alamat palsu: recoverY (3)

Euro zone finance ministers to rule on glacial Greek debt talks
Reuters – 3 hours ago

By Jan Strupczewski and Ingrid Melander

BRUSSELS/ATHENS (Reuters) – Euro zone finance ministers will decide on Monday what terms of a Greek debt restructuring they are ready to accept as part of a second bailout package for Athens after negotiators for private creditors said they could not improve their offer.

Resolving the issue of a Greek debt swap is key to putting Athens’ debt on a sustainable path and avoiding a chaotic default that could threaten the whole currency bloc.

After several rounds of talks, Greece and its private creditors are converging on a deal in which private bondholders would take a real loss of 65 to 70 percent on their Greek bonds, officials close to the negotiations said.

But some details of the debt restructuring, which will involve swapping existing Greek bonds for new, longer-term bonds to bring Greek debt down to a more sustainable 120 percent of GDP in 2020 from 160 percent now, are unresolved.

“What I am confident of is that our offer, that was delivered to the prime minister, is the maximum offer consistent with a voluntary PSI deal,” Institute of International Finance chief Charles Dallara, who is negotiating on behalf of banks and insurers holding Greek debt, told Antenna TV on Sunday.

“We are at a crossroads and I remain quite hopeful,” said Dallara, who left Athens on Saturday without a deal in place.

“We will listen to the report on the negotiations, see how far they have gotten and have the ministers say what is acceptable and what is not in terms of outcome of the negotiations,” one Eurogroup official said.

Once the guidance from the finance ministers, known as the Eurogroup, is clear, talks on the restructuring could be finalized later in the week.

Talks on the extent of Private Sector Involvement (PSI) in the Greek debt restructuring are a vital part of a second financing package for Athens that would keep it funded until 2014.

“We are working for a deal in time for the January 30 summit of EU leaders. The restructuring offer needs to be made in the course of February,” the official said.

“Obviously there is a clear link between the PSI and the next programme and what we will be focusing on in the Eurogroup is making the next programme operational.”

Without the second bailout from the euro zone and the International Monetary Fund, Greece will not be able to pay back 14.5 billion euros in maturing bonds in March, triggering a messy default that would hurt the whole euro zone economy.

There are doubts that even with a new bailout Greece’s mountainous debt can be reduced to a still-painful 120 percent of GDP by 2020.

German Finance Minister Wolfgang Schaeuble said on Sunday the crucial factor was that Athens should have a level of debt that was sustainable by then. “This goal must be achieved,” he told German public broadcaster ARD.

STICKING POINT

Euro zone leaders agreed in October that the second bailout would total 130 billion euros, if private bondholders forgave half of what Greece owes them in nominal terms.

But Greek economic prospects have deteriorated since then, which means either euro zone governments or investors will have to contribute more than thought.

The main sticking point is coupon, or interest rate, the new Greek bonds would carry. Officials said the new bonds are likely to be 30 years in maturity and carry a progressively higher coupon, which would average out at around 4 percent.

“The euro zone ministers will examine the proposal and say whether we have a deal. If they say we don’t, we’re back to the negotiating table,” a banking source close to the talks said.

Progress will be presented to euro zone ministers by Greek Finance Minister Evangelos Venizelos.

“We then expect a discussion about the coupon,” a senior Greek banker close to the negotiations told Reuters.

“I believe that the private sector can accept a lower coupon than the 4 percent average, but the question then is: will the PSI still be on a voluntary basis?” he said.

The voluntary character of the debt restructuring is important to avoid triggering the pay-out of insurance against a Greek default.

While the sums of such insurance appear relatively small, euro zone officials said, such a “credit event” could trigger a chain reaction of events that would entail rapid and large scale contagion in euro zone debt markets, and is thus best avoided.

NEW RESCUE FUND

After dealing with Greece, euro zone ministers will choose a replacement for European Central Bank Board member Jose Manuel Gonzales Paramo, whose term ends in May.

The 17 ministers of the euro zone will then be joined by 10 ministers from the other European Union countries to finalise a treaty setting up the euro zone’s permanent bailout fund – the 500 billion euro European Stability Mechanism (ESM). Its predecessor, the EFSF, is widely viewed as insufficient.

The ESM is another crucial element in the bloc’s efforts to end the sovereign debt crisis that threatens to engulf Spain and Italy after claiming Greece, Ireland and Portugal.

The fund should boost market confidence in euro zone defences should Spain or Italy need emergency financing. Separately, the IMF has launched a proposal to boost its war chest by $600 billion.

IMF head Christine Lagarde is to discuss this during a meeting with German Chancellor Angela Merkel on Sunday. She will make a speech on Monday in which she is expected to urge euro zone leaders to act quickly while acknowledging it is not merely Europe’s problem because “innocent bystanders” will also be hit by a worsening debt crisis.

The 27 EU finance ministers will also prepare the final draft of another treaty to sharply tighten fiscal discipline in the euro zone, called the fiscal compact, that is designed to ensure another sovereign debt crisis cannot happen in future.

EU leaders are to sign off on both treaties on January 30, allowing the ESM to become operational in July.

To prepare for the January 30 summit, Merkel will meet European Commission President Jose Manuel Barroso and European Council President Herman Van Rompuy on Monday evening.

(Additional reporting by Lefteris Papadimas and Ingrid Melander in Athens; Reporting By Jan Strupczewski, editing by Mike Peacock)
European banks prepare for worst, hoard cash

10:43am EST

By Gareth Gore and Christopher Whittall

Jan 20 (IFR) – European banks are preparing for a potential worsening of the region’s sovereign and banking crisis, with many firms stockpiling cash and cutting back on loans to new clients as they seek to protect themselves against a possible seizing-up of financial markets.

Faced with 650 billion euros of debt coming due this year – almost 40 percent of which matures before the end of March – lenders are choosing to build up a cash cushion to ensure they can cover redemptions, creating a squeeze on the wider economy in the process.

Such hoarding illustrates the nervousness of lenders even after the European Central Bank injected 489 billion euros of cash into the banking system in December. Cash deposits at the ECB have ballooned since then, reaching a record 528 billion euros this week – higher than after the Lehman Brothers collapse.

“The big concern is that things might get worse,” said Bernd Hartwig, treasury manager at Nord/LB. “Political decisions are taking too long and most banks are building up liquidity just in case something happens. They are very worried that a new crisis could be a bigger than 2008.”

System-wide hoarding is the reverse of what happened the last time central banks injected hundreds of billions of long-term money into the system. Then, banks moved quickly to put the money to work and generate returns, sparking bond and equity market rallies – and economic growth.

The US Federal Reserve almost trebled the size of its balance sheet to more than $2 trillion in the months after the collapse of Lehman Brothers, pumping cash into the banking system through programs such as the Term Auction Facility. The ECB grew its balance sheet by about a quarter in that time.

WAIT AND SEE

But this time round, many banks have taken the decision to wait. While some have paid off interbank loans – so boosting the cash reserves of creditor banks – and a handful have bought some domestic government paper, most are choosing not to commit new cash to assets or to lending.

“For many banks it’s all about survival and they have just bought more time for themselves with the ECB money,” said the treasurer of one of Europe’s largest banks. “None of the fundamentals have been addressed. People are in standby mode – you might need lots of liquidity at short notice.”

There are other factors at work, too. Banks face strict new capital and liquidity rules, and many are planning to shrink their balance sheets in order to meet those targets – not buy more. They also do not want to commit to new assets because selling out could prove difficult should conditions worsen.

“The problem is completely different from 2009,” said Elie el Hayek, global head of interest rates at HSBC. “Back then, a big proportion of the money went into assets. This time, banks cannot do that simply because they need to protect their capital and liquidity. They know any mark-to-mark losses will eat into those buffers so they don’t want to take the risk.”

PREMATURE OPTIMISM?

Recent market optimism might also be premature. Although recent sovereign bond deals have been well bid, bankers say buying in secondary markets has been weak, and that there are few signs of banks using fresh cash to buy up European government bonds.

The lack of demand in secondary markets is partly due to the stigma now attached to peripheral bonds. Investors and regulators have started to ask more questions about such exposures, with the European Banking Authority penalizing banks for holding Spanish and Italian bonds during recent stress tests. Italian 10-year bond yields have fallen slightly in recent weeks, but have not dropped below 6.3 percent since early December.

“Banks are coming under political pressure to buy in the primary market,” said Pavan Wadhwa, head of global interest rate strategy at JP Morgan. “Given the lack of demand in the secondary market for peripheral paper, we estimate the ECB would need to more than double its current pace of purchases of Italian and Spanish paper to stabilize markets at the longer end.”

On the funding side, a recent fillip in bank bond deals also masks deep underlying problems. Banks have raised more through unsecured bond issues in January than they did in the whole of the second half of 2011. But only the highest rated banks have been able to get deals done.

That leaves hundreds of other firms with debts coming due and no prospect of tapping private investors. At the ECB’s first three-year long-term refinancing operation in December, 523 banks collectively borrowed 489 billion euros. Bankers expect the February three-year LTRO to be popular too.

“The concurrent increase in deposits at the ECB is consistent with banks building up funds to replace maturing debt,” Fitch Ratings said in a report this week. “We expect the next three-year funding round in February to see a similarly high level of take-up.”

NEGATIVE CARRY

Although banks earn little by depositing cash at the ECB – a measly 0.25 percent – and so effectively lose money because they are paying a much higher rate to borrow the cash in the first place either from the central bank or privately, treasury officials and CFOs feel justified making those losses.

“Running a liquidity position is a cost,” said the treasurer at a bank facing one of the highest refinancing hurdles this year, who confirmed that the bank had tapped the ECB in December only to deposit the money right back there. “But taking cheap money from the ECB is going to increase your liquidity and placate investors and shareholders.”

High deposits at the ECB are not necessarily being made by the same banks borrowing from the central bank – although there is some anecdotal evidence of a handful doing that. Rather, high deposits are indicative of cash being hoarded on a system-wide basis.

For now, banks say they will sit on the cash until the larger problems are sorted. “Do I want new customers with high risk and low rates? I don’t think so,” said one treasurer.

If, however, confidence returns to the markets and banks become less fearful, a huge bounce in asset prices is possible. Some believe that the slow build-up of cash at the ECB creates the potential for a massive asset binge should nervousness ease and bank funding stabilize. The ECB balance sheet recently reached a record 2.7 trillion euros, the highest in its short history.

(This story will appear in the January 21 issue of the International Financing Review, a Thomson Reuters Publication. www.ifre.com )

Lembaga pemeringkat internasional, Moody’s Rating, menyatakan peringkat Indonesia masih bisa naik lagi. Asalkan memenuhi beberapa syarat yang ditentukan.

Berdasarkan siaran pers Moody’s yang dikutip detikFinance, Rabu (18/1/2012), beberapa faktor yang bisa menyebabkan pangkat Indonesia naik lagi antara lain:

Melebarkan ruang fiskal untuk meningkatkan pendapatan

Kondisi neraca pembayaran yang sehat secara berkelanjutan

Rekam jejak stabilitas moneter dan harga barang

Perkembangan dalam menyelesaikan hambatan-hambatan dalam infrastruktur sehingga menamba potensi pertumbuhan ekonomi

Menggenjot permodalan dan kredit dalam negeri secara bertahap supaya mempermudah akses pinjaman ke luar negeri.

Akan tetapi, Moody’s juga tak hanya mengiming-imingi untuk kembali menaikkan peringkat Indonesia, tapi juga memberikan peringatan peringkat tersebut sewaktu-waktu bisa diturunkan juga.

Turunnya peringkat tersebut diakibatkan oleh beberapa faktor seperti di bawah ini:

Inflasi tak terkendali dan stabilitas moneter

Gejolak hebat akan fiskal dalam negeri

Utang dan nilai tukar mata uang yang berbalik arah, misalnya, gara-gara salah mengeluarkan kebijakan Situasi politik yang tiba-tiba menggucang dan menghilangkan kepercayaan masyarakat dan investor asing

Seperti diketahui, Moody’s Rating menaikkan peringkat utang luar negeri Indonesia menjadi Baa3 dari sebelumnya Ba1. Outlook untuk peringkat ini ditetapkan stabil.

Ini merupakan kali kedua Indonesia mendapatkan kenaikan peringkat. Sebelumnya, pada 15 Desember 2011 lalu salah satu dari tiga lembaga pemeringkat kelas dunia, Fitch’s Rating menaikkan peringkat Indonesia dari BB+ menjadi BBB-. Ini merupakan peringkat yang setara dengan investment grade alias negara yang layak menjadi tempat berinvestasi.

Sumber: detikcom
Dollar Slides on Signs of Economic Recovery
By Monami Yui and Masaki Kondo – Jan 18, 2012

The dollar fell against most of its major counterparts before U.S. data today forecast to show industrial production rose and confidence among homebuilders increased, reducing demand for safer assets.

The euro gained versus the greenback for a second day after a hedge-fund manager on a creditors’ committee for Greece said yesterday the country is nearing a deal on its debt. Greek Prime Minister Lucas Papademos will resume negotiations with private bondholders today. Australia’s dollar traded near the highest level in 11 weeks before a report tomorrow that may show the country’s employers added jobs in December.

“The U.S. economy is showing signs of recovery,” said Thomas Averill, managing director in Sydney at Rochford Capital, a currency and interest-rate risk-management company. Haven currencies including the dollar and the yen “will come under a bit more pressure” over the next 12 months, he said.

The dollar weakened 0.3 percent to $1.2777 per euro at 2:28 p.m. in Tokyo from New York yesterday. The yen slid 0.1 percent to 97.97 per euro, following a 0.6 percent decline yesterday. The dollar was at 76.68 yen from 76.83.

Output at U.S. factories, mines and utilities probably increased 0.5 percent in December after a 0.2 percent drop in the prior month, according to the median estimate of economists in a Bloomberg News survey before the Federal Reserve releases the figures. The National Association of Home Builders/Wells Fargo index of builder confidence is projected to rise to 22 this month, a separate poll shows. That would be the highest since May 2010 and an increase from December’s figure of 21.
Debt Negotiations

Greece will resume talks today with the Institute of International Finance, which represents private creditors. The Washington based IIF broke off negotiations last week after failing to agree with the government about how much money investors will lose by swapping their bonds.

Demand for the euro increased as Bruce Richards, chief executive officer of New York-based Marathon Asset Management LP, said Greece is nearing a deal with bondholders that would give them cash and securities with a market value of about 32 cents per euro of government debt.

“I’m highly confident the deal will get done,” Richards said in a telephone interview yesterday with Bloomberg Businessweek. Marathon is on the committee of 32 private creditors.
Shorting the Euro

Futures traders last week increased bets to a record that the euro would weaken against the dollar. The difference between wagers that the shared currency will fall versus those that it will rise — so called net shorts — surged to 155,195 in the week ended Jan. 10, data from the Commodity Futures Trading Commission showed on Jan. 13.

“Because short positions have accumulated, there is an unwinding of these positions,” said Toshiya Yamauchi, a senior currency analyst in Tokyo at Ueda Harlow Ltd., which provides foreign-exchange margin trading services. “Only expectations are supporting the euro, including one that Greece’s debt-swap deal will be settled somehow.”

Fitch Ratings joined Standard & Poor’s in warning that Greece will fail to fully honor a bond payment, adding to concern that a first sovereign default in the euro area will further undermine investor confidence in the common currency.
Greek Default

“The so-called private sector involvement, for us, would count as a default,” Fitch Managing Director Edward Parker said yesterday in an interview. “So it won’t be a surprise when the Greek default actually happens and we expect it one way or the other to be relatively soon.”

Moritz Kraemer, S&P’s managing director of European sovereign ratings, said a day earlier that “Greece will default very shortly” because the proposed debt swap is considered a default.

The euro has weakened 4.1 percent over the past six months, according to Bloomberg Correlation-Weighted Indexes. The yen has risen 8.6 percent, the best performance among the 10 currencies tracked by the gauges. The dollar advanced 6.7 percent.

“The possibility is rising that a Greek default will become a reality,” said Koji Iwata, a vice president in New York at Mizuho Corporate Bank Ltd., a unit of Japan’s third- biggest banking group by market value. “Concerns about the euro have yet to disappear, so it isn’t going to have a big rebound.”

Portugal is due to offer bills today maturing in 91, 182 and 336 days, after Spain yesterday auctioned 12-month debt at an average yield of 2.049 percent, compared with 4.05 percent at a sale on Dec. 13. Greece sold 1.625 billion euros ($2.1 billion) of 13-week bills yesterday with a yield of 4.64 percent, down from 4.68 percent on Dec. 20.
Aussie Dollar

The Australian dollar advanced for a second day before government data forecast to show the number of people employed in Australia rose by 10,000 last month after a decline of 6,300 in November. The jobless rate is projected to remain unchanged at 5.3 percent, according to the median of economists’ estimates in a Bloomberg survey.

“We could get a lift in the short term for the Aussie on the back of the jobs data, which is likely to be relatively strong,” said Jim Vrondas, a manager at the online foreign- exchange dealer OzForex Ltd. in Sydney. “When risk comes on the table again, the Aussie will go higher, but that would probably be a good opportunity to sell.”

The so-called Aussie strengthened 0.1 percent to $1.0391. It rose as high as $1.0450 yesterday, the strongest level since Nov. 1.

– With assistance from Candice Zachariahs in Sydney and Mika Otsuka in New York. Editors: Benjamin Purvis, Jonathan Annells
JAKARTA: Pencapaian rating layak investasi seperti tak berdampak secara langsung kepada Indonesia, karena ada permasalahan kompleks yang mendera perekonomian global. Namun, pelaku usaha harus memandang pencapaian rating itu sebagai momentum untuk tetap bergerak.

Hal tersebut disampaikan oleh Gubernur Bank Indonesia Darmin Nasution dalam keynote Financial Lecture “Pasca Investment Grade” What’s Next? Yang di gelar Bisnis Indonesia, pagi ini.

Darmin menyampaikan pencapaian peringkat layak investasi bisa dikatakan prestasi Indonesia setelah 14 tahun melakukan pembenahan. Namun, sambungnya, yang paling istimewa pencapaian itu diperoleh saat negara lain, terutama negara maju, mengalami penurunan peringkat.

“Kita perlu menghargai karena saat perekonomian dunia sedang bergejolak dimana sejumlah negara, bahkan yang rating AAA mengalami penurunan rating. Saya kira kontras itu betapa Indonesia telah belajar banyak memperbaiki banyak dari krisis yang berlaku sejak 1997-1998,” terangnya.

Namun, tuturnya, pencapaian peringkat layak investasi itu pada saat ekonomi Eropa dan Amerika tengah ‘tenggelam’ dalam krisis, sehingga dampak dari aliran dana asing tak begitu terasa, karena tiap pemodal mengamankan likuiditasnya.

Bahkan, lanjutnya, pemodal cenderung menarik modal dalam kondisi panik. Hal itu terlihat dari penempatan dana Sertifikat Bank Indonesia yang menurun pada level terendah pada posisi 13 Januari Rp2,7 triliun.

“Kenaikan rating itu dihadapkan pada situasi mix. Kita menghadapi situasi dimana persepsi pasar di suatu pihak mengapresiasi pasar kita, tapi pihak lain keuangan dunia sedang bergejolak yang sebenarnya sumber dari AS tapi kemudian ke zona Euro,” paparnya.

Satu sisi, ungkapnya, perlu ada pembenahan di dalam negeri guna mengantisipasi perbaikan ekonomi global. Pasalnya pada saat ekonomi membaik aliran dana akan meningkat, sehingga jika Indonesia tak siap justru akan sia-sia.

“Maaf saya tak pidato berbunga-bunga dalam investement grade, karena ini hanya tonggak mengukur diri kita untuk terus maju berjalan, karena kita akan sadar dilewati negara lain jika tak bergerak,” tegasnya.

http://www.bisnis.com/articles/financial-lecture-ekonomi-global-didera-masalah-kompleks

Sumber : BISNIS.COM
STRASBOURG, Jan 16, 2012 (AFP)
European Central Bank chief Mario Draghi on Monday downplayed the importance of ratings agencies after Standard & Poor’s mass downgrade of eurozone countries, saying markets had priced in the action.

“I think what we should do is to learn either to do without them or with them but to a much more limited way than we do today,” said Draghi, in his capacity as head of the European Systemic Risk Board (ESRB).

“To a great extent, markets anticipated these ratings changes and priced their assets as if these ratings had already been issued,” said Draghi, speaking at the European Parliament in Strasbourg.

Europe’s leading stock markets on Monday shrugged off a wave of ratings downgrades on Friday, including that of France’s triple-A status, while the euro remained essentially unchanged.

As Draghi was speaking, S&P also downgraded the EU bailout fund EFSF by one notch to AA+ but said it would restore the top AAA ranking if the fund obtains additional guarantees.

Asked about this, Draghi said that other top-ranked countries would have to put more cash into the EFSF if the bailout fund wanted the same firepower.

“If you want the same price and lending capacity … you have to have additional contributions from triple-A countries,” he said.

Following S&P’s lowering of former triple-A France and Austria, only four countries in the eurozone retain their top ranking: Germany, Netherlands, Luxembourg and Finland.

The ECB president also appeared to suggest widening out the number of ratings agencies.

“We don’t have competition in the rating industry, so whatever we do to increase this competition is well done,” he said.

“We should learn to assess creditworthiness in a way in which ratings, or credit ratings agencies, are one of the many components of our information, we don’t depend 100 percent on the ratings agencies,” he added.

Draghi also issued a dire warning on the eurozone financial crisis, saying it had got worse in the past few months, describing it as “very grave”.

“When my predecessor Jean-Claude Trichet addressed this committee last October, he characterised the current crisis as one that had reached systemic dimensions. Since then, the situation has worsened further,” he said.

“We are in a very grave state of affairs and we must not shy away from this fact,” added Draghi.

He also warned European leaders that efforts to tighten the bloc’s fiscal rules as a response to the crisis must be implemented quickly.

“The euro area heads of state and government have agreed on an important fiscal compact,” said Draghi.

“However, decisions without matching actions are not enough,” cautioned the ECB president.

The ESRB was set up by the European Union to identify any emerging problems in Europe’s financial system so that relevant authorities could act correspondingly.

Although officially speaking as head of the ESRB, Draghi also defended the ECB’s actions in providing nearly half a trillion euros of funds to banks in a bid to ease credit conditions in the eurozone.

The ECB decided last month to make unlimited amounts of liquidity available to eurozone banks at super-cheap rates for a period of three years, the longest refinancing operation conducted by the ECB yet.

With these actions, “we think we have avoided a major credit crunch even though in some parts of the (euro) area, this credit crunch is already on its way”.

Asked about Greece, Draghi said he could only offer generalised comments, given talks were ongoing between Athens and its creditors.

However, he said that “both because of much lower growth and because of some lack of implementation”, Greece’s fiscal programme “isn’t delivering what was expected”.

PARIS, Jan 16, 2012 (AFP)
The Standard and Poor’s ratings agency on Monday downgraded the EU bailout fund EFSF by one notch to AA+ but said it would restore the top AAA ranking if the fund obtains additional guarantees.

The decision was the result of downgrades to France’s and Austria’s ratings from AAA since they served as top-level guarantors of the European Financial Stability Facility, S&P said in a statement.

“The EFSF’s obligations are no longer fully supported either by guarantees from EFSF members rated ‘AAA’ by Standard & Poor’s, or by ‘AAA’ rated securities,” said S&P.

The eurozone’s temporary bailout fund uses guarantees from its top-rated members to borrow funds at low rates on the market to loan onwards to countries which can no longer borrow on their own at affordable rates.

S&P’s downgrade of France and Austria to AA+ deprived the eurozone of two of the six triple-A countries that had underpinned the EFSF’s top rating.

“The outlook is developing, which reflects that we could raise the EFSF’s long-term rating to ‘AAA’ if we see that additional credit enhancements are put in place,” said S&P.

Eurozone countries have already been looking at whether to boost the EFSF, as it is now seen as insufficient if either Spain or Italy stumble, but so far Germany has stood squarely against increasing its contribution.

German Finance Minister Wolfgang Schaeuble told Deutschlandfunk public radio: “The guarantees for the EFSF are largely enough for what it has to do in the coming months.”

Following the S&P downgrade the German finance ministry said no immediate action was needed on the EFSF.

However European Central Bank head Mario Draghi warned Monday that if the eurozone wanted to have the same level of rescue funds at the same cost it then top-rated countries would have to stump up more guarantees.

“If you want the same price and lending capacity … you have to have additional contributions from triple-A countries,” said Draghi, adding otherwise the EFSF would have less capacity or higher costs.

The EFSF, which started off with borrowing power of 440 billion euros, has 250 billion euros left following rescues of Portugal and Ireland.

Greece is also awaiting a second bailout, leaving scant funds to come to the aid of Italy or Spain, the eurozone’s third and fourth economies, which have been faced with elevated borrowing costs.

A permanent fund, the European Stability Mechanism (ESM), is due to begin operating in July. It will run in parallel with the EFSF, a temporary instrument, for one year.

The combined capacity of both funds is supposed to be capped at 500 billion euros, but several countries, the European Central Bank and the European Commission want it to be bigger.

S&P warned that if it concludes credit enhancements are not likely to be made on the EFSF it will switch its rating outlook to negative to mirror the outlooks on France and Austria, and continue to be linked to changes in their ratings.

Cooling economy leaves air
in China’s homes market
By Robert M Cutler

MONTREAL – Property prices continue to decrease in China, but there is no sound of a bubble popping. The China Index Academy, an institute focusing on real estate, reports that property prices declined in November for the third month in a row, down 0.3% from October after October was down 0.2% from September. Prices fell in all 10 of the biggest cities, and in 57 of the 100 that the Academy tracks.

This is in line with the report last month by China’s National Bureau of Statistics that that residential property prices fell in October in 33 of the 70 cities it tracks, double the number from September. In a report released on Monday, Credit Suisse forecasts residential property prices in China to decline 20% from their high in 2011 through the end of 2012.

Home prices in many second- and third-tier cities still grew

Dilbert

strongly, as the central government continued to enforce policies to restrict home purchases on the local governments. The latter, by contrast, have an interest in liberalizing such purchases because local authorities derive significant revenue from sales of land. That is easier for them than crafting policies to promote small and medium enterprises, which therefore suffer and have not driven job-creation as strongly as they might have done.

Other statistics released this week suggest a continuing slowdown in Chinese economic growth, also due to domestic rather than international factors. From China, economists look at two Purchasing Managers Indexes (PMIs), which are measures of manufacturing activity with a neutral value of 50. A figure over 50 indicates economic expansion, and under 50 contraction. The official PMI released by the China Federation of Logistics and Purchasing fell from 50.4 in October to 49 last month, while the PMI compiled by HSBC fell from 51 to 47.7.

The PMI news follows the November 29 action by the People’s Bank of China (PBoC – central bank) to cut the required reserve ratio for the country’s banks by half a percentage point to 21% for the largest banks. This had the effect of increasing the amount of capital available for transfers among banks and for lending, and was seen as an indicator of the end of a general policy of monetary tightening.

In response, the SSCI stock index in Shanghai jumped 2.3% in a single day, although it has since settled back down to its level of a week ago, before the move. The SSCI is now at its lowest level since March 2009 and is still imprisoned in a marked downtrend channel that began eight months ago. If the high 2,200s are violated, then the next potential technical support (based December 2008) is to be found at 2,020, with real terra firma only lower, in the low 1,700s. Short-term technical indicators are generally unfavorable, medium-term indicators likewise unfavorable although a bit less so.

Declining real property prices and the loosening by the PBoC have increased the impression, or at least the hope, that China may obtain its desired “soft landing”. However, the PBOC’s loosening together with an anticipation relaxation of central restrictions on local property sales may lead to inflating the property bubble once more.

But Morgan Stanley’s Stephen Roach is skeptical of the skeptics, telling Bloomberg News that while Europe, China’s biggest export market, is showing softening demand, nevertheless China can be expected to “make conventional policy adjustments to stimulate their economy”, which the US for example cannot do. Roach expects inflation to continue to fall in China.

If the central decision has been taken in Beijing that there should be no more property bubble, then there could be negative consequences for economic growth next year. Decreased home construction would have knock-on slowdown effects in related industries, and demand would also fall for products and materials whether domestic or imported. Such a slowdown could be felt worldwide through, for example, decreased prices for copper, which is widely used in home construction and home appliances.

Already there is discontent among recent home and apartment buyers who have seen prices fall by as much as 20% since their purchases were finalized. Developers will have to cut prices even more to unload inventories in order to service their debts. Housing starts in August were up by almost one-third over August 2010, but in October they were essentially the same as October a year ago.

Despite this and other social problems related to housing (for example, there are also older Chinese who have put their life savings into real estate), an expert consensus is forming that the real estate bubble in China has been exaggerated. That is not to say that problems do not exist and will not continue. However, even a generalization of price cuts across the board for homes would not produce a “systemic crisis” because of strict mortgage regulation and the requirements for large down payments.

Dr Robert M Cutler (http://www.robertcutler.org), educated at the Massachusetts Institute of Technology and The University of Michigan, has researched and taught at universities in the United States, Canada, France, Switzerland, and Russia. Now senior research fellow in the Institute of European, Russian and Eurasian Studies, Carleton University, Canada, he also consults privately in a variety of fields.
Southeast Asia-China rise, fall together
By Shawn W Crispin

BANGKOK – If China slips, how far will Southeast Asia fall? With the United States and Europe facing prolonged and potentially worsening economic downturns, concerns are rising that China’s earlier resilience to global economic turmoil is starting to fade, darkening the outlook for the rest of emerging Asia.

China’s resilient growth helped Southeast Asia bounce back briskly from the 2008-9 global financial crisis, providing an alternative and fast growing source of demand for the region’s many export-geared economies. The recent rise of that intra-regional trade has been interpreted by some analysts as a sign that Southeast Asia has ”decoupled” from its past heavy reliance on Western export markets through greater integration with China.
Hard and soft commodities now account for 44% of Southeast

Asia’s total exports, a percentage that has risen this year while the region’s manufacturing shipments to the US and Europe have faltered. China’s emergence as a source of final demand for food, fuels and basic manufactured goods has contributed to the shift, a trade trend that has buoyed commodity exporters in Indonesia (coal, natural gas), Malaysia (palm and crude oil) and Thailand (foods).

At the same time, a much larger percentage of the region’s China-bound exports are processed in Chinese factories into products that are ultimately re-exported to the wider world. While China’s share of global imports has nearly doubled since 2003, rising from around 5% to 9%, its global share of domestic consumption is still small compared to the West. Consumption is a mere 35% of gross domestic product (GDP) in China, around half the amount in the US.

For Southeast Asia, China still serves more prominently as a regional assembly plant for re-export than as a final consumer of its commodities and products. Credit Suisse, an investment bank, shows in recent research that while official trade figures in Indonesia, Malaysia, Singapore and Thailand indicate that less than 30% of each countries’ total exports are sent directly to the West, the actual diversification is misleading when the final destination of the products is traced.

While less than 20% of Singapore’s exports are sent directly to the US and Europe, correlation statistics show that nearly 90% ultimately end up in either market. Only 20% of Indonesia’s shipments are sent directly to the West but 85% eventuate in the US and Europe after being re-exported from second countries, mainly China. In Thailand, where exports account for over 70% of GDP, the breakdown is 25% and 85% respectively. (Although less export-oriented, the Philippines has the most genuinely diversified trade in the region.)

Statistical haze
China’s dominant role in processing and re-exporting Southeast Asia’s commodity exports make the region especially vulnerable to a potential Chinese downturn. A residential property bubble, the impact of rising wages on global competitiveness and signs of weakening exports all threaten to undermine China’s 2012 growth prospects. The question to many analysts is whether China’s economy will merely slow or totally collapse.

Amid those signs of trouble, Chinese authorities are apparently doctoring official statistics more than normal to maintain confidence in the broad economy’s direction. Investment bank analysts note that robust export growth figures for November reported by China’s General Administration of Customs are at clear odds with more downcast container throughput statistics released by different Chinese ports.

The upbeat export growth statistics are also at seeming odds with the growing number of reported factory closures in the country’s southern export belt, which in recent months has been buffeted by rising worker unrest. Doubts have also been cast on last month’s official 16.9% jump in retail sales, which was out of step with a coincident month-on-month fall in inflation. China’s residential property problem, meanwhile, is the country’s largest statistical black hole.

With those contradictory indicators, economic analysts are now weighing hard and soft landing scenarios. The soft landing view foresees Chinese central technocrats responding timely with well-calibrated fiscal and monetary policies that maintain GDP growth of around 8%, the annual rate Beijing must achieve to absorb new graduates into the work force and keep unemployment manageable.

The hard landing scenario predicts that an uncontrolled implosion of the property market will unleash waves of wealth destruction, a credit crunch and consumption collapse that no amount of government intervention will be able to meaningfully forestall. That view sees worrying similarities, including a property bubble, questionably lending practices and deterioration in the current account, to the signs seen before Southeast Asia’s spectacular 1997-8 financial and economic collapse.

Blind consensus
Despite those signs of weakness, the consensus view among international investment banks, multilateral lenders and sovereign rating agencies is for a soft rather than hard landing. The World Bank’s 2012 economic growth forecasts for Southeast Asian countries are predicated on economic growth of around 8% in China. Investment banks CLSA, JP Morgan and UBS have all forecast in recent research notes a moderate rather than severe slowdown in China next year.

Kim Eng Tan, a director of sovereign and international public finance ratings at Standard & Poor’s, plays down the potential for a near-term hard landing, in part because the government will prioritize and has the policy tools at its disposal to maintain strong economic growth during the leadership transition from President Hu Jintao to Xi Jinping scheduled for the autumn of next year. He argues that China’s property bubble is less risky than the ones that have popped in the US and Europe because China’s banks have lent mainly to the rich and powerful rather than subprime borrowers who have defaulted en masse on their housing loans in the West.

Sriyan Pietersz, JP Morgan’s Bangkok-based head of research, believes there is room for China’s central technocrats to take a policy ”middle path”, one that maintains steady fast economic growth and continues to buoy Southeast Asia. He believes economic managers will respond in ”two step” fashion, with new stimulus measures targeting the productive side of the economy while other policy measures address problems in the non-productive sector, ie the property market.

Such a policy balance, Pietersz argues, would maintain strong Chinese demand for Southeast Asian commodities, an asset class he views as a ”safe haven” from global market volatility because most – including liquefied natural gas, coal and rice – are not traded on formal financial markets and thus are priced more by underlying demand than market-driven speculation.

Unlike the 2008-9 global financial crisis, when a crash in global manufacturing drove a collapse in global commodity prices, the two are moving in divergent directions (manufacturing down, commodities up) under current market pressures. Pietersz argues that’s because Chinese authorities are reacting more quickly to the threat of global weakening than they did in 2008, including a recent easing in reserve requirements for lenders and ramped up central government fiscal spending on infrastructure.

Tide of history
While China is reacting, other analysts have already raised doubts about the quality of the response and authorities’ ability to quarantine the economic good from the bad. A similar state-led push in 2008-9 bankrupted many provincial governments who were given a carte blanche to spend to maintain fast national growth. The head of research at an international investment bank, who requested anonymity because his personal views are at odds with his institution’s soft landing forecast, questions the economic wisdom of current fiscal plans to build as many as eight million new public housing units and thus boosting supply at a time the private residential market faces a price bubble.

He argues that no country in economic history has ever invested over 40% of GDP for five consecutive years – real-estate investments account for nearly half of the recent overall rise in total investment – and not eventually suffered a financial crisis. One of his top institutional investor clients is now short-selling consumption-related stocks worldwide in anticipation of an eventual Chinese, and by association, commodity price collapse.

Should that bearish view gain greater market currency, commodity prices would likely be among the first China-related asset classes to tumble. There were indications markets were moving in the direction in September when many Southeast Asian stock markets weakened, apparently amid concerns about the durability of China’s future growth. While Southeast Asia has benefited by piggybacking on China’s until now strong growth and demand for commodities, the region will inevitably be among the worst hit by a soft or hard landing in China.

Shawn W Crispin is Asia Times Online’s Southeast Asia Editor.
KRISIS EROPA: Tenang, benteng pertahanan Indonesia kuat

Oleh Arief Budisusilo

Jum’at, 13 Januari 2012 | 09:42 WIB

bisnis indonesia

Khawatir krisis Eropa memburuk? Tak perlu cemas berlebihan. Berikut ini adalah sejumlah langkah pengamanan untuk memadamkan risiko fiskal, yang disampaikan oleh Menteri Keuangan Agus Martowardojo di Jakarta, Kamis, 12 Januari.

LANGKAH MITIGASI KRISIS:

* Pemerintah akan mempercepat penyerapan anggaran sejak awal tahun, menyediakan protokol pengelolaan krisis bersama Bank Indonesia, dan menyediakan Dana Stabilisasi Obligasi.

* Kementerian Keuangan juga menyiapkan penggunaan Sisa Anggaran Lebih untuk stabilisasi Surat Berharga Negara jika terjadi penarikan secara tiba-tiba (sudden reversal), dan penyediaan pinjaman siaga untuk ketahanan pangan. Sisa anggaran hingga akhir 2011 mencapai Rp97 triliun.

* Ketahanan ekonomi kuat dari sisi cadangan devisa yang mencapai US$110 miliar

*Indonesia memiliki kesepakatan untuk memanfaatkan fasilitas keuangan dari ChiangMai Initiative senilai US$120 miliar serta fasilitas swap dengan China dan Jepang masing-masing US$15 miliar dan US$12 miliar.

* Pemerintah juga menyiapkan cadangan dana untuk mengatasi risiko fiskal tahun ini, antara lain pembentukan dana cadangan risiko fiskal senilai Rp15 triliun, alokasi dana bantuan sosial senilai Rp47,8 triliun, subsidi non energi Rp40,3 triliun, dan cadangan beras Rp2 triliun.

* Posisi Indonesia lebih aman lagi mengingat rasio utang, berdasarkan update terbaru, mencapai 24,9% terhadap PDB.

* Dengan investment grade, biaya pinjaman untuk Indonesia terus menurun, saat ini rata-rata bunga utang Indonesia lebih murah sekitar 3% dibandingkan rata-rata peer di emerging market.

* Dampak krisis Eropa ke Indonesia tidak terlalu besar mengingat pangsa ekspor Indonesia terhadap GDP hanya sekitar 45%, jauh berbeda dengan Singapura yang mencapai 377% atau Hong Kong yang mencapai 380%, menurut riset Standard Chartered Bank.

* Data terbaru ekspor Indonesia 2011 menembus US$200 miliar. Indonesia menjadi negara ke-21 di dunia yang memiliki nilai ekspor di atas US$200 miliar.

* Sejak tahun 2010 silam, investasi langsung kembali mengambil peran dalam pertumbuhan ekonomi Indonesia, yang diperkirakan akan semakin menguat menyusul level investment grade yang diraih akhir tahun lalu.

* Indonesia bersama negara berkembang Asia bahkan menyumbang 55% pertumbuhan ekonomi global selama tiga tahun terakhir. China dan India juga relatif tahan terhadap dampak penurunan permintaan global karena pangsa ekspor terhadap PDB kedua negara itu masing-masing hanya 47% dan 26%. Ini yang menjelaskan mengapa pada 2008 silam, China, India dan Indonesia menjadi tiga perekonomian terbaik di dunia meskipun krisis global yang dipicu kebangkrutan gadai kualitas rendah (subprime mortgage) berkecamuk di Amerika.

PENANGANAN SUBSIDI ENERGI

* Bila krisis Eropa memburuk disertai lonjakan harga minyak, pemerintah bisa mempercepat pengajuan perubahan APBN 2012. Jika itu dilakukan, opsi kenaikan harga bahan bakar minyak (BBM) yang sekarang ini belum diambil, bisa saja diambil dengan minta persetujuan DPR.

* Saat ini pemerintah memberikan dukungan fiskal untuk pengaturan BBM bersubsidi berupa kredit lunak untuk SPBU, penyediaan subsidi Konverter kit 200.000 unit, serta subsidi LGV sebesar Rp1.000 per liter.

* Pemerintah akan memastikan pembatasan konsumsi BBM bersubsidi secara bertahap mulai 1 April. Langkah itu diambil guna menjaga agar konsumsi premium tidak melebihi 40 juta kiloliter agar subsidi tidak membengkak seperti tahun lalu. Langkah itu diambil setelah pada 2011, subsidi BBM yang dianggarkan Rp85 triliun bengkak menjadi Rp165 triliun, sedangkan subsidi listrik yang diberi plafon Rp65 triliun membengkak menjadi Rp90 triliun. Akibatnya, realisasi subsidi energi tahun lalu bengkak Rp 195 triliun menjadi Rp255 triliun. Subsidi tambun itu terjadi akibat lonjakan konsumsi BBM bersubsidi yang semula dipatok 37 juta kiloliter menjadi di atas 40 juta kiloliter, yang berbarengan dengan kenaikan harga minyak dari asumsi US$95/barel menjadi US$111/barel.

PENERIMAAN PAJAK

* Risiko fiskal juga didekati dengan menggenjot penerimaan terutama perpajakan. Tahun ini pemerintah mematok target pajak Rp1.032 triliun. Penerimaan pajak itu telah meningkat 2,5 kali lipat dibandingkan dengan tahun 2006 yang mencapai Rp409 triliun.

* Namun demikian, pada tahun lalu pemerintah kecolongan dengan penerimaan pajak pertambahan nilai (PPN) sebesar Rp20 triliun, yang diduga akibat permainan sejumlah perusahaan wajib pajak di kawasan berikat, merujuk Dirjen Pajak Fuad Rahmany.

* Ditjen Pajak akan melakukan penelusuran dengan bantuan surveyor independen, termasuk terhadap perusahan pertambangan dan perusahaan perkebunan.

* Kementerian Keuangan juga akan melakukan sinergi basis data antara Ditjen Pajak dan Ditjen Bea dan Cukai untuk meningkatkan transparansi dan akurasi data, untuk membenahi berbagai fasilitas perpajakan karena disinyalir banyak digunakan oleh pihak-pihak yang tidak berhak.
Sabtu, 14/01/2012 12:09 WIB
Ini Dia 9 Negara Eropa yang Turun ‘Pangkat’
Wahyu Daniel – detikFinance

Jakarta – Lembaga pemeringkat internasional Standard & Poor’s menurunkan peringkat 9 negara di Eropa karena terlilit krisis utang yang cukup parah. Apa saja negara yang turun peringkatnya?

Dalam pengumumannya, ada empat negara yang peringkatnya turun dua tingkat yakni:

Italia
Spanyol
Portugal
Siprus

Kemudian, ada lima negara yang peringkatnya turun satu tingkat yaitu:

Prancis
Austria
Malta
Slowakia
Slovenia
“Keputusan peringkat baru ini didorong oleh hasil kajian kami bahwa inisiatif kebijakan yang diambil oleh pemerintah di Eropa dalam beberapa pekan ini belum cukup untuk memperbaiki sistem ekonomi di kawasan tersebut,” demikian isi pernyataan Standard & Poor’s yang dikutip dari Reuters, Sabtu (14/1/2012).

Keputusan Standard & Poor’s ini membuat peringkat Italia turun menjadi BBB+ yang berarti setingkat dengan Kazakhstan. Sementara peringkat Portugal makin merosot.

Meski begitu, Jerman lolos dari penurunan peringkat. Saat ini peringkat Jerman masih AAA. Pengumuman penurunan peringkat ini membuat ‘gerah’ pemerintah negara Eropa. Terutama Prancis dan Austria yang peringkatnya turun dari AAA.

Akibat peringkat yang turun ini, euro turun lebih dari 1%, Saham-saham di bursa Eropa yang awalnya naik langsung berbalik negatif setelah pengumuman penurunan peringkat tersebut.

(dnl/dnl)

ROME, Jan 14, 2012 (AFP)
Standard and Poor’s downgrade of Italy’s credit rating by two notches has made Rome even more determined to pursue reforms to tackle its debt crisis, a source in the prime minister’s office said Friday.

“This valuation increases the Italian government’s determination to continue on the path undertaken… balancing the budget, structural reforms and growth measures,” the source told AFP.

Standard and Poor’s downgraded Italy’s credit rating by two notches to BBB+ from A. The ratings agency had already downgraded it to A in September last year under then premier Silvio Berlusconi, who was replaced by Mario Monti.

The agency said the move was driven by “the risk the government’s mandate might be cut short, or the planned measures not adopted. This just increases the government’s determination,” the source said.

The downgrade puts Italy on the same Standard & Poor’s grading for long-term debt as Kazakhstan, South Africa and Thailand in a major setback for the eurozone’s third largest economy after France and Germany.

Since coming to power in November, Monti has pushed through a harsh austerity plan and has asked for European assistance in helping to drive down borrowing costs for Italy on the debt markets.

With sky-high public debt and an economy headed into a recession, Italy faces a daunting challenge this year as it needs to raise around 450 billion euros ($571 billion) on the markets at higher than usual rates.

PARIS, Jan 13, 2012 (AFP)
Standard and Poor’s said Friday it had downgraded France’s top AAA rating by one notch to AA+, with a negative outlook, while leaving European powerhouse Germany unchanged at AAA, stable.

S&P also downgraded Italy by two notches to BBB+, negative outlook, with Spain cut two notches to A, negative outlook, as part of a major overhaul of ratings on 16 of the 17 eurozone nations, with Greece excluded.

S&P said its rating actions reflected its view that “the policy initiatives taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the eurozone.”

S&P, one of the top three global ratings agencies, said it cut its long-term ratings on Cyprus, Italy, Portugal and Spain by two notches.

Austria, France, Malta, Slovakia and Slovenia were cut one notch while Belgium, Estonia, Finland, Germany, Ireland, Luxembourg and the Netherlands all had their ratings affirmed.

Overall, seven eurozone countries had their ratings confirmed while nine were downgraded.

“We affirmed the ratings on the seven eurozone sovereigns that we believe are likely to be more resilient in light of their relatively strong external positions and less leveraged public and private sectors,” said S&P.

The ratings agency said the downgrade of France “…reflects our opinion of the impact of deepening political, financial, and monetary problems within the eurozone.”

It said the outlook on the long-term rating on France is negative, which indicates that it believes that there is at least a one-in-three chance the rating could be lowered further in 2012 or 2013.

Failure to meet budgetary consolidation targets or growth targets of one percent this year and two percent in 2013 could spark a downgrade.

So could a heightening of financing and economic risks in the eurozone leading to an increase of France’s contingent liabilities or a worsening of borrowing conditions.

S&P said Italy’s downgrade “reflects what we view as Italy’s increasing vulnerabilities to external financing risks and the negative implications these could have for economic growth and hence public finances.”

Italy’s long-term borrowing rates have stubbornly held around seven percent in recent weeks, a level economists consider unsustainable in the long run.

While Spain was having extreme difficulty cutting its public deficit, S&P highlighted “…external financing risks in the private sector, which we believe could constrain growth and hamper the government’s efforts to narrow the fiscal deficit.”

In December, S&P announced that it was putting the eurozone countries on review for downgrade in view of the worsening debt crisis and the failure of EU leaders to put a halt to the problems.

Greece, which has seen its ratings repeatedly downgraded since it triggered the eurozone debt crisis last year, has a rating equivalent to that of a partial default from S&P at CC with negative outlook.

S&P gave the following list of ratings and outlook changes:
<pre> Country New rating/outlook Old rating/outlook
——- —————— ——————
Austria – AA+/Negative AAA/Watch Neg
Belgium – AA/Negative AA/Watch Neg
Cyprus – BB+/Negative BBB/Watch Neg
Estonia – AA-/Negative AA-/Watch Neg
Finland – AAA/Negative AAA/Watch Neg
France – AA+/Negative AAA/Watch Neg
Germany – AAA/Stable AAA/Watch Neg
Ireland – BBB+/Negative BBB+/Watch Neg
Italy – BBB+/Negative A/Watch Neg
Luxembourg – AAA/Negative AAA/Watch Neg
Malta – A-/Negative A/Watch Neg
Netherlands – AAA/Negative AAA/Watch Neg
Portugal – BB/Negative BBB-/Watch Neg
Slovakia – A/Stable A+/Watch Neg
Slovenia – A+/Negative AA-/Watch Neg
Spain – A/Negative AA-/Watch Neg
</pre>

Press watch, Jan 12
by George Gilson 12 Jan 2012

Three suicides every two days. Over 1,700 suicides in two years. The growing sense of desperation in Greece could hardly have been depicted more dramatically than in those statistics. The economic crisis and the brutal austerity imposed on the country by its lenders are destroying more and more lives, and families. The silent majority struggles and suffers increasingly harsh blows to their standard of living. European solidarity has been transformed into exemplary punishment.

The thought of cutting the bonuses earned by private sector employees, whose income has already been decimated, is the latest sign of the brutality of the troika, which in large measure is doing the bidding of Greek industry.

Interestingly, the latest reports, indicating that the IMF views the severe austerity as counter-productive, confirm that the punishment inflicted on the Greek people is “made in Germany”. The IMF maintains that Greece needs a much larger write-down than the 50 percent agreed to on October 26, and that tens of billions more in loans are needed to make the Greek debt viable.

The humiliating ultimatum given to Greek labour unions by Premier Lucas Papademos is evidence that he is completely in line with the troika. The government wants representatives of Greek business and the largest labour federations to agree on pay cuts within two weeks, otherwise the cuts will be imposed by decree. The idea is that pay cuts will help create jobs, but that is highly unlikely as long as no one – at home or abroad – wants to invest in the economy.

One report today, in Ta Nea, suggested that Papademos hopes that the two monthly salaries employees receive as holiday bonuses can be maintained, along with the minimum wage.

The restructuring of Greek debt continues to dominate front pages of Athens dailies. The accounts are conflicting about how well it is going, but some reports suggest it may be completed by the end of January.

“Difficulties and backroom activity on PSI+” reported Kathimerini’s headline. The paper reported that IMF chief Christine Lagarde says Greece should get tens of billions more in loans.

“Plan B for Greece” was Ta Nea’s headline, referring to the IMF’s proposal for additional loans. The paper reported that international speculators are holding up the haircut process, in the hopes of clinching a better deal. “Do it like Monti” read another title, which seemed to be advice to Premier Papademos. The story said that Italy’s technocrat premier told German Chancellor Angela Merkel that he can only convince Italians of the necessity of austerity if citizens can see the benefits of their sacrifices.
Draghi Says Credit Crunch Averted
By Matthew Brockett and Jeff Black – Jan 12, 2012
European Central Bank President Mario Draghi said the bank has averted a serious credit shortage and there are signs the economy is stabilizing, signaling policy makers may resist cutting interest rates further for now.

“According to some recent survey indicators, there are tentative signs of stabilization of economic activity at low levels,” Draghi said at a press conference in Frankfurt today after the ECB kept its benchmark interest rate at 1 percent following two straight reductions. While the debt crisis poses “substantial downside risks” to the economic outlook and the ECB remains “ready to act,” Draghi gave no indication that another rate cut is imminent.

With the euro area on the brink of a second recession in three years, some signs of economic resilience have given the ECB room to assess the impact of its stimulus measures to date, which include lending a record amount of cash to banks. Draghi said those loans prevented a “serious” credit contraction. He also noted that borrowing costs for governments across the 17- nation region have dropped.

The euro climbed to $1.2790 at 4.40 p.m. in Frankfurt from $1.2739 before Draghi’s press conference started.

‘Non-Committal’

“Draghi has been non-committal about policy going forward and the market had been anticipating that rates are going to be cut further,” said Steve Barrow, head of Group of 10 currency strategy at Standard Bank Plc in London. “He’s also spoken about tentative signs of stabilization, and maybe those two factors have helped the euro a little bit.”

Asked if the ECB is open to cutting rates further, Draghi said it depends on the inflation outlook. He indicated rates will remain low for an extended period.

“The monetary stance is and will remain accommodative,” Draghi said. “Uncertainty is very high. We will monitor all developments and stand ready to act.”

The Bank of England also refrained from announcing new stimulus today, maintaining its 275 billion-pound ($422 billion) bond-purchase target and holding its key rate at 0.5 percent, as the U.K. economy shows some signs of robustness.

Draghi’s remarks on signs of economic stabilization were “a recognition that we could have seen the trough in the fourth quarter,” said Tobias Blattner, a former ECB economist now working for Daiwa Capital Markets Europe in London. “If that is the case, they are unlikely to cut rates again. However, he left the door open for further rate cuts if needed, and if the data deteriorates rapidly next month then I don’t think they’ll hesitate.”

Signs of Stabilization

Data this week showed gains in German exports and French business confidence. Europe’s Stoxx 600 Index has gained 2 percent this year and is up 16 percent from its 2011 low on Sept. 22. The euro’s 10 percent drop against the dollar since late October and an easing of financial conditions may also provide support as leaders battle to restore investor faith in their region’s bond markets.

Italy sold 12 billion euros ($15 billion) of Treasury bills today, meeting its target. The rate on the one-year bills plunged to 2.735 percent from 5.952 percent at the last auction of similar-maturity securities on Dec. 12.

Spain sold 9.98 billion euros of bonds maturing in 2015 and 2016, twice the maximum target. The yield on a new benchmark bond, which matures in July 2015, was 3.384 percent, compared with 5.187 percent when Spain sold notes maturing in April 2015 at an auction in December.

German Recession?

The euro area may still struggle to stave off recession. German gross domestic product probably dropped 0.25 percent in the fourth quarter of last year from the third, the Federal Statistics Office said yesterday. Some economists predict another contraction this quarter, putting Europe’s largest economy into recession.

The ECB last month cut its 2012 growth forecast for the euro region to 0.3 percent from 1.3 percent.

The new estimate “looks optimistic,” said Nick Kounis, head of macro research at ABN Amro in Amsterdam. “We think that further cuts in the central bank’s refinancing rate are likely going forward, taking it to a low of 0.5 percent.”

Draghi said while inflation will remain elevated for several months, it will then fall below the ECB’s 2 percent ceiling.

ECB Loans

The ECB last month loaned financial institutions an unprecedented 489 billion euros for three years and widened the pool of collateral they can use to obtain the funds. It will offer a second batch of three-year loans in February.

“We do think that at least this decision has prevented a credit contraction that would have been more serious, much more serious,” Draghi said.

He downplayed the surge in overnight deposits at the ECB to a record 486 billion euros this week, which suggests banks are parking the excess cash rather than lending it on.

“By and large, the banks that have borrowed the money from the ECB are not the same that are re-depositing the money with the ECB,” Draghi said.

The median forecast in a survey of 21 economists before today’s decision was for the ECB to keep its key rate at 1 percent through mid 2013.

“Unless there is marked deterioration in economic activity and credit availability, it does not seem very likely that the ECB will cut rates in February,” said Elga Bartsch, chief European economist at Morgan Stanley in London. “But then we are expecting the ECB to revise down its forecasts significantly in March.”
Kejahatan terorganisir telah mengencangkan cengkeramannya terhadap ekonomi Italia selama krisis ekonomi, menjadikan mafia bank terbesar negara itu dan meremas kehidupan dari ribuan perusahaan kecil.

“Pinjaman yang diperas oleh kelompok-kelompok kriminal itu telah menjadi ‘darurat nasional,’” kata laporan anti-crime group SOS Impresa seperti dikutip Reuters.

Kejahatan terorganisir sekarang menghasilkan omset tahunan sekitar 140 miliar euro (US$178,89 miliar) dan keuntungan lebih dari 100 miliar euro. “Dengan 65 miliar euro di likuiditas, mafia merupakan bank nomer satu Italia,” kata pernyataan dari grup, yang didirikan di Palermo satu dekade yang lalu untuk menentang pemerasan terhadap usaha kecil.

Kelompok-kelompok kejahatan teroganisir seperti Sisilia Cosa Nostra, Naples Camorra atau Calabria ‘Ndrangheta telah lama memiliki cekikan terhadap ekonomi Italia, menghasilkan keuntungan yang setara dengan sekitar 7 persen output nasional.

“Pinjaman yang diperas telah menjadi semakin canggih dan menguntungkan sumber pendapatan, bersama-sama dengan perdagangan narkoba, penyelundupan senjata, prostitusi, perjudian dan pemerasan,” kata laporan itu.

Lingkungan klasik atau pinjaman dengan pemerasan adalah jalan keluar, memberikan cara untuk mengatur lpinjaman tersebut yang terhubung dengan baik dengan kalangan profesional dan beroperasi dengan keterlibatan profesional tingkat tinggi. Diperkirakan sekitar 200.000 bisnis terikat dengan pinjaman pemerasan dan telah menyebabkan puluhan ribu otang kehilangan pekerjaan sebagai hasilnya.

http://pasarmodal.inilah.com/read/detail/1817479/mafia-jadi-bank-terbesar-italia

Sumber : INILAH.COM

Carmen Reinhart and financial repression

Jan 10th 2012, 16:34 by Buttonwood

FOR those who haven’t read the excellent This Time is Different, Carmen Reinhart has produced a succinct view of her thinking in a new paper, A Series of Unfortunate Events (alas, you may have to pay if you’re not a member for the Centre for Economic Policy Research).

There is a useful list of the factors that tend to precede financial crises:

1. large capital inflows,
2. sharp run-ups in equity prices,
3. sharp run-ups in house prices,
4. inverted V-Shaped growth trajectory and
5. a marked rise in indebtedness.

What is striking is that the Alan Greenspan school might not have worried about anything on that list, bar the growth trajectory. Many cited the capital inflows into the US (the obverse of the current account deficit) as a sign of confidence in the American model; similar reasoning applied to higher asset prices, while the increase in debt was being driven by a more “sophisticated” economy.

A further point relates to the response of the central bank when things go wrong. Ms Reinhart writes that

If the exchange rate is heavily managed (it does not need to be explicitly pegged), a policy inconsistency arises between supporting the exchange rate and acting as lender of last resort to troubled institutions…. more often than not, the exchange rate objective is subjugated to the lender of last resort role.

I would add that the same problem crops up even with floating currencies, as the central bank faces a conflict between its role as lender of last resort and its inflation target. In Britain, the inflation target has been repeatedly missed while rates have been held at 0.5% because the Bank of England has decided (probably correctly) that the economy and financial system are too fragile to withstand higher rates.

The big issue is how we get out of this. Ms Reinhart raises again the prospect of financial repression, as used after the Second World War; making the rate on government debt negative in real terms. Of course, that raid on creditors was made easier by capital controls, whereas today money flows freely across borders.

But as Ms Reinhart points out, that has barely mattered. Real rates have been negative in the US, UK and Germany (occasionally they have been negative in nominal terms as well) and investors have proved gluttons for punishment. Macroprudential regulation ( a new enthusiasm for central banks) could be code for financial repression; by insisting that banks, pension funds, insurance companies etc own more government bonds as a means of “protecting clients”. In addition, QE, by driving bond yields down, makes it easier for government to finance themselves or as Ms Reinhart more tactfully puts it

A large role for non-market forces in interest rate determination is a key feature of financial repression.

The other big issue is the willingness of emerging market central banks to keep financing western governments.  This issue is also raised by Maurice Obstfeld in a piece for the forthcoming book “In the Wake of the Crisis”. He points to a similarity with the Triffin paradox that emerged in the 1960s. The Bretton Woods system was built on the dollar and needed a growing supply of dollars to keep the system oiled. but the more dollars that were supplied, the less confidence that investors had in the ability of the Federal Reserve to redeem dollars for gold. Eventually, the system broke down.

Currently Asian central banks have an appetite for government bonds. As Mr Obstfeld writes

If (they) prefer safe government debt, then governments have to issue more debt. If these countries keep accumulating reserves at the rate they have been, and if present growth trends continue as we expect, how will this demand for reserves possibly be satisfied?

My thesis has been that some kind of grand bargain might eventually be reached, in which China trades a steady rise in its exchange rate for a limit on the size of the US deficit. This system would require restrictions on capital movements, such as the Chinese favour. It is good to see Ms Reinhart has similar thoughts arguing that

While emerging markets may increasingly look to financial regulatory measures to keep international capital out, advanced economies have incentives to keep capital in and create a domestic captive audience to facilitate the financing of the high existing levels of public debt.

Selasa, 10 Januari 2012 | 09:16 WIB
RI Terbitkan SUN Valas US$ 1,75 Miliar

TEMPO.CO, Jakarta – Pemerintah menjual surat utang negara (SUN) berdenominasi valuta asing dengan nilai nominal US$ 1,75 miliar atau sekitar Rp 15,76 triliun pekan depan. Obligasi seri RI0142 bertenor 30 tahun itu merupakan bagian dari program penerbitan Global Medium Term Notes (GMTN) Republik Indonesia yang mencapai US$ 15 miliar.

Penjualan SUN kali ini akan digunakan untuk pembiayaan anggaran pendapatan belanja negara. Dalam edaran yang diterbitkan Kementerian Keuangan, disebutkan bahwa tingkat kupon berada di posisi 5,250 persen, imbal hasil (yield) 5,375 persen, dan harga 98,148 persen. Obligasi ini akan diterbitkan pada 17 Januari 2012 dan jatuh tempo pada 17 Januari 2042. Tingkat kupon dan yield tersebut tercatat sebagai nilai terendah sepanjang sejarah penerbitan SUN bertenor 30 tahun.

Transaksi tersebut membukukan total penawaran masuk sebesar US$ 3,6 miliar atau oversubscription sebanyak 2,06 kali. Sebesar 51 persen penawaran datang dari investor Amerika Serikat, 37 persen dari investor Asia (15 persen di antaranya dari Indonesia), serta 12 persen dari investor Eropa.

Berdasarkan jenis investor, penawaran terbanyak dilakukan oleh assets managers (73 persen), bank (20 persen), asuransi dan dana pensiun (4 persen), serta private banking (3 persen). Joint Lead Managers dan Joint Bookrunners dalam transaksi SUN ini adalah HSBC, J.P. Morgan Chase, dan Standard Chartered. Sedangkan PT Mandiri Securitas bertindak sebagai co-managers.

Pemerintah Indonesia terakhir menerbitkan SUN dalam valas bertenor 30 tahun pada 2008. Transaksi SUN kali ini dilakukan dalam kondisi rating BBB- (Stable) dari Fitch, BB+ (Positive) dari S&P, dan Bal (Stable) dari Moody’s.

MARTHA THERTINA
Global Credit Research – 09 Jan 2012

Singapore, January 09, 2012 — Moody’s Investors Service will assign a provisional rating of (P)Ba1 to the Government of Indonesia’s forthcoming U.S. dollar-denominated bond issuance maturing in 2042.

RATINGS RATIONALE

Indonesia’s sovereign rating has been supported by increasingly robust domestic demand over the past few years, which has helped to shield the economy from the global financial crisis. In the ensuing recovery, the pickup in global commodity prices further bolstered the economic outlook. In contrast to many of its ratings and regional peers, Indonesia has been able to maintain its economic momentum despite a deterioration in external demand in the second half of 2011. Real GDP growth has averaged 6.5% year-on-year through the first three quarters of 2011, while inflation has trended downwards. This rapid pace of growth looks to be sustainable over the medium-term, aided by an improving track record of inflation management by the monetary authorities and enhanced prospects for infrastructure development.

In addition, government finances continue to be managed conservatively with deficits averaging below 2% of GDP since 2001. However, further improvement has been encumbered by the lack of progress on subsidy reform, while structural issues impede the effectiveness of government expenditure. Nonetheless, the government’s debt burden as a share of GDP has fallen even through the global recession and is likely to remain on a gradually improving trend, providing ample fiscal space to stimulate growth if necessary.

Indonesia’s foreign currency reserve adequacy has also benefited since the crisis from strength in non-oil and gas commodities exports and larger FDI and portfolio inflows, some of which may be reversible. As a result, the stock of foreign currency reserves have more than doubled from $51.6 billion at end-2008 to $111.3 billion in November 2011, more than two times residual short-term external debt.

Challenges to the rating include the relatively shallow depth of Indonesia’s capital markets, manifested in fairly large non-resident ownership of government securities. As this poses a key vulnerability in the event of substantial capital outflows, the government has put together a crisis management protocol to stabilize the bond market and mitigate any adverse effects on deficit financing.
January 9, 2012
Germany and France Warn Greece on Bailout Money
By NICHOLAS KULISH

BERLIN — Chancellor Angela Merkel of Germany and President Nicolas Sarkozy of France warned Greece on Monday that it needed to move forward with promised structural changes or risk losing the next installment of badly needed bailout money.

The leaders of the European Union’s two largest countries met in the German capital to discuss their next steps in combating the sovereign-debt crisis that has destabilized the Continent and threatened the common currency. Even as Mrs. Merkel and Mr. Sarkozy promised quick action to stem the crisis, investors signaled the depth of their continuing concern over the instability that has spread from Greece to the very heart of the euro zone, by purchasing German debt at a negative interest rate for the first time ever.

Mr. Sarkozy, speaking at a news conference after the two leaders met at the chancellery building here, acknowledged the uncertainty in the markets, saying, “The situation is very tense, very tense.”

There are increasing signs that Greece will fail to make the structural changes to its economy that its leaders have promised. Greece’s prime minister, Lucas Papademos, warned last week that without deeper spending cuts a disorderly default was a possibility, and could result in Greece leaving the euro.

Mr. Sarkozy said that “our Greek friends must live up to their commitments,” while Mrs. Merkel said that if those commitments were not met by the Greek government, “it will not be possible to pay out the next tranche” of the bailout money.

The holidays may have created a lull in the action, but the new year promised to be just as hectic as the old for European leaders and Mrs. Merkel in particular. The head of the International Monetary Fund, Christine Lagarde, will arrive Tuesday evening for talks with the German chancellor. Italy’s prime minister, Mario Monti, is scheduled to come to Berlin on Wednesday.

Mrs. Merkel and Mr. Sarkozy are scheduled to travel to Rome on Jan. 20 for negotiations with the Italian government ahead of the next European Union summit in Brussels on Jan. 30.

“Everyone would like a grand design rather than a series of small steps going forward, some going backwards,” said André Sapir, an economist and senior fellow at Bruegel, a research group based in Brussels. “Sometimes there doesn’t seem to be a design at all, and that has been unnerving investors being asked to refinance debt both private and public.”

A drumbeat of bad economic news lately has led many economists to predict the imminent return to recession for many of the countries that use the euro. At the same time, European countries and financial institutions need to raise about $2.4 trillion in 2012.

Asked whether she feared that more European nations might be downgraded by ratings agencies, further spooking markets, Mrs. Merkel replied coolly, “Fear does not motivate my political actions.”

The gap between the countries with sound finances, and those like Italy and Spain that are forced to pay high rates, has widened to a chasm of five percentage points or more. Germany on Monday joined the likes of the Netherlands and Switzerland as perceived safe havens where buyers of short-term debt are willing to lose money in return for shelter from upheaval and the possibility of even greater losses.

Mrs. Merkel called the plan to stabilize the euro “an ambitious but attainable goal.” She hit several familiar themes, emphasizing that there were no quick solutions to the euro crisis and that Greece was an exception when it came to debt write-downs, often known as a “haircut,” for private investors.

“Our intention is that no country must withdraw from the euro area,” Mrs. Merkel said.

She and Mr. Sarkozy both voiced their determination to press ahead with a tax on financial transactions opposed by Britain, but they appeared to diverge on the timing. Mr. Sarkozy, facing a strong left-wing challenge in his bid for re-election in May, suggested France might go it alone and challenge other countries to follow suit.

The French prime minister, François Fillon, said Monday in Paris that France might present a bill on such a tax in February, hoping that other countries do the same. “Someone has to be the first to jump in the water,” Mr. Fillon said.

Mrs. Merkel expressed support for Mr. Sarkozy’s goal of moving quickly on the financial-transaction tax, saying that European Union finance ministers should make a formal proposal by March. Although an agreement between the 27 members of the union was preferable, one among the 17 members that use the euro was acceptable.

“If Sarkozy loses the election, which is entirely possible, the Socialists would certainly be a more difficult partner for Merkel,” said Frank Decker, a political scientist at the Institute for Political Sciences and Sociology at the University of Bonn. “As a result, she looks for ways that she can strengthen his position.”

Steven Erlanger in Paris contributed reporting.

http://media.economist.com/sites/default/files/media/2011InfoG/Interactive/China_US_GDP_20111129/China_US.swf

How to get a date

The year when the Chinese economy will truly eclipse America’s is in sight

Dec 31st 2011 | from the print edition

IN THE spring of 2011 the Pew Global Attitudes Survey asked thousands of people worldwide which country they thought was the leading economic power. Half of the Chinese polled reckoned that America remains number one, twice as many as said “China”. Americans are no longer sure: 43% of US respondents answered “China”; only 38% thought America was still the top dog. The answer depends on which measure you pick. An analysis of 21 different indicators chosen by The Economist (see the full set) finds that China has already overtaken America on over half of them and will be top on virtually all of them within a decade.

Economic power is best gauged by looking at absolute size rather than per-person measures. On a few indicators, such as steel consumption, ownership of mobile phones and beer-guzzling (a crucial test of economic superiority), the milestone was reached as long as a decade ago. Several more have been passed since. In 2011 China exported about 30% more than the United States and spent some 40% more on fixed capital investment. China is the world’s biggest manufacturer, and partly as a result it burns around 10% more energy and emits almost 40% more greenhouse gases than America (although its emissions per person are only one-third as big). The Chinese also buy more new cars each year than anybody else.

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The country that invented the compass, gunpowder and printing is also challenging America in the innovation stakes. We estimate that in 2011 more patents were granted to residents in China than in America. The quality of some Chinese patents may be dubious but they will surely improve. The World Economic Forum’s “World Competitiveness Report” ranks China 31st out of 142 countries on the quality of its maths and science education, well ahead of America’s 51st place. China’s external financial clout also beats America’s hands down. It has total net foreign assets of $2 trillion; America has net debts of $2.5 trillion.

The chart shows our predictions for when China will overtake America on several other measures. Official figures show that China’s consumer spending is currently only one-fifth of that in America (although that may be understated because of China’s poor statistical coverage of services). Based on relative growth rates over the past five years it will remain smaller until 2023. Retail sales are catching up much faster, and could exceed America’s by 2014. In that same year China also looks set to become the world’s biggest importer—a huge turnaround from 2000, when America’s imports were six times those of China.

Find even more indicators and adjust the figures to make your own predictions using our interactive chart

What about GDP, the most widely used measure of economic power? The IMF predicts that China’s GDP will surpass America’s in 2016 if measured on a purchasing-power parity (PPP) basis, which adjusts for the fact that prices are lower in poorer countries. But America will only really be eclipsed when China’s GDP outstrips it in dollar terms, converted at market-exchange rates.

In 2011 America’s GDP was roughly twice as big as China’s, down from eight times bigger in 2000. To predict how quickly that gap might be closed, The Economist has updated its interactive online chart (also here) which allows you to plug in your own assumptions about real GDP growth in China and America, inflation rates and the yuan’s exchange rate against the dollar. Our best guess is that annual real GDP growth over the next decade averages 7.75% in China (down from 10.5% over the past decade) and 2.5% in America; that inflation (as measured by the GDP deflator) averages 4% and 1.5% respectively; and that the yuan appreciates by 3% a year. If so, then China will overtake America in 2018. That is a year earlier than our prediction in December 2010 because China’s GDP in dollar terms increased by more than expected in 2011.

Second place is for winners

Even if China became the world’s biggest economy by 2018, Americans would remain much richer, with a GDP per head four times that in China. But Rupert Hoogewerf, the founder of the annual Hurun Report on China’s richest citizens, reckons that it may already have more billionaires. His latest survey identified 270 dollar billionaires but the true total, he says, is probably double that because many Chinese are secretive about their wealth. According to the Forbes rich list, America has 400 billionaires or so.

America still tops a few league tables by a wide margin. Its stockmarket capitalisation is four times bigger than China’s and it has more than twice as many firms in the Fortune global 500, which lists the world’s biggest companies by revenue. Last but not least, America spends five times as much on defence as China does, and even though China’s defence budget is expanding faster, on recent growth rates America will remain top gun until 2025.

Being the biggest economy in the world does offer advantages. It helps to ensure military superiority and gives a country more say in fixing international rules. Historically, the biggest economy has become the issuer of the main reserve currency, which is why America has also been able to borrow more cheaply than it otherwise would. But it would be a mistake for American leaders to try to block China’s rise. China’s rapid growth benefits the whole global economy. It is better to be number two in a fast-growing world than top dog in a stagnant one.

from the print edition | Finance and economics

Self-induced sluggishness

This year will probably be a pretty bad one for the world economy; it doesn’t have to be

Jan 7th 2012 | from the print edition

POLITICIANS like to promise better times ahead. But these days many are peddling gloom. In her new year’s address, Angela Merkel, Germany’s chancellor, predicted that 2012 would be more difficult for the euro zone than 2011. Nicolas Sarkozy, France’s president, spoke of “the year of all risks”. Half a world away, Manmohan Singh, India’s prime minister, warned Indians not to take fast growth for granted.

In one way this pessimism looks a little overdone. The worst outcomes—a collapse of Europe’s single currency or a hard landing in China—are avoidable. The latest crop of statistics, particularly better-than-expected figures on global manufacturing prospects, argue against a sudden slump. America may do a bit better than forecast. The overall effect should be sluggish, not dire: global output may grow by 3%, the slowest since 2009 and well below the average of the past decade.

But in another way, the sombre warnings are apt, and profoundly depressing. One reason why the outlook is so lacklustre is that politicians—especially in the West—will do little to help (and may harm) their economies. It could be better.

Begin with Europe, the weakest cog in the global engine. The euro zone has almost certainly already slipped into recession, which most forecasters expect to be short and shallow: a group of seers polled regularly by The Economist estimates that output will fall by 0.5% in 2012. The case for a mild downturn assumes that Europe’s policymakers, however haltingly, are on course to solve their debt crisis; that the European Central Bank (ECB) has reduced the risk of a debt calamity with its recent provision of three-year liquidity to banks; and that the impact of fiscal austerity on growth will be brief and modest.

Those hopes may be misplaced. Uncertainty about the euro zone’s future is still acute, not least because its politicians are more focused on preventing future profligacy than supporting embattled economies today. Despite the ECB’s liquidity injection, banks seem reluctant to buy many government bonds. And since Italy and Spain alone need to roll over €150 billion ($195 billion) of debt in the first three months of this year, the odds are that worries about sovereign debt will intensify. A pernicious circle of weak growth, bigger deficits and more austerity is setting in. Look at Spain, where the new government revealed that the 2011 budget deficit would be worse than expected (8% of GDP rather than 6%) and immediately announced new spending cuts and tax increases to compensate (see article). If these contractionary forces feed on themselves, Europe’s downturn could be ghastly.

Some emerging concerns

The euro zone is thus the darkest shadow hanging over the world economy; but it is not the only one. Emerging markets may stumble. China’s economy is clearly cooling. And even if, as seems likely, Beijing loosens macroeconomic policy deftly enough to prevent a sharp slowdown, growth this year is likely to be no more than 8%. Slower growth in China is dampening commodity prices, hitting exporters in Latin America. Add in some home-grown problems (India, for example, faces a big budget deficit, declining confidence and high inflation—see article) and the ripple effects of the euro crisis (which will hit growth in eastern Europe and Turkey hard) and it is plausible that emerging economies will grow by only about 5%. That would be their weakest performance in a decade, aside from the global slump of 2009.

If there is a positive surprise, it is likely to come from the United States. That is not because growth there will soar, but because expectations for the world’s biggest economy are so low. The consensus among professional forecasters is that America’s GDP will grow by 2% in 2012, below its underlying speed limit, and far too slow to bring the jobless rate down.

That could prove a bit too gloomy. Unlike Europe, America has moderated the pace of its fiscal tightening, thanks to the temporary extension of the payroll-tax cut. Household-debt burdens have fallen, the housing market shows signs of stability and the labour market is showing flickers of life. But America’s outlook, like Europe’s, is darkened by political uncertainty. The payroll-tax cut has only been extended for two months, ensuring that the rest of the year will be punctuated with fiscal skirmishes, even as nothing is done to deal with America’s medium-term fiscal mess, or to smooth the huge tax hikes and spending cuts that loom at the end of 2012 under current law. It is a recipe for crushing confidence and scaring off investors.

History teaches that financial crises are followed by years of weakness. But some of the current pain is unnecessary. There is no excuse for the lack of clarity around the euro zone’s future, nor for America’s fiscal paralysis. Europeans do not need to compound the peripheral economies’ problems with even deeper austerity. A more calibrated approach with more financing and more structural reforms makes far more sense. Inept politicians have placed a big burden on central banks, which will have to take more unconventional measures, such as quantitative easing (see article). That will ease the agony, but it won’t make up for politicians’ mistakes. It looks like 2012 will be the year of self-induced sluggishness.

from the print edition | Leaders

SINGAPURA: Indeks saham di Asia bergairah sejalan dengan pertumbuhan manufaktur di Australia, China dan India yang menambah optimisme perekonomian di wilayah itu akan bertahan dari pengaruh buruk krisis Eropa.

Indeks MSCI Asia Pacific, tidak termasuk Jepang, naik 0,6% ke posisi 394,46 pada pukul 8:35 waktu Hong Kong. Penguatan ini terjadi bersamaan dengan langkah China untuk mendinginkan pasar propertinya dan Eropa yang berjuang mengtasi krisis utang.

Harga saham Samsung Electronics Co naik 1,7% di Seoul. Harga saham BHP Billiton Ltd meningkat 1,4% di Sydney. Harga saham Australia & New Zealand Banking Group Ltd naik 1,1% setelah lembaga itu meraih pengsa terbesar di pasar obligasi Australia.

Indeks Australia’s S&P/ASX 200 naik 1%, sedangkan indeks Kospi Korsel meningkat 1,7%. Pasar Jepang dan China masih tutup karena liburan Tahun Baru.

http://www.bisnis.com/articles/gairah-awal-tahun-di-bursa-asia

Sumber : BISNIS.COM
Ini Dia ‘Headline’ Ekonomi Global 2012

Oleh: Vina Ramitha
Ekonomi – Minggu, 1 Januari 2012 | 09:04 WIB

INILAH.COM, Jakarta – Beberapa isu dan peristiwa besar dunia masih mengendalikan perekonomian global. Apa saja?

Kondisi Eropa terkait krisis utang dan potensi berlanjutnya ketegangan di Timur Tengah tampaknya akan mendominasi headline pasar finansial dan komoditas tahun depan. Pengamat pasar menyatakan, volatilitas tahun ini juga akan menjadi lanskap 2012.

Hal ini juga bisa diartikan, pelaku pasar sebaiknya bersiap terhadap segala kemungkinan jika terjadi peningkatan aktivitas di kawasan-kawasan tersebut di atas. Meski beberapa peristiwa memang terjadi mendadak dan tak disangkap, tak ada salahnya investor bersiap.

Kejatuhan kawasan Eropa karena krisis utang memiliki efek berkepanjangan bagi beberapa negara. Perdebatan apakah sejumlah anggota Uni Eropa akan default, menjadi perdebatan yang membuka 2012 mendatang.

“Waspadai negara-negara Eropa Tengah yang perekonomiannya bergantung pada Eropa Barat. Benua ini sedang di ujung tanduk,” ujar analis pasar dan penasihat komoditas Country Hedging, Sterling Smith.

Secara khusus, Smith mengawasai Hungaria, Ukraina dan Lithuania sebagai potensi sumber masalah jika Eropa Barat resesi. Meski tak kelihatan, Smith menyebut negara-negara itu juga memiliki masalah perbankan dan krisis utang.

Senada, Bob Siegel yang Presiden perusahaan manajeman dana, Cabot Capital Group menyatakan, Eropa merupakan isu yang paling menekan kondisi perekonomian dunia. Terutama karena arah perkembangannya masih belum diketahui.

“Hanya karena kita tahu apa yang terjadi, bukan berati itu tak berbahaya. Jika Eropa mulai bertindak seperti (Bank Sentral AS) The Fed, maka akan menolong. Skenario terburuknya, mereka tak menolong dan kita yang kelimpungan,” kata Siegel.

Kemungkinan pecahnya zona euro sudah tertanam di benak pelaku pasar. Namun tak ada yang tahu apakah benar memecah euro menjadi langkah selanjutnya. Presiden West Cooper Asset Management Rich DeFalco menyatakan, hal ini masih sulit dinilai sebagai kemungkinan.

Lebih mungkin yang terjadi, negara dengan perekonomian lemah seperti Yunani dikeluarkan daru Uni Eropa. Ia juga menyatakan ada kemungkinan Uni Eropa terbagi jadi dua blog, utara dan selatan. “Tak ada yang tahu. Jadi sebaiknya bersiap untuk hal baik dan buruk,” katanya.

Analis juga mengamati perkembangan situasi Timur Tengah yang sedang dilanda gelombang reformasi atau lebih dikenal sebagai ‘Arab Spring’. Pergantian kepemimpinan ini menentukan masa depan politik negara dan otomatis, kebijakan ekonominya.

Iran juga menjadi pusat perhatian, karena menghadapi kemungkinan sanksi tambahan terkait masalah nuklir. Segala macam aktivitas militer terkait Iran, mempengaruhi produksi minyak negara tersebut. Apalagi Uni Eropa berniat menghentikan pembelian 600 ribu barel, karena sanksi tersebut.

“Entah produksi dihentikan karena sanksi atau karena aksi militer, yang jelas akan lumpuh. Sulit menentukan seperti apa masa depan perdagangan minyak dengan Iran ini ke depannya,” ujar CEO IndexIQ Adam Patti.

Hal lain yang perlu diperhatikan adalah kondisi perekonomian Amerika Serikat (AS). The Fed berencana mempertahankan suku bunga rendah setidaknya hingga 2013. Ini dinilai analis sebagai masalah pada permintaan kuat untuk obligasi ultra-low. [mdr]

US job market ends year in better shape
Modest economic growth, fewer layoffs points to steady hiring gains next year
Associated PressBy Christopher s. Rugaber, AP Economics Writer | AP – 2 hours 9 minutes ago

29 December 2011

WASHINGTON (AP) — The long-suffering job market is ending the year better off than it began.

The number of people applying for unemployment benefits each week has dropped by 10 percent since January. The unemployment rate, 8.6 percent in November, is at its lowest level in nearly three years.

Factory output is rising, business owners say they’re more optimistic about hiring and consumer confidence has jumped to its highest level since April. Even the beleaguered housing market is looking slightly better.

“We are ending the year on an up note,” says Joel Naroff, president of Naroff Economic Advisors.

Still, 25 million Americans remain out of work or unable to find full-time jobs. Most analysts forecast a stronger economy and job growth in 2012 — and rule out a second recession — but they caution that could change if Europe’s debt crisis worsens or consumers pull back on spending.

On Thursday, the Labor Department said the number of people applying for unemployment benefits last week rose 15,000 to 381,000. But the four-week average, a less volatile measure, dropped to 375,000 — the lowest level since June 2008.

When applications for unemployment benefits consistently fall below 375,000, economists consider it a reasonable sign that hiring is rising enough to push the unemployment rate lower. The four-week average has remained below 400,000 for seven weeks, the longest stretch since April.

A mildly positive report on housing also came out on Thursday. The National Association of Realtors said the number of people who signed contracts to buy homes rose in November to its highest level in a year and a half.

The association sought to temper enthusiasm by noting that the number of canceled contracts is also on the rise. But financial markets seized on the good news in both reports.

The Dow Jones industrial average rose more than 113 points in afternoon trading.

“The recovery in the labor market is maintaining its momentum,” says Michael Gapen, an economist at Barclays Capital.

That’s noteworthy for an economy faced with a debt crisis in Europe and, as recently as last summer, scattered predictions of a second recession at home.

There was plenty of reason for gloom. A political standoff over the federal borrowing limit brought the United States to the brink of default and cost the nation its top-drawer credit rating.

Most analysts now say another recession is unlikely.

The economy likely grew at an annual rate of 3 percent or more in the final three months of this year, analysts say. That would top the 1.8 percent growth rate in the July-September quarter, and the 0.9 percent growth rate in the first half of the year.

Employers have added an average of 143,000 net jobs a month from September through November. That’s almost double the pace for the previous three months. Although it’s below the pace from the first quarter of 2011,

Next year should be even better for hiring. The Associated Press surveyed 36 economists this month who said they expect the economy to generate an average of about 175,000 jobs per month in 2012. That’s almost double the pace for the previous three months, but not as high as job growth in the first quarter of the year.

Job listings website Indeed.com says its revenue has more than doubled in the past year as companies spend more on recruiting. CEO Paul Forster says the healthcare, energy and information-technology sectors have the greatest increase in job openings.

More small businesses plan to hire than at any time in three years, a trade group said earlier this month. And a separate private-sector survey found more companies are planning to add workers in the first quarter of next year than at any time since 2008.

Consumers are also growing more confident. The Conference Board said Tuesday that its consumer confidence index rose to 64.5 in December, the highest reading since April.

Still, the economy and job market remain vulnerable to setbacks.

Economists view Europeas the biggest threat to the global economy in 2012. Europe is expected to fall into recession as banks reduce lending and countries cut spending and raise taxes in response to a simmering government-debt crisis.In the worst case, a government default could destabilize the eurozone financial system and trigger a global panic.Economists are also concerned that consumer spending in the U.S. could taper off if wages — which did not keep up with inflation in 2011 — do not rise faster or if families decide to purchase less on credit.In November, the unemployment rate fell to 8.6 percent from 9 percent to its lowest level since March 2009. About half that decline was attributed to the 315,000 people who gave up looking for work. When people stop looking for a job, the government no longer counts them as unemployed.Economists surveyed by the AP predict the unemployment rate will fall to 8.4 percent by Election Day.About 7.2 million people are receiving unemployment benefits. Congress agreed last week to keep the emergency benefits that half of them depend on for another two months, instead of letting them lapse at the end of this year.

Economists view Europe as the biggest threat to the global economy in 2012.