Business News & Financial News

European banks need a hundred billion of fresh capital to strengthen their balance sheet and address the current turmoil, said Thursday the Austrian Minister of Finance, Maria Fekter.

The issue of recapitalization of banks is a major enrolled in the agenda of the EU summit scheduled for Sunday, expected to make a comprehensive response to the debt crisis.

"Thank God it's not as high as suggested by the media.What is needed for the recapitalization is about 100 billion (euros), "said Maria Fekter at a conference.

Banking sources and the European Union had earlier told Reuters it would take 90 to 100 billion euros to recapitalize banks in the EU.

This amount, which is the subject of an agreement on the part of Twenty-Seven, should cover about sixty of the largest banks in the EU, the sources said.

"The amount was discussed by member states, it is now acceptable for everyone," said a source told Reuters the EU.

"The amount could exceed 90 billion euros," said a banking source.

The envelope must be added to the 50 billion already raised by European banks over the period from January to April and the funds raised on the market for which the sum is not yet precisely known.

Sovereign debt valued in "MARK TO MARKET"

It takes into account a requirement of capital adequacy ratio "core tier one" of 9% and retains the same definition of this ratio as that used in the last series of stress tests in July, despite protests from some countries.

Germany will for example not allowed to consider in its bank holdings "silent" they hold in other institutions and, in the same way, Spain will not recognize additional reserves of capital that Bank of Spain requires national banks.

As expected, the amount also takes into account a value to market value of sovereign debt held by banks.

This exercise of "mark to market" will cover not only the securities issued by the peripheral countries of the euro area but also those known as the center, who sometimes treat the secondary market at above face value, as the case for German Bunds.

"There is no reason that we inflicted only the negative aspects of this exercise without taking into account the positive aspects," said one source, but said it would have a positive impact on the envelope eventually required for such recapitalization.

This amount must now be discussed by finance ministers and between heads of state and government of the euro area and EU, who meet from Friday to Sunday in Brussels.

The Securities and Exchange Commission (SEC) has opened a broad investigation into index funds (ETF) to ensure they are sufficiently transparent and do not feed market volatility, said Wednesday a leader of the U.S. stock policeman .

"The Commission staff are conducting a general review of index funds including on the sufficiency of the information provided to investors, the levels of liquidity and transparency of the underlying instruments in which the index products (FTE) invest, the accuracy valuations, the effectiveness of arbitration and the relationship between market volatility and FTEs, "said Eileen Rominger, Director of the Division of Investment Management at the SEC.

According to the text of a planned intervention Wednesday before members of Congress, the official stressed that the survey also aims to "gather and analyze detailed data on specific products."

This assessment is the second SEC investigation related to investment companies, after the commission decided in August to gather opinions on the potential risks of the use of derivatives by mutual funds ("mutual funds' ), ETFs and other structured funds.

ETFs, such as those managed by BlackRock, State Street and Vanguard Group, are financial products reproducing the weighting of an index and therefore its performance.Since their introduction in the 1990s, they took off to about 1,000 billion in assets (724.7 billion euros).

However, certain types of incidents and some ETF market, as the "flash crash" ('flash crash') of 6 May 2010, have fueled concerns of regulators, who fear that these index funds do not contribute to volatility markets and pose problems for the less informed investors.

During the 'flash crash', for example, ETFs have experienced massive changes in the meeting and represented 70% of aborted transactions.This incident prompted the SEC and stock exchange operators to set up a system of "circuit breaker".

The SEC also began to focus on leveraged ETF, used to multiply the gains, ETF and reversed, that achieve the performance opposite to that of the underlying index.

The bill for French distributors to almost 5 billion euros, or 1.40% of turnover. Flights are committed to 44% by customers, 30.1% and 7.2% staff from suppliers. A stand of Guerlain perfumes in a department store in Berlin.

Thefts from shops are starting to rebound in France between the mid-2010 and mid-2011, rising 2.9% in value, according to a study published Tuesday, pointing a "professionalization" of shoplifting .The study, conducted in 43 countries by the Centre for Research in the distribution (Center for Retail Research, based in England) from 1187 groups to the security company Checkpoint Systems, as the "shrink", that is ie the difference between theoretical and actual stocks, resulting from theft, but also of administrative errors or suppliers.

In France, the bill for the distributors is rising again, to reconnect with a sum amounting to two years ago, 4.9 billion euros, or 1.40% of turnover, against 4.7 billion euros, or 1.36% of sales a year ago. The equivalent, according to the study of an annual tax of 200 euros per household. Retailers believe that the flights are 44% committed by customers, 30.1% and 7.2% staff from suppliers.

The shoplifting is becoming more professional

"Thieves better information more easily thwart the standard features of security and those who get caught are the thieves who are casual, with smaller amounts," he told AFP Cedric Brossard, marketing director for the textile division of Europe Checkpoint Systems. "There is a professionalization of the flight," which becomes "a real job for some people with real orders," he said, citing "a lot of distributors who believe they have experienced an increase in organized crime." "Whenever there is a new product, it may generate a black market," he added.Conversely, he does not think that inflation on food products has had a significant impact on the increase in theft, noting for example that the coffee was already one of the most stolen.

In Europe, the thefts have increased more strongly than in France, 7.8%, but to a lesser extent, or 1.39% of sales of 36.23 billion euros. The average amount of shoplifting it was down 17.5% to 93.85 euros and the flight staff down 27% to 1,381.4 euros. Globally, the flights were up 6.6% to 88.88 billion euros, or 1.45% of sales distributors, against 1.36% a year ahead. Always at the center of envy, products expensive brands and smaller, easier to conceal and to spare."The flights do not give priority to basic necessities," the study said.

Fashion accessories among the most stolen

Among the most stolen items, fashion accessories, food products high-end such as meals and spirits, articles health / beauty products such as shaving and perfume, or technology products, such as MP3 players and smartphones. In Europe, the increase in shrinkage occurred despite an increase of almost 2% to 8.45 billion euros in spending on security and loss prevention, or 0.30% of turnover Distributors. "Those who have limited or theft managed to bring it down have introduced a multitude of solutions, unfortunately there is not a quick fix," said Mr. Brossard.The number of shoplifters and dishonest employees arrested by the distributors of the year under review exceeded 6 million, according to the study.

Cigarette packs will cost on average 30 cents more starting Monday. This should bring 600 million euros to the state in one year.

Cigarette packs will cost on average 30 cents more starting Monday in France, a 6% increase sought by the government should have little effect on consumption, but that will bring 600 million euros a year in State to Safely smokers will find it in a package less than 5.70 euros in their tobacconist. For the first time, the Marlboro (the best-selling package with nearly 25% market share) will pass the bar 6 euros to 6.20 euros.The government has allowed manufacturers to revise their prices, anticipating an increase in minimums of perception which must be passed by Parliament in the law on financing of Social Security.

This increase was announced by Prime Minister Francois Fillon, in late August, when presenting the plan anti-government deficit. It should bring 90 million euros this year and 600 million in a full year.

Taxes are 80% of the price of a pack of cigarettes. Most (over 10 billion euros in 2010) goes into the coffers of the social security system. Fillon also announced a further increase of 6% in 2012, without specifying the date. This is the third consecutive year that the cigarettes in the fall recorded such an increase (30 cents per pack), well above inflation.However, sales have never declined so far in the same proportions.

54.8 billion cigarettes sold in 2010

Thus, it has sold 54.79 billion cigarettes in 2010 against 54.98 in 2009, a mere drop of 0.3%. At the same time, the amount of rolling tobacco rose from 7257 to 7598 tonnes (+4.7%). In total, sales of tobacco (including cigars) increased by 0.14% by volume, according to figures from the observatory of drugs (OFDT). Again this year, cigarette sales in late July had declined by only 0.6% in volume compared to 2010.

Value, because of previous price increases, the market is increasing by about 5%. Growth shared by the state (almost 13 billion euros in 2010, including 2.5 under the VAT), tobacconists (8.2%) and manufacturers and distributors (11.8%). The anti-smoking groups believe that any increase less than 10% has no effect on consumption.The Office of Tobacco Prevention (OFT) ironically on Monday up seeing an "application" of the state "to the tobacco industry for agreeing to increase by more than 100 million profit."

Tobacconists and manufacturers recall their part that a sharp increase has an effect on sales in tobacco shops, without lowering consumption, since it encourages smokers to buy abroad or from resellers on the sly. A study of Customs estimates that 20% of cigarettes smoked in France are not purchased in the network of tobacconists, but fraud (5%) or legally (15%) in the neighboring European countries (Belgium and Spain) where the package is sell up to 30% cheaper.

These purchases, which exploded after the sharp increases in tobacco prices in 2003/2004, affecting particularly border trade, result in financial compensation from the state to tobacconists.A parliamentary report issued in early October to the Minister of Budget, recommends "a convergence of prices of tobacco in France and in neighboring states," but also "to reflect on the taxation of rolling tobacco" for "contrecarrrer the substitution effect for each increase in the price of cigarettes. "

After the leak on the proposed closure of two blast furnaces in Liege, Belgium, Lorraine ArcelorMittal employees are concerned about their future. Employees of ArcelorMittal at the entrance of the site of Florange, September 9, 2011.

Article first published on LExpress.fr

In shock. Back Thursday night in Lorraine, Edward Martin, the CFDT delegate of ArcelorMittal Florange, found the words to shout his anger. "At noon, I was unable to speak," he admits. Hours earlier, he was still in Luxembourg, following a meeting of the EWC's No. 1 global steel industry. Meeting at which management claimed to have nothing to say to the union representatives, while in Belgium, the Walloon region have learned announced the closure of two blast furnaces in Liege. "The Belgian colleagues were crying," said Edouard Martin.Both blast furnaces were arrested temporarily. Florange such as: one ceased operations on July 6, the other on October 4. "How to extend credit to the word of Mittal who say one day it will not close and decide the opposite the next day? Edward Martin gets carried away. Eric Besson does not doubt the word of Mittal? It is more naivety is complicity! "

A Florange, fear is escalated after the announcement that hit the site of Liege. The area has already seen the closure of the steelworks in Gandhinagar in 2009. Teams know that ArcelorMittal wants to improve the productivity of blast furnaces and focus activity on large-capacity facilities, located by the sea, more profitable (Fos and Dunkerque in France, Ghent, Belgium, Bremen, Germany , Gijon, Spain).Seven sites in Europe are now involved in the activity stops, France, Belgium, Germany and Spain. On September 23, at the investor day in London, the management of Mittal announced an "optimization plan assets of € 1 billion" in the old continent.

"We wondered where it would find one billion, one begins to understand, but this is not enough, loose Edward Martin, furious. We always used the same refrain, the temporary closure. Until punch in the stomach the final decision. It is sure that with the presidential election, it would make a bad impression to announce closure of Florange. But what will happen there in June 2012? ". Segolene Royal after a fortnight ago, François Holland a week ago, Jean-Luc Mélenchon which is Florange this Friday, October 14. "But we are disgusted by the silence of French and European authorities, denounced Martin.Libya is saved, we save the banks, and we? We will not let them kill Florange. For thirty-three years I worked here. This plant is ours. In 1992, there had been 1.5% of payroll to pay for a new galvanizing line. They killed Gandhinagar, they will not kill Florange. Angry? Today, it is not anger, it's disgust. "

France should maintain its valuable credit rating "AAA" Despite the security which would make Paris a portion of the bond portfolio of troubled bank Dexia and a possible capital injection into banks, analysts said a Reuters poll .

They point out that this type of guarantee, recorded as an off-balance in the public accounts, and a possible capital investment banks, which could eventually generate a profit, do not pose a risk to the sovereign debt.

But the rescue of Dexia, which should be formalized on Sunday, and a new injection of public funds in other banks will form a new constraint on the flexibilities of the French government, which announced a few weeks ago to 12 billion euros of savings in order to preserve the triple "A" credit rating the highest possible.

Analysts point out however they can not confirm their hypothesis that once the details of the dismantling of Dexia are known.

The Belgian, French and Luxembourg reaffirmed Sunday after a meeting held at midday in Brussels their solidarity in the search for a solution that ensures the future of Franco-Belgian bank.

In a joint statement, the Belgian Prime Minister Yves Leterme and French François Fillon stated that the three governments give their full support to the proposals of management of the banking group, presented at a Board of Directors scheduled to begin at 15:00 in Brussels.

The activities of the Franco-Belgian bank, first bank in size in Europe to be a victim of the crisis of sovereign debt in the euro zone could be split and the most risky assets confined to a separate structure.

Brussels and Paris are trying to agree on the guarantees afforded by the two countries to the hive to accommodate the bond portfolio of 95 billion euros in Dexia, hoping not to aggravate the situation of public finances .

The rating agency Moody's has also increased pressure on the Belgian camp Friday night: it has placed the sovereign rating of Aa1 by explaining kingdom under surveillance will include assessing the costs and liabilities that the state could play in supporting Dexia.

European shares closed Friday up and recorded a third straight session of gains, as Wall Street made by U.S. jobs figures better than expected in September.

"The employment report for this month is also surprisingly good as last month was surprisingly bad. The labor market remains weak and the Fed should not be impressed by this report, which suggests an EQ3 (a third cycle of purchasing government bonds) at the FOMC meeting of November 2, "said Rob Carnell, economist at ING Financial Markets.

The CAC 40 index gained 0.66% to 3095.56 points but under the highest of the day (3126.0) after nearly 8% over the previous two sessions.For the week, the index rose by 3.81%.

London has been 0.23%, 0.54% Frankfurt and Milan 1.29%. The pan-European Euro Stoxx 50 index rose 0.81%.

"The European stock markets appear to initiate a phase of stabilization, as the actions of several sectors (banking, insurance, oil, utilities, telecommunications). This reflects the extremely low valuations of these securities," said Vincent Guenzi, strategist at Cholet Dupont.

Axa (5.10%) finished at the top of increases in the CAC 40, followed by Total (2.85%) and Peugeot (2.56%).

Carrefour (-3.66%) registered the largest decline of the CAC on profit taking.EADS lost 3.32%, hit by the rise of the euro, which fell from 1.3190 dollars late Monday at 1.3485 late Friday afternoon, the day after the announcement of new measures support to banks by the ECB.

In the bond market, the performance of the German government bond (Bund) and 10 years has reached 2%.

U.S. stocks rebounded sharply late in the session on Tuesday purchases with it after spending most of the session in the red.

The Dow Jones gained 1.44% or 153.41 points at 10,808.71 points. The Standard & Poor's 500 benchmark fund managers, was awarded 24.72 points or 2.25% at 1123.95 points. The Nasdaq composite has been 2.95% or 68.99 points to 2404.82 points.

The U.S. stock market at large had lost 18% over the last four months, affected by poor economic growth around the world and concerns about the deficit countries in the euro area.

The magnitude of these losses out of the woods investors on the lookout for buying opportunities.In particular, they set their sights on tech stocks and banking.

"We buy a few shares. We stick to companies with strong balance sheets, or with a global presence in emerging markets, certainly not in the financial services area," said Kim Forrest, an analyst at Fort Pitt Capital Group in Pittsburgh.

Some other investors, however, favored the bank. The index of the financial sector, down nearly 30% since the market peak reached on April 29, ended up 4.1%.

The remarks of the President of the Federal Reserve were also able to help cheer the fellows.The Fed, Ben Bernanke said, is ready to take further steps to support economy "almost staggering," clearly referring to the will of the central bank to intervene further to ensure that the U.S. fall into recession.

In terms of values, Apple, including the presentation of the new iPhone has disappointed, ended down by 0.56% to 372.50 dollars. The value has sharply reduced its losses late in the session along with the market went back.

Bank of America, in session after reaching its lowest level since March 2009, ended with a gain of 4.15% to 5.76 dollars.

Citigroup rebounded by 5.5% and Morgan Stanley from 12.3% to 14.01 dollars.The value is down 48.5% this year.

Sears Holdings soared 11.7% to 63.94 dollars.

About 12.9 billion shares changed hands on the New York Stock Exchange, the Nasdaq and the Amex, more than 60% more than the usual daily average since the beginning of the year.

The growth slowdown coupled with the dynamism of the labor force will not help to reduce the number of unemployed, estimated employment center in its economic outlook. Agency employment center in Nice

Employment center does not provide for improvement on the unemployment front table and at best a stabilization of the number of job seekers in 2011 and 2012 and, at worst, a deepening if growth turned out lower than forecast government. "The slowdown in job creation combined with the dynamism of the labor force should not be allowed to initiate a decline in unemployment," said employment center in its economic outlook published Tuesday, October 4.

For 2011, the Agency plans to increase the number of job seekers without any activity of 5000 and 78,000 by including persons who have reduced activity.These predictions are based on a growth assumption of 1.75%, made by the government. Next year, "unemployment started to decline," if growth remained at 1.7% (assuming the government), with a decline in the number of job seekers with no activity on the order of 5000 and 12,000 by integrating people with reduced activity.

However, "if growth slowed in 2012, unemployment would continue to grow," said employment center. Based on a growth assumption of 1.4% (the IMF), the number of job seekers with no activity would increase by about 27,000.The prospect of a "stabilization of unemployment seems reasonable, except major accident" by the end of the year, said at a press briefing Christian Charpy, general manager of employment center.

Job creation is not strong enough to absorb the increase of the labor force

But, "unemployment will not reach the level it had before the entry into recession in early 2008," noted Bernard Ernst, director of studies of employment center who recalled that in previous crises of 1974 and 1992 the Unemployment had found "quite quickly" its pre-crisis. These forecasts are more optimistic than those of UNEDIC (unemployment insurance) that, based on growth in 2012 of 1.2% (consensus of economists) has provided an increase of 36,700 unemployed with no activity this year and 55,500 next year. "At this stage, a forecast of 1.2% in 2012 seems overly pessimistic," said Mr.Charpy.

Employment center provides, in addition, 130,000 net new jobs this year by companies affiliated with unemployment insurance, but the momentum is down (44 000 in the second half, against 96,000 in the first). In 2012, job creation should remain the same (126 000) if growth remained at 1.7% but reach only 101,000, with growth slowing to 1.4%. These new jobs do not seem sufficient to reduce unemployment because they are less than the increase in the labor force estimated at 140,000 or 150,000 per year.

According to Bernard Ernst, the labor force could grow more than expected after the announcement by INSEE in mid-May to strong growth in first quarter (0.9%).The prospect of an upturn in the economy brought on the labor market of people (youth, women etc) that were not previously found that increased enrollment in the employment center lists the "first mover" and people signing up for a "return to work," he said. "Registration for employment center are not independent of the economy" said Mr. Charpy.

Hermes currently finds no sign of spending restraint to its customers despite a darkening economic outlook, said Sunday the manager of the French luxury group on the fringes of Paris Fashion Week.

"At the moment, there is no impact on our sales," said Patrick Thomas told Reuters, adding that think the purchasing power of customers in the luxury had not yet been assigned.

"The fact that it does not see today does not mean it will not happen", he warned, however.

"When there are moments of macroeconomic concerns, it always results in our businesses."

The values ​​of luxury was heckled last week in the markets, amid concerns about the evolution of the Chinese market and the strength of demand for luxury goods in slowing global economy.

Patrick Thomas, however, has sought reassurance about the level of sales of Hermes in September. "September went well," he said.

In addition, the manager of the saddle on the Rue du Faubourg Saint-Honore said Hermes would soon create the family holding to sanctuaries a majority stake in the group face to the appetites of LVMH.

"It'll be soon. There are many administrative procedures," he said.