Browsing all articles tagged with Government
May
18

French President Urges Euro Zone Government

Francois Hollande, French President called on Thursday for an economic government for the euro zone with its own budget the right to borrow a harmonized tax system and a full time president.

At a 150 minute news discussion marking his first year in office a day following economic statistics showed France had fall into recession, the Socialist leader defended his record on economic reform and budget regulation and informed the French people they would have to work a bit longer for a complete pension in future.

Rebutting criticism that France has lost its leadership role in Europe as of its dwindling economic competitiveness, Hollande thought he wanted to create a fully-fledged political European Union within two years.

Hollande said it is my responsibility as the leader of a founder member of the European Union to pull Europe out of this torpor that has gripped it and to reduce people’s disappointment with it.

He accepted that he could face resistance from Germany, Europe’s dominant power, which opposes mutualising debt between member states. Berlin is also reluctant to give the euro zone its own secretariat for fear of deepening division in the EU, among the 17 members of the single currency and the 10 others.

Non-euro Britain’s government previously faces growing domestic pressure to hold a referendum on leaving the bloc.

Hollande stated he wanted Britain to stay in the EU but added, he can understand that others don’t want to join the single currency, however they cannot stop the euro zone from advancing.

Hollande said a future euro zone economic government would debate the main economic and political decisions to be taken by member states, harmonize welfare policies and national fiscal and launch a battle against tax fraud.

He proposed bringing forward planned EU spending to combat record youth unemployment, pushing for an EU-wide transition to renewable energy sources and envisaged a budget capacity that would be decided to the euro zone along with the gradual likelihood of raising debt.

May
4

Job Market Resilience Eases Growth Concerns

Employment rose at a quicker pace than expected in April and hiring was much stronger than formerly thought in the prior two months, a sign of flexibility that should help the economy absorb the blow from belt tightening in Washington.

Labor Department said on Friday,non-farm payrolls increased by 165,000 jobs previous month and the unemployment rate dropped to 7.5 percent, the lowest level since December 2008. The job counts for February and March were revised up by a net 114,000.

Scott Anderson, chief economist at Bank of the West in San Francisco said that this boosts the case that the US economy will be able to survive the joint headwinds of sequestration and a deepening recession in Europe.

Investors on Wall Street cheered the statistics, which beat economists’ expectations for a 145,000 jobs advance and a steady 7.6 percent reading on the unemployment rate.

US stocks rallied, with the Dow Jones industrial average and the Standard & Poor’s 500 index closing at record highs. The US dollar vaulted to a one week high against the yen, however Treasury debt prices tumbled.

Payrolls climbed by 138,000 jobs in March, 50,000 more than formerly reported, and job growth for February was revised up by 64,000 to 332,000, the largest growth since May 2010.

However the gains previous month were far below the 206,000 jobs per month average of the first quarter, the newest evidence the economy is cooling even if not as rapidly as earlier feared.

Construction employment dropped for the first time since May and manufacturing payrolls were flat. The length of the average workweek pulled off a nine  month high and a gauge of the overall work effort knock down.

Economists pin the slowdown mainly on higher taxes that took hold at the start of the year and $85 billion in federal government spending cuts known as the sequester, that went into effect at the start of March. Economies overseas have also weakened cutting into US export growth.

However the US economy grew at a 2.5 percent annual pace in the first quarter, statistics on construction spending, retail sales and trade suggested it ended the period with less speed.

Apr
24

Gold Plunge on Stronger US Greenback, ETF outflows

Yellow metal knock down more than 1 percent on Tuesday as a stronger US dollar put pressure on prices and as the outflow from the world’s leading gold exchange-traded fund known as ETF accelerated and accentuated an investor shift towards equities and other assets.

At the midsession, bullion along with markets in stocks, oil, bonds and other commodities, was roiled temporarily by a bogus report of explosions at the White House. Bullion pulled up off its lows on the fake report.

The early turn down retraced some of gold’s 1.6 percent rally from a day earlier, which was encouraged by strong physical purchases.

Heraeus Precious Metals Management metals trader David Lee said that he believe the whole commodities space came off because of the weak PMI out of Europe and the weak PMI out of China, particularly Germany. That combination is dragging everything from silver to copper to platinum and palladium down. And yellow metal is going down in sympathy as it’s part of the basket.

Traders stated gold prices chop down to session lows in overnight dealings when the US dollar firmed in reaction to weaker April manufacturing statistics from both Germany and China, and then lingered at the lower levels.

Shortly following 1 p.m. (1700 GMT), precious metal prices pulled up off their lows, US government debt prices surged briefly and stocks knock down sharply following a false tweet from the Associated Press stated there had been two explosions at the White House and that President Barack Obama had been injured.

Gold knock down 1.4 percent to a session low of $1,405.44 per ounce and had pared losses to $1,412.70 by 3:14 EDT (1914 GMT), off 0.87 percent. Precious metal has dropped 15 percent this year.

US gold futures for June delivery were losing 0.61 percent at $1,412.30 per ounce.

Traders said gold’s retreat off the one week high it reached a day earlier reproduce investor nervousness regarding holding on to precious metal positions for long. Many yellow metal bulls were caught by surprise a week ago when bullion slid to its biggest-ever daily loss in Greenback terms.

Gold was also under pressure from a strong dollar and bounce back of equity markets following sales of new US single family homes climbed in March, indicating the housing market recovery remains on track.

Commerzbank analyst Carsten Fritsch said that bullion is lower as well as other commodities, including base metals oil and crude, which knock down following weaker than expected economic data out of China and Europe, which gave a boost to the dollar.

In other markets, copper knock down to an 18-month low and crude oil was down nearly 1 percent because data revealed a slowdown in business activity in Germany and China in April. The figures heightened worries over global growth.

Apr
20

G20 Urges EU to Complete Banking Union Fast, Germany Digs in Heels

World financial leaders support the European Union on Friday to rapidly complete its banking union to help growth, however Germany stood firm that the next step toward such a union be through a risky and lengthy process a change of EU law.

The banking union is one of the key projects to improve the economy of the 17 countries sharing the euro, it would assist eliminate many of the problems that now hold back the flow of credit needed to finance a euro zone economic recovery.

Finance ministers and central bankers from the G20 leading economies said in a statement that the euro area the foundations of monetary and economic union should be enhanced, including through an urgent movement towards banking union.

The EU has previously made the first step it agreed that the European Central Bank would take over the administration of all banks in the euro zone from July 2014 in what is called the Single Supervisory Mechanism.

The next step is to agree how the euro zone will deal with closing down failed banks and how it will pay for that in the provisional period before enough fees from the financial industry accrue to cover the potential expense.

The idea is to use the euro zone bailout fund, the European constancy Mechanism to provide the necessary money for resolving failed banks in that era, however that means the use of euro zone taxpayers money.

The German government, which faces elections in September, consider that without a treaty change the potential use of German taxpayer money for winding down a bank in another euro zone state could give grounds to query it in the German constitutional court.

Wolfgang Schaeuble, German Finance Minister told reporters earlier on Friday that the German government is willing to change the treaties, the sooner, the better.

He said we should do what is necessary appropriately, one must have the strength to do so. The German government is strongly determined to go this way, there was a prospect the changes could be introduced through a simplified procedure to speed the process.

Apr
19

German Court to Hear Case Against ESM, ECB bond-buying in June

Germany’s Constitutional Court said on Friday that it would hold a public hearing on complaints against the euro zone’s bailout fund the European Stability Mechanism, and the European Central Bank’s bond buying program on June 11 and 12.

The seven complaints in total, reflect German unease regarding the mounting costs of dealing with the three year debt crisis and fears that the ECB bond buying program may violate the taboo against direct central bank financing of state budgets.

The court based in Karlsruhe southwestern Germany, ruled in a preliminary verdict previous September that the ESM did not violate German law and could go further on, while it insisted on veto rights for the German parliament.

The ECB has not yet trigger the program as struggling euro zone states, previously implementing tough austerity measures, are reluctant to recognize the onerous conditions of the program, however the pledge alone has been enough to bring down their borrowing costs over recent months.

Gunnar Beck, constitutional law expert said he did not expect Karlsruhe to support the complaints, given its precedent record on not blocking moves towards European integration, despite the legal worries over the bond buying program.

There is no doubt that the EU contract, rule out bond purchases whenever they might facilitate state financing through the printing press and permit indebted states to obtain enhanced rates than they would otherwise.

There is no significant precedent where the German constitutional court has directly challenged the German government over an issue of European policy.

He added, I have no doubt the court will present to the government’s wishes in one form or another when it comes to the ECB bond purchases.

Political analysts say a decision is unlikely earlier than Germany’s September election when Chancellor Angela Merkel, her popularity enhanced by what voters see as her competent handling of the euro zone crisis is expected to win a third four year term.

Apr
18

President Barack Obama’s nominee to Lead Budget Office Sails Toward Confirmation

President Barack Obama’s choice to lead the Office of Budget and Management appeared Wednesday to be on a clear path toward Senate confirmation.

Sylvia Mathews Burwell, a former official in the administration of President Bill Clinton and until lately head of Wal Mart Stores philanthropic wing, float through committee votes without Republican opposition on Wednesday, almost assuring her confirmation as the next head of OMB.

Democratic Senator Patty Murray of Washington state, chairwoman of the budget committee released a declaration shortly following the committee vote on Wednesday applauding the tough bipartisan support for Burwell’s confirmation.

Murray said I am confident she is going to do a enormous job at OMB working to enhanced the economy and tackle our deficit and debt in a balanced way and I am looking forward to the complete Senate approving her nomination as soon as possible.

If Burwell proceeds through verification of the full Senate, she will take over the office that crafts the administration’s spending policies and acts as a key negotiator in budget argument with Republicans in the US Congress.

As Obama has faced a number of staining confirmation battles over his executive branch selections, Burwell cleared both the Senate Homeland Security and Senate Budget Committee and Governmental Affairs Committee the by a voice vote, winning praise from some Republicans along the way.

Senator Jeff Sessions of Alabama, a longtime critic of OMB and the highest ranking Republican member of the budget committee and Obama’s budget policies, offered kind words for the president’s nominee.

She’s a very wonderful person, Sessions said, maybe at a time of fiscal crisis it’s the toughest job in Washington.

Burwell would swap acting director Jeffrey Zients, who stepped in following Obama tapped former OMB Director Jack Lew to be his White House chief of staff.

Apr
13

Gold Drop into bear market on institutional Migration

Yellow metal sank more than 5 percent on Friday, entering bear market territory as institutional investors fled gold in favor of other safe-haven assets amid concerns regarding central bank sales and souring sentiment.

The span of the sell off will underscore some expectations that gold’s meteoric rally may end following 12 years of gains.

Robin Bhar, Societe General analyst stated the scale of the turn down has been absolutely breathtaking, they tried to rally and that just did not get anywhere, there has not been any downside support it’s like a knife through butter.

Selling became heavy following an unexpected contraction in US retail sales statistics, which hurt stocks and supported the US dollar. It increased to pressures that were building this week from numerous factors, including a draft plan for Cyprus to sell gold and outflows from exchange traded yellow metal funds.

The precious metal slide below $1,500 per ounce for the first time since July, 2011. Yellow metal posted its largest weekly decline since December, 2011.

The speed of the sell-off appeared tied to instability in the price of Japanese government bonds, which has forced certain holders to sell other assets to meet the risk modeling of their investment portfolios.

The spot price of gold strike a low of $1,476 per ounce, down 5.3 percent on the day. For the week, it showed a turn down of more than 6 percent, in its largest weekly drop since December 2011, bonds rallied on Friday.

Geoffrey Fila, associate portfolio manager at Galtere Ltd, commodities focused hedge fund in New York with almost $600 million under management. Could it retest $1,300 or $1,200 on a short term technical basis? Absolutely yes.

Losses in precious metal accelerated and trading volumes ballooned following prices fell through key support at $1,521 per ounce. The market is down some 23 percent below a record peak of $1,920.30 strike in September 2011. Investors define a bear market as a turn down of 20 percent or more from a market high.

US gold futures also strike their lowest since July 2011, with metal for June delivery declining to as low as $1,476 per ounce by 5:20 p.m. EDT (2150 GMT). It settled at $1,501.40, losing 4.1 percent.

Apr
12

Gold Heads for Third Weekly Fall, Firm Shares Reflect

Precious metal prices were stable on Friday however remained on track for their worst week since late February as strong equities lured investors seeking better returns, as outflows from exchange traded funds underlined the shaky attitude for gold.

CIMB regional economist Song Seng Wun said US equities have continued to defy gravity accumulation that the market had also shrugged off the threat of conflict with North Korea.

Usually, given growing tensions there will be flight to safety and bullion will benefit, however he suppose at this point, as they are mindful of the increased risk, nobody really think that the North Koreans will actually carry through on their threats.

Growing tensions on the Korean peninsula have done little to blend safe haven buying, while yellow metal could regain some of its luster if the newest US earnings season disappoints.

Yellow metal was stable at $1,560.84 per ounce by 0628 GMT, heading for a more than 1 percent turn down this week, its third such fall in a row.

Gold has fall about 7 percent so far this year, following increasing for the previous 12 years, lagging added of more than 11 percent in the S&P 500 index.

US government agency has stated North Korea has a nuclear weapon it can mount on a missile, accumulating an ominous dimension to threats of war by Pyongyang, however the assessment was quickly dismissed by several US officials and South Korea.

Dealer in Singapore, it’s a slim market and a two way business. Mean’s we are seeing both buying and selling today, buying is not extremely high from India. I would say there is not anything strange yet.

Gold future for June delivery fall almost $20 or 1.3%, to 3,561.50 per ounce, on track for a weekly drop of nearly 1%. US gold for June delivery was $1,560.90 per ounce, drop $4.00.

Apr
11

President Barack Obama Tax Plan Opening Gambit in Potential Tax Rewrite

Obama on Wednesday revitalized a list of his favorite tax thoughts, hopeful to raise $580 billion in new revenues from the wealthy over a decade in a potential opening strategy to forge a deal with Congress to renovate the tax code.

Although certain not to move forward all together, his 2014 budget proposal has elements likely to spur discussion including a proposal to tax derivatives more strictly, as lawmakers weigh a tax code restore and face a limit on the government’s debt limit this summer.

Chris Krueger, an analyst at Guggenheim Partners stated that these are all opening bids in any possible grand negotiate, so from that perspective they are significant.

Congressional Republicans mostly blasted the Democratic president’s budget proposal, weighing the difficulty policymakers have had forging a long-term deficit cutting plan.

Obama’s budget does not seek to lift individual tax rates as he has proposed in prior budgets. For years, he sought to elevate rates on household income over $250,000.

Republicans and Obama agreed during previous year’s fiscal cliff battle to elevate rates for households earning more than $450,000 a year, to 39.6 percent from 35 percent.

Obama’s budget also recommended a new Buffett tax, a minimum tax rate for the rich named for investor Warren Buffett, that stage in a minimum 30 percent tax rate on household income over $1 million.

The bid renew Obama’s offer previous year to Republican House of Representatives Speaker John Boehner during the discussion to avoid the so-called fiscal cliff of looming tax hikes.

The budget also reprized a proposal to limit tax breaks between wealthier taxpayers, opening at household income of roughly $250,000, limiting the value of deductions and loopholes in determining taxable income. A phased-in limit on deductions is now part of the tax code for more wealthy taxpayers.

The new cap would apply to the same list of breaks proposed in previous years , including the charitable tax break and the exception for municipal bond interest.

One encounter Obama proposed to fight once more is over the estate tax, pitching to lift it to 45 percent for estates worth over $3.5 million, following a deal to cap it in January at 40 percent for estates over $5 million.

Apr
6

President Barack Obama Tries to Encourage Republicans With Cuts in Budget

President Barack Obama will offer cuts to Social Security and other benefit programs in a budget offer coming week aimed at captivating over enough congressional Republicans to pass a broad deal to reduce the deficit.

Although Obama’s prior budgets have principally been ignored in Congress, the White House wants to use this year’s suggestion to be released on Wednesday, to move away from the fiscal fights that have consumed Washington since 2010.

However several attempts to reach an agreement balancing tax increases with spending cuts have failed, and prediction for a grand bargain remain soften. John Boehner ,House of Representatives Speaker, who let taxes climb for the wealthiest Americans earlier this year, has ruled out any additional revenue increases and was lukewarm regarding Obama’s latest proposal.

When the president visited the Capitol previous month, House Republicans declared a desire to find common ground and urged him not to make savings we agree upon conditional on another round of tax boost, if reports are accurate the president has not notice that call.

Obama also faces confrontation from fellow Democrats over his offer to apply a less generous measure of inflation to calculate cost of living raise that would affect Social Security and other government programs when he reveals his budget.

That change would effect in lower payments to some beneficiaries of the Social Security pension program and is staunchly opposed by many of the president’s party as well as retiree groups and labor.

Vermont Senator Bernie Sanders, an independent who votes with the Democrats said that he is terribly disappointed and will do everything in my power to block President Obama’s offer to cut benefits for Social Security recipients.

Rudolph Penner, a former Congressional Budget Office director said that he believe that he would like to have is a impressive bargain which puts these fiscal issues behind them for a good number of years. If he does not get the grand bargain his second term is not going to be a very cheerful one.