News That Matters
François Hollande, the French Socialist presidential candidate, is not seeking to unpick the European fiscal pact but wants to complete it with tools to promote economic growth, one of his senior advisers signalled on Tuesday. Financial markets have been unsettled at the prospect of a victory for Mr Hollande in the May 6 run-off against Nicolas Sarkozy, fearing his refusal to ratify the treaty unless his demands are met could unleash fresh eurozone wrangling on deficit cuts.

The Murdoch family dramatically turned the tables on Britain’s government on Tuesday, putting pressure on David Cameron and one of his senior ministers to answer tough new questions about their close relationship with News Corp. In evidence presented to an official inquiry into the press, James Murdoch, News Corp’s deputy chief operating officer, laid bare the intimate relationship between his company and the office of Jeremy Hunt, the media minister who was acting in a quasi-judicial capacity in deciding on News Corp’s £8.3bn bid for full control of British Sky Broadcasting.

Apple has brushed aside concerns that it could soon reach the limits of its soaring growth, with news on Tuesday that huge international sales of the iPhone enabled its latest financial results to once again top even the most optimistic Wall Street forecasts. The news gave an immediate lift of more than 7 per cent to Apple’s shares in after-market trading, adding more than $35bn to the company’s market value and reversing a two-week correction that had wiped 13 per cent from the price.

Italy said on Tuesday it had paid $380,000 to the families of two Indian fishermen who officials said were mistaken for pirates and shot dead by an Italian navy security team guarding a merchant vessel. Two marines, who were escorting the Italian-flagged tanker Enrica Lexie off India’s south western coast in February, were charged with murder and are awaiting trial in the state of Kerala.

Markets in Europe have understandably been preoccupied with politics, but Monday’s weak eurozone purchasing managers’ indices suggest that more attention ought now to be paid to the dysfunctional relationship between eurozone banks and the real economy. That point is reinforced by the latest Global Financial Stability Report from the International Monetary Fund, which ominously forecasts that the process of deleveraging in the European banking system is set to continue and broaden.


Inside story of the global financial crisis. Videos click here. 

Asian stock markets rose Wednesday, led by sharp gains for technology shares after Apple Inc. AAPL -2.00%posted strong second quarter earnings. After several days of declines for equities amid global growth and debt concerns in Europe, investors took heart from a largely positive performance on Wall Street Tuesday and successful bond auctions in the euro-zone.  Japan’s Nikkei Stock Average rose 1.0% and South Korea’s Kospi Composite advanced 0.4%. Early trading in the region was somewhat subdued as markets in Australia and New Zealand were closed for a public holiday. Dow Jones Industrial Average futures were up 28 points in screen trade.

A pledge by European Union governments to bring their swollen budget deficits back in line with EU rules by the end of 2013 is causing economic pain and political discontent across Europe, prompting officials to begin a politically sensitive discussion on how the goal could be changed to avoid driving the Continent further into turmoil. The target, set in 2009, is still seen as an important signal that the budget rules won’t be flouted as they were in the past. But meeting the 2013 goal, which for most countries was a deficit of 3% of gross domestic product, will entail more spending cuts or tax increases by governments across the EU.

China has stepped up its campaign to clamp down on the Internet, which has emerged as a virtual town square for exchanging information about the Bo Xilai scandal and the nation’s biggest political upheaval in years. The popular Twitter-like microblogging service Sina Weibo on Tuesday deleted the accounts of several users, including that of Li Delin, a senior editor of the Chinese business magazine Capital Week, whose March 19 post helped fuel rumors of a coup in Beijing. The service announced the move to many of its more than 300 million user accounts, thereby turning it into a public lesson in the consequences of rumor mongering.

The MF Global Holdings Ltd. executives still working to untangle the records of the failed firm won’t receive bonuses, the trustee overseeing its bankruptcy estate told a Senate panel Tuesday. The executivesoperations chief Bradley I. Abelow, finance chief Henri I. Steenkamp and general counsel Laurie R. Ferberwere all at MF Global when it collapsed on Oct. 31 and an estimated $1.6 billion shortfall in customer funds developed. They are currently working for the trustee to help return money to creditors.

Despite a recession in Europe and slower growth in China, some big U.S. industrial companies are reporting surprisingly robust results for the first quarter and sounding confident about the rest of the year, largely because they are doing well at home. “We’re off to a good start this year,” 3M Co.’s new chief executive, Inge Thulin, said Tuesday after the company reported a 4% rise in first-quarter net income, beating analysts’ expectations for profit and margins. 3M also nudged up its full-year earnings forecast. The company’s results were generally weak in Europe and Asia, but it sold more adhesives and

Hundreds of small banks can’t afford to repay federal bailout loans, a top watchdog will warn Wednesday in a report that challenges the government’s upbeat assessment of its financial-system rescue. Christy Romero, special inspector general for the Troubled Asset Relief Program, said 351 small banks with some $15 billion in outstanding TARP loans face a “significant challenge” in raising new funds to repay the government.

In the latest sign that U.S. banks are bridling at tighter oversight that began after the financial crisis, a handful of big lenders have been jawboning Moody’s Investors Service ahead of potential downgrades expected this spring. Bank of America Corp. Chief Executive Brian Moynihan and Citigroup Inc. CEO Vikram Pandit have argued against downgrades in person, people familiar with the talks said. An executive at Goldman Sachs Group Inc. last week publicly questioned Moody’s methods on a conference call with analysts and investors. Morgan Stanley CEO James Gorman, who has met with the ratings firm more often than usual in

The youngest son of Bo Xilai, the sacked Communist Party official at the center of China’s biggest political crisis in a generation, issued a statement expressing deep concern about events surrounding his family and seeking to refute allegations that he led a dissolute lifestyle while studying overseas. But Bo Guagua, who is 24 and a postgraduate student at Harvard University’s Kennedy School of Government, said he had no comment about the parallel investigations into his father and his mother, Gu Kailai, who is in custody as a murder suspect in the death of a British business consultant in China.
Japanese manufacturers are repatriating some of their production lines back to Japan from China, as Chinese wages grow rapidly, the Nikkei business daily reported Wednesday. The producers were increasingly making high-end items in Japan, though some low-cost items were still being made in China, the report said. The report cited Hewlett-Packard Japan Ltd., majority owned by U.S. tech major Hewlett-Packard Co.
U.S. authorities reported the first U.S. case of mad cow disease in six years on Tuesday and quickly assured consumers and global importers that meat from the California dairy cow did not enter the food chain. John Clifford, the USDA’s chief veterinary officer, said the case was “atypical” and that there was “no cause for alarm” from the animal. Cows can contract the disease spontaneously in rare cases and that it cannot be transmitted unless the brain or spinal tissue is consumed by humans or another animal, according to scientists.

North Korea has almost completed preparations for a third nuclear test, a senior source with close ties to Pyongyang and Beijing said, an act that would draw further international condemnation following a failed rocket launch. The isolated and impoverished state sacrificed the chance of closer ties with the United States when it launched the long-range rocket on April 13 and was censured by the U.N. Security Council, which includes the North’s sole major ally, China. Critics say the rocket launch was aimed at honing the North’s ability to develop an intercontinental ballistic missile capable of hitting the United States, a move that would dramatically increase its military and diplomatic heft.
The U.S. housing market is showing more signs of stabilization as price declines ease and home demand improves, spurring several economists to call a bottom to the worst real estate collapse since the 1930s.  “The crash is over,” Mark Zandi, chief economist for Moody’s Analytics Inc. in West Chester,Pennsylvania, said in a telephone interview yesterday. “Home sales — both new and existing — and housing starts are now off the bottom.”

European lenders, more reliant than ever on emergency aid after borrowing $1.3 trillion from their central bank, may need additional cash infusions until policy makers stem the crisis engulfing Spain and Italy. After more than 30 bond sales in the first quarter, no bank has sold unsecured debt this month, and the cost of insuring against default has soared to levels last seen in January. Financial stocks, which rallied 20 percent following the European Central Bank’s December decision to provide unlimited three-year loans, are now 2 percent lower since then.

Volvo Car Corp. (175), the Swedish carmaker owned by China’s Zhejiang Geely Holding Group Co., said it plans to more than double its number of models to compete with Volkswagen AG (VOW)’s Audi and BMW AG in the world’s largest automobile market. Volvo, which currently sells 6 models in China, is planning to introduce 10 new ones in the country within six years, including “bigger and more luxury high end” vehicles, as well as medium- to small-sized cars such as the V40 hatchback, Volvo said in an e-mail.

Mitt Romney declared himself the Republican presidential nominee and launched his general- election campaign against President Barack Obama, seeking to turn the president’s own promises against him and capitalize on voters’ disaffection with the state of the economy. In a speech in New Hampshire last night as he swept five primary contests and moved closer to the 1,144 delegates needed for the nomination, Romney made clear he isn’t waiting any longer to end the Republican race and turn his attention to beating Obama.

Bank of England policy maker David Miles said his vote for more so-called quantitative easing this month still looks vindicated as the economy is weak and data today might even show it contracted in the first quarter. “The weakness of demand, given the amount of spare capacity in the economy, still made a strategy of having monetary policy even more expansionary the right one,” Miles said in an interview in London yesterday. “On reflection that seems to me still the right strategy.” Miles was the sole official seeking more stimulus, after his colleague Adam Posen switched his vote and policy makers said inflation may turn out faster than forecast even though the U.K. economy might be in a recession. First-quarter gross domestic product data will be released at 9:30 a.m. in London.

The Federal Reserve tried to bring more clarity to policy making in January by releasing Fed officials’ forecasts for interest rates. Instead, it may be creating confusion. Policy makers tomorrow will probably repeat their plan to keep the benchmark interest rate low at least through late 2014, economists say. At the same time, a Bloomberg News survey of economists this month predicted that the central bank will raise borrowing costs by June of that year.  One reason for the disconnect: Six policy makers in January forecast a rate increase before 2014, and others may join their ranks this week on signs the economy is improving. Yet the Federal Open Market Committee’s time horizon won’t shift because its most influential members — including Chairman Ben S. Bernanke and Janet Yellen– probably won’t change their view, said Michael Hanson, a former Fed economist.
A gauge of U.S. consumer confidence has declined for a second month, ticking down in April on lower expectations, even as views on the present situation increased, the Conference Board reported Tuesday. The consumer-confidence index fell to 69.2 in April from a revised March reading of 69.5. A prior estimate had pegged March’s confidence level at 70.2. “As was the case last month, the slight dip was prompted by a moderation in consumers’ short-term outlook, while their assessment of current conditions continued to improve,” said Lynn Franco, director of the Conference Board’s consumer research center.
Wipro Ltd., India’s No. 3 software exporter, dropped the most in more than eight months in Mumbai trading after its forecast for information-technology revenue in the first quarter lagged behind some analysts’ estimates. IT sector revenue in the three months ending June 30 may be between $1.52 billion and $1.55 billion, compared with $1.54 billion in the fiscal fourth quarter, Bangalore-based Wipro said in a statement today. The company’s fourth-quarter total sales of 98.4 billion rupees ($1.9 billion) also lagged behind analysts’ estimates for 101.5 billion rupees.
The UK government borrowed more than expected in March, official figures have shown, but still met its borrowing target for the year. Public sector net borrowing, excluding interventions such as bank bail-outs, came in at £18.2bn in March, the Office for National Statistics (ONS) said. However, previous months’ borrowing was revised down, meaning the government met its target of £126bn for the year. On Wednesday, figures will show how the economy performed in the first quarter.

India’s Supreme Court has given the government until 31 August to hold a fresh auction of 122 telecoms licences that were cancelled in February. The court extended its earlier deadline of 2 June after the government asked for more time to conduct the sale.  Telecoms shares fell on Tuesday after regulators advised the base mobile spectrum price should be 10 times what it was in the first sale in 2008. The “2G” licences were mis-sold, costing the country an estimated $40bn.

Google has launched a new consumer service offering up to 16TB (terabytes) of storage for photos and other online content. Dubbed Google Drive, the service goes head to head with rival cloud services such as Dropbox and Microsoft’s SkyDrive. It offers 5GB (gigabytes) of storage for free. People pay on a rising scale for more space. Experts say that Google is “late” to the market. 16TB of space could hold more than 4,000 two-hour movies coded in 720p high-definition resolution.
Angela Merkel launched a staunch defence of Europe’s fiscal pact as politicians from the Netherlands, Spain and Greece scrambled to keep their own austerity measures on track. In a rare concession, the German Chancellor admitted that austerity alone would not solve the crisis but she insisted that the wave of political opposition to fiscal discipline was wrong. “We’re not saying that saving solves all problems,” Ms Merkel said at a conference in Berlin. “[But] you can’t spend more than you take in. You can’t live your whole life this way. Everybody knows this.”
Hector Sants, chief executive of the Financial Services Authority, has criticised top bankers for continuing to take their bonuses and said they should act with “integrity” when running their businesses. Speaking to the Guardian after delivering his last speech as chief executive of the City regulator, Sants also said he was concerned about the way directors of large
No single proposal to fix Canada’s retirement savings headache, such as expanding the Canada Pension Plan or increasing retirement age, will be enough, a new study says. Policy makers would do much more to alleviate the problem of Canadians having enough to live on in retirement years, if they were to make a series of minor changes to various aspects of the retirement system, concludes a new report by McKinsey & Co.

Canadian house prices are now almost five times higher than incomes, the latest illustration of why policy makers are worried about parts of the housing market. The average price is roughly 4.75 times the average income, Bank of Canada Governor Mark Carney said Tuesday, noting that the historical norm is closer to 3.5.  Speaking to the House of Commons finance committee, he said “valuations are firm” in some cities and segments of housing, such as Toronto’s condo market, posing “more downside risk than upside risk.” While “extremely attractive” mortgage rates linked to exceptionally low overall borrowing costs are a key reason, he said, borrowers need to make sure they’ll be able to afford any loans once interest rates start rising.
South Korea’s consumer confidence rose for three straight months in April due to recovery in the real economy and stable consumer prices, the central bank said Wednesday.  The consumer sentiment index (CSI), which gauges consumers’ overall economic outlook, stood at 104 in April, up 3 points from a month earlier, according to the Bank of Korea (BOK). The April figure posted the third straight month of gain. The CSI is based on survey response from 2,052 households in 56 cities conducted between April 12 and 18. The reading above 100 means optimists outnumbered pessimists.  The April advance was mainly attributed to improved economic conditions as well as stable consumer prices which fell below the 3 percent level for the first time in 19 months in March.”Improved consumer confidence came after our real economy such as production and consumption was enhanced. Consumer prices that slipped into the 2 percent range also contributed to the sentiment enhancement, “said an official at the BOK.

Growth of China’s tax revenues logged the slowest pace in three years in the first quarter of 2012 as a result of the country’s cooling economy, official data showed Tuesday. Tax revenues rose 10.3 percent year-on-year to 2.5858 trillion yuan (410.4 billion U.S. dollars) in the first quarter, the Ministry of Finance said in a statement posted on its website. The growth rate marked the slowest pace in three years, pulling back 22.1 percentage points from the same period last year, the ministry said.  Revenues from major tax items saw slower year-on-year gains. Receipts from value-added tax, consumption tax and turnover tax rose 5.4 percent, 15.1 percent and 7.6 percent, respectively, down 17.8 percentage points, 6.4 percentage points and 18.7 percentage points from a year earlier, the statement said.
The CPI(M) on Tuesday accused the government of “complete arbitrariness” in trying to get the Finance Bill passed to allocate funds without discussing the 12th Plan proposals. Alleging that the opinion of elected representatives was “being given a go-by” by the government, senior party leader Sitaram Yechury demanded immediate discussion on the 12th Plan in Parliament. Noting that the five-year plans have to be discussed before any budgetary allocations are made, he said while the National Development Council (NDC), comprising Chief Ministers, finalises the plan, the government has indicated that NDC would meet only in June or July after the Finance Bill is adopted.
State Bank of India
can look forward to crossing the border 47 years after it had to shut its branches in Karachi and Lahore in the wake of the India-Pakistan war. The troubled neighbours are set to allow banks from both sides to open branches in each other’s territory amid a renewed attempt at reviving relations. The two central banks – Reserve Bank of India and State Bank of Pakistan – are readying to invite applications from interested commercial banks, following a meeting of their officials earlier this month when they sorted out most prickly issues. These included the high capitalisation requirement for banks in Pakistan, which Indian lenders find steep, an official privy to the talks told ET, adding that a joint announcement can come as early as next month during the meeting of the commerce secretaries.

Production of fruits and vegetables, including apple, onion and tomato, increased by around 3 per cent in India during last fiscal, Parliament was informed today. The production of fruits and vegetables was 775.25 lakh tonnes and 1,496.07 lakh tonnes respectively in 2011-12, Minister of State for Agriculture Harish Rawat said in a written reply to the Lok Sabha.
The fruits and vegetable production was at 748.78 lakh tonnes and 1,465.54 lakh tonnes respectively in 2010-11, he said.  India is the second largest producer of fruits and vegetables in the world after China.

Food Minister K V Thomas today said sufficient stock of foodgrains at over 525 lakh tonnes is available with the government to meet the requirement of the public distribution system (PDS). “The government has sufficient stock of foodgrains to meet the requirement of Public Distribution System. As on April 1, 2012, 191.52 lakh tonnes of wheat and 333.50 lakh tonnes of rice was available in the central pool,” Thomas said in a written reply to the Lok Sabha. The minister said there has also been record procurement of wheat and rice during Rabi and Kharif marketing seasons 2009-10, 2010-11 and 2011-12.
South Korea should pay closer attention to the construction sector and job creation to ensure sustainable economic growth in the face of weak exports, the country’s top central banker said Wednesday. In an economic review meeting with private economists and experts, Bank of Korea (BOK) Gov. Kim Choong-soo said the domestic market’s overall contribution to national growth is on the rise. “Because construction and jobs are key to bolstering the domestic economy, the country needs to do more to revive the building sector and create more employment opportunities,” he said.
The South African Reserve Bank’s monthly economic sentiment indicator continued a gradual trend higher in February, with the leading business cycle indicator at 134.4 points from 132.9 in January.
The indicator collates data such as business confidence, job advertisements and the volume of manufacturing orders to gauge the economic outlook. It has been soft but gradually picking up since September last year.



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