News & Financial Advice

Standard & Poor's expects a mild recession in the euro area in the first half of 2012 and Thursday lowered growth forecasts for several countries.

In a report entitled "European Economic Perspective: The Return of the recession," the rating agency forecasts growth of 0.4% for the euro area next year, following 1.5% expected this year.It has revised its forecast to 0.5% growth for France in 2012 (against 0.8% previously), 0.6% for Germany (against 1%) and 0.1% for Italy (against 0.2%).

In 2013, growth would accelerate to 1.2% for the euro area to 1.3% for France, 1.5% for Germany, 0.5% for Italy and 1.0% for Spain (after + 0.3% expected in 2012).

"We now expect a mild recession in the first half of 2012 in the euro area, before a modest rebound in the second half of the year," wrote the chief economist at S & P for Europe, Jean-Michel Six.

"The impending recession threatening Europe was first found fertile ground in Spain, Portugal and Greece, but economic problems are spreading now in the heart of the euro area, France and Spain," says it.

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Societe Generale plans to eliminate hundreds of positions in its Corporate and Investment Banking (CIB) to adapt its activities to the crisis in the euro area, have indicated Tuesday the unions of the bank at the end of a meeting with the CEO Frédéric Oudéa.

As BNP Paribas and Credit Agricole, SocGen launched in September a plan for savings and reducing the size of its balance sheet to enhance its financial strength and reduce its financing needs in dollars, after seeing its market capitalization s' collapse during the summer.

Universal Music, a subsidiary of Vivendi, announced Friday the signing of a definitive agreement with Citigroup to buy back the recorded music industry of its British rival EMI for a total of 1.2 billion sterling (1.4 billion euros).

The operation, if it goes to completion, will allow the first record company to add to its global purse of music stars such as Coldplay and Katy Perry, but it may be a long review and detailed by the competition authorities.

"It is a historic acquisition for UMG (Universal Music Group) and an important step in preserving the heritage of EMI Music," said Lucian Grainge, CEO of Universal, in a statement.

The U.S. bank, the Financial Times on Friday, would end the deadlock by agreeing to make such commitments at his expense.

Also interested in the recorded music division of EMI, the billionaire Len Blavatnik, owner of Warner Music Group, was considered the favorite, but according to two people familiar with the discussions, he threw in the towel last week after the rejection by Citigroup's offer of a $ 1.5 billion.

The Greek Ministry of Finance announced that new elections would be held on February 19. This date has been set by the leaders of the country's two main parties, George Papandreou and Antonis Samaras. Finance Minister Evangelos Venizelos and the Greek Prime Minister George Papandreou during the vote in Parliament of a new austerity plan, June 30, 2011.

The two main Greek political parties that have managed Sunday evening to a political agreement to form a national unity government agreed that February 19 would be the most appropriate date for the elections, said the Greek Ministry of Finance.

The Tokyo Stock Exchange ended up sharply Thursday, forgetting his concerns over the high yen, in the hope that the Europe Agreement on the night between Wednesday and Thursday will stem the debt crisis.

The Nikkei gained 2.04% or 178.07 points to 8,926.54 and the Topix has taken 2.18% (16.31 points) to 762.79.

The Bank of Japan is also stepped in to buy more assets in the markets, which helped improve investor sentiment.

"There are many unknowns about Europe, and it is now more likely that something disappointing for investors to happen, instead of a positive surprise," said Tomomi Yamashita, fund manager at Shinkin Asset Management .

About values, Olympus has seen a strong rebound after plummeting last few days, taking 23.29% to 1,355 yen.

Olympus gave a press conference defending its mergers and acquisitions Thursday following the resignation of its chairman.

Several major automakers have values ​​slightly outperformed the market: Toyota made 2.22% to 2,584 yen and Honda has awarded 2.75% to 2,393 yen.

In electronics, Sony jumped 5.43% to 1,650 yen, while qu'Elpida fell by 0.6% to 496 yen.

NEC (2.31% at 177 yen) and Softbank (0.91% to 2450 yen) released their quarterly earnings at closing.

The "troika" of international donors in Greece recommends to pay as soon as possible to Athens a sixth tranche of aid, despite the dynamic "serious concern" of government debt, according to its draft report.

The economic crisis in Greece is much more severe than expected, the debt situation has deteriorated in recent months and it may be necessary to revise downward its growth forecast over the medium term, we read in this and other Reuters report that was obtained Thursday.

He concludes, however, that further action on budget revenues and expenditures should allow Greece to meet its deficit target in 2012, even if it lacks that of 2011.

The report of the European Commission was prepared with the assistance of the European Central Bank but the International Monetary Fund, the third member of the "troika", which writes its own report on its side.

The Commission and the ECB to pay recommend using "as soon as possible, as soon as previous initiatives agreed on fiscal consolidation, privatization and labor market reform announced by the government have been included in the law."

Greece needs the help of eight billion euros to avoid becoming insolvent in mid-November.

"DYNAMIC CONCERN"

The Troika also finds that the previous projection of a growth close to 3% per year over the period 2015-2020 can not be achieved "in the case of a marked acceleration of structural reform initiatives, including privatization."

She noted deficiencies and delays in implementing fiscal reforms but added that additional measures "are the projection of a deficit in 2012 in line with the agreed ceiling" without the gap or deficit in 2011 fully met.

The Greek financial sector remains fragile due to a drying up of liquidity, deposits continue to decline and banks remain highly dependent on the ECB for financing.

"The dynamics of public debt remains extremely worrying," says the draft report of donors, adding that debt levels remain high "for many years."

"Compared with the prospect of a few months ago, the debt situation has actually deteriorated," they continued, referring in particular the delay in reforms "and the prospect of a recapitalization banks ".

Athens will be at least a quarter behind schedule for privatization, for administrative reasons but also because market conditions have deteriorated in the third quarter, especially on the Athens Stock Exchange, also explains the document.

The budget deficit in Greece reached 10.6% of GDP in 2010, not 10.5% as previously calculated, announced Monday the national office of statistics.

"According to preliminary data, the public deficit in 2010 is estimated at 24.1 billion euros (10.6% of GDP)", the office announced in a statement.

The volume of public debt in 2010 was also revised upward to 144.9% of GDP, against 142.8% in the previous estimate.

The Swiss bank plans to remove "thousands" of jobs in its investment bank. Restructuring decided before the discovery of a fraud of $ 2 billion a trader of its subsidiary in London. UBS, headquartered in Zurich, Switzerland, May 26, 2011.

Swiss bank UBS, which said Thursday he was the victim of fraud by one of its brokers who lost $ 2 billion, will "massively" reduce its investment banking and to make major layoffs, said the Helvetic Press Friday.

A reduction in size of the bank, often cited by analysts, should be announced Nov. 17 at the UBS Investor Day, said the daily Tages-Anzeiger, which is based on internal sources of bank.This will result in the reduction of "thousands" of jobs in the division, said the newspaper, which is also expected that the Chief Oswald Grübel and the head of the banking Carsten Kengeter have to resign soon .

The Swiss press has reacted strongly in the wake of revelations of the first bank Helvetic, who announced Thursday he was the victim of fraudulent activities of one of its traders, which caused him to lose $ 2 billion (1.4 billion euros) . While the bank had to release third quarter earnings of between 900 million and 1.1 billion Swiss francs, analysts said it could now suffer a loss of 500 million, the first since the third quarter of 2009.

"You have to ask, how is it possible, despite recommendations stricter domestic (…), to lose such sums out of control," questioned the daily Neue Zürcher Zeitung (NZZ). For the newspaper, the case threatens the reputation of the entire Swiss financial center, which represents more than 10% of gross domestic product Helvetic. A Swiss Exchange, the rebounded Friday morning as UBS. After closing Thursday down more than 10%, the action gained 2.67% to 10.01 Swiss francs in a market up 0.60%.

The European Commission said on Wednesday which would shortly introduce proposals for Eurobonds, which promises a new face serious challenges, but that supports the euro and equity markets, especially as return to the political maneuvering to try to find solutions to the debt crisis in the euro area.

Degradation by Moody's credit ratings of two of the largest French banks came to illustrate the growing risks to the European financial sector of a deepening crisis.In particular, Moody's said the one notch downgrade of the rating on Societe Generale and Credit Agricole by exposure to the Greek debt.

President Nicolas Sarkozy and Chancellor Angela Merkel were to meet with Greek Prime Minister George Papandreou in the late afternoon.

No official communication is provided at the end of the conference, which takes two days to an informal meeting of EU finance ministers, in Wroclaw, Poland, with the participation of exceptionally U.S. Treasury Secretary Timothy Geithner.

Meanwhile, France and Germany have reiterated their opposition to the issuance of Eurobonds.

In Paris, the budget minister Valérie Pécresse reiterated the position of France, that these bonds could only be "the culmination of a process of consolidation in the euro area" and a convergence of fiscal policies, and not a starting point.

In Berlin, a spokesman for the Ministry of Finance said that Germany was always hostile to it waiting to see what the European Commission will propose.

The President of the European Commission Jose Manuel Barroso said in the morning before the European Parliament that the EC will soon propose options for the introduction of euro bonds. It would, at this stage that a technical document that lists the available options and nothing says that member states of the EU finally choose to embark on this path.

THE BRICS also consider ASSISTANCE

José Manuel Barroso warned, however, that in case of issue of eurobonds would not provide an immediate solution to the problems of Europe.And the Commissioner of Economic and Monetary Affairs Olli Rehn was wanted by recalling that a prudent option amounting to euro bonds was proposed in May 2010 for countries sharing the single currency, which had rejected.

However, these comments supported the euro, which hit a high of 1.3742 to dollar days before returning to around 1.3690 in mid-afternoon.

Sign of the nervousness of investors, European equity markets that had erased their losses after the initial declaration of the President of the EC, significantly reduced their earnings to 16.30, traders citing a possible postponement of the vote in the second rescue plan by the Greek the Austrian Parliament, scheduled Sept. 21 but retoqué in committee.

Bank stocks, the volatility remains high, were all divided down in Paris in the afternoon.Societe Generale, BNP Paribas, Credit Agricole signed the three largest declines in the CAC 40 index.

Hopes also came Wednesday from major emerging countries gathered in the club of the Brics, which should decide on the opportunity to help the euro area at their meeting in Washington Sept. 22, according to an official of the Indian Ministry of Finance.

The BRIC countries (Brazil, Russia, India, China and South Africa) have begun preliminary discussions to increase their holdings of bonds denominated in euro, had already indicated to Reuters on Tuesday an official of the Brazilian government.

Chinese Premier Wen Jiabao at the World Economic Forum in Dalian, nevertheless said China would invest more in Europe but the Europeans were on their side to avoid an extension of the debt crisis. An adviser to the Chinese central bank, Li Dakui, subsequently said that China should refrain from buying large volumes of European bonds, adding that it was important for European countries to continue their reforms.

The adoption of the austerity plan seems to Italy. The government of Silvio Berlusconi has won the confidence of the House of Deputies, the last step before the vote, in the evening, this package of measures designed to bring the country out of the crisis.

The deposit is located over 2,000 meters deep off the coast of Guyana. But it is too early to estimate its potential. The permit allows the drilling to 6000 meters deep and angered environmentalists.

Oil was first discovered off the coast of Guyana, as Total and Shell. The deposit was located in deep water, in more than 2,000 meters deep, about 150 kilometers northeast of Cayenne.

"We are pleased with the preliminary results of the first ever undertaken exploratory drilling off the coast of French Guiana," said an official with the exploration department of Shell, David Lawrence. The "major" Anglo-Dutch holds the largest share (45%) of the project. She said it is too early at this stage to assess the reserves, but the initial results are "encouraging."

A spokesman for Total, which owns 25% of shares, confirms that this is the first discovery of oil off the French department. Guyana, region and overseas department of French, whose per capita income is one of the lowest in the country, has never produced oil.

A basement as rich as the Gulf of Guinea?

The finding revives hopes for a new Eldorado in the department overseas, prompted by the recent major discoveries in the north-east coast of neighboring Brazil.

Geologists assume that the basement of the northeast coast of South America is similar to the rich in hydrocarbons, Gulf of Guinea in Africa. The two were indeed connected before the continents formed and drift away from each other.

The exploration permit is operated by Guyanese British company Tullow Oil, which owns 27.5% of the project.It allows drilling to 6,000 meters (2,000 feet of water and 4,000 m in the oceanic basement). The installation in March of this platform had attracted the wrath of environmentalists, who worry about such a possibility of operation after the disaster of the Deepwater Horizon platform in the Gulf of Mexico.

According to Total, the drilling has already reached 5711 meters below sea level "After a campaign of intermediate measures, the drilling of the GM-ES-1 will resume soon to reach its planned final depth. The production potential and scope resources will then be identified, "said Total. "The joint venture will continue its drilling, evaluate results and decide next steps," said Shell.