4:19 PM, 04/10/2010
(Chinhphu.vn) – Lãnh đạo 48 nước dự Hội nghị thượng đỉnh Á-Âu lần thứ 8 (ASEM 8) diễn ra trong hai ngày 4-5/10, tại Brussells (Bỉ) sẽ tập trung vào 2 vấn đề chính là kinh tế và khí hậu.
Trong lĩnh vực kinh tế, các bên sẽ không thảo luận về tỷ giá đồng Nhân dân tệ của Trung Quốc nhưng sẽ tập trung vào các vấn đề: cải tổ hệ thống tiền tệ quốc tế, tài chính, kinh tế và thương mại.
Hội nghị cũng sẽ thảo luận với Trung Quốc về một số điểm gây tranh cãi, như việc đòi Trung Quốc mở rộng thị trường cho các doanh nhân châu Âu và bảo đảm quyền sở hữu trí tuệ.
Bên cạnh đó, EU và nhiều nước đang trỗi dậy tại châu Á cùng theo đuổi một mục đích là mong muốn cải tổ thể thức vận hành của Quỹ Tiền tệ quốc tế (IMF).
Ngày 1/10, Bộ trưởng Tài chính 27 nước EU đã đồng ý cùng đàm phán với các đối tác châu Á để các nền kinh tế đang trỗi dậy có một tiếng nói quan trọng hơn trong Hội đồng Quản trị IMF. Cụ thể là EU sẵn sàng nhường lại 2/9 ghế của châu Âu trong định chế tài chính này cho các nước đang phát triển.
Theo giới phân tích, đề nghị cải tổ nói trên của EU được đưa ra trước khi Hội nghị thượng đỉnh ASEM khai mạc, cho thấy EU đang kỳ vọng dùng biện pháp này để thương lượng và đòi Trung Quốc nâng giá đồng Nhân dân tệ.
Liên quan đến hồ sơ biến đổi khí hậu, trên nguyên tắc, các lãnh đạo hai khối Á-Âu cùng nhấn mạnh đến mục tiêu đạt được một hiệp ước quốc tế với những điều khoản mang tính bó buộc, công bằng và hữu hiệu nhằm giảm bớt lượng khí thải CO2, thủ phạm làm trái đất nóng lên.
Mai Hằng
04/10 Ireland có thể là một “Hy Lạp mới”
5:07 PM, 04/10/2010
(Chinhphu.vn) - Ngân hàng Trung ương Ireland cho biết, gói cứu trợ trị giá 34,3 tỷ Euro, tương đương tổng doanh thu thuế quốc gia trong 1 năm, có thể đẩy thâm hụt ngân sách của Ireland lên mức cao kỷ lục, tới 32% GDP trong năm nay.
Nếu đúng như dự báo nói trên, đây sẽ là mức thâm hụt ngân sách lớn nhất đối với một nước thành viên khu vực đồng tiền chung châu Âu (Eurozone) kể từ khi khu vực này ra đời năm 1999 và khiến giới đầu tư thêm lo lắng về mức độ gia tăng nợ quốc gia của các nền kinh tế thành viên.
Cùng với thâm hụt ngân sách khổng lồ, nợ quốc gia của Ireland có thể tương đương 98,6% GDP năm nay, so với 64% GDP năm 2009.
Bộ trưởng Tài chính nước này Brian Lenihan lo ngại về một "cơn ác mộng" đang đến.
Tình trạng nợ nần đang đẩy kinh tế các nước Eurozone quay trở lại "vùng nguy hiểm" khi Ireland tiết lộ tình trạng thâm hụt ngân sách nói trên. Trong khi đó, Tây Ban Nha bị hạ mức xếp hạng tín dụng (từ AAA xuống Aa1) và một số nước thành viên khác như Pháp và Bồ Đào Nha đua nhau cắt giảm chi tiêu ngân sách, bất chấp những phản ứng dữ dội từ phía người lao động.
Tiết lộ của Ireland cho thấy các khoản nợ chất lên Ngân hàng Trung ương Ireland có thể khiến nước này rơi vào cảnh mất khả năng thanh toán. Thông báo này đồng thời gợi lên nỗi ám ảnh về sự đổ vỡ của hệ thống tài chính tương tự như đã xảy ra ở Hy Lạp hay Iceland, một nền kinh tế nằm ngoài Eurozone.
Tuy nhiên, Chính phủ Ireland vẫn cam kết sẽ cắt giảm thâm hụt xuống dưới mức 3% GDP vào năm 2014. Ông Brian Lenihan cho biết, Chính phủ nước này sẽ nắm quyền kiểm soát phần lớn các ngân hàng thuộc Liên minh các ngân hàng Ireland (Allied Irish Banks) và sẽ “bơm” thêm hàng tỷ Euro cho 2 ngân hàng nhỏ hơn là Anglo Irish và Irish Nationwide.
Ngày 30/9, theo EU, tỷ lệ lạm phát của Eurozone trong tháng 9/2010 có thể đã tăng lên 1,8% so với cùng kỳ 2009.
Nguyễn Chiến
(Chinhphu.vn) - Ngân hàng Trung ương Ireland cho biết, gói cứu trợ trị giá 34,3 tỷ Euro, tương đương tổng doanh thu thuế quốc gia trong 1 năm, có thể đẩy thâm hụt ngân sách của Ireland lên mức cao kỷ lục, tới 32% GDP trong năm nay.
Nếu đúng như dự báo nói trên, đây sẽ là mức thâm hụt ngân sách lớn nhất đối với một nước thành viên khu vực đồng tiền chung châu Âu (Eurozone) kể từ khi khu vực này ra đời năm 1999 và khiến giới đầu tư thêm lo lắng về mức độ gia tăng nợ quốc gia của các nền kinh tế thành viên.
Cùng với thâm hụt ngân sách khổng lồ, nợ quốc gia của Ireland có thể tương đương 98,6% GDP năm nay, so với 64% GDP năm 2009.
Bộ trưởng Tài chính nước này Brian Lenihan lo ngại về một "cơn ác mộng" đang đến.
Tình trạng nợ nần đang đẩy kinh tế các nước Eurozone quay trở lại "vùng nguy hiểm" khi Ireland tiết lộ tình trạng thâm hụt ngân sách nói trên. Trong khi đó, Tây Ban Nha bị hạ mức xếp hạng tín dụng (từ AAA xuống Aa1) và một số nước thành viên khác như Pháp và Bồ Đào Nha đua nhau cắt giảm chi tiêu ngân sách, bất chấp những phản ứng dữ dội từ phía người lao động.
Tiết lộ của Ireland cho thấy các khoản nợ chất lên Ngân hàng Trung ương Ireland có thể khiến nước này rơi vào cảnh mất khả năng thanh toán. Thông báo này đồng thời gợi lên nỗi ám ảnh về sự đổ vỡ của hệ thống tài chính tương tự như đã xảy ra ở Hy Lạp hay Iceland, một nền kinh tế nằm ngoài Eurozone.
Tuy nhiên, Chính phủ Ireland vẫn cam kết sẽ cắt giảm thâm hụt xuống dưới mức 3% GDP vào năm 2014. Ông Brian Lenihan cho biết, Chính phủ nước này sẽ nắm quyền kiểm soát phần lớn các ngân hàng thuộc Liên minh các ngân hàng Ireland (Allied Irish Banks) và sẽ “bơm” thêm hàng tỷ Euro cho 2 ngân hàng nhỏ hơn là Anglo Irish và Irish Nationwide.
Ngày 30/9, theo EU, tỷ lệ lạm phát của Eurozone trong tháng 9/2010 có thể đã tăng lên 1,8% so với cùng kỳ 2009.
Nguyễn Chiến
04/10 Châu Phi- đối tác thương mại lớn thứ 3 của Trung Quốc
4:37 PM, 04/10/2010
(Chinhphu.vn) - Bộ Thương mại Trung Quốc ngày 3/10 cho biết, kim ngạch thương mại hai chiều năm 2010 giữa Trung Quốc với châu Phi sẽ tăng mạnh và có thể vượt ngưỡng 100 tỷ USD.
Trong 6 tháng đầu năm 2010, kim ngạch thương mại hai chiều giữa Trung Quốc và châu Phi đã đạt 61,2 tỷ USD, tăng 65%. Năm 2009, do khủng hoảng kinh tế thế giới, kim ngạch song phương chỉ đạt hơn 91 tỷ USD, giảm 14,7% so với năm 2008 (106,8 tỷ USD), trong khi buôn bán giữa Mỹ với châu Phi đạt 86 tỷ USD vào năm 2009.
Châu Phi giờ trở thành đối tác thương mại lớn thứ 3 của Trung Quốc.
Kể từ năm 2000, Trung Quốc và châu Phi đã thống nhất thiết lập quan hệ hợp tác chiến lược theo nguyên tắc: bình đẳng về chính trị, tin cậy lẫn nhau và hai bên cùng có lợi trong hợp tác kinh tế. Quan hệ kinh tế Trung Quốc - châu Phi hiện nay tập trung vào việc tăng cường đầu tư, thúc đẩy trao đổi thương mại và hợp tác lao động.
Theo Bộ Thương mại Trung Quốc, Chính phủ Trung Quốc đang khuyến khích các doanh nghiệp lớn đầu tư vào châu Phi theo phương châm bình đẳng, cùng có lợi, cùng phát triển.
Hiện nay, có hơn 1.600 doanh nghiệp Trung Quốc đầu tư vào châu Phi trong các lĩnh vực nông nghiệp, khai thác khoáng sản, sản xuất và xây dựng cơ sở hạ tầng. Kể từ tháng 7/2010, Trung Quốc đã thực hiện giảm 60% thuế cho các loại hàng hoá nhập khẩu từ 26 nước kém phát triển nhất của châu Phi.
Linh Đức
(Chinhphu.vn) - Bộ Thương mại Trung Quốc ngày 3/10 cho biết, kim ngạch thương mại hai chiều năm 2010 giữa Trung Quốc với châu Phi sẽ tăng mạnh và có thể vượt ngưỡng 100 tỷ USD.
Trong 6 tháng đầu năm 2010, kim ngạch thương mại hai chiều giữa Trung Quốc và châu Phi đã đạt 61,2 tỷ USD, tăng 65%. Năm 2009, do khủng hoảng kinh tế thế giới, kim ngạch song phương chỉ đạt hơn 91 tỷ USD, giảm 14,7% so với năm 2008 (106,8 tỷ USD), trong khi buôn bán giữa Mỹ với châu Phi đạt 86 tỷ USD vào năm 2009.
Châu Phi giờ trở thành đối tác thương mại lớn thứ 3 của Trung Quốc.
Kể từ năm 2000, Trung Quốc và châu Phi đã thống nhất thiết lập quan hệ hợp tác chiến lược theo nguyên tắc: bình đẳng về chính trị, tin cậy lẫn nhau và hai bên cùng có lợi trong hợp tác kinh tế. Quan hệ kinh tế Trung Quốc - châu Phi hiện nay tập trung vào việc tăng cường đầu tư, thúc đẩy trao đổi thương mại và hợp tác lao động.
Theo Bộ Thương mại Trung Quốc, Chính phủ Trung Quốc đang khuyến khích các doanh nghiệp lớn đầu tư vào châu Phi theo phương châm bình đẳng, cùng có lợi, cùng phát triển.
Hiện nay, có hơn 1.600 doanh nghiệp Trung Quốc đầu tư vào châu Phi trong các lĩnh vực nông nghiệp, khai thác khoáng sản, sản xuất và xây dựng cơ sở hạ tầng. Kể từ tháng 7/2010, Trung Quốc đã thực hiện giảm 60% thuế cho các loại hàng hoá nhập khẩu từ 26 nước kém phát triển nhất của châu Phi.
Linh Đức
04/10 Switzerland Proposes Tougher Rules for Its Biggest Banks
October 4, 2010
By JACK EWING
FRANKFURT — A Swiss government panel Monday proposed rules that would require the nation’s two big banks, UBS and Credit Suisse, to hold more capital in reserve than international competitors as a way to provide extra insurance against a catastrophic failure.
The rules, which require approval by the Swiss parliament, address concerns by the Swiss National Bank and others that a severe crisis at Credit Suisse or UBS could prove more than the nation of 7.8 million people could bear. The two banks’ combined balance sheets are five times the size of the Swiss economy.
“Given their size, it cannot be ruled out that the big Swiss banks are potentially T.B.T.B.R.,” or too big to be rescued, the Commission of Experts said in a report. The commission, which was appointed by the Swiss Federal Council, included representatives of the central bank as well as industry and the two big banks.
Credit Suisse and UBS said in statements that they will be able to meet the requirements, which by the end of 2018 would require them to maintain low-risk reserves equal to 10 percent of their total assets. That is a higher reserve requirement than was proposed for global banks last month by the Basel Committee on Bank Supervision.
Switzerland’s decision to hold its big international banks to a higher standard could alarm some in the industry, who have expressed fear that countries will use the so-called Basel III proposals merely as a starting point to impose onerous new requirements on banks.
With its banking tradition and reputation for prudence, Switzerland could also serve as an influential precedent for other governments which are rewriting their banking rules. However, analysts said that the proposed Swiss rules are not as strict as some in banking circles had feared.
“These are at the better end of expectations and hence should be a positive catalyst for the shares,” Jon Peace, a banking analyst at Nomura Global Equity Research, said in a note Monday.
“The proposed measures will strengthen the stability of the financial system,” Credit Suisse, based in Zurich, said in a statement. “They also represent an appropriate solution to the ‘too big to fail’ problem relating to the big banks without compromising their international competitiveness or that of the Swiss financial center.”
The rules would require the two big Swiss banks to hold so-called common equity, the most durable form of capital, equal to 10 percent of their risk-weighted assets, or assets whose value has been adjusted according to how risky they are. The more reserves a bank has, the more it is able to absorb losses if the value of its holdings declines or its customers cannot repay loans.
The Swiss proposals also set up sliding scales that would automatically increase the reserve requirements for banks as their assets grow or they acquire more market share.
Under the formula, Credit Suisse and UBS would be required to hold another 9 percent in reserves, for a total of 19 percent. But the additional 9 percent could be in the form of so-called contingent convertible bonds: debt that banks issue that automatically converts to equity in time of a crisis, so that it can be used to cushion losses.
Mr. Peace of Nomura noted that it is unclear whether anyone will want to buy such bonds. The 9 percent ratio “is at the high end of market expectations,” he said, “and could be a cause for concern given that such a market does not really exist today.”
The Basel rules would require banks to hold a ratio of 7 percent common equity to risk-weighted assets, up from as little as 2 percent currently.
Both sets of proposals would give banks until the end of 2018 to comply.
However, the Basel rules could wind up being similar to the Swiss rules as they apply to big or highly interconnected institutions, whose failure would threaten the financial system or the economy.
A separate panel known as the Financial Stability Board, which is working in concert with the Basel Committee, is considering stricter rules for such institutions.
The Swiss National Bank already rescued UBS once after the bank lost 46 billion Swiss francs, or $47 billion, from the end of 2007 through 2009. The report Monday noted that the S.N.B. ultimately made a profit of 1.2 billion francs on the support it provided to UBS.
Smaller banks in Switzerland would not have to hold as much capital in reserve as Credit Suisse and UBS.
By JACK EWING
FRANKFURT — A Swiss government panel Monday proposed rules that would require the nation’s two big banks, UBS and Credit Suisse, to hold more capital in reserve than international competitors as a way to provide extra insurance against a catastrophic failure.
The rules, which require approval by the Swiss parliament, address concerns by the Swiss National Bank and others that a severe crisis at Credit Suisse or UBS could prove more than the nation of 7.8 million people could bear. The two banks’ combined balance sheets are five times the size of the Swiss economy.
“Given their size, it cannot be ruled out that the big Swiss banks are potentially T.B.T.B.R.,” or too big to be rescued, the Commission of Experts said in a report. The commission, which was appointed by the Swiss Federal Council, included representatives of the central bank as well as industry and the two big banks.
Credit Suisse and UBS said in statements that they will be able to meet the requirements, which by the end of 2018 would require them to maintain low-risk reserves equal to 10 percent of their total assets. That is a higher reserve requirement than was proposed for global banks last month by the Basel Committee on Bank Supervision.
Switzerland’s decision to hold its big international banks to a higher standard could alarm some in the industry, who have expressed fear that countries will use the so-called Basel III proposals merely as a starting point to impose onerous new requirements on banks.
With its banking tradition and reputation for prudence, Switzerland could also serve as an influential precedent for other governments which are rewriting their banking rules. However, analysts said that the proposed Swiss rules are not as strict as some in banking circles had feared.
“These are at the better end of expectations and hence should be a positive catalyst for the shares,” Jon Peace, a banking analyst at Nomura Global Equity Research, said in a note Monday.
“The proposed measures will strengthen the stability of the financial system,” Credit Suisse, based in Zurich, said in a statement. “They also represent an appropriate solution to the ‘too big to fail’ problem relating to the big banks without compromising their international competitiveness or that of the Swiss financial center.”
The rules would require the two big Swiss banks to hold so-called common equity, the most durable form of capital, equal to 10 percent of their risk-weighted assets, or assets whose value has been adjusted according to how risky they are. The more reserves a bank has, the more it is able to absorb losses if the value of its holdings declines or its customers cannot repay loans.
The Swiss proposals also set up sliding scales that would automatically increase the reserve requirements for banks as their assets grow or they acquire more market share.
Under the formula, Credit Suisse and UBS would be required to hold another 9 percent in reserves, for a total of 19 percent. But the additional 9 percent could be in the form of so-called contingent convertible bonds: debt that banks issue that automatically converts to equity in time of a crisis, so that it can be used to cushion losses.
Mr. Peace of Nomura noted that it is unclear whether anyone will want to buy such bonds. The 9 percent ratio “is at the high end of market expectations,” he said, “and could be a cause for concern given that such a market does not really exist today.”
The Basel rules would require banks to hold a ratio of 7 percent common equity to risk-weighted assets, up from as little as 2 percent currently.
Both sets of proposals would give banks until the end of 2018 to comply.
However, the Basel rules could wind up being similar to the Swiss rules as they apply to big or highly interconnected institutions, whose failure would threaten the financial system or the economy.
A separate panel known as the Financial Stability Board, which is working in concert with the Basel Committee, is considering stricter rules for such institutions.
The Swiss National Bank already rescued UBS once after the bank lost 46 billion Swiss francs, or $47 billion, from the end of 2007 through 2009. The report Monday noted that the S.N.B. ultimately made a profit of 1.2 billion francs on the support it provided to UBS.
Smaller banks in Switzerland would not have to hold as much capital in reserve as Credit Suisse and UBS.
03/10 Frustrations Aside, Indians Bask in Opening of Games
October 3, 2010
By HEATHER TIMMONS and HARI KUMAR
NEW DELHI — In sharp contrast to the run-up to the Commonwealth Games, the opening ceremony started on time Sunday night and appeared to be meticulously planned, with a throbbing musical number that included hundreds of intricately costumed drummers, the world’s largest helium balloon and enormous dancing puppets.
A crowd of about 60,000, ranging from Indian families to Prime Minister Manmohan Singh and Prince Charles and his wife, Camilla, packed Jawaharlal Nehru Stadium in central Delhi. Audience members danced in their seats; the applause was spontaneous and enthusiastic.
“This opening is as good as it can be anywhere,” said Anil Chandel, 41, an executive. “It is spectacular.”
The exuberant ceremony was a welcome change from preparations for the games, which were notable for missed deadlines, accusations of corruption, filthy living quarters for athletes and the collapse of a footbridge that injured more than two dozen people.
As the audience filed into the stadium, many seemed to be hoping for the best, but worried about the worst.
“I will keep my fingers crossed,” said Harjeet Kandhari, 41, a garment business executive with his wife and two daughters. “Let us see how this all proceeds.”
India had promised a world-class spectacle when it won the bid in 2003 to host the quadrennial competition, but until Sunday there was little reason to believe anything close to that would occur. The budget for the games has ballooned to at least $2.8 billion from an estimated $210 million, and delays and problems were so endemic that some of the 71 teams attending threatened to pull out.
“This is much better than I expected,” said Manish Jain, a 38-year-old exporter. “With all the talks of mismanagement earlier, at least you do not see that today.”
However, Indian sports fans’ frustration with their government was on display. When the Indian official in charge of the games, Suresh Kalmadi, rose to give a speech, a prolonged chorus of boos rolled through the stadium. “India is ready, ready to host the Commonwealth Games,” Mr. Kalmadi said.
But in several cases “barely ready” would have been more apt. The new metro rail station outside Jawaharlal Nehru Stadium, the main site for the games, opened on Sunday. On Friday night, workers were still putting finishing touches on other facilities, including unpacking and positioning hurdles for track events.
Several top-ranked athletes — citing injuries, scheduling problems or security concerns — pulled out in advance of the competition, which begins Monday with archery and badminton. There was speculation, though, that the problem-plagued preparations could have been a factor in their decisions.
The athletes’ village had its first case of dengue fever, The Associated Press reported Sunday. But the victim, a member of India’s lawn bowling team, has been in New Delhi since March and may have gotten it from outside the village, a hospital spokesman said. Dengue had been a concern for Indian officials, partly because the quarters were built near a breeding ground for the mosquitoes that spread the disease.
Security has been in full force in New Delhi in recent days, with an estimated 100,000 police officers as well as officers from the military and private security agencies, spread around the city. Snipers were positioned on the stadium roof during the opening ceremony, and patrons had been advised to arrive two hours early so they could be searched for a long list of prohibited items, including food, umbrellas and loose change.
Some major roads have been closed and regular bus service throughout the normally traffic-choked city has been reduced to cut down on gridlock during the games, leaving many working-class people at the mercy of rickshaw drivers, who have doubled their rates.
Sunday’s audience, for the most part, seemed willing to wait until then to focus on the scores of delays and difficulties leading up to the opening ceremony.
“All the other issues of corruption and delays we can take care later,” said Dr. Vinay Aggarwal, 54, who was attending with his son. “Now I only want that the games should be a success.”
By HEATHER TIMMONS and HARI KUMAR
NEW DELHI — In sharp contrast to the run-up to the Commonwealth Games, the opening ceremony started on time Sunday night and appeared to be meticulously planned, with a throbbing musical number that included hundreds of intricately costumed drummers, the world’s largest helium balloon and enormous dancing puppets.
A crowd of about 60,000, ranging from Indian families to Prime Minister Manmohan Singh and Prince Charles and his wife, Camilla, packed Jawaharlal Nehru Stadium in central Delhi. Audience members danced in their seats; the applause was spontaneous and enthusiastic.
“This opening is as good as it can be anywhere,” said Anil Chandel, 41, an executive. “It is spectacular.”
The exuberant ceremony was a welcome change from preparations for the games, which were notable for missed deadlines, accusations of corruption, filthy living quarters for athletes and the collapse of a footbridge that injured more than two dozen people.
As the audience filed into the stadium, many seemed to be hoping for the best, but worried about the worst.
“I will keep my fingers crossed,” said Harjeet Kandhari, 41, a garment business executive with his wife and two daughters. “Let us see how this all proceeds.”
India had promised a world-class spectacle when it won the bid in 2003 to host the quadrennial competition, but until Sunday there was little reason to believe anything close to that would occur. The budget for the games has ballooned to at least $2.8 billion from an estimated $210 million, and delays and problems were so endemic that some of the 71 teams attending threatened to pull out.
“This is much better than I expected,” said Manish Jain, a 38-year-old exporter. “With all the talks of mismanagement earlier, at least you do not see that today.”
However, Indian sports fans’ frustration with their government was on display. When the Indian official in charge of the games, Suresh Kalmadi, rose to give a speech, a prolonged chorus of boos rolled through the stadium. “India is ready, ready to host the Commonwealth Games,” Mr. Kalmadi said.
But in several cases “barely ready” would have been more apt. The new metro rail station outside Jawaharlal Nehru Stadium, the main site for the games, opened on Sunday. On Friday night, workers were still putting finishing touches on other facilities, including unpacking and positioning hurdles for track events.
Several top-ranked athletes — citing injuries, scheduling problems or security concerns — pulled out in advance of the competition, which begins Monday with archery and badminton. There was speculation, though, that the problem-plagued preparations could have been a factor in their decisions.
The athletes’ village had its first case of dengue fever, The Associated Press reported Sunday. But the victim, a member of India’s lawn bowling team, has been in New Delhi since March and may have gotten it from outside the village, a hospital spokesman said. Dengue had been a concern for Indian officials, partly because the quarters were built near a breeding ground for the mosquitoes that spread the disease.
Security has been in full force in New Delhi in recent days, with an estimated 100,000 police officers as well as officers from the military and private security agencies, spread around the city. Snipers were positioned on the stadium roof during the opening ceremony, and patrons had been advised to arrive two hours early so they could be searched for a long list of prohibited items, including food, umbrellas and loose change.
Some major roads have been closed and regular bus service throughout the normally traffic-choked city has been reduced to cut down on gridlock during the games, leaving many working-class people at the mercy of rickshaw drivers, who have doubled their rates.
Sunday’s audience, for the most part, seemed willing to wait until then to focus on the scores of delays and difficulties leading up to the opening ceremony.
“All the other issues of corruption and delays we can take care later,” said Dr. Vinay Aggarwal, 54, who was attending with his son. “Now I only want that the games should be a success.”
03/10 Lehman Omnipresent in Nomura’s Push Into U.S.
October 3, 2010
By GRAHAM BOWLEY
The discreet sign by the door does not say Lehman Brothers. But step inside: a bit of Lehman lives on here in Manhattan.
Two years after Lehman’s collapse, hundreds of former Lehman employees are working together again at the Wall Street headquarters of Nomura, the Japanese brokerage giant.
The Lehmanization of this tradition-bound Japanese bank is startling. The head of investment banking came from Lehman. So did the chief risk officer, who held a similar post at Lehman. The top global economist, the co-heads of fixed income, senior salesmen, traders — the list goes on.
The arrivals are part of one of the most aggressive — and potentially most risky — expansions under way on Wall Street. Nomura, a heavyweight in Japan, is a perennial also-ran in the United States. But in the wake of the financial collapse, its executives sense an opening.
Rivals scoff at the idea that Nomura can break into the big leagues here. Nomura tried in the 1980s, and again in the 1990s and 2000s.
“The Japanese banks have always wanted to come here for the prestige,” said Edward Lincoln, director of the Center for Japan-U.S. Business and Economic Studies at New York University. “This is the place you have got to be, but they have never made much headway.”
And yet at a time when giants of American finance have begun to cut back again, Nomura is hiring. Today it employs 1,900 people inside the World Financial Center in Lower Manhattan and its eight other offices in the United States and Canada. That is up from 650 two years ago.
Nomura bought Lehman’s international operations in September 2008, swelling its global work force by more than 8,000 in Europe and Asia.
In the United States, Lehman’s investment banking and capital markets operations, and 10,000 Lehman workers, were swallowed by Barclays, the British bank. Not all stayed on there, however. After the merger, Barclays laid off 3,000 employees, many from Lehman, who scattered across Wall Street.
Since then, Nomura has become something of a Wall Street melting pot: everyone, it seems, came from someplace else.
But for the people in the Lehman diaspora who have coalesced here, the new Nomura feels like a homecoming.
“Coming here meant reuniting with many of my former colleagues from Lehman,” said Michael P. Guarnieri, who spent 12 years at Lehman before joining Nomura last year as global head of bond research.
Still, skeptics like Mr. Lincoln see a culture clash coming. They wonder if Nomura will be willing — or able — to offer the big paydays that many American bankers have come to expect.
Naoki Matsuba, the president and chief executive of Nomura’s American operations, is confident that this time his bank will succeed. “This is a once in a lifetime opportunity,” he said.
Mr. Matsuba represents the will of Nomura’s ambitious president and chief executive back in Tokyo, Kenichi Watanabe. Mr. Matsuba said that in the wake of the financial collapse, companies and investors would think twice about their bankers.
“We believe that the landscape will change in a tough market,” he said.
From Mr. Matsuba’s glass-fronted end-office on the sixth floor, you can see bankers from all over Wall Street — from Bear Stearns, Bank of America, Deutsche Bank, Barclays, Citibank, Goldman Sachs.
Lehman was a strong bond house, and many of the former Lehman people at Nomura are on the fixed income side, whereas the new staff on the equities side of the firm come more from all over Wall Street.
A former Bank of America executive, Ciaran O’Kelly, a wiry Irishman, is running Nomura’s expanded equities operations. David Steck, from Deutsche Bank, heads foreign exchange.
Yet of the roughly 1,000 new workers, about 250 arrived from Lehman Brothers. Among them are people like Jeffrey Michaels and Charles Spero, the joint heads of Nomura’s fixed income division, where the head count has risen to 360 people, from 60.
“We have the advantage of growing while many other banks are shrinking,” Mr. Michaels said.
“It is a good position to be in.”
Some of the new employees are refugees from the shake-up since the financial crisis and seem glad to still have a job. They acknowledge that taking business from the established Wall Street firms is going to be hard.
Others, however, are stars poached from rivals.
Nomura is making much of its recent hiring of one of Wall Street’s best brokerage analysts, from UBS, as well as a widely respected media industry analyst, from Sanford C. Bernstein.
It is also beefing up its investment banking business, run by the former Lehman banker Glenn H. Schiffman. The staff count in investment banking has rocketed to about 100, from 12 at the start of the year.
Last month, Nomura hired five new members in its natural resources investment banking team, in addition to four investment bankers on its media team, including three with backgrounds at Lehman.
The chatter on Wall Street is that, despite the Japanese reluctance to pay big salaries, scores of new hires are being lured by hefty amounts, including some on generous two-year guaranteed contracts. Nomura executives deny they are paying above the market rate.
In February Nomura raised $3 billion on international debt markets, its first United States public bond sale, to back its push in the United States and globally. In another sign of its ambition, after giving up its license in November 2007, last year it once again became a primary dealer in the Treasury bond market.
It still has a long way to go: Nomura ranks 17th in United States-marketed bond underwriting so far this year, compared with 25th in 2009, according to Dealogic.
It is even further down the league tables, at 35th, in mergers and acquisition advice.
But it is taking some strides forward: its newly assembled fixed income analysts team was ranked seventh for 2010 in a closely watched Institutional Investor survey, the first time Nomura has even been ranked.
And so, for the moment, this Japanese bank has a bit of Wall Street swagger.
“As a new entrant and a challenger in the U.S. marketplace, competitors are not always aware of Nomura,” Mr. O’Kelly said. “This will change.”
Susanne Craig and Peter Lattman contributed reporting.
By GRAHAM BOWLEY
The discreet sign by the door does not say Lehman Brothers. But step inside: a bit of Lehman lives on here in Manhattan.
Two years after Lehman’s collapse, hundreds of former Lehman employees are working together again at the Wall Street headquarters of Nomura, the Japanese brokerage giant.
The Lehmanization of this tradition-bound Japanese bank is startling. The head of investment banking came from Lehman. So did the chief risk officer, who held a similar post at Lehman. The top global economist, the co-heads of fixed income, senior salesmen, traders — the list goes on.
The arrivals are part of one of the most aggressive — and potentially most risky — expansions under way on Wall Street. Nomura, a heavyweight in Japan, is a perennial also-ran in the United States. But in the wake of the financial collapse, its executives sense an opening.
Rivals scoff at the idea that Nomura can break into the big leagues here. Nomura tried in the 1980s, and again in the 1990s and 2000s.
“The Japanese banks have always wanted to come here for the prestige,” said Edward Lincoln, director of the Center for Japan-U.S. Business and Economic Studies at New York University. “This is the place you have got to be, but they have never made much headway.”
And yet at a time when giants of American finance have begun to cut back again, Nomura is hiring. Today it employs 1,900 people inside the World Financial Center in Lower Manhattan and its eight other offices in the United States and Canada. That is up from 650 two years ago.
Nomura bought Lehman’s international operations in September 2008, swelling its global work force by more than 8,000 in Europe and Asia.
In the United States, Lehman’s investment banking and capital markets operations, and 10,000 Lehman workers, were swallowed by Barclays, the British bank. Not all stayed on there, however. After the merger, Barclays laid off 3,000 employees, many from Lehman, who scattered across Wall Street.
Since then, Nomura has become something of a Wall Street melting pot: everyone, it seems, came from someplace else.
But for the people in the Lehman diaspora who have coalesced here, the new Nomura feels like a homecoming.
“Coming here meant reuniting with many of my former colleagues from Lehman,” said Michael P. Guarnieri, who spent 12 years at Lehman before joining Nomura last year as global head of bond research.
Still, skeptics like Mr. Lincoln see a culture clash coming. They wonder if Nomura will be willing — or able — to offer the big paydays that many American bankers have come to expect.
Naoki Matsuba, the president and chief executive of Nomura’s American operations, is confident that this time his bank will succeed. “This is a once in a lifetime opportunity,” he said.
Mr. Matsuba represents the will of Nomura’s ambitious president and chief executive back in Tokyo, Kenichi Watanabe. Mr. Matsuba said that in the wake of the financial collapse, companies and investors would think twice about their bankers.
“We believe that the landscape will change in a tough market,” he said.
From Mr. Matsuba’s glass-fronted end-office on the sixth floor, you can see bankers from all over Wall Street — from Bear Stearns, Bank of America, Deutsche Bank, Barclays, Citibank, Goldman Sachs.
Lehman was a strong bond house, and many of the former Lehman people at Nomura are on the fixed income side, whereas the new staff on the equities side of the firm come more from all over Wall Street.
A former Bank of America executive, Ciaran O’Kelly, a wiry Irishman, is running Nomura’s expanded equities operations. David Steck, from Deutsche Bank, heads foreign exchange.
Yet of the roughly 1,000 new workers, about 250 arrived from Lehman Brothers. Among them are people like Jeffrey Michaels and Charles Spero, the joint heads of Nomura’s fixed income division, where the head count has risen to 360 people, from 60.
“We have the advantage of growing while many other banks are shrinking,” Mr. Michaels said.
“It is a good position to be in.”
Some of the new employees are refugees from the shake-up since the financial crisis and seem glad to still have a job. They acknowledge that taking business from the established Wall Street firms is going to be hard.
Others, however, are stars poached from rivals.
Nomura is making much of its recent hiring of one of Wall Street’s best brokerage analysts, from UBS, as well as a widely respected media industry analyst, from Sanford C. Bernstein.
It is also beefing up its investment banking business, run by the former Lehman banker Glenn H. Schiffman. The staff count in investment banking has rocketed to about 100, from 12 at the start of the year.
Last month, Nomura hired five new members in its natural resources investment banking team, in addition to four investment bankers on its media team, including three with backgrounds at Lehman.
The chatter on Wall Street is that, despite the Japanese reluctance to pay big salaries, scores of new hires are being lured by hefty amounts, including some on generous two-year guaranteed contracts. Nomura executives deny they are paying above the market rate.
In February Nomura raised $3 billion on international debt markets, its first United States public bond sale, to back its push in the United States and globally. In another sign of its ambition, after giving up its license in November 2007, last year it once again became a primary dealer in the Treasury bond market.
It still has a long way to go: Nomura ranks 17th in United States-marketed bond underwriting so far this year, compared with 25th in 2009, according to Dealogic.
It is even further down the league tables, at 35th, in mergers and acquisition advice.
But it is taking some strides forward: its newly assembled fixed income analysts team was ranked seventh for 2010 in a closely watched Institutional Investor survey, the first time Nomura has even been ranked.
And so, for the moment, this Japanese bank has a bit of Wall Street swagger.
“As a new entrant and a challenger in the U.S. marketplace, competitors are not always aware of Nomura,” Mr. O’Kelly said. “This will change.”
Susanne Craig and Peter Lattman contributed reporting.
03/10 Runoff Will Decide the Presidency of Brazil
October 3, 2010
By ALEXEI BARRIONUEVO
SÃO PAULO, Brazil — Dilma Rousseff was leading late Sunday in her bid to be Brazil’s first female president, but election officials said she had failed to come up with enough votes to avoid a second round.
With about 99.6 percent of the votes counted, Ms. Rousseff, the former chief of staff of President Luiz Inácio Lula da Silva, had 46.8 percent of the votes to 32.6 percent for her closest rival, the former governor of São Paulo, José Serra. Ms. Rousseff needs to exceed 50 percent of the vote total to win outright.
With Ms. Rousseff coming up short, the election will now be decided with an Oct. 31 runoff. Ms. Rousseff was denied her victory by a strong showing by a third candidate, Marina Silva, the Green Party candidate and a former environmental minister, who captured more than 19 percent.
Analysts expressed little doubt that Ms. Rousseff, 62, would prevail in a second round against Mr. Serra. Despite her lack of political experience and public charm, she has ridden a wave of prosperity and good feeling in Brazil under the leadership of Mr. da Silva, whose approval ratings hover near 80 percent.
After two four-year terms, Mr. da Silva is barred by Brazil’s Constitution from running for a third consecutive term — although he could run again in four years.
If elected, Ms. Rousseff will join a wave of elected female leaders breaking the gender barrier in the past five years, including Michelle Bachelet of Chile, Cristina Fernández de Kirchner of Argentina and Germany’s chancellor, Angela Merkel.
Ms. Rousseff, who was active in armed militant organizations fighting the dictatorship in the 1960s, is considered a competent administrator but is lacking in the kind of seductive charisma that helped make Mr. da Silva so popular. A former union leader with a fourth-grade education, Mr. da Silva’s dirt-poor background resonated with many Brazilians, especially in the northeast and among an emerging lower-middle class he helped create.
Some analysts and foreign investors have expressed concern that Ms. Rousseff’s leftist background could cause her to steer the country left and give the state more control over the economy.
The daughter of a Brazilian mother and a Bulgarian immigrant father, Ms. Rousseff grew up middle class in the Brazilian city of Belo Horizonte.
In an interview last year, Ms. Rousseff denied having participated in an armed action against the government, including the most celebrated incident tied to her, a 1969 armed robbery of the safe of São Paulo’s governor.
She was captured and imprisoned in 1970 for crimes of “opinion and organization.” She ended up spending three years behind bars; she said that she was tortured repeatedly with electro-shocks and that her head was forcibly dunked under water.
Shortly after Mr. da Silva was elected in 2002, he named her minister of mines and energy. Then, after a vote-buying scandal involving his previous chief of staff, José Dirceu, who was forced to resign, Mr. da Silva put her in charge of the cabinet in 2005.
As chief of staff, she handled a multibillion-dollar infrastructure development fund, and, separately, she served as chairwoman of Petrobras, the giant Brazilian oil company.
Mr. da Silva spent the better part of a year introducing Ms. Rousseff to Brazilians and giving her some credit for his accomplishments. Her treatment for lymphatic cancer caused some concern last year over whether she would continue as the Workers’ Party candidate. But the president stuck with her, campaigning vigorously for her and managing to make the election essentially a referendum on his years in office.
“I am voting for Dilma to continue what Lula began,” Wagner Campos, a 27-year-old supermarket manager, said Sunday after voting in the center of São Paulo. “Dilma’s story and her struggles inspire me and Brazil.”
Ms. Rousseff also managed to maintain most of her lead over Mr. Serra despite a scandal last month involving Erenice Guerra, the woman that succeeded her as chief of staff, who was accused along with Ms. Guerra’s son of being involved in influence-peddling. Ms. Guerra, while denying the accusations, resigned under pressure from the president a few days after the scandal broke.
Both Ms. Rousseff and Mr. Serra have vowed to continue the economic formula that has allowed Brazil to rise into a bigger global power during the past decade. That includes the subsidy programs for the poor that have been greatly expanded under Mr. da Silva to more than 12 million people.
Ms. Rousseff has promised to create millions of jobs and housing units, and to “dramatically” reduce Brazil’s interest rates, which are among the highest in the world. She also said she would greatly expand the number of health care centers and adapt a program to forcibly oust drug lords from Rio de Janeiro slums for use in other cities. During the campaign, she defended alliances Mr. da Silva forged with Iran and Venezuela, despite criticism from the United States about those leaders’ democratic values.
Mr. Serra tried to publicize his superior political experience during the campaign. He said he would more than double the number of metro rail miles across 13 cities; promised to create a ministry of public security to better combat organized crime and drug trafficking; and said he would pressure Bolivia to crack down on drug cartels that are sending cocaine across Brazil’s border.
Myrna Domit contributed reporting.
By ALEXEI BARRIONUEVO
SÃO PAULO, Brazil — Dilma Rousseff was leading late Sunday in her bid to be Brazil’s first female president, but election officials said she had failed to come up with enough votes to avoid a second round.
With about 99.6 percent of the votes counted, Ms. Rousseff, the former chief of staff of President Luiz Inácio Lula da Silva, had 46.8 percent of the votes to 32.6 percent for her closest rival, the former governor of São Paulo, José Serra. Ms. Rousseff needs to exceed 50 percent of the vote total to win outright.
With Ms. Rousseff coming up short, the election will now be decided with an Oct. 31 runoff. Ms. Rousseff was denied her victory by a strong showing by a third candidate, Marina Silva, the Green Party candidate and a former environmental minister, who captured more than 19 percent.
Analysts expressed little doubt that Ms. Rousseff, 62, would prevail in a second round against Mr. Serra. Despite her lack of political experience and public charm, she has ridden a wave of prosperity and good feeling in Brazil under the leadership of Mr. da Silva, whose approval ratings hover near 80 percent.
After two four-year terms, Mr. da Silva is barred by Brazil’s Constitution from running for a third consecutive term — although he could run again in four years.
If elected, Ms. Rousseff will join a wave of elected female leaders breaking the gender barrier in the past five years, including Michelle Bachelet of Chile, Cristina Fernández de Kirchner of Argentina and Germany’s chancellor, Angela Merkel.
Ms. Rousseff, who was active in armed militant organizations fighting the dictatorship in the 1960s, is considered a competent administrator but is lacking in the kind of seductive charisma that helped make Mr. da Silva so popular. A former union leader with a fourth-grade education, Mr. da Silva’s dirt-poor background resonated with many Brazilians, especially in the northeast and among an emerging lower-middle class he helped create.
Some analysts and foreign investors have expressed concern that Ms. Rousseff’s leftist background could cause her to steer the country left and give the state more control over the economy.
The daughter of a Brazilian mother and a Bulgarian immigrant father, Ms. Rousseff grew up middle class in the Brazilian city of Belo Horizonte.
In an interview last year, Ms. Rousseff denied having participated in an armed action against the government, including the most celebrated incident tied to her, a 1969 armed robbery of the safe of São Paulo’s governor.
She was captured and imprisoned in 1970 for crimes of “opinion and organization.” She ended up spending three years behind bars; she said that she was tortured repeatedly with electro-shocks and that her head was forcibly dunked under water.
Shortly after Mr. da Silva was elected in 2002, he named her minister of mines and energy. Then, after a vote-buying scandal involving his previous chief of staff, José Dirceu, who was forced to resign, Mr. da Silva put her in charge of the cabinet in 2005.
As chief of staff, she handled a multibillion-dollar infrastructure development fund, and, separately, she served as chairwoman of Petrobras, the giant Brazilian oil company.
Mr. da Silva spent the better part of a year introducing Ms. Rousseff to Brazilians and giving her some credit for his accomplishments. Her treatment for lymphatic cancer caused some concern last year over whether she would continue as the Workers’ Party candidate. But the president stuck with her, campaigning vigorously for her and managing to make the election essentially a referendum on his years in office.
“I am voting for Dilma to continue what Lula began,” Wagner Campos, a 27-year-old supermarket manager, said Sunday after voting in the center of São Paulo. “Dilma’s story and her struggles inspire me and Brazil.”
Ms. Rousseff also managed to maintain most of her lead over Mr. Serra despite a scandal last month involving Erenice Guerra, the woman that succeeded her as chief of staff, who was accused along with Ms. Guerra’s son of being involved in influence-peddling. Ms. Guerra, while denying the accusations, resigned under pressure from the president a few days after the scandal broke.
Both Ms. Rousseff and Mr. Serra have vowed to continue the economic formula that has allowed Brazil to rise into a bigger global power during the past decade. That includes the subsidy programs for the poor that have been greatly expanded under Mr. da Silva to more than 12 million people.
Ms. Rousseff has promised to create millions of jobs and housing units, and to “dramatically” reduce Brazil’s interest rates, which are among the highest in the world. She also said she would greatly expand the number of health care centers and adapt a program to forcibly oust drug lords from Rio de Janeiro slums for use in other cities. During the campaign, she defended alliances Mr. da Silva forged with Iran and Venezuela, despite criticism from the United States about those leaders’ democratic values.
Mr. Serra tried to publicize his superior political experience during the campaign. He said he would more than double the number of metro rail miles across 13 cities; promised to create a ministry of public security to better combat organized crime and drug trafficking; and said he would pressure Bolivia to crack down on drug cartels that are sending cocaine across Brazil’s border.
Myrna Domit contributed reporting.
30.09 A Message for China
NYT Editorial
September 30, 2010
China and President Obama have a lot to think about after the House voted, overwhelmingly, on Wednesday to give the Obama administration expanded authority to impose tariffs on nearly all Chinese imports.
Protectionist impulses run far too strong on Capitol Hill, especially in an election year. But China’s aggressive undervaluation of its currency is providing a hugely unfair boost to its exports — hurting some American exports, but doing a lot more damage to others and hindering the recovery around the world.
If the House vote grabs Beijing’s attention, that would be a good thing. We are skeptical that punitive tariffs are the answer. They wouldn’t provide all that much redress to American companies because at this point, except for steel and a few other products, most of the things Americans buy from China: TVs, refrigerators, toys — are no longer made here.
As for whether tariffs would change Beijing’s thinking, we fear there is at least an equal chance that China will lash back. A trade war would be disastrous for bilateral relations, complicating efforts to contain nuclear programs in Iran and North Korea, and disastrous for the world economy.
A more effective strategy would be to muster the support of the many other countries whose manufacturing industries have been mauled. China needs to hear and see that its currency policy is a global problem that is undermining the global influence it so clearly desires.
So far, Beijing has used its clout as a major foreign investor and the world’s biggest importer of raw materials to mollify or intimidate its potential critics. The Obama administration needs to be at least as determined in its efforts to persuade others to finally speak up.
A lot of that can and should be done with behind-the-scenes diplomacy. There is also an important public part to be played. One of the best venues to get the message across — to Beijing and other world capitals — is at the World Trade Organization. China, which relies so heavily on exports, keeps an especially close watch there.
Last month, Washington filed two W.T.O. cases against China for duties it slapped on American steel and its discrimination against American suppliers of electronic payment services. It would be unlikely to win a case on China’s currency manipulation (which the World Trade Organization does not define as illegal). A broad challenge against China’s illegal trade practices, including providing subsidized energy and cheap credit to its exporters, could help embolden others to put forth their own complaints.
This strategy also carries the risk of retaliation. But the United States can’t be paralyzed, and moving with others should lessen that threat. A few other countries are already speaking out. Japan has begun criticizing China’s currency policies. Brazil’s finance minister complained earlier this week about the “international currency war” set off by the manipulation of China’s currency, the renminbi.
As the vote in the House loomed, Beijing defiantly slapped steep tariffs on poultry from the United States. On the day of the vote, Foreign Ministry officials warned of potentially dire consequences to bilateral trade relations, and China’s central bank let the renminbi fall a little. Still, over the last three weeks, the bank allowed the currency to rise about 1.5 percent against the dollar, roughly three times as much as it appreciated in the previous three months.
Hours before the House vote, China’s central bank issued a statement pledging to “increase currency flexibility,” and “gradually improve the exchange rate setting mechanism.” Beijing has made these promises before. Which is why the United States and other countries need to push harder, together.
September 30, 2010
China and President Obama have a lot to think about after the House voted, overwhelmingly, on Wednesday to give the Obama administration expanded authority to impose tariffs on nearly all Chinese imports.
Protectionist impulses run far too strong on Capitol Hill, especially in an election year. But China’s aggressive undervaluation of its currency is providing a hugely unfair boost to its exports — hurting some American exports, but doing a lot more damage to others and hindering the recovery around the world.
If the House vote grabs Beijing’s attention, that would be a good thing. We are skeptical that punitive tariffs are the answer. They wouldn’t provide all that much redress to American companies because at this point, except for steel and a few other products, most of the things Americans buy from China: TVs, refrigerators, toys — are no longer made here.
As for whether tariffs would change Beijing’s thinking, we fear there is at least an equal chance that China will lash back. A trade war would be disastrous for bilateral relations, complicating efforts to contain nuclear programs in Iran and North Korea, and disastrous for the world economy.
A more effective strategy would be to muster the support of the many other countries whose manufacturing industries have been mauled. China needs to hear and see that its currency policy is a global problem that is undermining the global influence it so clearly desires.
So far, Beijing has used its clout as a major foreign investor and the world’s biggest importer of raw materials to mollify or intimidate its potential critics. The Obama administration needs to be at least as determined in its efforts to persuade others to finally speak up.
A lot of that can and should be done with behind-the-scenes diplomacy. There is also an important public part to be played. One of the best venues to get the message across — to Beijing and other world capitals — is at the World Trade Organization. China, which relies so heavily on exports, keeps an especially close watch there.
Last month, Washington filed two W.T.O. cases against China for duties it slapped on American steel and its discrimination against American suppliers of electronic payment services. It would be unlikely to win a case on China’s currency manipulation (which the World Trade Organization does not define as illegal). A broad challenge against China’s illegal trade practices, including providing subsidized energy and cheap credit to its exporters, could help embolden others to put forth their own complaints.
This strategy also carries the risk of retaliation. But the United States can’t be paralyzed, and moving with others should lessen that threat. A few other countries are already speaking out. Japan has begun criticizing China’s currency policies. Brazil’s finance minister complained earlier this week about the “international currency war” set off by the manipulation of China’s currency, the renminbi.
As the vote in the House loomed, Beijing defiantly slapped steep tariffs on poultry from the United States. On the day of the vote, Foreign Ministry officials warned of potentially dire consequences to bilateral trade relations, and China’s central bank let the renminbi fall a little. Still, over the last three weeks, the bank allowed the currency to rise about 1.5 percent against the dollar, roughly three times as much as it appreciated in the previous three months.
Hours before the House vote, China’s central bank issued a statement pledging to “increase currency flexibility,” and “gradually improve the exchange rate setting mechanism.” Beijing has made these promises before. Which is why the United States and other countries need to push harder, together.
03/10 More Countries Adopt China’s Tactics on Currency
October 3, 2010
By DAVID E. SANGER and MICHAEL WINES
WASHINGTON — As the Obama administration escalates its battle with Chinese leaders over the artificially low value of China’s currency, a growing number of countries are retreating from some free-market rules that have guided international trade in recent decades and have started playing by Chinese rules.
Japan and Brazil have taken measures recently to devalue their currencies, or at least prevent them from appreciating further against the Chinese currency, the renminbi. The House of Representatives last week overwhelmingly passed the first legislation to allow the United States to slap huge tariffs on Chinese goods unless China allows the renminbi to appreciate, another mechanism for making Chinese goods more expensive here and American exports more competitive in China.
In Europe, policy makers have begun to fret that, despite the debt crisis that sent investors fleeing just a few months ago, the euro has now risen sharply again against the dollar, potentially weakening exports by making European goods more expensive. Those exports have been one of Europe’s few sources of growth, and President Nicolas Sarkozy of France, who will take over leadership of the Group of 20 biggest economies, said over the weekend that he was pushing for a new system of coordinating global currencies as wealthy nations did in the 1970s, before a free market orthodoxy took hold.
It is unclear if the result will be a “currency war,” as Brazil’s finance minister recently warned, or if these are just warning shots, fired to force Beijing’s leadership to make good on years of promises that it would allow the value of its currency to appreciate.
But that question is so in the air that Treasury Secretary Timothy F. Geithner felt compelled last week to try to dampen the fear. “We’re not going to have a trade war,” he said at a forum sponsored by The Atlantic. “We’re not going to have currency wars.” He acknowledged that the only way to break the cycle was for a country “to decide it is in its own interest to allow its currency to appreciate in response to market forces,” and he said he believed that a “substantial fraction of the Chinese leadership” now understands the need to allow the currency to rise in value.
But it is unclear how far the Chinese are willing to go, since a more expensive currency means more expensive exports and a possible loss of jobs. “It’s a tradeoff for the Chinese leadership,” said one senior United States official who has talked at length to China’s top officials. “They are under pressure from governors and mayors who fear unemployment in China’s manufacturing territory, exactly what we are struggling with.”
But the fact remains that the rest of the world is beginning to mimic the technique China has perfected: manipulating currencies for national advantage, while resisting political pressure from trading partners.
Some economists argue that the standoff over China’s currency could herald a new era of protectionism reminiscent of the 1920s and ’30s, which they say they fear could undermine trade and make a weak recovery even weaker. But others argue that it was the free-market consensus of the 1980s and ’90s that weakened American competitiveness and was exploited by rising powers like China, calling for a more assertive policy to protect jobs, increase exports and keep industry at home.
“Everyone’s playing beggar-thy-neighbor games, willingly or unwillingly,” Michael Pettis, a Peking University professor and economist at the Carnegie Endowment for International Peace, said in an interview. “This is very similar to what happened in the ’30s, when the collapse in Europe’s ability to finance itself also meant a collapse in its trade deficit, and the world rushed around trying to find a new equilibrium in which every country tried to grab a larger share of the dwindling global demand.”
Of course, many countries have manipulated their currencies before — the United States reached a political accord with Japan in the Reagan administration to do exactly that, in an effort to reduce a yawning trade deficit. And for decades, despite global rules prohibiting the practice, countries have sought to help their industries by providing subsidies to companies, as Europe did for years with Airbus, its competitor to Boeing.
But many around the world fear getting trampled as the United States and the Chinese battle each other. Japan intervened in the currency markets recently for the first time in six years, after accusing China of driving the yen up to a 15-year high, in part by buying Japanese debt. But it was a short-term move, many Japanese experts fear. “Japan is in a sense losing out in this competitive devaluation war” through inaction, said Kazuo Ueda, a professor of finance at the University of Tokyo, and a former member of the policy board of Japan’s central bank.
Brazil took similar action and vowed last week to take whatever action it needs to prevent its currency from appreciating. Its finance minister, Guido Mantega, said in an interview that the actions by developed countries, including the United States, to keep interest rates at record lows, one way of devaluing a currency, was a “strategy from the past” that was threatening the economy of Brazil and other “dynamic” emerging markets.
“This is a kind of desperate action taken by countries to try to activate their economies,” Mr. Mantega said. “Since they have not been able to activate their own internal markets, the way out becomes exports. So developed countries work on devaluing their currency in order to become competitive in the few dynamic markets in the world.” Most Western governments, and many economists, place the blame for currency frictions on China, which has refused to let the renminbi trade at anywhere near its real value. Moreover, China has subsidized its exports with artificially low interest rates that shift money from consumers’ bank deposits into cheap loans to businesses.
These tactics are nothing new, especially among the emerging economies of Asia. But experts say the sheer size of the Chinese economy means that its currency policies have global effects.
Not surprisingly, the Chinese see the problem differently. The Chinese press is filled with articles arguing that Americans do not appreciate China’s efforts on their behalf. While other nations’ currencies devalued against the dollar in the 2008 financial crisis, some economists note, the renminbi did not. And while Chinese exports may be artificially cheap, the effect has been to give American shoppers bargains at the expense of Chinese consumers.
“Nobody thinks about that,” Shen Minggao, the chief China economist for Citibank, said in a telephone interview from Hong Kong. “Should China think about the welfare of Chinese consumers, not U.S. consumers?”
China could solve much of the problem by shifting to an economy driven by domestic consumption instead of profits from exports. And in principle, Chinese experts agree.
But China’s progress toward that goal has been glacial. Since June, when the government said it would move the renminbi closer to its real value, the currency has gained about 1 percent. Most experts say the real value is 15 percent to 20 percent higher.
A variety of economic and political factors limit China’s flexibility, said Li Daokui, who directs Tsinghua University’s Center for China in the World Economy. Dr. Li sits on the government’s Monetary Policy Committee, which advises China’s central bank, and stressed he was not speaking for the government. If China lets its renminbi gain value too quickly, he said, that could make exports too expensive and collapse an entire sector of the economy. That would spike unemployment and risk social unrest, which Chinese leaders are committed to avoiding.
Dr. Li said that a “mild appreciation” of the renminbi was needed, but that ordinary Chinese need to be prepared for even that small step. Otherwise, he said, “it’s counterproductive, because many people believe there’s a conspiracy to keep the Chinese economy from growing.”
David E. Sanger reported from Washington, and Michael Wines from Beijing. Alexei Barrionuevo contributed reporting from São Paulo, Brazil, Steven Erlanger from Paris, and Martin Fackler from Tokyo.
By DAVID E. SANGER and MICHAEL WINES
WASHINGTON — As the Obama administration escalates its battle with Chinese leaders over the artificially low value of China’s currency, a growing number of countries are retreating from some free-market rules that have guided international trade in recent decades and have started playing by Chinese rules.
Japan and Brazil have taken measures recently to devalue their currencies, or at least prevent them from appreciating further against the Chinese currency, the renminbi. The House of Representatives last week overwhelmingly passed the first legislation to allow the United States to slap huge tariffs on Chinese goods unless China allows the renminbi to appreciate, another mechanism for making Chinese goods more expensive here and American exports more competitive in China.
In Europe, policy makers have begun to fret that, despite the debt crisis that sent investors fleeing just a few months ago, the euro has now risen sharply again against the dollar, potentially weakening exports by making European goods more expensive. Those exports have been one of Europe’s few sources of growth, and President Nicolas Sarkozy of France, who will take over leadership of the Group of 20 biggest economies, said over the weekend that he was pushing for a new system of coordinating global currencies as wealthy nations did in the 1970s, before a free market orthodoxy took hold.
It is unclear if the result will be a “currency war,” as Brazil’s finance minister recently warned, or if these are just warning shots, fired to force Beijing’s leadership to make good on years of promises that it would allow the value of its currency to appreciate.
But that question is so in the air that Treasury Secretary Timothy F. Geithner felt compelled last week to try to dampen the fear. “We’re not going to have a trade war,” he said at a forum sponsored by The Atlantic. “We’re not going to have currency wars.” He acknowledged that the only way to break the cycle was for a country “to decide it is in its own interest to allow its currency to appreciate in response to market forces,” and he said he believed that a “substantial fraction of the Chinese leadership” now understands the need to allow the currency to rise in value.
But it is unclear how far the Chinese are willing to go, since a more expensive currency means more expensive exports and a possible loss of jobs. “It’s a tradeoff for the Chinese leadership,” said one senior United States official who has talked at length to China’s top officials. “They are under pressure from governors and mayors who fear unemployment in China’s manufacturing territory, exactly what we are struggling with.”
But the fact remains that the rest of the world is beginning to mimic the technique China has perfected: manipulating currencies for national advantage, while resisting political pressure from trading partners.
Some economists argue that the standoff over China’s currency could herald a new era of protectionism reminiscent of the 1920s and ’30s, which they say they fear could undermine trade and make a weak recovery even weaker. But others argue that it was the free-market consensus of the 1980s and ’90s that weakened American competitiveness and was exploited by rising powers like China, calling for a more assertive policy to protect jobs, increase exports and keep industry at home.
“Everyone’s playing beggar-thy-neighbor games, willingly or unwillingly,” Michael Pettis, a Peking University professor and economist at the Carnegie Endowment for International Peace, said in an interview. “This is very similar to what happened in the ’30s, when the collapse in Europe’s ability to finance itself also meant a collapse in its trade deficit, and the world rushed around trying to find a new equilibrium in which every country tried to grab a larger share of the dwindling global demand.”
Of course, many countries have manipulated their currencies before — the United States reached a political accord with Japan in the Reagan administration to do exactly that, in an effort to reduce a yawning trade deficit. And for decades, despite global rules prohibiting the practice, countries have sought to help their industries by providing subsidies to companies, as Europe did for years with Airbus, its competitor to Boeing.
But many around the world fear getting trampled as the United States and the Chinese battle each other. Japan intervened in the currency markets recently for the first time in six years, after accusing China of driving the yen up to a 15-year high, in part by buying Japanese debt. But it was a short-term move, many Japanese experts fear. “Japan is in a sense losing out in this competitive devaluation war” through inaction, said Kazuo Ueda, a professor of finance at the University of Tokyo, and a former member of the policy board of Japan’s central bank.
Brazil took similar action and vowed last week to take whatever action it needs to prevent its currency from appreciating. Its finance minister, Guido Mantega, said in an interview that the actions by developed countries, including the United States, to keep interest rates at record lows, one way of devaluing a currency, was a “strategy from the past” that was threatening the economy of Brazil and other “dynamic” emerging markets.
“This is a kind of desperate action taken by countries to try to activate their economies,” Mr. Mantega said. “Since they have not been able to activate their own internal markets, the way out becomes exports. So developed countries work on devaluing their currency in order to become competitive in the few dynamic markets in the world.” Most Western governments, and many economists, place the blame for currency frictions on China, which has refused to let the renminbi trade at anywhere near its real value. Moreover, China has subsidized its exports with artificially low interest rates that shift money from consumers’ bank deposits into cheap loans to businesses.
These tactics are nothing new, especially among the emerging economies of Asia. But experts say the sheer size of the Chinese economy means that its currency policies have global effects.
Not surprisingly, the Chinese see the problem differently. The Chinese press is filled with articles arguing that Americans do not appreciate China’s efforts on their behalf. While other nations’ currencies devalued against the dollar in the 2008 financial crisis, some economists note, the renminbi did not. And while Chinese exports may be artificially cheap, the effect has been to give American shoppers bargains at the expense of Chinese consumers.
“Nobody thinks about that,” Shen Minggao, the chief China economist for Citibank, said in a telephone interview from Hong Kong. “Should China think about the welfare of Chinese consumers, not U.S. consumers?”
China could solve much of the problem by shifting to an economy driven by domestic consumption instead of profits from exports. And in principle, Chinese experts agree.
But China’s progress toward that goal has been glacial. Since June, when the government said it would move the renminbi closer to its real value, the currency has gained about 1 percent. Most experts say the real value is 15 percent to 20 percent higher.
A variety of economic and political factors limit China’s flexibility, said Li Daokui, who directs Tsinghua University’s Center for China in the World Economy. Dr. Li sits on the government’s Monetary Policy Committee, which advises China’s central bank, and stressed he was not speaking for the government. If China lets its renminbi gain value too quickly, he said, that could make exports too expensive and collapse an entire sector of the economy. That would spike unemployment and risk social unrest, which Chinese leaders are committed to avoiding.
Dr. Li said that a “mild appreciation” of the renminbi was needed, but that ordinary Chinese need to be prepared for even that small step. Otherwise, he said, “it’s counterproductive, because many people believe there’s a conspiracy to keep the Chinese economy from growing.”
David E. Sanger reported from Washington, and Michael Wines from Beijing. Alexei Barrionuevo contributed reporting from São Paulo, Brazil, Steven Erlanger from Paris, and Martin Fackler from Tokyo.
NYT: 03/10 Fear and Favor by Paul Krugman
October 3, 2010
By PAUL KRUGMAN
A note to Tea Party activists: This is not the movie you think it is. You probably imagine that you’re starring in “The Birth of a Nation,” but you’re actually just extras in a remake of “Citizen Kane.”
True, there have been some changes in the plot. In the original, Kane tried to buy high political office for himself. In the new version, he just puts politicians on his payroll.
I mean that literally. As Politico recently pointed out, every major contender for the 2012 Republican presidential nomination who isn’t currently holding office and isn’t named Mitt Romney is now a paid contributor to Fox News. Now, media moguls have often promoted the careers and campaigns of politicians they believe will serve their interests. But directly cutting checks to political favorites takes it to a whole new level of blatancy.
Arguably, this shouldn’t be surprising. Modern American conservatism is, in large part, a movement shaped by billionaires and their bank accounts, and assured paychecks for the ideologically loyal are an important part of the system. Scientists willing to deny the existence of man-made climate change, economists willing to declare that tax cuts for the rich are essential to growth, strategic thinkers willing to provide rationales for wars of choice, lawyers willing to provide defenses of torture, all can count on support from a network of organizations that may seem independent on the surface but are largely financed by a handful of ultrawealthy families.
And these organizations have long provided havens for conservative political figures not currently in office. Thus when Senator Rick Santorum was defeated in 2006, he got a new job as head of the America’s Enemies program at the Ethics and Public Policy Center, a think tank that has received funding from the usual sources: the Koch brothers, the Coors family, and so on.
Now Mr. Santorum is one of those paid Fox contributors contemplating a presidential run. What’s the difference?
Well, for one thing, Fox News seems to have decided that it no longer needs to maintain even the pretense of being nonpartisan.
Nobody who was paying attention has ever doubted that Fox is, in reality, a part of the Republican political machine; but the network — with its Orwellian slogan, “fair and balanced” — has always denied the obvious. Officially, it still does. But by hiring those G.O.P. candidates, while at the same time making million-dollar contributions to the Republican Governors Association and the rabidly anti-Obama United States Chamber of Commerce, Rupert Murdoch’s News Corporation, which owns Fox, is signaling that it no longer feels the need to make any effort to keep up appearances.
Something else has changed, too: increasingly, Fox News has gone from merely supporting Republican candidates to anointing them. Christine O’Donnell, the upset winner of the G.O.P. Senate primary in Delaware, is often described as the Tea Party candidate, but given the publicity the network gave her, she could equally well be described as the Fox News candidate. Anyway, there’s not much difference: the Tea Party movement owes much of its rise to enthusiastic Fox coverage.
As the Republican political analyst David Frum put it, “Republicans originally thought that Fox worked for us, and now we are discovering we work for Fox” — literally, in the case of all those non-Mitt-Romney presidential hopefuls. It was days later, by the way, that Mr. Frum was fired by the American Enterprise Institute. Conservatives criticize Fox at their peril.
So the Ministry of Propaganda has, in effect, seized control of the Politburo. What are the implications?
Perhaps the most important thing to realize is that when billionaires put their might behind “grass roots” right-wing action, it’s not just about ideology: it’s also about business. What the Koch brothers have bought with their huge political outlays is, above all, freedom to pollute. What Mr. Murdoch is acquiring with his expanded political role is the kind of influence that lets his media empire make its own rules.
Thus in Britain, a reporter at one of Mr. Murdoch’s papers, News of the World, was caught hacking into the voice mail of prominent citizens, including members of the royal family. But Scotland Yard showed little interest in getting to the bottom of the story. Now the editor who ran the paper when the hacking was taking place is chief of communications for the Conservative government — and that government is talking about slashing the budget of the BBC, which competes with the News Corporation.
So think of those paychecks to Sarah Palin and others as smart investments. After all, if you’re a media mogul, it’s always good to have friends in high places. And the most reliable friends are the ones who know they owe it all to you.
By PAUL KRUGMAN
A note to Tea Party activists: This is not the movie you think it is. You probably imagine that you’re starring in “The Birth of a Nation,” but you’re actually just extras in a remake of “Citizen Kane.”
True, there have been some changes in the plot. In the original, Kane tried to buy high political office for himself. In the new version, he just puts politicians on his payroll.
I mean that literally. As Politico recently pointed out, every major contender for the 2012 Republican presidential nomination who isn’t currently holding office and isn’t named Mitt Romney is now a paid contributor to Fox News. Now, media moguls have often promoted the careers and campaigns of politicians they believe will serve their interests. But directly cutting checks to political favorites takes it to a whole new level of blatancy.
Arguably, this shouldn’t be surprising. Modern American conservatism is, in large part, a movement shaped by billionaires and their bank accounts, and assured paychecks for the ideologically loyal are an important part of the system. Scientists willing to deny the existence of man-made climate change, economists willing to declare that tax cuts for the rich are essential to growth, strategic thinkers willing to provide rationales for wars of choice, lawyers willing to provide defenses of torture, all can count on support from a network of organizations that may seem independent on the surface but are largely financed by a handful of ultrawealthy families.
And these organizations have long provided havens for conservative political figures not currently in office. Thus when Senator Rick Santorum was defeated in 2006, he got a new job as head of the America’s Enemies program at the Ethics and Public Policy Center, a think tank that has received funding from the usual sources: the Koch brothers, the Coors family, and so on.
Now Mr. Santorum is one of those paid Fox contributors contemplating a presidential run. What’s the difference?
Well, for one thing, Fox News seems to have decided that it no longer needs to maintain even the pretense of being nonpartisan.
Nobody who was paying attention has ever doubted that Fox is, in reality, a part of the Republican political machine; but the network — with its Orwellian slogan, “fair and balanced” — has always denied the obvious. Officially, it still does. But by hiring those G.O.P. candidates, while at the same time making million-dollar contributions to the Republican Governors Association and the rabidly anti-Obama United States Chamber of Commerce, Rupert Murdoch’s News Corporation, which owns Fox, is signaling that it no longer feels the need to make any effort to keep up appearances.
Something else has changed, too: increasingly, Fox News has gone from merely supporting Republican candidates to anointing them. Christine O’Donnell, the upset winner of the G.O.P. Senate primary in Delaware, is often described as the Tea Party candidate, but given the publicity the network gave her, she could equally well be described as the Fox News candidate. Anyway, there’s not much difference: the Tea Party movement owes much of its rise to enthusiastic Fox coverage.
As the Republican political analyst David Frum put it, “Republicans originally thought that Fox worked for us, and now we are discovering we work for Fox” — literally, in the case of all those non-Mitt-Romney presidential hopefuls. It was days later, by the way, that Mr. Frum was fired by the American Enterprise Institute. Conservatives criticize Fox at their peril.
So the Ministry of Propaganda has, in effect, seized control of the Politburo. What are the implications?
Perhaps the most important thing to realize is that when billionaires put their might behind “grass roots” right-wing action, it’s not just about ideology: it’s also about business. What the Koch brothers have bought with their huge political outlays is, above all, freedom to pollute. What Mr. Murdoch is acquiring with his expanded political role is the kind of influence that lets his media empire make its own rules.
Thus in Britain, a reporter at one of Mr. Murdoch’s papers, News of the World, was caught hacking into the voice mail of prominent citizens, including members of the royal family. But Scotland Yard showed little interest in getting to the bottom of the story. Now the editor who ran the paper when the hacking was taking place is chief of communications for the Conservative government — and that government is talking about slashing the budget of the BBC, which competes with the News Corporation.
So think of those paychecks to Sarah Palin and others as smart investments. After all, if you’re a media mogul, it’s always good to have friends in high places. And the most reliable friends are the ones who know they owe it all to you.
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