Standard and Poor’s (S&P) has cut France’s credit rating to AA from AA+.
The moves comes almost two years after the country lost its top-rated AAA status….
S&P said in its statement: “We believe the French government’s reforms to taxation, as well as to product, services and labour markets, will not substantially raise France’s medium-term growth prospects and that ongoing high unemployment is weakening support for further significant fiscal and structural policy measures.”
Elite business-school graduates are increasingly heading to work in technology over finance as the lingering aftereffects of the financial crisis””along with Wall Street’s long hours and scaled-back pay””sends newly minted M.B.A.s elsewhere.
At Harvard Business School, 18% of job-seeking students landed tech-sector spots this year, up from 12% in 2012. A similar shift is under way at the business schools at Yale University and Cornell University, where the share of graduates going into tech more than doubled over the past two years.
Meanwhile, just 27% of Harvard Business School graduates took jobs in finance this year, down from 35% last year. That figure dropped to 16% from 27% at the MIT Sloan School of Management.
Religious faith is a “powerful and increasingly influential global reality” which must be taken seriously, especially in the City of London, according to the Archbishop of Canterbury.
The Most Rev Justin Welby said God and mammon ”“ material wealth or greed ”“ are not mixable, but this did not mean there was no place for faith in the City.
“That’s on the authority of Jesus Christ who said you can’t serve God and mammon. God and the City, by contrast I think, are eminently mixable.”
He was speaking at a Mansion House dinner hosted by Roger Gifford, a senior banker and Lord…
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The bishops might have been promoting a strictly Democratic line, but U.S. Senate Chaplain Barry Black was more ecumenical. Amid the shutdown, Rev. Black offered a daily prayer in the Senate chamber asking God to “save us from the madness. We acknowledge our transgressions, our shortcomings, our smugness, our selfishness, and our pride.” Later he condemned the “hypocrisy of attempting to sound reasonable while being unreasonable.” His listeners in one party no doubt assumed he was talking about the other side.
It is one thing to spiritually shame politicians, as Rev. Black did. Trying to do their jobs is another. The bishops and other clergy in the Circle of Protection go well beyond their competencies when they make such policy prescriptions. Speaking about the moral issues of the day is certainly within their pastoral purview, but the bishops’ calls to raise revenues (aka taxes), for instance, or eliminate “unnecessary” military spending are not.
Bishops routinely assert their authority as “pastors and teachers,” as Bishops Blaire, Gomez and Pates did, but according to the tradition of their own church, they have no teaching authority when it comes to politics.
With just two days to go before an Oct. 17 deadline to raise the nation’s debt limit, 51% of the public views a rise in the nation’s debt limit as “absolutely essential” in order to avoid an Half View Debt Limit Increase as Essential, More than a Third Say it is Noteconomic crisis, while 36% think the country can go past the deadline without major problems.
Public concern over breaching the debt limit deadline has risen only slightly from a week ago, when 47% said a rise in the debt limit was essential and 39% said it was not.
Those who see no dire economic consequences resulting from going past Thursday’s deadline are not only skeptical about the timing ”“ most say there is no need to raise the debt limit at all. Nearly a quarter of all Americans (23%) ”“ including 37% of Republicans and 52% of Tea Party Republicans ”“ believe the debt limit does not need to be raised at all.
Top Senate leaders on Monday said they were within striking distance of a deal to sidestep a looming debt crisis and reopen the federal government two weeks after a partisan deadlock forced it to close.
Fourteen days after a partial government shutdown began, senators signaled a bipartisan resolution could come soon.
“I’m very optimistic we will reach an agreement that’s reasonable in nature this week to reopen the government, pay the nation’s bills and begin long-term negotiations to put our country on sound fiscal footing,” Senate Majority Leader Harry Reid (D., Nev.) said on the Senate floor.
When the Archbishop of Canterbury was embarrassed by the revelation earlier this year that the Church had invested indirectly in Wonga ”“ after he had announced plans to take on the payday lender ”“ it served as a bleak reminder that even the best-intentioned investor can be let down by their so-called ethical investments.
If you are looking to put your spare cash to good use by investing “ethically”, be warned that you could face similar nasty surprises unless you keep a keen eye on the investment criteria. A close examination of the ethical fund sector shows investments in some unexpected areas. They include oil companies operating in tar sand fields, deemed harmful by some environmentalists; arms manufacturers; and businesses that have exposure to fur and animal testing.
What started as a mad dash to strike a deal to lift the federal debt limit slowed to a crawl over the weekend as stalemated Senate leaders waited nervously to see whether financial markets would plunge Monday morning and drive the other side toward compromise.
Republicans seemed to think they had more to lose. After talks broke down between President Obama and House leaders, GOP senators quickly cobbled together a plan to end the government shutdown ”” now entering its third week ”” and raise the $16.7 trillion debt limit. Senate Minority Leader Mitch McConnell (R-Ky.) then asked Majority Leader Harry M. Reid (D-Nev.) to elevate negotiations to the highest level.
On Sunday ”” with the Treasury Department due to exhaust its borrowing power in just four days ”” Reid was wielding that leverage to maximum advantage. Rather than making concessions that would undermine Obama’s signature health-care initiative, as Republicans first demanded, Democrats are now on the offensive and seeking to undo what has become a cherished prize for the GOP: deep agency spending cuts known as the sequester.
A senior Chinese official has warned that the “clock is ticking” to avoid a US default that could hurt China’s interests and the global economy.
China, the US’s largest creditor, is “naturally concerned about developments in the US fiscal cliff”, vice finance minister Zhu Guangyao said.
Washington must agree a deal to raise its borrowing limit by 17 October, or risk being unable to pay its bills.
Angela Merkel won a landslide personal victory in Germany’s general election on Sunday, but her conservatives appeared just short of the votes needed to rule on their own and may have to convince leftist rivals to join a coalition government.
Seeing a more uneven economic climate than they expected and the potential for fiscal discord in Washington, Federal Reserve officials got cold feet Wednesday and decided to keep their signature easy-money program in place for the time being.
The move, coming after Fed officials spent months alerting the public that they might begin to pare their $85 billion-a-month bond-buying program at the September policy meeting, marks the latest in a string of striking turnabouts from Washington policy makers that have whipsawed markets in recent days.
Earlier today, I spoke with Larry Summers and accepted his decision to withdraw his name from consideration for Chairman of the Federal Reserve.
Larry was a critical contributor to the radical deregulation that was one of many causes of the worst economic crisis since the Great Depression. It was in no small part because of his lack of expertise, false wisdom, and inept leadership that the economy crashed and burned and even today is still failing to be to back to its full growth potential.
Ever since the euro crisis broke in late 2009 this newspaper has criticised the world’s most powerful woman. We disagreed with Angela Merkel’s needlessly austere medicine: the continent’s recession has been unnecessarily long and brutal as a result. We wanted the chancellor to shrug off her cautious incrementalism and the mantle of her country’s history””and to lead Europe more forcefully. She is largely to blame for the failure to create a full banking union for the euro zone, the first of many institutional changes it still needs. She has refused to lead public opinion, never spelling out to her voters how much Germany is to blame for the euro mess (nor how much its banks have been rescued by its bail-outs). We also worry that she has not done enough at home: in recent years no country in the European Union has made fewer structural reforms, and her energy policies have landed Germany with high subsidies for renewables and high electricity prices.
And yet we believe Mrs Merkel is the right person to lead her country and thus Europe. That is partly because of what she is: the world’s most politically gifted democrat and a far safer bet than her leftist opponents. It is also partly because of what we believe she could still become””the great leader Germany and Europe so desperately needs.
R&L: Why did you want to write this book? Tell us what crony capitalism means to you and give us a sense of its greatest threat.
Peter Schweizer: I wanted to write the book because for years I’ve been involved in policy and the philosophical debate in D.C. concerning the growth and size of government. I’ve come to the conclusion that while that debate is important and needs to continue to take place, the bottom line is that whether conservatives or liberals are in charge, the government continues to expand.
We’ve got to change the incentive structure that exists in Washington, and that incentive structure is driven by cronyism, where the state and private sector intersect. If I were to define crony-capitalism, I really use the term cronyism because I don’t think that it speaks of capitalism per se, but cronyism is essentially where economic decisions in terms of who accumulates wealth and who doesn’t, is not based on merit, it’s not based on economic prowess or success or meeting needs in the marketplace. It’s based on political connections and relationships whereby you are able to either manipulate the state to your advantage, and to the disadvantage of your competitors.
Since the euro crisis began, many governments across Europe have been swept from power. France last year saw a presidential campaign heavily focused on Europe, and calls for alternatives to austerity have grown ever louder. So why is it that Germany, the country key to solving the euro crisis, seems immune to this polarization of views on the future of economic and monetary union?
Partly it has to do with the Greens and the Social Democrats, two opposition parties struggling to differentiate their euro policies from Merkel’s government, a coalition of her conservatives and the business friendly Free Democrats (FDP). Both the Greens and the SPD have supported all major euro rescue measures thus far. Even the Left Party, a stronger critic of the government, recently confirmed its overall commitment to the common currency. There is currently no anti-euro party in Germany parliament, with newcomers such as the euro-skeptic Alternative for Germany, media attention notwithstanding, yet to demonstrate their potential at the ballot box.
One reason is that Germans are still not feeling the pinch of the crisis. On the contrary, they continue to hear good news about strong exports, lower unemployment and economic growth. With the election looming, it is no surprise that the Merkel administration is wary of spoiling this mood of complacency by addressing the downsides of the “German model” for fellow euro-zone member states.
The Federal Bureau of Investigation has discovered vulnerabilities in the government’s system for preventing market-moving economic reports from leaking to traders before public release.
Law-enforcement officials found “a number of operational vulnerabilities” involving “black boxes” used by several departments to control the release of sensitive economic data such as the monthly unemployment rate, according to a report by the inspector general at the Commerce Department.
The report said it was possible to subvert the system, which was designed to prevent media companies from sending economic data to traders early.
Read it all(or if necessary another link is there).
The head of the Church of England said on Friday he was embarrassed to find out that his organisation had invested indirectly in a short-term loan company which he had vowed only days earlier to drive out of business.
The discovery of the relatively small investment was a major setback for Archbishop of Canterbury Justin Welby, after he launched a scathing attack on “payday” lenders who charge high interest rates on short-term loans that are typically repaid when borrowers receive their wages.
But the former oil executive and a member of Britain’s Banking Standards Commission said he would push ahead with his campaign to compete with, and eventually render obsolete, a business he labels “morally wrong”.
When Greece ran into financial trouble three years ago, the problem soon spread. Many observers were mystified. How could such a little country set off a continental crisis? The Greeks were stereotyped as a nation of tax-dodgers who had been living high on borrowed money for years. The Portuguese, Italians and Spanish insisted that their finances were fundamentally sound. The Germans wondered what it had to do with them at all. But the contagion was powerful, and Europe’s economy has yet to recover.
America seems in a similar state of denial about Detroit filing for bankruptcy…. Many people think Motown is such an exceptional case that it holds few lessons for other places. What was once the country’s fourth-most-populous city grew rich thanks largely to a single industry. General Motors, Ford and Chrysler once made nearly all the cars sold in America; now, thanks to competition from foreign brands built in non-union states, they sell less than half. Detroit’s population has fallen by 60% since 1950. The murder rate is 11 times the national average. The previous mayor is in prison. Shrubs, weeds and raccoons have reclaimed empty neighbourhoods. The debts racked up when Detroit was big and rich are unpayable now that it is smaller and poor.
The bankruptcy of Detroit, confirmed in 16 pages filed at 4:06 p.m. Thursday, marks an epic fall for an iconic American city even as it opens a new chapter whose ending is decidedly uncertain.
No one really knows how the largest municipal bankruptcy in the nation’s history will end and when ”” not Emergency Manager Kevyn Orr, who recommended the step Tuesday, not his lawyers, and not Gov. Rick Snyder, who said he approved the filing “as a last resort to return this great city to financial and civic health for its residents and taxpayers.”
“This decision comes in the wake of 60 years of decline for the city, a period in which reality was often ignored,” the governor wrote in his authorization. “Without this decision, the City’s condition would only worsen. With this decision, we begin to provide a foundation to rebuild and grow Detroit.”
Two more Portuguese ministers from the junior ruling coalition party were ready to resign on Wednesday, local media said, deepening turmoil that could trigger a snap election and derail Lisbon’s exit from an EU/IMF bailout.
Multiple newspaper radio and television reports said Agriculture Minister Assuncao Cristas and Social Security Minister Pedro Mota Soares will follow their CDS-PP party leader Paulo Portas who tendered his resignation on Tuesday. Party officials were not available to comment as the party’s executive commission was in a meeting.
The Federal Reserve chairman, Ben S. Bernanke, said on Wednesday that the central bank intended to reduce its monetary stimulus later this year ”” and end the bond purchases entirely by the middle of next year ”” if unemployment continued to decline at the pace that the Fed expected.
Mr. Bernanke said that the Fed planned to continue the asset purchases until the unemployment rate fell to about 7 percent, the first time that the Fed has specified an economic objective for the bond-buying. The rate stood at 7.6 percent in May.
The Federal Reserve also struck notes of greater optimism about the economic recovery, saying in a statement released after a two-day meeting of its policy-making committee that the economy was expanding “at a moderate pace,” the job market was improving and risks to the recovery had “diminished since last fall.”
During the testosterone-fuelled boom years, Christian faith was about surviving in the City, but since 2008 and the revelation that it was all built on sand, Christians have been saying unequivocally that the gospel is non-negotiable, that working in commerce isn’t about surviving as a Christian but about transforming the way we do business, that Christianity is disruptive of systemic greed and corruption: that, in short, their work serves their faith and not the other way round. They are converting markets, not just people. These are the new Power Christians.
Welby is their spiritual, as well as titular, leader. Born in 1956 into a privileged, if eccentric family, he has managed a tension between descent from a powerful Conservative dynasty (on his mother’s side, he is a scion of the Butler family, which gave us Rab Butler, the deputy prime minister to Harold Macmillan) and skeletons in the family cupboard (it was seen fit to conceal his paternal Jewish-immigrant lineage from him until he became an adult).
This background may have contributed to Welby the Outsider, part of the establishment but also a thorn in its side. It is no surprise that the relentlessly bourgeois HTB couldn’t contain him. Note that he considerably widened not only his social but his theological circle after he left the Knightsbridge church. Via Africa and the Middle East, he arrived as dean of Liverpool Cathedral, where he operated what he and Dr Williams have dubbed a “mixed economy” of traditions. Now add that eclecticism ”“ one might even call it a catholic taste in denominations ”“ to the can-do attitude of the City whizz-kid and you have someone who can tap effortlessly in to the energy of any kind of Christian witness….
European governments are figuring out that taxing financial transactions won’t be a magical money machine and that the proposed levy might even damage the European economy.
Reuters first reported Thursday that EU officials are scaling back a transaction tax proposal supported by 11 countries that is supposed to take effect in January. The levy could instead be introduced on a “staggered basis,” one official told the news agency. The first phase might only tax sales and purchases of shares, not bonds or derivatives transactions, and at 0.01% instead of 0.1% as currently proposed. A rate of zero is more appropriate.
Enthusiasm for the tax has been dimming for a while, including in governments that have previously backed it. Christian Noyer, the Governor of the Banque de France, said in Paris on Tuesday that the levy will raise “nothing at all.” One unnamed EU official told Reuters that a scaled-back transaction tax would reap revenue of less than €3.5 billion. The full-fledged levy, as proposed by the European Commission in February, was supposed to rake in €31 billion a year.
Read it all (if necessary another link may be found here.
European countries plan to scale back a proposed financial transactions tax drastically, initially imposing a tiny charge on share deals only and taking much longer than originally intended to achieve a full roll-out.
There is no evidence that an FTT would moderate market volatility ”” and attenuate sudden shifts of mood on financial markets.
A recent report by Anna Pomeranets from the Bank of Canada concluded that there have been instances when an FTT led to an increase in volatility ”” most significantly on the New York Stock Exchange and the American Stock Exchange, between 1932 and 1981, where increases in the FTT were associated with rising volatility, increased bid-ask spreads, and lower trading volumes.
Similarly, the idea that capital is under-taxed in current tax regimes is mistaken.
Read More At Investor’s Business Daily: http://news.investors.com/ibd-editorials-viewpoint/052913-658027-financial-transaction-tax-in-europe-will-not-raise-much-money-and-may-hurt-growth.htm#ixzz2UmJX6SiT
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In the thirty or so years that I have been following EU affairs ”“ or is it nearer 35 years now since I studied in French literature in Paris, and German philosophy in Mainz ”“ I have never seen ties between Europe’s two great land states reduced so low.
The French Socialist Party crossed a line by lashing out at Chancellor Angela Merkel in person. It is one thing to protest “German austerity”, it is quite another to rebuke the “selfish intransigence of Mrs Merkel, who thinks of nothing but the deposits of German savers, the trade balance recorded by Berlin and her electoral future”.
There is no justification for such an ad hominem attack. German policy is indeed destructive, but that is structural. It is built into the mechanisms of EMU and the anthropological make-up of the enterprise.
Justin Welby, the new leader of nearly 80m Anglicans around the world, has won a respectful hearing for his ideas on banking and the British economy. Even if they disagree with the details, people have generally not reacted by saying “this man hasn’t a clue what he is talking about” or “he should go back to singing hymns.”
On April 21st, the archbishop of Canterbury suggested that big, unhealthy banks should be broken up into regional ones, as part of a “revolution in the aims” of banks designed to make sure that they served society as well as their own narrow interests. That sounded very like the proposal made last month by Ed Miliband, the Labour leader, for local lenders modelled on the German system. It comes at a time when the government faces hard decisions about the future of the Royal Bank of Scotland after its rescue by the tax-payer. Given the immediacy of the issue, some people will accuse the archbishop (who lists his hobbies as French culture, sailing and politics) of making narrow political points rather than broad moral ones.
But he also had some longer-term ideas on the financial sector. Drawing on his experience as a member of a parliamentary Banking Standards Commission, he said senior positions in banking ought to form a regulated profession which required qualifications.
Speaking on Radio 4… [on Saturday], the Archbishop of Canterbury stressed the implications of Christian ethics for the City of London
The Christian Gopsel has “always had strong social implications” and been concerned with “the common good”, the Archbishop of Canterbury said….
In an interview for Radio 4’s Week in Westminster, Archbishop Justin said his main mission wasn’t to inject morality back into British business. But he said that how the City of London – which “is so important and so full of very gifted people” ”“ behaves in relation to the common good is a major concern not just for the Church but for society generally.
Justin Welby, the archbishop of Canterbury, laughs when it is suggested that he has a mission to raise moral standards in the City. “My key mission is to lead the Church in worshipping Jesus Christ,” he says.
He points out, however, that Christian teaching concerns the “common good”, and he is concerned about “how the City of London, which is so important and so full of very gifted people”, relates to this concept.
Dr Welby is in a unique position to do something about it. Outside the cathedral he enjoys two political pulpits from which to shape the debate: in the House of Lords and on the cross-party parliamentary banking commission.
Read it all (another link ).
The City of London has been affected by a “culture of entitlement” at variance with what others think reasonable, the new Archbishop of Canterbury has said.
But the Most Reverend Justin Welby told the BBC business morality was in many ways much better than in the past.
He also defended his description of the UK’s economic situation as a depression rather than a recession.