NEWS,31.01.2013

Income surge releaves US consumers

American income growth surged in December as companies rushed to make dividend payments before higher tax rates set in, while buoyant wage growth also gave a lift to households. US personal income rose 2.6% last month, the biggest increase in eight years, the Commerce Department said on Thursday. While much of the gain was due to special payments aimed at beating tax increases due to begin this month, wages still grew at one of the faster rates seen last year. That should lend support to consumer spending and provide some underlying momentum for the economy despite a surprise contraction in gross domestic product during the fourth quarter."Even abstracting from the one-off surge in dividend payments ... the general tone of this report was quite encouraging," said Millan Mulraine, an economist at TD Securities in New York.The increase in overall personal income was well above analysts' expectations for a 0.8% gain. However, another economic report showed an increase in new jobless claims last week, and US stocks traded lower as investors sifted through the mixed data, while prices for US Treasuries were higher.The big rise in incomes put consumers on stronger footing entering the new year, even if the gains may not have been distributed evenly throughout the workforce. Extra dividend payments likely went to the nation's wealthier households who derive more of their income from investments.Still, wages and salary payments grew 0.6% last month, building on a sizable 0.9% gain in November.The income gains helped push the saving rate, the amount of disposable income households socked away, to 6.5%, the highest since May 2009. That offers a cushion for consumer spending as the temporary boost in incomes from investments unwinds and households deal with higher tax rates that took effect this month.Last month, consumer spending rose a modest 0.2%, which was just below the pace expected by analysts.The Commerce Department report also showed cooling inflation, which could help the US Federal Reserve continue easy-money policies aimed at boosting employment.Prices rose 1.3% in the 12 months through December, down a tenth from the reading in November and well below the Fed's 2% target. A core price reading, which strips out volatile food and energy prices to provide a better sense of inflation trends, was up a tame 1.4% from a year ago. A separate report from the Labour Department showed initial claims for state unemployment benefits increased 38 000 last week to 368 000. However, the increase followed a week where new claims were at their lowest in five years and still pointed to an economy where employers are adding jobs, albeit at a lackluster pace. The four-week moving average for new claims, which provides a better sense of underlying trends, gained 250 to 352 000.A report on Friday is expected to show employers added 160 000 jobs to their payrolls in January after an increase of 155 000 in December. The unemployment rate is seen holding steady at 7.8%.The number of planned layoffs at US firms rose in January from the prior month, but declined from a year earlier, another report showed on Thursday. Employers announced 40 430 job cuts this month, up 24.2% from 32 556 in December, according to the report from consultants Challenger, Gray & Christmas, Inc. Layoffs were down 24.4% from January 2012.

Worldwide tablet sales soar

Worldwide tablet sales jumped in the fourth quarter beyond even some of the most optimistic forecasts to 52.5 million, with Android-powered devices pacing growth, a survey showed on Thursday.The preliminary survey by business research firm IDC showed the tablet market grew 75.3% year over year in the quarter and rocketed 74.3% from the previous quarter's total of 30.1 million.IDC said the strongest growth came from Android, including tablets made by South Korea's Samsung and Taiwan's Asus, which makes a Google-branded Nexus tablet.Apple remained the biggest seller, but its market share was under 50%, IDC said. The survey found that Microsoft, which launched its new Surface tablet in the quarter, failed to break into the top five sellers and shipped a modest 900 000 of the devices in the quarter.Overall, the market's strong gains came from a spate of new product launches, including the iPad mini, and lower prices, which encouraged buyers over the holiday shopping season, IDC said."We expected a very strong fourth quarter, and the market didn't disappoint," said IDC analyst Tom Mainelli."The record-breaking quarter stands in stark contrast to the PC market, which saw shipments decline during the quarter for the first time in more than five years."Apple's iPad held its top position with 22.9 million units shipped. That was up 48% from a year earlier, but lower than overall market growth.As a result, Apple's market share declined for a second quarter in a row to 43.6% from 46.4% in the third quarter.Samsung, the number two vendor, saw year-on-year growth of 263%, selling 7.9 million tablets and grabbing a 15.1% market share.IDC said Amazon, which does not provide its own sales data, delivered some six million tablets in the quarter to retain its spot as the number three vendor.That represented 26.8% growth, giving Amazon a market share of 11.5%, IDC said.Fourth place belonged to Asus, which sold 3.1 million tablets, year-on-year growth of more than 400%. That gave the Taiwan-based firm a 5.8% market share.Barnes & Noble sold one million of its Nook tablets and accounted to 1.9% of the market, the survey found.IDC analyst Ryan Reith said Microsoft will need to shift its strategy to compete better in the tablet market."There is no question that Microsoft is in this tablet race to compete for the long haul," he said, calling the market reaction to Surface "muted.""We believe that Microsoft and its partners need to quickly adjust to the market realities of smaller screens and lower prices. In the long run, consumers may grow to believe that high-end computing tablets with desktop operating systems are worth a higher premium than other tablets, but until then (selling prices) on Windows 8 and Windows RT devices need to come down to drive higher volumes."

Ukraine economy in official recession

 

Kiev Ukraine's economy plunged into recession in the final quarter of 2012 with GDP contracting 2.7%, the second quarter running of negative growth, the statistics office said.Gross domestic product in Ukraine contracted 2.7% in the fourth quarter of 2012 compared with the same period last year. The economy had already shrunk by 1.2% in the third quarter.For the whole of 2012, growth was almost stagnant at 0.2% compared with 5.2% in 2011 and the projection in the budget for growth of 3.9%.Ukraine, which was one of the European states worst hit by the 2009 economic crisis, is hugely vulnerable to the current global slowdown due to its dependence on metals exports.

Bitter taste for German chocolate makers

German antitrust authorities have fined 11 chocolate makers €60m for colluding to rig the price of confectionary.The Federal Cartel Office says the offences committed by companies, including Kraft and Nestle, occurred between 2004 and 2008.The offences include agreeing on how much to increase the price of chocolate bars when the cost of raw materials rose sharply in 2007.The cartel office said in a statement on Thursday that the companies "simply ceased competing with each other and piled the price rises on to consumers".It said that Mars avoided a fine by alerting authorities to the illegal practices.

Nappy hunters bare Norwegian bottoms

Southern Norway is in the midst of a nappy shortage after a supermarket price war lured enterprising bulk shoppers from eastern Europe who have cleaned out the shelves, customs officials and retailers said.Norway is one of the world's most expensive countries. However, supermarkets in the south trying to lure local customers by undercutting rivals on the price of nappies inadvertently made it profitable enough for residents of nearby countries to start trading in them."They buy every last diaper [nappy], I mean everything we have on the shelves, throw it in the back of their car and take them home, where they sell it for a nice profit," says Terje Ragnar Hansen, a regional director for retail chain Rema 1000."It's not stealing and it's not even criminal but it's a big problem, ... they leave nothing for our regular customers.Customers come into Norway from Sweden, drive along the coast to fill their cars, then take a ferry back to the continent, said Helge Breilid, the chief of customs in Kristiansand on Norway's southern coast.Some have been stopped with nappies worth up to $9 100, roughly 80 000 nappies, a legal shipment even though Norway is not part of the European Union. "They told us that the only reason they came to Norway was to drive around and buy nappies to bring back home and resell," Breilid said. "These people mainly come from Poland and Lithuania, and we have no reason to believe that they are part of any criminal gangs."Norwegian nappies cost as little as $5.47 for 50, less than half of the prevailing price in Lithuania. Coincidentally, the internet is heaving with Lithuanian sellers advertising Norwegian nappies.

French civil servants go on strike

French civil servants went on strike on Thursday for better pay in their first mass show of dissent since the Socialist Francois Hollande became president last year.Dozens of street protests were planned across the country as part of the day of action called by three of the several unions which represent France's 5.2 million state workers.The main complaint of the unions relates to the index used to calculate salaries, which has been frozen for three years.Raising the index by one point would cost €800m if applied only to central government workers or €1.8bn if applied to all civil servants, according to the state audit authority.Jean-Marc Canon of the CGT union said the situation was "absolutely catastrophic", and noted that nearly a million civil servants were being paid the minimum wage.The unions are seeking to put pressure on Civil Service Minister Marylise Lebranchu ahead of pay talks next Thursday.She has acknowledged "the difficult situation facing civil servants" but hinted that pay rises were unlikely given the budgetary constraints on the government.The government was due later on Thursday to announce how many civil servants had answered the strike call.

NEWS,05.08.2012

Monti fears Europe could tear apart

Italian Prime Minister Mario Monti has voiced fears that tensions sparked by the eurozone crisis have already turned countries against each other and must not be allowed to rip Europe apart.Asked about resentment in Italy towards Germany and complaints of German arrogance in its handling of the debt crisis, Monti told Monday's edition of the German news magazine Der Spiegel that he was "concerned".He said he had talked about growing resentment in Italy not only towards Germany and at times Chancellor Angela Merkel but also towards the EU and the euro, with Merkel herself, according to an advance copy of Der Spiegel.But he said the problem went far beyond the relationship between Germany and Italy."The pressures, which have accompanied the eurozone in recent years, already bear the traits of a psychological breakup of Europe," Monti said. "We must work hard to contain it."And he warned that if the euro became a reason for Europe to drift apart, "the foundations of the European project" would be destroyed.The Italian prime minister also said he welcomed comments by the European Central Bank last week that the government bond market, where Italy and Spain's borrowing costs have soared, was distorted.The problems behind this, he said, must be quickly resolved to prevent further uncertainty about the ability of the eurozone to deal with the crisis.He also called on government chiefs to maintain clear room for manoeuvre in relation to their national parliaments. "If governments were to let themselves be bound completely by the decisions of their parliaments without maintaining their own scope for negotiation, Europe is more likely to break up than see closer integration," he warned.

Cayman Expat Tax: Haven's Planned Fee Could Damage Country's Economy

 

One among thousands of lawyers, accountants and other workers from around the globe, Paul Fordham is escaping cold weather and the taxman by working in a sunny British territory in the Caribbean. He and many others, however, worry they soon may be looking for another haven.The Cayman Islands have lost some of their allure by proposing what amounts to the territory's first ever income tax. And it would fall only on expatriate workers like Fordham who have helped build the territory into one of the most famous or, for some, notorious offshore banking centers that offer tax advantages for foreign investment operations."The discriminatory nature of the tax has stirred up so much uncertainty for people who moved here thinking they knew what they were getting into," said Fordham, an insurance sector specialist from the London area who moved to the main island of Grand Cayman 6 1/2 years ago. His recent attempt to sell his house collapsed because an interested buyer was spooked by the prospect of the islands' first direct tax.In the seaside capital of George Town, where financial experts in casually elegant clothes unwind over beer or white wine, conversations have been about little else since July 25, when Premier McKeeva Bush declared his intention to impose a 10 percent income tax on expatriate workers as part of an effort to bail the government out of a financial hole.Bush refuses to call it a tax, preferring instead to dub it a "community enhancement fee." The 10 percent payroll levy, as things stands now, will be imposed Sept. 1 on expatriates who earn more than $36,000 a year.It's a monumental shift for the territory of 56,000 people where zero direct taxation, friendly regulations and the global money they lured in recent decades helped transform the economy of the island chain, a dependency of Jamaica until 1959, from a reliance on seafaring, fishing and rope-making.Government data show 91,712 companies were registered as of March 2011. A total of 235 banks, including most of the world's top 50 banks, held licenses at the end of June as did 758 insurance companies. Assets for the registered companies totaled $1.607 trillion last September, down from $1.725 trillion a year earlier.Bush says the tax is necessary to meet British government demands that the territory diversify its sources of revenue beyond the fees and duties it now relies on, that have left his administration with a budget deficit."This is not an us-and-them story, no matter how many screaming headlines call this an expat tax," Bush told a crowd of critics and supporters late Wednesday during a four-hour meeting in a school gym, where each side vented complaints against the other.Opponents argue that a social contract may have been broken by targeting only the roughly 5,875 expatriates who are paid more than $36,000 a year, saying it could drive some away and hurt the financial services and tourism sectors that are now the pillars of the Caymans' economy. Government reports say a majority of the wealthiest residents are Cayman citizens.Numerous competing tax havens, from Jersey to the British Virgin Islands, impose income taxes on workers, but not on one sector of the population. Under a controversial "rollover" immigration policy, expatriates in the Cayman Islands already are required to leave the islands for a year after living and working locally for a period of seven years.Richard Murphy, director of British-based policy consultants Tax Research LLP, thinks fears are overblown that a direct tax on expatriates will cause an exodus."The finance industry in Cayman exists to sell to foreigners, and, like it or not, many are heavily invested in Cayman structures. They'll bear the additional price," Murphy said in an email.But leading businessmen argue that indirect taxes such as work permit fees, stamp duty on real estate deals and duties on imported goods already make the Caymans a relatively pricey place to do business. Work permit fees are typically 5 percent to 15 percent of salary and would remain along with the income tax, raising an expat worker's tax costs to between 20 percent and 30 percent of salary.Anthony Travers, chairman of the Cayman Islands Stock Exchange, described the tax plan as "probably the single greatest existential threat to the Cayman Islands in over 200 years.""The whole economic structure in the Cayman Islands has been based on having no direct taxation," he said in a phone interview.Many people complain that Bush's proposal was made without public consultation and note that it came roughly three years after a government-commissioned report said a payroll tax combined with the work permit fees would make the Caymans less competitive in the market for skilled professionals.And it's not just finance types who are troubled. At a small beach in downtown George Town, local fishermen gutted glistening jacks and snappers debated the merits of the new tax. They agreed that overspending and excessive hiring by the government was behind the islands' financial difficulties."The way I see it, this tax on expats is causing a division in this society and that's not good. It's too much spending by the government that got us here," said fishing boat captain Dennis Downs, sitting next to a table displaying the morning catch.Bush said he is looking for any feasible alternative for solving the government's revenue problems and rumors are swirling that he may withdraw the tax proposal because of the heated reaction.On Saturday, he told local TV station Cayman 27 that he was open to recasting the "community enhancement fee" on expats but only "if a solution can be found that does not affect ordinary Caymanians."Even if it is revoked, some believe damage has already been done."It has stirred up so much uncertainty," said Fordham. "It's hard to say if this place could ever be the same."

Venezuela Presidential Elections: Thumbprint Readers Stir Vote Fairness Fears

 

With President Hugo Chavez in his tightest re-election race yet, some of his opponents are warning that the use of thumbprint readers at Venezuelan ballot boxes could scare away voters, adding to fears about the fairness of the Oct. 7 vote.The country's electoral council has long used fingerprint scanners at the entrance to polling places to ensure voter identification. But this year, the readers will be hooked to the electronic voting machines themselves. Citizens must press down a thumb to activate the ballot system.Many say they fear that could let the government know how each person votes."If the thumbprint makes the machine work, how do you know it doesn't end up being recorded who you voted for?" asked Jacqueline Rivas, a 46-year-old housewife.Experts say there is no evidence the system has ever been used to reveal voters' preferences, and most opposition leaders, who stand to suffer if supporters don't vote, have been eager to assure the system is safe.But worries have persisted. Many Venezuelans say they see a pro-Chavez bias in the National Electoral Council and remember a previous scandal in which the names of Venezuelans who petitioned to recall Chavez in 2004 were publicly leaked. Hundreds of people alleged they were fired or suffered discrimination after their names turned up on the so-called "Tascon List," named after a pro-Chavez lawmaker who released it.Chavez later urged supporters to "bury the list" and put it behind them.Worries about the government obtaining the names of anti-Chavez voters led the opposition to destroy many lists of voters after a February primary, flouting a Supreme Court ruling that the lists should be turned over to the electoral council."A government that has fired people for thinking different, for voting different, that drew up the Tascon List and that puts out thumbprint machines, that puts in people's minds ... makes them fear the thumbprint," said Ramon Muchacho, an opposition politician.Opposition presidential candidate Henrique Capriles and his campaign aides have sought to assuage fears, saying that they are sure voters' choices will remain secret and that no one should cave to any government attempts at intimidation.Others who question the thumbprint readers include the vote watchdog group Sumate. Ricardo Estevez, the group's executive director, said past checks of the system have shown that safeguards are in place to ensure secrecy. "But the problem is the perception," Estevez said.When a voter presses a thumb to the reader, the image is instantly checked against a government database of thumbprints, which are collected when citizens apply for national identification cards.The National Electoral Council has been touting the system in television ads that show a smiling man pressing a thumb onto the screen as a voice assures voters that the automated identification system is a "secure key to vote."Sumate and other critics question how effective the system is, pointing to the statements by election officials that the thumbprint data are incomplete and saying the voter rolls haven't been audited to weed out errors and duplicate registrations.Diego Arria, a Chavez opponent who is a former Venezuelan ambassador to the United Nations, said the thumbprint system won't ensure that each voter casts only one ballot. "But it will work for something, and it's the fundamental aim: to intimidate voters."In addition to public employees who may fear for their jobs, there are also more than 1 million Venezuelans who have given their thumbprints when they applied for public housing, Arria said. "It serves to scare them."Even critics who say they're confident the vote will remain secret worry about the fairness of the election campaign, saying the electoral council tilts in Chavez's favor.Four of the five members of the council are either Chavez allies or perceived as favoring the president. The National Assembly, where Chavez backers have long held a majority, appoints the council members, who include a former congresswoman from Chavez's party and a former minister in his Cabinet. The council's former chief, Jorge Rodriguez, is now Chavez's campaign manager.The council has largely ignored opposition complaints that Chavez is hogging campaign airtime and abusing his presidential authority by regularly forcing all Venezuelan TV and radio stations to interrupt programming for his marathon speeches.Last week, council Vice President Sandra Oblitas accused Capriles of "contempt of the electoral authority" for ignoring council warnings about using a baseball cap with the colors of the national flag. Campaign regulations ban use of the flag's colors in electoral propaganda, but Capriles maintains he has done nothing wrong."In Venezuela, there's no electoral referee. There's a ministry of elections of the regime," Arria said. "When such a sophisticated system is put in their hands, it makes it more dangerous. "Tibisay Lucena, the president of the electoral council since 2006, insists the body is fully independent and defends the country's automated voting system, which also involves manual auditing of paper receipts printed out by the ballot machines."The Venezuelan electoral process is one of the most audited in the world," Lucena told reporters recently. "We have controls that make impossible any attempt to interfere with the public will."Capriles has been trailing in the polls, though the margin has varied widely in surveys. The Venezuelan polling firm Datanalisis found Chavez with a 15-point lead in one June poll, but also said 23 percent were undecided or didn't reveal a preference. The poll had a margin of error of nearly 3 percentage points."Beyond the automated system and other factors, we have no doubt that if we have low abstention and the presence of witnesses in all the voting centers, we're going to win," said Teresa Albanes, who leads the opposition's election commission.

NEWS,10.03.2012.

Sarkozy says will bow out if French don't pick him

French President Nicolas Sarkozy said on Thursday he would fight with everything he has to win a second term but will bow out of politics if he loses an April-May election.Riot police using teargas were sent in to clear a crowd of 200 mostly young protestors in a town ahead of a campaign rally he was due to hold in the central French town of Saint-Just-Saint-Rambert just a few weeks from election day.Sarkozy, who is badly lagging Socialist challenger Francois Hollande in opinion polls six weeks before the first round of voting, said Hollande's lack of ministerial or international experience was a problem at a time of economic turmoil.I worry when I look at the Socialist candidate's programme ... and I worry about this dearth of experience in such a troubled period. But if the French people do not put their faith in me, do you really think I would carry on in politics? The answer is no," Sarkozy told .Hollande widened his lead slightly this week, advancing 2 points to 30 percent support for the April 22 first round, while Sarkozy gained only 1 point to 28 percent.The survey, by pollster CSA, saw Hollande beating Sarkozy by 56 percent to 44 percent in a May 6 runoff."I will fight with all my strength to win your confidence, to protect and lead you and build a strong France, but if that is not your choice I will bow out, that's the way it is, and I will have had a great life in politics," he said.His wife, former model-turned singer Carla Bruni, said Sarkozy had devoted himself entirely to his job and would continue to do so if he won a second term, but if he lost he would have little choice but to change direction."What do you expect him to do after being president of the Republic? Do you want him to go back to being a minister or a mayor?" she told French talkshow "C a Vous", adding that she worried about his health and his long working hours.Sarkozy said on a three-hour televised debate on Tuesday that he was not discouraged by his weak poll scores and that one of his characteristics is that he never gives up.But French media are reporting that his campaign team is starting to worry that Sarkozy's efforts to overcome a widespread dislike of his personal style and anger over three years of economic gloom are not working.A week after protestors pelted his escort with eggs in the southwest of France, Sarkozy's impending arrival in Saint-Just-Saint-Rambert triggered a protest by some 200 youths waving banners with slogans such as "no to the president" or "Sarkozy, you're the security problem".A reporter saw riot police move in to clear the crowd and prevent them nearing the rally location.Campaign spokeswoman Nathalie Kosciusko-Morizet - who was lambasted as out of touch after she was unable to tell a radio presenter the price of a Paris metro ticket - lamented this week that the race had descended into distracting polemic.Sarkozy launched his campaign in mid-February, several weeks after Hollande, and has opted for a strategy of unveiling his ideas - such as a new minimum tax on company profits, making the unemployed sign up to training to get their benefits and holding policy referendums - week by week. After a strong start that saw him trim the gap with Hollande by a few points, he suffered setbacks in his second week, including being jostled by left-wing militants while out on the campaign trail, and has now lost his initial bounce. Meanwhile Hollande has consolidated his lead position after announcing a surprise 75 percent tax rate on annual income above 1 million euros, a move nearly two in three voters support. On Thursday's radio show, Sarkozy proposed a new household fund for women abandoned by fathers of their children, a new renovation programme for city suburbs and said he would cut the number of lawmakers by 10 to 15 percent to trim public spending.Socialist politician Bernard Cazeneuve said the raft of measures smacked of a last-minute panic, and mocked Sarkozy for diverting attention with talk of life after the presidency.

"We don't care what he does if he loses, what we want to know is what he'll do if he's elected," he told.Sarkozy, whose main focus is on structural reform and tighter immigration rules, is expected to give his first real campaign overview at a big campaign rally on Sunday in the Paris suburb of Villepinte.