Europe - Economic Data & News 01 (May 08 - Oct 08)

Re: European Economic Data & News

Postby millionairemind » Tue Jul 08, 2008 7:54 pm

Crisis exposes Brown boomers
By Roland Gribben
Last Updated: 1:59am BST 08/07/2008

Executives who cut their teeth during the ''Brown boom" confess they are ill-prepared to lead their firms in a bear market, says a research study.

The so-called ''Brown boom generation" admit they lack the experience to handle a downturn after benefiting from a buoyant economy when the Prime Minister was Chancellor.

Half the 120 business leaders canvassed by consultants Hay Group say their shortcomings in managing a downturn is a serious threat.

A similar proportion also acknowledge that they lack the vision needed to lead their business through a period of economic turbulence.

Hay Group economists feel that the results show business has been caught out by the downturn and "exposes a startling lack of planning".

On average, companies began planning for a slowdown as the credit crisis began to bite 10 months ago but almost 20pc admit that they have only just started to make contingency plans.

More than half also say their strategy is not designed to cope with an economic slide, but more than two thirds say they have no plans to change tack. The typical reaction has involved a "simple readjustment of performance targets".

Executives accept that they are struggling to "know what to prepare for" and blame pressures from shareholders and risk-averse boards for neglecting the long term.

Most agree that the current economic climate will change the business environment, with almost 20pc forecasting that the UK economy will be radically different once it recovers. Just 13pc say they have started recovery plans.

Last week, Hay Group forecast that the downturn would lead to more than 350,000 job losses and a sharp fall in profits.

Russell Hobby, Hay Group associate director, said: "British businesses have been caught out by the downturn and now risk missing the recovery too."
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: European Economic Data & News

Postby millionairemind » Fri Jul 11, 2008 10:51 am

Slide in house prices is the worst since the Great Depression
By Edmund Conway
Last Updated: 1:36am BST 11/07/2008

Britain is now in the midst of the worst housing slide since the Great Depression, economists declared after house price inflation dropped to the lowest level since comparable records began.


Halifax figures show house prices have fallen by 8.7pc in the year to June

Figures from Halifax, the UK's biggest mortgage lender, showed house prices have fallen by 8.7pc in the year to June, confirming that the property crunch is more severe than the last housing crash in the early 1990s. Hours before, the Bank of England voted to leave rates unchanged at 5pc.

The Halifax figures - which showed prices dropped 2pc last month, following a 2.5pc slide in May - indicate that the scale of the crash now rivals the falls in UK home values in the 1930s. In the three months to June, house prices were 6.1pc lower than the comparable period last year - described by Halifax as the "annual change".

House prices have never fallen by more than 10pc over a year in recorded history, except in 1931, when Britain left the gold standard.

David Owen of Dresdner Kleinwort said: "Back then, sterling had been ejected from the gold standard and the currency collapsed, and, although this helped exports, house prices collapsed. What we are seeing now has some parallels with then.

"However, it is a very unreal situation because this is happening without there being a major recession, and we haven't seen distressed selling, nor a significant increase, yet, in unemployment."

The Bank of England reported recently that the number of mortgages being approved for housing purchases dropped to 42,000 in May - the lowest level since comparable records began in 1993 and down 64pc on the previous year.

Alex Vitillo, of Fathom Consulting, said that the downturn was already more severe than the early 1990s, where, according to figures from Nationwide, prices dropped by around 20pc over a number of years.

He said: "As the UK housing market downturn gathers pace, it is common for analysts to argue that this downturn will not be as bad as the early 1990s vintage. It looks like it will be worse, perhaps far worse.

"The decline is far greater and swifter than anything we saw in the early 1990s. Our modelling work suggests that nominal house prices could fall by another 15pc to 20pc from here," he said, adding that there was a risk of even greater falls.

Economists predicted that, with the economy slowing sharply, it may have to cut interest rates by the autumn. Former MPC member Charles Goodhart warned yesterday that with the economy looking "dire", Britain is now facing a recession.

Prof Goodhart, now at the London School of Economics, said: "Output is going to fall, unemployment is going to rise, possibly quite sharply. It's a horrible situation.


"The British economy is getting into quite a recession. I remember when the Queen had an 'annus horribilis,' and this is the annus horribilis for the MPC.

"The third quarter will show no growth, maybe even a marginal reduction in output," he said in an interview with Bloomberg Television. "I think it will last rather longer than is going to be comfortable. The situation looks dire."

Michael Saunders of Citigroup said: "The housing market is probably not even close to the bottom, and sizeable further declines in house prices are likely, not necessarily every month, in the rest of this year and in 2009. In turn, plenty more weakness lies ahead for the overall economy as well."
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Re: European Economic Data & News

Postby millionairemind » Fri Jul 11, 2008 10:55 am

BIS slams central banks, warns of worse crunch to come
Last Updated: 1:21am BST 01/07/2008Page 1 of 3

The central bankers' bank renews fear of second depression, writes Ambrose Evans-Pritchard

A year ago, the Bank for International Settlements startled the financial world by warning that we might soon face challenges last seen during the onset of the Great Depression. This has proved frighteningly accurate.

The venerable body, the ultimate bank of central bankers, said years of loose monetary policy had fuelled a dangerous credit bubble that would entail "much higher costs than is commonly supposed".

In a pointed attack on the US Federal Reserve, it said central banks would not find it easy to "clean up" once property bubbles have burst.

If only we had all listened to the BIS a long time ago. Ensconced in its Swiss lair, it has fired off anathemas for years, struggling to uphold orthodoxy against the follies of modern central banking.

Bill White, the departing chief economist, has now penned his swansong, the BIS's 78th Annual Report, released today. It is a disconcerting read for those who want to hope the global crisis is over.

"The current market turmoil is without precedent in the postwar period. With a significant risk of recession in the US, compounded by sharply rising inflation in many countries, fears are building that the global economy might be at some kind of tipping point," it said.

Bill White of the BIS has renewed fears of a global slump
"These fears are not groundless. The magnitude of the problems yet to be faced could be much greater than many now perceive," it said. "It is not impossible that the unwinding of the credit bubble could, after a temporary period of higher inflation, culminate in a deflation that might be hard to manage, all the more so given the high debt levels."

Given the constraints under which the BIS must operate, this amounts to a warning that monetary overkill by the Fed, the Bank of England, and above all the European Central Bank could prove dangerous at this juncture.

European banks have suffered worse losses on US property than American banks. Their net dollar liabilities are $900bn, mostly short-term loans that have to be rolled over, a costly business with spreads still near panic levels. Mortgage and consumer credit has "demonstrably worsened".

The BIS cautions the ECB to handle its lending data with great care. "The statistics may understate the contraction in the supply of credit," it said.

The death of securitisation has forced banks to bring portfolios back on to their balance sheets, while firms in need are drawing down pre-arranged credit lines. This is a far cry from a lending recovery.

Warning signs are flashing across Eastern Europe (ex-Russia) where short-term foreign debt is 120pc of reserves, mostly in euros and Swiss francs. Current account deficits are 14.6pc of GDP.

"They could find it difficult to secure foreign funding if global financing conditions were to tighten more severely," it said. Swedish, Austrian and Italian banks have drawn on wholesale markets to lend heavily to subsidiaries across the region. This could "dry up".

China is not immune, although the BIS has dropped last year's comment that growth is "unstable, unbalanced, unco-ordinated and unsustainable".

The US accounts for 20pc of China's exports, but that does not capture the inter-links across Asia that ultimately depend on US shopping malls. "There is a risk that China's imports overall could slow down sharply should the US economy weaken further," it said.
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Re: European Economic Data & News

Postby kennynah » Fri Jul 11, 2008 10:01 pm

Europe Round Up - German Wholesale Price, Spanish CPI Inflation Accelerates
7/11/2008 9:56 AM ET


Eurozone

In Germany, the Destatis announced that the wholesale price index or WPI rose 8.9% year-on-year in June, faster than the 8.1% increase recorded in May. According to the statistical office, the latest rise in wholesale prices is the highest since January 1982, when prices were up 9.5%. During the month of March, WPI had risen 6.9% over the year-ago period. On a monthly basis, the index was up 0.9% in June, marking a slower pace than the 1.4% logged in May.

Spanish annual inflation continued to increase for the second straight month in June
after recording a temporary slowdown in April. According to a report from the statistical office INE, the rate of inflation jumped to 5% in June from 4.6% in May. On a monthly basis, the consumer price index rose 0.6% versus 0.7% rise in the previous month. The harmonized index of consumer prices rose 0.6% on a monthly basis and 5.1% on an annual basis.

Statistics Finland said in its report that new orders in manufacturing fell 23.2% year-over-year in May, a significantly larger decline than the 2.8% drop in April. Separately, the statistical office reported that building costs climbed 4.5% year-on-year in June.

The Statistical Service of the Republic of Cyprus announced that industrial turnover increased 19.7% year-over-year in April, after a 2.4% increase in March. Manufacturing turnover increased 17%. Further, the agency reported that retail trade turnover value increased 5.3% month-on-month in April, after rising 7.3% in March.

The General Secretariat of the National Statistical Service of Greece said the import price index rose 10.5% year-over-year in May, significantly higher than the 1.3% increase in the previous year.

The Paris-based Organization for Economic Co-operation and Development, or OECD, said in a report that its composite leading indicator, or CLI, for the OECD area fell to 97.2 in May from 97.7 in April. The indicator for the euro area stood at 96.0, down from 96.4 in the month before.

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Re: European Economic Data & News

Postby millionairemind » Sat Jul 12, 2008 6:32 pm

Monetarists warn of crunch across Atlantic economies
By Ambrose Evans-Pritchard

The lifeblood of countries' economies is draining away - with grim consequences for us all, writes Ambrose Evans-Pritchard

The money supply data from the US, Britain, and now Europe, has begun to flash warning signals of a potential crunch. Monetarists are increasingly worried that the entire economic system of the North Atlantic could tip into debt deflation over the next two years if the authorities misjudge the risk.

The key measures of US cash, checking accounts, and time deposits - M1 and M2 - have been contracting in real terms for several months. A dramatic slowdown in Britain's broader M4 aggregates is setting off alarm bells here.

Money data - a leading indicator - is telling a very different story from the daily headlines on inflation, now 4.1pc in the US, 3.7pc in Europe, and 3.3pc in Britain.

Paul Kasriel, chief economist at Northern Trust, says lending by US commercial banks contracted at an annual rate of 9.14pc in the 13 weeks to June 18, the most violent reversal since the data series began in 1973. M2 money fell at a rate of 0.37pc.

"The money supply is crumbling in the US. There was a very sharp lending contraction in the second quarter lending. If the Federal Reserve is forced to raise rates now to defend the dollar, it would be checkmate for the US economy," he said.

Leigh Skene from Lombard Street Research said the lending conditions in the US were now the worst since the Great Depression. "Credit liquidation has begun," he said.

The Fed's awful predicament does indeed have echoes of the early 1930s when the bank felt constrained to tighten into the Slump in order to halt bullion loss under the Gold Standard. Investors - notably foreigners - dictated a perverse policy. Over 4,000 US banks collapsed. This time a de facto "Oil Standard" is boxing in Ben Bernanke. Benign neglect of the dollar has started to backfire. It is pushing up crude, with multiple leverage.

The monetary picture is highly complex. The different measures - M1, M2, M3, M4 - have all given false signals in the past. Each tells a different tale, and monetarists fight like alley cats among themselves.

The Federal Reserve stopped paying much attention to the data a long time ago. It has abolished M3 altogether. The US economic consensus is New-Keynesian (dynamic stochastic general equilibrium model). Delving into the money entrails is derided as little better than soothsaying.

That attitude, retort monetarists, is the root cause of the credit bubble. The money supply almost always gives advance warning of big economic shifts. Those who track the data are now calling on central banks to move with extreme caution. If the rate-setters overreact to an inflation spike caused by oil and food - or confuse today's climate with the early 1970s - they may set off an ugly chain of events.

"The data is pretty worrying," said Paul Ashworth, US economist at Capital Economics. "US lending is shrinking dramatically in real terms, and we know from the Fed's survey that banks want to tighten further. People are clamouring for higher rates but we think deflation is now the biggest threat. The idea that the Fed should tighten with unemployment soaring is preposterous," he said. The jobless rate jumped from 5pc to 5.5pc in May.

In Britain, the Shadow Monetary Policy Committee - hosted by the Institute for Economic Affairs, and a refuge for UK monetarists - issued its own alert this week. The focus is on "adjusted M4", which covers loans to "private non-financial corporations" and may offer the best insight into the health of British business.

The growth rate has dropped from 16.1pc a year ago to minus 0.5pc in April. It is the suddenness of the decline that matters most. The data reeks of recession. Professor Patrick Minford from Cardiff Business School called for an immediate rate cut, arguing that the credit crunch is a more powerful and long-lasting force than the oil inflation.

Professor Tim Congdon from the London School of Economics said the UK was lurching from boom to bust. "Real money growth is virtually nil. The British economy is taking a thrashing and it is going to get worse. Corporate money balances have contracted 3pc over the last three months, which is double digits on an annualised basis. This is a serious squeeze for companies," he said.

Mr Congdon warned three years ago that surging M4 would lead to a "dangerous" bubble, which is what occurred. He now fears the MPC will react too late as the process goes into reverse.

Roger Bootle from Capital Economics said Britain could be facing a "real economic crisis and a financial collapse. The MPC does not have the luxury of waiting until all is absolutely crystal clear. By that time the bird will have flown."

The eurozone is at a later stage of the credit cycle. Even so, house prices are collapsing in Spain, and falling in Germany and France. German industrial orders have dropped for the last six months in a row. A joint IFO-INSEE survey said eurozone growth had stalled to zero in the second quarter.

'Credit liquidation has begun'

"Consumer lending has fallen off a cliff. It is contracting in real terms," said Hans Redeker, currency chief at BNP Paribas. Core inflation has fallen from 1.9pc to 1.7pc over the last year.

Unlike the Fed, the European Central Bank keeps a close eye on money data (though not on real M1, now shrinking). It looks at the broader M3 figures. There is a raging debate in Europe over the signals now being sent by this indicator.

The M3 growth is still 10.5pc, down from 11.5pc in January. However, the data has been badly distorted by the closure of the capital markets. Firms have been forced to draw down existing credit lines from banks, which shows up as M3 growth. (It is the same story with America's M3 since the collapse of the Commercial Paper market).

"The credit lines are expiring. Companies cannot roll over loans. We are going to see the entire private credit multiplier go into a slowdown," said Mr Redeker.

Jean-Claude Trichet, the ECB's president, said last week that the M3 data "overstates the underlying pace of monetary expansion". The ECB nevertheless pressed ahead with a rate rise to 4.25pc, setting off a storm of protest. This may go down as one of the most unwise monetary decisions of modern times.

The strain on eurozone banks is growing by the day. They bid a record $85bn (£43bn) at the ECB's last auction for dollars. Only $25bn was available. The spreads on Euribor interbank lending are still at extreme stress levels.

Few disputes that "global inflation" is taking off. Over 50 countries now face double-digit price rises. Ukraine (29pc), Vietnam (27pc), and the Gulf states are out of control, with Russia (15pc), and India (11pc) close behind. China (7.1pc) is on the cusp. Interest rates are still below inflation across much of the emerging world. This is the driving force behind spiralling commodity prices.

The oil spike is already squeezing real wages in the Atlantic region. The debate is whether the Fed, Bank of England, and ECB should squeeze them further, trying to off-set energy rises with a deflationary bust in the rest of the economy. If and when oil peaks in this cycle, they may find inflation crashing faster than they dare to imagine.

The 9th Circle in Dante's Inferno - starring Judas and Brutus - is a frozen lake. Cold can be more frightful than heat. "Blue pinch'd and shrined in ice the spirits stood," (Canto XXXIII). Such awaits the victims of debt deflation.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: European Economic Data & News

Postby millionairemind » Tue Jul 15, 2008 7:28 pm

European recession looms as Spain crumbles
By Ambrose Evans-Pritchard
Last Updated: 10:13am BST 15/07/2008

The eurozone is tipping into a deeper downturn than America itself despite the tremors in the US mortgage industry, and may already be in full recession for the first time since the launch of the single currency.

Industrial production for the EMU bloc fell 1.9pc in May, according to fresh Eurostat data. It is the sharpest one-month decline for the region since the exchange rate crisis in 1992. Officials in Berlin have warned that Germany's economy could contract by as much as 1.5pc in the second quarter as export orders crumble.

Industrial output in both Italy and Greece has slumped 6.6pc over the past year. Portugal is off 6.2pc. "It is a very ugly picture: we're on maximum alert," said Emma Marcegaglia, head of Italy's business federation Confindustria.

Rome is now lobbying for a "New Deal" to revive Italy's economy through massive infrastructure projects.

The idea is to use bonds issued by the European Investment Bank, allowing EU states to circumvent the 3pc limit on budget deficits imposed by the Maastricht Treaty.

Jacques Cailloux, Europe economist at the Royal Bank of Scotland, said a "reverse decoupling" is now under way as Europe goes down harder than the US - just as it did after the dotcom bust. "There is loss of momentum across the board. We can't exclude a recession," he said.

Spain is now spiralling into the worst crisis since the Franco dictatorship. "The economy is in dire straits," said Dominic Bryant, Spain expert at BNP Paribas.
"Some of the housebuilders are going to go bust, it is as simple as that. Over 10pc of Spain's economy has been building houses. This compares with 6pc-7pc in the US at the height of the bubble. The adjustment will be enormous," he said.

Fear haunted the Spanish property sector yesterday after the share price of developer Martinsa-Fadesa crashed by more than 50pc in two days, leading to a suspension in trading by the Madrid bourse. The real estate and shopping mall group has so far failed to secure refinancing for its €5.1bn (£4.1bn) debt. The board held an emergency meeting yesterday.

Finance minister Pedro Solbes said the Martinsa-Fadesa crisis was turning "more complicated" but denied that there is any risk of a chain reaction across the sector. Banco Popular is understood to be the most exposed bank.

The crunch engulfing Spain's property market is rapidly turning into a full-fledged national drama. The developers' association APCE said house prices had already fallen 15pc since September. Unemployment has risen by 425,000 over the past year, reaching 9.9pc.

Deutsche Bank said the property crisis is more serious that the collapse in the early 1990s. It expects a 35pc fall in real house prices by 2011 as the market slowly clears the vast overhang of property, now estimated at nearly 700,000 homes.

In Castilla-La Mancha - Don Quixote's region - some 69pc of all houses built over the past three years are still unsold.

Spain's premier, Jose Luis Zapatero, blamed the European Central Bank for making matters worse by raising interest rates into the teeth of the crisis last week. He called the move "irresponsible". More than 98pc of home loans in Spain are priced off floating rates linked to Euribor, which has risen 145 basis points since August.

Mr Zapatero has resorted to a fiscal boost worth 1.5pc of GDP to help cushion the slump. But Spain's budget surplus is turning into a deficit as tax revenues collapse. Car sales, for instance, fell 31pc in May. The Bank of Spain is concerned about the health of smaller regional lenders with heavy exposure to the mortgage market. Deputy governor Jose Vinals has called on banks to set aside more against bad debts. "Provisions need to keep rising throughout the year. Prudent coverage levels are needed to face this situation with confidence," he said.

The precipitous slide now under way in Europe has yet to cause investors to lose their ardour for the euro, but a number of analysts, including Bill Gross, head of the giant bond fund Pimco, say there is no justification for the euro's 25pc to 30pc over-valuation against the US dollar. "We're turning incredibly bearish on the euro," said BNP Paribas.

The counter argument is that the US has merely stolen growth from the future with this spring's one-off fiscal stimulus package. Dollar bears expect a nasty second leg to the crisis later this year, forcing the Fed to slash interest rates to 1pc or lower.

Goldman Sachs said Europe is the "tie-breaker" for the whole global economy.
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: European Economic Data & News

Postby millionairemind » Tue Jul 15, 2008 7:38 pm

German Investor Confidence Fell to Record in July (Update3)

July 15 (Bloomberg) -- German investor confidence fell to a record low in July as surging inflation and higher interest rates dimmed the outlook for growth in Europe's largest economy.

The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations dropped to minus 63.9, the lowest since it was first compiled in December 1991, from minus 52.4 in June. Economists expected a decline to minus 55, the median of 37 forecasts in a Bloomberg survey shows.

Record oil and food prices prompted the European Central Bank to raise its key rate by a quarter point to 4.25 percent this month, further squeezing purchasing power. As a stronger euro weighs on exports and the U.S. housing slump damps confidence worldwide, Germany's benchmark DAX share index has dropped 7 percent in the past month and 23 percent this year.

``It will be crucial to see not whether the economic slowdown takes place, but to what extent,'' said Andreas Rees, chief economist for Germany at UniCredit Markets & Investment Banking in Munich. ``Future development in the index hinges on how the U.S. deals with problems at Fannie Mae and Freddie Mac.''

The dollar dropped to a record low against the euro today, declining to $1.6038. The currency extended this year's 10 percent slide partly on concern that confidence in the debt of Fannie Mae and Freddie Mac, which buy or finance almost half the $12 trillion of U.S. mortgages, will deteriorate even after the U.S. government pledged support.

European Slowdown

European government bonds extended gains after the ZEW figures, pushing the yield on the German 10-year bund 3 basis points lower to 4.36 percent by 10:06 a.m. in London. ZEW's survey aims to predict economic activity six months in advance. A negative reading means pessimists outnumber optimists.

Growth is slowing across Europe's economy. Confidence among French manufacturers fell to the lowest in five years in June, the country's central bank said today, and European industrial output fell the most in almost 16 years in May. The U.K.'s economy is edging closer to a recession as house prices decline.

``Expectations are very negative, reflecting increased global risks,'' said Sandra Schmidt, an economist at the ZEW. ``We have very high oil prices, the strong euro, which appreciated further, the U.S. crisis, the ECB has raised interest rates and also consumer demand should continue to weaken.''

Second Quarter


Heidelberger Druckmaschinen AG, the world's largest printing- press maker, said last week demand faces a ``prolonged'' slowdown. Germany's economy probably shrank in the three months through June, Deputy Economy Minister Walther Otremba said last month.

``I don't believe in a recession, but we'll see a strong contraction in the second quarter,'' Unicredit's Rees said.

The ECB and other central banks are finding it difficult to cut rates as inflation accelerates. Euro-region consumer prices jumped 4 percent in June from a year earlier, the highest in more than 16 years. British inflation accelerated to the fastest pace since at least 1997, the country's statistics office said today.

Oil prices have almost doubled in the past year and reached a record $147.27 a barrel last week.

Traders reduced bets the ECB will increase rates further this year. The implied rate on December Euribor interest-rate futures contracts fell to 5.03 percent, from 5.28 percent on July 2. Bank of England policy maker Kate Barker said this week that ``we are all worried'' about ``holding policy too tight'' in the U.K.

Strong Euro

A stronger euro is putting pressure on German exporters already coping with a slowing global economy. Europe's single currency has gained 15 percent against the dollar over the past year, while the crisis in U.S. subprime mortgages has roiled financial markets and damped the outlook for global growth.

``The cooling of world economic activity will damp foreign sales and the stronger euro is an additional restricting factor,'' according to the Ifo economic institute.

The world's biggest financial companies have posted more than $415 billion in writedowns and credit losses since the start of last year.

Still, Germany's gross domestic product, which accounts for about a third of the euro-region economy, rose 1.5 percent in the first quarter from the previous three-month period as companies stepped up spending on machinery and construction.

Deputy Finance Minister Joerg Asmussen said today the German economy will cope with risks from slowing global growth and rising commodity prices. ``We think economic growth of 1.7 percent in 2008 is realistic, despite continuing financial market turbulence and a worsening of the international economic environment.''

``The ZEW is an exaggeration to the downside,'' said Claus Meyer-Cording, who helps oversee the equivalent of $15 billion in euro-denominated bonds at DWS Investment GmbH in Frankfurt. ``I believe it's time for modest optimism as a lot of negative factors are already priced in.''
"If a speculator is correct half of the time, he is hitting a good average. Even being right 3 or 4 times out of 10 should yield a person a fortune if he has the sense to cut his losses quickly on the ventures where he has been wrong" - Bernard Baruch

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Re: European Economic Data & News

Postby iam802 » Tue Jul 15, 2008 10:49 pm

Belgian Government Falls on Rift Over Regions' Powers

July 15 (Bloomberg) -- Belgian Prime Minister Yves Leterme's four-month-old government collapsed after failing to heal a rift between French- and Dutch-speaking voters that may threaten to split the country.


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Re: European Economic Data & News

Postby ishak » Wed Jul 16, 2008 12:07 am

PARIS (Reuters) 15/07/2008 15:54
Stocks hit 3-yr closing low
European stocks dropped 1.9 percent on Tuesday, knocked lower by growing fears over the fate of the financial services sector, but a steep fall in oil prices helped the market end above the session’s lows.

U.S. crude oil futures sank more than $7 to just over $137 a barrel after the U.S. Federal Reserve Chairman Ben Bernanke said that a weakening housing market, tighter credit and rising oil prices threatened the economy.

The FTSEurofirst 300 <.FTEU3> index of top European shares unofficially ended 1.9 percent lower at 1,112.59 points, after falling by more than 3 percent. It is the index’s lowest close since May 2005.

FTSE closed down 2.4 percent at 5171.9 points.

"We’re back into the panic mode we experienced back in mid-March. The distrust is at a very high level, and it is totally justified," said Marie-Pierre Peillon, head of equity and credit research at Groupama Asset Management, in Paris.

"The U.S. housing crisis is getting worse, and it has now spread from the "subprime" segment to the "prime" segment, with regional banks getting hit now."

Banks got hammered again, with Fortis the biggest loser. The stock sank 11 percent on worries the Belgian-Dutch financial services group might have to raise more funds and after the Dutch market regulator said it was looking into the company’s funding plan.

Fortis said it did not envisage any additional capital increase.

Royal Bank of Scotland shed 7.1 percent, Natixis dropped 9.7 percent and Anglo Irish Bank fell 6.9 percent.

(Reporting by Blaise Robinson)
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Re: European Economic Data & News

Postby LenaHuat » Wed Jul 16, 2008 5:19 pm

Extract from the NewYork Times ;
Economic Tempest Overtakes Europe
By Mark Landler

Spain, Ireland and Denmark are either in a recession or on the brink. France is weakening fast. And Germany is suddenly faltering, dashing hopes that Europe could escape the upheaval in the United States.

Europe, which held the world’s economic storms at bay for the last year, has finally succumbed.

Spain, Ireland and Denmark are either in a recession or on the brink. Italy is stagnating. France is weakening fast. And Germany, the sturdy locomotive of European growth, is suddenly faltering -- dashing most residual hopes that Europe could escape the upheaval in the United States.
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