspicuous spot inside the building.
We actively work with the media to give them information about the new, New Orleans, for example were working with the Saints to get the broadcasters for the playoff game information about how the Wall Street Journal just ranked us as the fastest improving economy in the country, Hecht added.
TV news stations from around the region, like FOX 10 out of Mobile, Alabama are also keeping the city in the spotlight several times a day.
But business leaders are not counting just on the free media coverage. Big sporting events attract movers and shakers from other parts of the country and it is an opportunity to sell the city as a place to do business.
The local SPC.A which is behind the colorful dog sculptures which are being placed in the central business district calls the timing great.
He said after the big football games on Saturday and Monday theres more national media coverage for the city to come, and it has nothing to do with Mardi Gras.
Mississippi: SBA Deadline for Economic Injury Disaster Loans Coming Soon
Posted by: Admin
January 23rd, 2012 >> Economic
(Source: US Small Business Administration) ATLANTA, Jan. 4, 2012 – The US Small Business Administration is reminding businesses in Mississippi that working capital loans are still available to small businesses economically impacted by the severe storms, tornadoes, straight-line winds and associated flooding that occurred from April 15 28, 2011.
Businesses that suffered economic losses as a result of the disaster and want to apply for low-interest loans from the SBA are urged to do so before the Jan. 30, 2012 deadline, said Frank Skaggs, director of SBA Field Operations Center East.
Economic Injury Disaster Loans (EIDLs) up to $2 million are available at 4 percent for small businesses and 3 percent for private nonprofit organizations of all sizes, with terms up to 30 years. The loans are intended to pay fixed debts, payroll, accounts payable, and other expenses that could have been paid had the disaster not occurred. To be considered for this assistance, disaster victims need to apply by the deadline.
These EIDLs are available to businesses and nonprofits in the counties of Alcorn, Attala, Benton, Bolivar, Calhoun, Carroll, Chickasaw, Choctaw, Claiborne, Clarke, Clay, Coahoma, Copiah, Covington, DeSoto, George, Grenada, Greene, Hinds, Holmes, Humphreys, Itawamba, Jasper, Jones, Kemper, Lafayette, Lauderdale, Leake, Lee, Leflore, Lowndes, Madison, Marshall, Monroe, Montgomery, Neshoba, Newton, Noxubee, Oktibbeha, Panola, Perry, Pontotoc, Prentiss, Quitman, Rankin, Scott, Simpson, Smith, Sunflower, Tallahatchie, Tate, Tippah, Tishomingo, Tunica, Union, Warren, Washington, Wayne,Webster, Winston, Yalobusha and Yazoo in Mississippi; Choctaw, Colbert, Franklin, Lamar, Lauderdale, Marion, Mobile, Sumter and Washington in Alabama; Crittenden, Desha, Lee and Phillips in Arkansas; and Fayette, Hardeman, Hardin, McNairy and Shelby in Tennessee.
To obtain disaster loan information and application forms, call the SBAs Customer Service Center at 800-659-2955 (800-877-8339 for the deaf and hard-of hearing) or send an email to disastercustomerservice@sba.gov. Loan application forms can also be downloaded from www.sba.gov. Completed applications should be mailed to: US Small Business Administration, Processing and Disbursement Center, 14925 Kingsport Road, Fort Worth, TX 76155.
Those affected by the disaster may also apply for disaster loans electronically from the SBAs website at https://disasterloan.sba.gov/ela/.
The deadline for economic injury applications is January 30, 2012.
For more information about the SBAs Disaster Loan Programs, visit our website at www.sba.gov.
Contact: Michael Lampton
Phone: 404-331-0333
Source: US Small Business Administration
Sarkozy, Merkel to Discuss Economic Convergence, Treaty Jan. 9
Posted by: Admin
January 21st, 2012 >> Economic
French President Nicolas Sarkozy and
Germany’s Chancellor Angela Merkel will discuss European
economic convergence and a new treaty when they meet in Berlin
on Jan. 9, France’s budget minister and government spokeswoman
Valerie Pecresse said today.
Speaking to reporters after the weekly cabinet meeting in
Paris, Pecresse said the government will proceed with its plan
for a tax on financial transactions, in spite of the risk of
foreign competition, and use the money collected for domestic
issues.
The French senate will vote on legislation that makes it a
crime to deny any genocide recognized by French law before the
end of January, Pecresse said. The bill is a “general” one and
isn’t “against Turkey,” she told reporters.
To contact the reporter on this story:
Helene Fouquet in Paris at
hfouquet1@bloomberg.net
To contact the editor responsible for this story:
Steve Rhinds at
srhinds@bloomberg.net
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The year might be fresh and new, but Canadians already have a dark view of their economic prospects for 2012 with large numbers believing the country is already in recession and top economists seeing storm clouds as far out as 2013.
The views of economists from Canada’s five biggest banks are coloured by expectations that the budget tightening that Americans largely deferred in 2011 will finally take hold in 2013, creating its own economic restraint.
Those economists presented their view Thursday to an event hosted by the Economic Club of Canada, the tone for which was set by Economic Club polling results that show 70 per cent of Canadians believe Canada has already slipped back into recession.
“That does surprise me,” said Helmut Pastrick, chief economist for Central 1 Credit Union in an interview, because “Canada is not in a recession. The United States is not in a recession.”
Nationally, 63 per cent of respondents said they believed Canada is in a mild recession and seven per cent reported a belief the recession is severe. For the BC component, those numbers were 68 per cent and five per cent.
“Canadians, in aggregate, are remarkably canny about the economy,” Michael Marzolini, chairman of Pollara, said while presenting the survey findings. “It’s the most pessimistic findings we’ve had in 16 years. Canadians are more self-centred.”
Considering Canada is in an economic climate where job growth is slow and wage increases lacklustre, Pastrick added that perceptions that people aren’t getting ahead is understandable.
In the polling data, commissioned by the Economic Club and conducted by Pollara Strategic Insights, respondents reporting generally feeling they are “holding their own” or falling behind when it comes to matters of personal finances.
On the question of how respondents felt about their finances in a general sense, 48 per cent said they were merely holding their own. In BC, however, the number was 51 per cent.
However, 33 per cent nationally said they felt they were losing ground at the national level, a proportion that rose to 35 per cent in BC
“That does speak to income growth, and the lack thereof,” Pastrick added.
Inflation, Pastrick said, averaged about 2.8 per cent in 2011, and was “higher than typical wage gains.”
Ken Peacock, vice-president and chief economist for the Business Council of BC, added that the perceptions of Canadians also appears to reflect the steady stream of bad news about a possible recession in Europe and escalating debt in the US
“The world is definitely uncertain, to say the least,” Peacock said, “and I think some of those external factors are going to start to weigh on BC”
However, in the meantime, Peacock said Canada “just doesn’t have that same level of problem or concern.”
The provincial government’s most recent survey of its Economic Forecast Council, estimated BC’s economy will grow 2.2 per cent in 2012, which is “not a vigorous or robust climate,” Peacock added.
Nationally, the bank economists have concerns about 2013, based on what they see potentially happening in the US
“What does 2013 look like? Not a whole lot better than 2012,” Avery Shenfeld, chief economist with CIBC World Markets, said Thursday. “As the US defers fiscal tightening for another year, 2013 is set up for huge fiscal tightening to hit the US economy.”
Craig Alexander, chief economist with TD Economics, warned that the many desperate fiscal decisions the United States has made over the past few years will truly come to roost in 2013.
These include the billions spent in stimulus spending, tax cuts, bailouts and record high deficits since the financial crisis, as well as the total gridlock in Washington that came to a head in 2011 when politicians failed to find a long-term solution to the nation’s debt crisis.
“Many of those fiscal measures are expiring, and as they expire they will create a drag on the economy. What is more stark is what happens in 2013,” Alexander said.
The margin for error is 1.8 per cent 19 times out of 20 for the national results.
depenner@vancouversun.com
Twitter.com/derrickpenner
Postmedia News
Papademos Warns Greek Economic Collapse Looms Without Cuts
Posted by: Admin
January 10th, 2012 >> Economic
Papademos Warns Greek Economic Collapse Looms Without Cuts
January 06, 2012, 4:05 AM EST
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By Maria Petrakis and Natalie Weeks
(Adds EU comment on next Greek loan installment in sixth paragraph. For more on Europe’s debt crisis, click on EXT4.)
Jan. 5 (Bloomberg) — Prime Minister Lucas Papademos told Greeks that cuts in income are the only way to stay in the euro and get more financing from international creditors to avert an economic collapse that may otherwise come as soon as March.
“We have to give up a little so we don’t lose a lot,” Papademos said, according to an e-mailed transcript of his statements to union and business leaders yesterday. Talks later this month with officials from the European Union, the International Monetary Fund and the European Central Bank, the so-called troika, will focus on a “credible” economic plan for 2012 to 2015.
“Without this agreement with the troika and subsequent financing, Greece in March faces the immediate risk of a disorderly default,” Papademos said.
Appointed in early November to lead an interim government to secure a second financing package, Papademos is racing to complete a voluntary swap of debt with private bondholders, part of the new rescue plan for the country, which also includes 130 billion euros ($166 billion) of public funds. Under the terms of Greece’s second bailout, investors would take a 50 percent hit on the nominal value of 206 billion euros of privately owned debt. The country redeems 14.4 billion euros of bonds on March 20.
The next loan tranche of 5 billion euros under Greece’s May 2010 EU-led bailout, originally scheduled for December, will be delayed until March because of the discussions on the new aid package, Olivier Bailly, a spokesman for the EU, told reporters today in Brussels.
Bond Yields Rise
Greece’s ASE benchmark stock index fell 2.2 percent to 647.58 at the close of trading in Athens today. The yield on the 10-year Greek bond added 7 basis points to 34.94 percent. Two- year note yields rose 72 basis points to 135.02 percent.
Greece will sell 1.25 billion euros of 26-week Treasury bills on Jan. 10, the Athens-based Public Debt Management Agency said today.
The premier is chairing a Cabinet meeting today on an omnibus bill that will include opening up so-called closed professions, including taxis, and regulation on settling outstanding taxes. The legislation is intended to tackle pledges that the troika has said aren’t being implemented effectively or promptly enough to allow the economy to become more competitive and return to growth.
‘Belt Tightening’
Despite two years of wage cuts and tax increases, the IMF estimates Greece’s 2011 deficit to be about 9 percent of gross domestic product compared with 10.6 percent in 2010. The economy was expected to shrink about 6 percent last year, according to the latest IMF estimates.
“Greece has not much room for maneuver, but must rely on further austerity and belt-tightening, while extracting as much as it can from sovereign debt holders in current debt swap negotiations,” said Thomas Costerg, an economist at Standard Chartered Bank Plc in London. “Risks are definitely on the rise: there is bailout fatigue in the north, and austerity fatigue in the south, especially in Greece, where GDP shows no sign of bottoming.”
Papademos, 64, assumed office after Germany and France warned Greece last year that they would cut all aid to the country until it signs up to a bailout plan agreed to in Brussels on Oct. 26.
Elections Call
Former Prime Minister George Papandreou, who told his socialist Pasok party yesterday that he would step down as leader and won’t seek re-election as premier, handed off to Papademos after at least five austerity packages whittled down support for his government and his majority in parliament.
Maria Damanaki, the EU’s Maritime Affairs and Fisheries Commissioner, said Greece will need to make more sacrifices. “But I repeat, it gives opportunities,” said Damanaki, whose comments were sent by e-mail after a meeting with Papademos where they discussed use of EU funds to guarantee investments and create jobs.
Political leaders like Antonis Samaras, the head of the second-biggest party, New Democracy, are keeping up the pressure on Papademos to resolve the debt swap and call elections. While Finance Minister Evangelos Venizelos has said elections will be held at the end of April, according to a Dec. 27 report by state-run Athens News Agency, Samaras has said elections can be held at the end of March.
Wage Cuts
New Democracy, which is calling for no more wage cuts or tax increases, had 21 percent voter support, compared with 13 percent for Papandreou’s Pasok, according to 1,004 people surveyed Dec. 28-29 by Kapa Research. Nearly eight in 10 Greeks say the country’s leaders should do whatever is needed to remain in the euro, according to that poll.
Papademos said the troika had pointed to a range of issues to be tackled. They include adjustments to the minimum wage, abolition of Christmas and summer vacation bonuses and automatic wage increases.
Yannis Panagopoulos, the head of Greece’s biggest private- sector union group GSEE and the driving force behind seven general strikes last year, said he was willing to discuss how to reduce non-wage costs to protect jobs.
The organization won’t consider changes to national labor accords such as cutting the minimum wage and the so-called 13th and 14th annual wages, Panagopoulos said in comments on NET TV.
Greece’s debt is forecast to balloon to almost double the size of its shrinking economy this year without the write-off, the European Commission estimates. The swap is aimed at helping reduce debt to 120 percent of gross domestic product by 2020. A successful swap will reduce the deficit this year to 5.4 percent of GDP, in part by savings on debt servicing costs, according to Greece’s 2012 budget.
–With assistance from Jones Hayden in Brussels and Marcus Bensasson in Athens. Editors: Leon Mangasarian, Alan Crawford
To contact the reporters on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net; Natalie Weeks in Athens at nweeks2@bloomberg.net
To contact the editor responsible for this story: Tim Quinson at tquinson@bloomberg.net
READER DISCUSSION
Makeup of Leading Economic Indicators Index in U.S. to Change
Posted by: Admin
January 8th, 2012 >> Economic
For the first time since 1996, the
components of the US leading economic indicator index will
change, according to the New York-based Conference Board.
Gone will be the inflation-adjusted money supply, the
Institute for Supply Management’s supplier deliveries gauge, the
Thomson Reuters/University of Michigan’s measure of consumer
expectations and the Commerce Department’s orders for non-
defense capital goods, the private research group said in a
statement.
Replacing the money supply will be the Conference Board’s
own Leading Credit Index, which aggregates measures of the yield
curve, interest-rate swaps and the Federal Reserve’s senior loan
officer survey. The ISM’s supplier deliveries gauge will give
way to the group’s index of new orders.
Instead of using one measure of consumer confidence, the
Conference Board will include an equally weighted average of the
Michigan sentiment expectations reading and its own measure.
Finally, the capital goods component will be replaced by the one
that excludes commercial aircraft.
The Conference Board called it “the first major overhaul”
of the LEI since 1996, when the group took over responsibility
for the business cycle indicators program from the Bureau of
Economic Analysis at the Commerce Department. The changes
respond to structural changes in the US economy and are aimed
at making the LEI a better predictor of peaks and troughs in the
business cycle, the Conference Board said.
The new index will start with the December number coming
out on Jan. 26, the group said, and readings will be revised
retroactively to 1990.
To contact the reporter on this story:
Carlos Torres in Washington at
Ctorrres2@bloomberg.net
To contact the editor responsible for this story:
Christopher Wellisz at
cwellisz@bloomberg.net
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AP
President Obama, shown in this Dec. 9, 2011, photo, is headed to Ohios most Democratic congressional district to push his economic message.
This is a rush transcript from On the Record, November 25, 2011. This copy may not be in its final form and may be updated.
SHANNON BREAM, FOX NEWS GUEST HOST: Wall Street Journals senior economic writer Steve Moore is with us now. All right, Steve, I dont have the stomach to brave Black Friday, but millions of Americans we hope do. I mean, what kind of impact do we know so far?
With Europes debt crisis deepening by the day, stock markets ended a miserable week on a down note.
In New York, where Fridays session ended early, the Samp;P 500 Index posted its worst Thanksgiving week performance since 1932.
The broadly based index fell about three points to 1,158.67, marking its seventh straight decline.
Meanwhile, the blue chip Dow Jones Industrial Average fell 26 points – its fourth consecutive drop – and the tech-laden Nasdaq Composite Index shed 18 points, for its seventh straight loss.
Despite the recent slide, major US indexes remain well north of bear market territory. Thats not the case in Toronto, where this weeks losses left the TSXs benchmark index 20 per cent below its 2011 high.
The Samp;P/TSX Composite Index shed 23 points Friday on light volume to close at 11,462.06. That left it down 430 points for the week and 790 points or 6.4 per cent so far this month.
With growing signs that the sovereign debt crisis in Greece, Portugal and Italy is now being felt in France and even Germany, Canadian Finance Minister Jim Flaherty warns that any contagion in credit markets will be felt far beyond Europes borders.
We are not immune to challenges that emanate from beyond our borders, says Flaherty.
Again today, we are staring a crisis in the face.
Flahertys increasingly gloomy assessment is reflected in the falling share values of Canadas top bank and insurance stocks, many of which sagged to new 52-week lows Friday.
The list of prominent losers includes Bank of Nova Scotia, TD Bank, Sun Life, National Bank and Royal Bank, among others.
European markets have entered a dangerous new phase of the crisis as bond auctions across core euromember states are no longer a sure bet, Scotiabanks economists warn, in a report released Friday.
This will be tested further next week as Italy, Belgium, Spain and France conduct bond auctions.
An auction of traditionally ultrasafe German bonds – known as bunds – failed to sell out last week, sparking fears that investors are now beginning to shift money away from Europe entirely.
Although yields on German bonds are still very low – unlike Italys, which are in the danger zone above seven per cent – theyve been edging up lately. Since Germany has to refinance a big chunk of its $4.7-trillion US external debt over the next three years, thats bound to be a growing worry for Angela Merkels government.
Despite pervasive fears that Europe is tipping into recession, depressing North American economic growth rates further, some analysts remain bullish on the outlook for oil, copper, gold and selected other commodities.
The physical copper market is tight and has tightened further over recent months. The same is true for oil. The physical crude oil market is extremely tight at present, which explains why crude oil prices have been very resilient, says a recent report issued by Societe Generale.
The tightness in some of the key commodity markets means that, in the absence of a global recession, the forthcoming global slowdown is, on balance, unlikely to result in much lower commodity prices.
Still, Societe Generale says the months ahead are likely to be bumpy and unpredictable, and that could spell further short-term weakness for commodities and related resource stocks – creating an even more attractive entry point.
Here are some other snippets from the report: ??Oil prices: Societe Generale sees the price of West Texas Intermediate (WTI) crude – the primary US
grade – averaging $103 US a barrel next year. Thats up sharply from its previous forecast, and reflects what it calls strong supply-demand fundamentals in the industrialized world and expectations of a reduced WTI discount to Brent crude.
Natural gas prices: Unfortunately, ? ? Societe Generale is far less upbeat about the outlook for natural gas.
For 2012, it predicts an average price of less than $3 per MMBtu (million British thermal units) on the New York Mercantile Exchange, as a warm fall leaves the US with high inventories that will persist into the spring.
Gold prices: Societe Generale ex-? ? pects the price of the yellow metal – which has risen sharply since 2002 – to finally reach a peak by late 2012 or early 2013, at about $2,200 an ounce.
After soaring to a high of more than $1,900 per ounce earlier this year, gold has drifted lower in recent months, closing Friday at about $1,690 per ounce.
The market remains in surplus, with oversupply versus fundamental demand, and when investor momentum slows the gold price will come down, Societe Generale predicts.
The recession developing in the eurozone will support more riskhedging in 2012, especially as the ECB (European Central Bank) is likely to cut interest rates and liquidity will remain ample.
Although high gold prices and a stall-speed economy will slash jewelry purchases globally next year, the Chinese market is expected to remain buoyant, it adds.
The impact of further easing from the Fed, persistent inflationary fears and a weaker dollar will all combine to boost gold investment and take prices through $2,000 in 2012, with an assault on $2,200 likely before year-end.
glamphier@edmontonjournal.com