Weekly Summary
(May 2013) The Eurozone’s GDP dipped for the sixth straight quarter, falling by 0.2% in the first quarter of 2013. The economy contracted in nine of the single currency's 17 countries, including France, which fell into recession for the second time in four years. Germany, grew by just 0.1%. Meanwhile, the UK unemployment rate was at 7.8% in the first three months of the year. The jobless rose by 15,000 compared with the previous quarter, to 2.52m. In Ireland, a paper published by the ESRI (Economic and Social Research Institute), said in a paper that Irish GNP (gross national product) and the Current Account surplus have been overstated because of the rise in large mainly US companies transferring headquarters to Ireland while having most of their operations overseas. The Wall Street Journal reported that the Obama administration on Friday cleared the way for broader natural-gas exports by approving a $10bn facility in Texas, a milestone in the US transition into a major supplier of energy for world markets.
(May 2013) Spain’s average borrowing costs fell Thursday after the country took advantage of positive market sentiment for financially stretched issuers to sell more government bonds than planned at an auction. The Spanish Treasury sold €4.57bn ($6.0bn) in three government bonds, maturing in 2016, 2018 and 2026, topping its €3.5bn to €4.5bn target range. meanwhile, the richest 1%, the world’s 1,426 billionaires, are likely stockholders in the Dow’s latest rally that’s more than doubled from the 6,547 bottom in March 2009 to the week's record over 15,000. Meanwhile GDP has been hurting the other 99%, as wages stagnated for this generation.
(May 2013) The European Central Bank cut its main interest rate on Thursday, but opposition from the German member of the central bank's six-man executive board, highlighted the constraints to further action. In the US non-farm payrolls rose by 165,000 last month and the unemployment rate fell to 7.5%, a four-year low, from 7.6%, the government said. In addition, hiring was much stronger than previously thought in February and March. Purchasing manager's index data showed a slowing of manufacturing activity in several countries, and on Friday, presenting the European Commission's spring economic forecasts, Olli Rehn, the European commissioner for economic and monetary affairs, said the Eurozone's gross domestic product (GDP) is now expected to shrink by 0.4%. The previous forecast was a 0.3% contraction.
(April 2013) Irish public sector employee members in 20 trade unions rejected measures to cut the annual payroll bill by €300m. Brendan Howlin, minister for public expenditure and reform, phoned the Troika bailout members on Tuesday evening to advise them of the development. Meanwhile, following a report of slower first quarter growth in China, the biggest plunge in the price of gold for more than 30 years wiped $1tn off the value of global reserves of the precious metal, as prices slumped for a fourth week.
(April 2013) European Union finance ministers meeting in Dublin on Friday agreed to allow Portugal and Ireland to repay their bailout loans later than initially agreed, officials said, in a bid to help the two governments wean themselves off bailout money in the coming year. On Tuesday, a partner of KPMG, the BIG 4 accounting firm based in its Los Angeles office, issued a statement admitting he provided stock tips on clients to a friend in exchange for cash and gifts. He will spend years in prison for his stupidity. Meanwhile, global PC sales tumbled 14% in the first quarter of 2013, the biggest slide since US research firm IDC began tracking the industry in 1994. The poor consumer response to Microsoft's Windows 8 operating system, contributed to the plunge.
(April 2013) Japan announced a massive bond-buying program to end deflation; the US added only 88,000 jobs in March and the ECB left its key refinancing rate at a record-low 0.75% at its monthly meeting on April 4, with Mario Draghi, ECB president, saying at a press conference that monetary policy “will remain accommodative for as long as needed.” Meanwhile the Portuguese government warned that a high court decision to strike down some austerity measures will put into question the country's ability to fulfill its €78bn international bailout program.
(March 2013) The news in Europe was dominated all week by fallout from the EU-IMF bailout deal for Cyprus that provided for unprecedented haircuts for insured depositors. Ireland reported a GDP rise of 0.9% in 2012 with the help of a 15% rise in computer services exports related to multinational tax strategies. Ryanair, Ireland's low fares airline, ordered 175 aircraft from Boeing at a list price of $15.6bn. In the UK George Osborne, chancellor of the exchequer, unveiled the government’s 2013 budget.
(March 2013) European Union finance ministers may next month agree to give Ireland and Portugal more time to repay bailout loans, Olli Rehn, economic and monetary affairs commissioner said. Meanwhile, US employers in February boosted hiring by adding 236,000 jobs, posting gains in almost every corner of the private sector. February's job creation compared with the 195,000-job-a-month average of the previous three months and pushed the jobless rate to a four-year-low of 7.7%.
(February 2013) Weekly Business News Summary: The big news of the week was the liquidation of the former Anglo Irish Bank - - the most reckless bank of the Irish property bubble -- and the extension of the maturity of a related bailout advance of €28bn to the Government from the Irish Central Bank, to up to 40 years (another reckless Irish lender, Irish Nationwide Building Society, was also included in that debt). In the US, Dell, the world’s third-largest PC computer-maker, announced details of its plan to take itself private. Michael Dell, who founded the company in 1984 from his college dormitory in Texas, is to head a buy-out consortium that includes Silver Lake, a private-equity firm, and Microsoft. If the $24.4bn deal is approved by shareholders, it will be the biggest leveraged buy-out since the start of the financial crisis in 2007. Dell’s share price plunged by half over the past five years as the firm has been overtaken by smartphones and tablets such as the iPad.
(February 2013) Weekly Business News Summary -- week ending Feb 02, 2013: Ireland's GDP (gross domestic product) likely grew by 0.7% in 2012, just the second year of growth since 2007, the central bank said, increasing its estimate from 0.5% after the latest GDP data. However, it cut its forecast for 2013 to 1.3% from 1.7% and warned the volatile global economy posed a risk of future downgrades. Meanwhile the Economic and Social Research Institute (ESRI), an independent but publicly-funded think-tank, said GDP is estimated to have climbed 1.3% for 2012 and predicted a rise to 2.3% in 2014. Domestic demand is due to contract again in 2013 and 2014, though the pace of contraction is easing. In the US, the Dow Jones Industrial Average and the Standard & Poor's 500-stock index are within 1.1% and 3.4%, respectively, of the record highs they set on October 9, 2007. The US economy shrank by 0.1% in the fourth quarter of 2012, its first contraction since the recession ended in 2009.
