Latin America prepares for economic downturn
Washington, DC, United States (AHN) – Latin American finance ministers are trying to shield their countries from disaster amid predictions U.S. government budget cutbacks could hurt the region’s economies.
Economic ministers from the 11-nation Unasur organization met last week in Buenos Aires, Argentina, to discuss defensive strategies. They are working on an agreement that would create a roughly $12 billion emergency fund to bail out collapsing economies.
They also seek to reduce their dependence on the U.S. dollar for international trade and to develop policies to balance their trade deficits.
Unasur consists of Brazil, Colombia, Bolivia, Chile, Ecuador, Guyana, Paraguay, Peru, Surinam, Uruguay and Venezuela.
So far, Latin America’s economy has avoided the worst of the economic collapses in the United States and Europe that began in 2008 with a stock market collapse and recession. A brief drop in commodities prices along with government spending programs that shored up declining industries helped them avoid the worst of the crisis. However, economists predict the resilience of Latin American economies will not last much longer.
South American economies grew at an average of 6.6 percent last year, according to the International Monetary Fund.The Fund’s economists predict growth will slow to 4.7 percent this year and 4.1 percent in 2012.
By comparison, U.S. economic growth this year is running at 2 percent. Some European countries are showing no growth.
Stock markets in Latin American countries fell as much as 15 percent last week on news the credit rating service Standard & Poor’s downgraded the U.S. credit rating to double-A plus from triple-A.
Augusto de la Torre, the World Bank’s chief economist for Latin America and the Caribbean, said this week the outlook for Latin America is uncertain as concerns grow about another crisis for the United States and Europe.
China could be the next to falter as Western markets dry up for their manufactured products, he said.
“If China has a hard landing, that will hit us hard,” de la Torre told the Peruvian news media during an economic meeting.
Unasur leaders are exploring options to increase trade with China as its Western markets for manufactured products fizzle.
Protecting the economy is a major campaign issue in Argentina, where current president Cristina Fernandez won a landslide victory in primary elections this week.
She said at a press conference after the primaries that keeping Argentina’s economy strong would be a top priority for her if she is re-elected in October.
Low-income persons are most likely to be hurt by U.S. budget cuts that could reverberate around the world, including Argentina, she said.
Wall Street economists warn that her policies of price controls and using central bank reserves to pay debts could backfire for South America’s third largest economy.
The policies strengthen government control but depress market forces that help to balance the economy, according to some economists.
Argentina’s inflation rate is running close to 25 percent.
Other economic concerns are arising in Brazil, where inexpensive imported products are hurting the domestic manufacturing industry.
Chile and Peru still have stable economies as investors try to protect their assets by purchasing gold and copper, but economists predict declines in the precious metals market.
A decrease in demand for oil is depressing the economies of Venezuela and Mexico.
View full post on Foreign Exchange Market Stories
Gulf Becomes Fault Line for Sunni –Shiite Tensions
Riyadh, Saudi Arabia (TML) – Being a Saudi soccer fan is no fun these days. The reason has little to do with the players’ sportsmanship, but with the abuses fans have been forced to put up with in recent matches in Iran. “Death to Saudi Arabia,” shouted the Iranian fans during a game between the Iranian club of Piroozi and the Saudi club of Al-Ittihad May 3, as they tried to burn a Saudi flag.
On both sides of the Gulf – a body of water whose name is even a source of contention with a debate on whether it should be the Persian or Arab Gulf – tensions have risen both in the corridors of power and on the street. But rather than being defined as a struggle over national interests, both sides are determined to cast in religious terms – another chapter in a thousand-year-old contest between the Sunni and Shiite branches if Islam. And, unlike in the past, both sides are ready to talk about it openly, thereby fanning the flames.
“Arab Gulf countries have been concerned about Iran’s hegemonic plans for some time, but as a result of the Bahrain situation some of that fear has come to the fore in openly hostile rhetoric,” Salman Sheikh, director of the Brookings Doha Center, a Qatar-based think tank, told The Media Line.
The war of words in the Gulf is filled with risk for the West. The region contains the world’s biggest reserves of oil and Iran is believed by the U.S. and Europe to be developing nuclear weapons to enhance its power. The U.S. has troops in Iraq and the U.S. Navy Fifth Fleet is based in Bahrain.
The issue that enraged the Iranian fans was Bahrain, a tiny island kingdom situated just off the eastern coast of Saudi Arabia – a potential tinderbox where Sunni and Shiites live side by side in a country adjacent to some of the world’s biggest oil fields.
With an estimated 70% Shiite majority, but ruled by the Sunni Al-Khalifah dynasty, unrest erupted in the kingdom in February. The protestors demand political reforms and an end to discrimination, but in the eyes of the government and Sunni minority the rioters quickly revealed their sectarian nature.
Blaming Iran for sparking the unrest, King Hamed Al Khalifah, summoned Saudi and United Arab Emirates forces to quell the uprising in March, enraging Shiite Iran and failing to end the sectarian dispute. Dialogue between government and opposition broke down, and on May 17 seven Shiite parliament members from the Al-Wefaq party tendered their resignation, joining eleven Shiite colleagues who left parliament in March.
But the violence on the Iranian soccer court only expressed what many Gulf Arabs regard as Iran’s deep-seeded animosity to Arab culture. And now Arabs across the Gulf are starting to fight back.
Sectarian tensions have even spilled over into places like Kuwait, which traditionally enjoyed good inter-communal relations.
Three Kuwaiti Sunni Islamist lawmakers petitioned last month to question Prime Minister Sheikh Nasser Al-Sabah, barely two weeks into the tenure of his new government. A local version of a non-confidence vote, the question was titled “the damage caused to Kuwait’s national security as a result of his government’s foreign policy alignment with the Iranian regime.”
The move followed a visit by Iranian Foreign Minister Ali Akbar Salehi to Kuwait on May 18. Salehi was trying to calm Kuwaitis after an alleged Iranian spy chain was exposed in Kuwait. Two Iranians and a Kuwaiti were sentenced to death for forming the cell, reportedly associated with Iran’s Revolutionary Guards. Senior Iranian diplomats, including the ambassador, were banished from Kuwait.
“Loyalty to Arab land … is the common denominator defining the identity of the Gulf Arab, in spite of those who do not call it ‘the Arab Gulf’,” wrote Abd Al-Latif Al-Atiqi in an editorial in the Kuwaiti daily Al-Qabs on May 23, referring to the age-old dispute between Iran and the Arab world on the correct name for ‘the Gulf’.
“I have lived in Iran for 40 days and I speak some Persian. When watching a play in Teheran I witnessed all too well their deep hatred for everything Arab. I will not forget it my entire life,” Al-Atiqi wrote.
Sheikh warned that the failure to politically resolve the social unrest in Bahrain could lead to an open confrontation between Iran and Arab Gulf states.
“I’m worried that if the situation isn’t handled carefully, it could spin out of control,” Sheikh said, adding that even military confrontation could be imminent – stimulated by a host of unresolved political issues. Among those are a territorial dispute between the United Arab Emirates (UAE) and Iran over the tiny Gulf Islands of Abu-Mousa, Greater Tunb and Lesser Tunb, which were allegedly illegally occupied by Iran in November 1971.
The political body spearheading the fight against what it dubs “Iranian expansionism” is the Gulf Cooperation Council (GCC). Established in 1981 by six Gulf countries: Kuwait, Bahrain, Saudi Arabia. Qatar, UAE and Oman, the GCC set out to contain the increasing Iranian influence in the Arab Gulf both economically and militarily. The Peninsula Shield Force, led by Saudi Arabia and deployed in Bahrain in March to quash Shiite-led anti government protests, was the GCC’s first tour de force in years.
GCC foreign ministers, traditionally cautious about arousing the Arab-Iranian tension, have broken their silence on Iran in recent months. In early March they condemned Iran’s “blatant” interference in Kuwait’s affairs after the spy chain was revealed. In April, the GCC condemned Iran again, saying the Iranian actions “aimed at destabilizing national security and spreading division and sectarian strife in GCC countries.”
Abdullah Al-Shayji, head of the political science department at Kuwait University, says Kuwaitis were growing increasingly wary of Iranian ambitions in the Gulf.
“We are in the midst of a cold war with Iran,” he says.
“There is widespread belief among many Kuwaitis that Iran is causing a lot of mischief in the area,” Al-Shayji told The Media Line. “It has supported the Syrian regime in its repression of its own people, as well as many non-state actors.”
Al-Shayji noted that the GCC foreign ministers have met four times recently to discuss Iran, using harsher language than ever before. But he says the cold war with Iran was unlikely to deteriorate into a full-fledged military conflict.
“The Iranians are smart, they won’t directly fight but rather continue to use their proxies in the region,” Al-Shayji says.
However, the Arab Gulf is investing a whopping $120 billion in military purchases, including advanced fighter planes and anti-missile defence systems over the coming years, indicating that military engagement with Iran is a very real scenario.
 
View full post on All Stories
Wheat prices realign after Ensus confirms shutdown
London wheat prices regroup after Europe’s top wheat ethanol plant confirms Agrimoney.com’s report that it is to close temporarily
View full post on Commodities Stories
Wealth of worlds’ millionaires calculated to rise to $202 trillion by 2020
New York, NY, United States (AHN) – Financial analysts from service company Deloitte say the total wealth among millionaire households could more than double over the next decade in 25 major economies. Their wealth now calculated at nearly $92 trillion could rise to a staggering $202 trillion in 2020.
According to the study, the United States and Europe will continue to have the greatest concentrations of wealth, despite emerging markets closing in. The findings also highlight that numerous opportunities for growth in local markets across the country still remain.
“We wanted to go beyond some existing wealth management statistics by looking both into the future and across the globe to forecast how wealth among millionaire households might evolve,” says Andrew Freeman, executive director of the Deloitte Center for Financial Services. “Identifying and understanding how different market segments are changing can help formulate growth strategies.”
Freeman adds, “Which countries may offer the most promising future and how wealth managers can potentially increase profitability in the next decade are important questions for a wide range of financial institutions.”
Some of the other findings in the report include China continuing to be the driving force in the growth of millionaire wealth, followed by Brazil and Russia. Of the 25 countries examined in this study, China and South Korea will join the top 10 countries in terms of the total number of millionaires by 2020.
Millionaire households in the U.S. could reach $87 trillion in 2020, up from $39 trillion in 2011.
Among the forecasts for each of the 50 U.S. states, California is expected to remain the state with the wealthiest households, while New Jersey will continue to have the greatest density of millionaire households. The East Coast could see the highest growth rates with New York and Florida adding 1.5 million new millionaire households by 2020.
View full post on All Stories
HSBC suspends retail banking in Russia
Moscow, Russian Federation (AHN) – Hong Kong and Shanghai Banking Corporation pulled out of retail banking in Russia. HSBC said it will focus on making available global lending services to industrial and corporation clients.
With the announcement, HSBC will close five retail units in Moscow and St. Petersburg.
Husein Ozkaya, manager of HSBC’s Russian operations, said Europe’s largest bank decided to stop retail banking after a review revealed that corporate banking offered it the strongest opportunity in the country.
With the announcement, HSBC became the latest foreign bank to leave retail banking in Russia after another leading British bank Barclays also pulled out recently from Russia as the retail banking sector becomes dominated by local banks.
Only one in four Russians have a bank account, making Russia one of the lowest banking penetration rates. But the potential yield is vast because of the country’s population of 142 million which resulted in the retail banking business doubling in size every two years prior to the 2008 financial crisis.
Barclays paid in 2008 $560 million (GBP 373 million) for Expobank, which was six times the book value to be able to offer retail banking services in Russia. But after barely two years, Barclays sought a buyer for its retail business in Russia and instead decided to focus on investment banking.
Banco Santander of Spain is also leaving retail banking in Russia.
The foreign banks attracted depositors with new services such as Internet banking, linked investment accounts and online bill payments. It helped foreign banks that Russians had a distrust of their own financial institutions due to a series of scandals and ruble devaluations, which wiped out savings of Russians in the 1990s.
But the anticipated decline of Russian state banks’ share of the retail market did not take place because of a matching of similar services by Sherbank – a former Soviet retail bank – to those offered by foreign banks. To further attract local depositors, Sberbank emphasized that it is a state-backed institution, while many western banks were on the brink of collapse.
HSBC advised account holders to close their accounts by June 30, while their credit cards could no longer be used after May 31. To help clients move their savings to other banks, HSBC said it would waive fees for cash withdrawals and outbound transfers.
View full post on All Stories
Cheap freight, behind unusual crop deals, to stay
The low shipping costs which have helped take US corn to China and, potentially, Australian wheat to Europe, look set to stick around
View full post on Commodities Stories
Investors push crude oil prices to 2.5-year highs
Washington, DC, United States (AHN) – Traders pushed oil prices to highs not seen in more than two years, in part because the weaker dollar makes oil cheaper for investors using other currencies.
The possibility of a government shutdown has pushed the dollar down to its lowest value in trading against other currencies since 2009.
Oil is priced in and purchased with dollars in global markets.
On the New York Mercantile Exchange, light sweet crude for May delivery rose $1.10, or 1 percent, to $111.40 a barrel.
On the ICE futures exchange, Brent crude rose by $1.84, or 1.5 percent, to $124.50 a barrel.
Both sweet crude and Brent oil in trading earlier in the day reached levels not seen since September 2008. Light sweet crude reached $111.90 per barrel in intraday trading while Brent crude reached $124.84.
Even before crude oil prices reached two-and-a-half-year highs on Friday, International Monetary Fund officials earlier in the week said that high oil prices were here to stay. Oil prices have risen 12.5 percent over the past decade.
High gas prices are pushing down consumer demand in the U.S. and Europe while China is trying to dampen consumer demand there. However, other things are driving oil prices, including scarcity of supply to meet growth in demand from increased automobile ownership in India and China, unrest in the Middle East and investor speculation in global oil markets.
Gas prices for self-serve regular gas are up more than 20 cents from last month. According to the AAA’s Fuel Gauge Survey, the average price was $3.73.9 a gallon on Friday, up from $3.619 a week earlier.
View full post on All Stories
Commodity prices soar as investors seek hedge against global instability
Washington, DC, United States (AHN) – Global economic and political instability has made paper money less attractive to investors who are now driving up prices for commodities such as oil, precious metals and crops.
Sovereign debt risk in Europe and the U.S., coupled with Japan’s post-earthquake and ongoing nuclear crisis on top of political instability in the Middle East, is behind investor decisions to put their money into commodities.
That much liquidity in commodity markets is pushing commodity prices to high levels.
Wednesday morning trading in London saw gold reach a new record nominal high of $1,460.92 per ounce while silver hit a 31-year nominal high of $39.63 per ounce.
Oil settled at $108.34 per barrel, which pushed U.S. gasoline prices up to an average $3.685.
Cotton prices are around $2 per pound, which has many U.S. farmers scrambling to plant cotton this year instead of food crops such as corn, soybeans or peanuts.
View full post on All Stories
Arab League seeks Security Council’s approval for no-fly zone over Libya
Tripoli, Libya (AHN) – Following their emergency meeting in Egyptian capital Cairo, the Arab League on Sunday urged the United Nations Security Council for a no-fly zone on Libya to stop Colonel Muammar Gaddafi from any military action on his people.
The 22-nation body said that they had been in constant touch with rebels about the ground situation in the country, putting pressure on the U.S. and Europe to impose limited military action against Gaddafi’s regime.
Earlier, AL Secretary General Amr Moussa described the military action as the only way to protect Libyan nationals from Gaddafi’s “disdainful” regime. “I do not know who will impose this zone, nor how, that remains to be seen,” he said, in an interview with Germany’s Der Spiegel magazine. “I am talking about a humanitarian action. It consists, with a no-fly zone, of supporting the Libyan people in their fight for freedom against a regime that is more and more disdainful,” Moussa added.
Moussa’s comments came after Gaddafi government declared a crucial victory against rebels on Ras Lanuf oil port in eastern Libya. Gaddafi’s son Saif al-Islam claimed that they have regained control over “90 per cent of the country” and hoped to claim victory over rebels soon. Describing the rebels as terrorists, Saif said that they need to end a war against terrorism in the country, hence, ruled out possibilities of negotiations with them.
British Foreign Secretary William Hague, who is keen supporter of imposing no-fly zone over Libya, in an interview to The Sunday Telegraph, stressed on the need to impose a legal base for any military action, adding that the support should come with the Arab world. He called on the Arab nations to participate in it militarily. He added, “Even if he regained control over part of the country, the Arab world want to have nothing to do with him any more.”
Meanwhile, Gaddafi’s People’s Armed Forces spokesman claimed that the rebels in the east are surrendering, hence, the government troops no longer need to wage a war. “These are people, who when we come to them raise their hands and give up,” Col Milad Hussein said at a press conference in Tripoli.
View full post on All Stories
Europe’s leaders at odds over bond plan
Europe’s leaders face fresh splits over how to tackle the eurozone’s crisis after being urged to create a market for joint European government bonds
View full post on UK Business Stories
Day Trading- Fuji recalls women’s cruiser bicycles over fall hazard
- Get fully automated day trading system
- Wal-Mart reports more sales but lower Q4 profits
- SEC Warns Top Banker of Charges Over Magnetar Deal
- Taco Bell to launch new Dorito shells
- Questions loom as Europe inks new Greek bailout
- Make Easy Money with Automated Forex Trading
- Clock ticking for Egypt’s finances
- Diffa traders hit by Nigerian border closure
- Automated Forex Trading System
- Business loans
- An error has occurred; the feed is probably down. Try again later.
- Trading 101
- Stocks fall Friday amid European downgrade concerns
- U.S. stocks fall as eurozone worries overshadow jobs news
- Stocks up after jobless claims hit 3 1/2-year lows
- Stocks open lower on eurozone deal doubts
- Dow holds strong gains Wednesday after Fed move
- Stocks slide on euro worries; oil trades over $100 a barrel
- Markets open down Friday despite drop in unemployment rate
- U.S. stocks rally Friday ahead of weekend Eurozone summit
- Apple shares drop 5.3% in Germany following news of Jobs’s death
- U.S. considers fraud investigation into Chinese Internet companies
- Internet Money
- Business Credit Information
- Honda widens recall for airbag problem
- GM CEO: Earnings good, but not good enough
- Chinese companies buying automaker Saab
- Suzuki demands VW return shares after alleged contract breach
- Chrysler has best September since 2007
- Honda recalls million cars worldwide
- General Motors to manufacture plug-in Cadillac ELR plug-in hybrid electric car
- GM earnings soar 92 percent on global sales
- Volkswagen postpones MAN supervisory board takeover
-
