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Chase Bank Limits Cash Withdrawals, Bans International... Before you read this report, remember to sign up to http://pennystockpaycheck.com for 100% free stock alerts Chase Bank has moved to limit cash withdrawals while banning business customers from sending...

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Richemont chairman Johann Rupert to take 'grey gap... Billionaire 62-year-old to take 12 months off from Cartier and Montblanc luxury goods groupRichemont's chairman and founder Johann Rupert is to take a year off from September, leaving management of the...

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Cambodia: aftermath of fatal shoe factory collapse... Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Spate of recent shock departures by 50-something CEOs While the rising financial rewards of running a modern multinational have been well publicised, executive recruiters say the pressures of the job have also been ratcheted upOn approaching his 60th birthday...

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UK Uncut loses legal challenge over Goldman Sachs tax... While judge agreed the deal was 'not a glorious episode in the history of the Revenue', he ruled it was not unlawfulCampaign group UK Uncut Legal Action has lost its high court challenge over the legality...

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Cambodia: aftermath of fatal shoe factory collapse – video

Category : Business

Workers clear rubble following the collapse of a shoe factory in Kampong Speu, Cambodia, on Thursday

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Watch out, George Osborne: Smith, Marx and even the IMF are after you | Ha-Joon Chang

Category : Business

When even the IMF’s free market ideologues recoil from the UK chancellor’s austerity politics, democracy itself is at stake

George Osborne and his Treasury officials are gearing up for a fight. They’ve promised to make life difficult for the other side for the next two weeks. The unlikely opponents are the team of economists visiting from the IMF for a regular policy review.

Why has this routine meeting, which would hardly be noticed outside professional circles, become a confrontation? Because the IMF has recently dropped its support for the chancellor’s austerity policy and repeatedly urged him to rethink it. It even said he was “playing with fire” in refusing to change course.

This is an astonishing development. For in the past three decades the IMF has been the standard-bearer for austerity. Back in 1997 it even forced South Korea – with an existing budget surplus and one of the smallest public debts in the world (as a proportion of GDP) – to cut government spending. Only when the policy turned what was already the biggest recession in the country’s history into a catastrophe, with more than 100 firms going bankrupt every day for five months, did it do an embarrassing U-turn and allow a budget deficit to develop.

Given this history, being told by the IMF to go easy on austerity is like being told by the Spanish Inquisition to be more tolerant of heretics. The chancellor and his team should be worried.

If even the IMF doesn’t approve, why is the UK government persisting with a policy that is clearly not working? Or, for that matter, why is the same policy pushed through across Europe? A certain dead economist would have said it is because the government is “in reality instituted for the defence of the rich against the poor“. Dead right.

Current policies in the UK and other European countries are really about making poor people pay for the mistakes of the rich. Millions of poor people have lost their jobs and the support they received through welfare, but how many of those top bankers who caused the crisis have suffered – except for a cancelled knighthood here and a partially returned pension pot there? If anyone has suffered in the financial industry, it is its poorer members – junior analysts who lost their jobs and tellers who are working longer hours for shrinking real wages.

In case you were wondering, it wasn’t Karl Marx who wrote the words that I quoted above. He would have never put it so crudely. His version, delivered with typical panache, was that the “executive of the modern state is but a committee for managing the common affairs of the whole bourgeoisie”. No, those damning words came from Adam Smith, the supposed patron saint of free-market economics.

To Smith and Marx, the class bias of the state was plain to see. They lived at a time when only the rich had votes (if there were elections at all) and so there were few checks on the extent to which they could dictate government policy.

With the subsequent broadening of suffrage, ultimately to every adult, the class nature of the state has been significantly diluted. The welfare state, regulations on monopoly, consumer protection, and protection of worker rights are all things that have been established only because of this political change. Democracy, despite its limitations, is in the end the only way to ensure that policies do not simply benefit the privileged few.

This is, of course, exactly why free-market economists and others who are on the side of the rich have been so negative about democracy. In the old days, free-market economists strongly opposed universal suffrage on the grounds that it would destroy capitalism: poor people would elect politicians who would appropriate the means of the rich and give handouts to the poor, they argued, completely destroying incentives for wealth creation.

Once universal suffrage was introduced, they could not openly oppose democracy. So they started criticising “politics” in general. Politicians, it was argued, would adopt policies that maximised their chances of re-election but damaged the economy – printing money, handing out favours to powerful monopolies, and increasing social welfare spending for the poor. Politicians needed to be prevented from making important policy decisions, the argument went.

On this advice, since the 1980s, many countries have ring-fenced the most important policy areas to keep politicians out. Independent central banks (such as the European Central Bank), independent regulatory agencies (such as Ofcom and Ofgem) and strict rules on government spending and deficits (such as the “balanced budget” rule) have been introduced.

In particularly difficult economic times, it was even argued, we need to insulate economic policies from politics altogether. Latin American military dictatorships were justified in such terms. The recent imposition of “technocratic” governments, made up of economists and bankers who have not been “tainted” by politics, on Greece and Italy comes from the same intellectual stable.

What free-market economists are not telling us is that the politics they want to get rid of are none other than those of democracy itself. When they say we need to insulate economic policies from politics, they are in effect advocating the castration of democracy.

The conflict surrounding austerity policies in Europe is, then, not just about figures on budget, unemployment and growth rate. It is also about the meaning of democracy.

As José Manuel Barroso, the president of the European commission, has recently recognised, the policy of austerity has “reached its limits” in terms of “political and social support”. If European leaders, including the British chancellor, keep pushing these policies against those limits, people will inevitably start asking: what is the point of democracy, when policies serve only the interest of the tiny minority at the top? This is nothing less than crunch time for democracy in Europe.

Downdraft theory in Lion Air crash

Category : Business

Investigators consider whether powerful ‘wind shear’ or ‘microburst’ caused Bali crash in which all 108 on board survived

The Lion Air pilot whose jet fell into the sea while trying to land in Bali has reportedly described how he felt it “dragged” out of its trajectory and into the water. Investigators are considering whether a powerful downdraft of wind caused the crash in which all 108 passengers and crew survived despite the Boeing 737 cracking in half on impact.

The newly built plane undershot the tourist island’s main airport runway in Denpasar and belly-flopped in water on Saturday. Authorities from Indonesia, the US and Boeing are investigating.

Initial debriefings, witness comments and weather reports have focused attention on the possibility of “wind shear” or a downdraft from storm clouds known as a “microburst”. Experts say such violent and unpredictable gusts are rare but can leave even the most modern jet helpless if they are stronger than the plane’s ability to fly out of trouble – with the critical moments before landing among the most vulnerable.

“If you have a downdraft which exceeds the performance of the plane, then even if you put on full thrust you will go downhill and you can’t climb out,” said Hugh Dibley, a former British Airways captain and expert on loss-of-control events.

The cause of the crash has potential implications for the reputation of one of the world’s fastest-growing airlines, which is fighting to be removed from a European Union safety blacklist just as it buys record volumes of Airbus and Boeing jets.

According to initial pilot debriefings, details of which have been described to the Reuters news agency, flight JT-904 was on an eastwards approach to Bali’s Ngurah Rai airport at mid-afternoon on Saturday following a normal flight from Bandung, West Java.

The co-pilot, an Indian national with 2,000 hours of relevant flying experience, was in charge for the domestic trip, which was scheduled to last one hour and 40 minutes.

As the Lion Air plane was coming in to land, with an aircraft of national carrier Garuda following behind and another about to take off on the runway just ahead, the co-pilot lost sight of the runway as heavy rain drove across the windshield. The captain, an Indonesian citizen with about 15,000 hours’ experience and an instructor’s licence, took the controls.

Between 122 metres and 61 metres altitude (400-200ft) pilots described flying through a wall of water, according to the source. Bursts of heavy rainfall and lost visibility are not uncommon in the tropics but the aircraft’s low altitude meant the crew had little time to react.

With no sight of the runway lights or markings the captain decided to abort the landing and perform a “go around”, a routine manoeuvre for which all pilots are well trained. But the captain told officials afterwards that instead of climbing the 737 started to sink uncontrollably and their well-practised routines unravelled quickly.

“The captain says he intended to go around but that he felt the aircraft dragged down by the wind; that is why he hit the sea,” said the source, who was briefed on the crew’s testimony. “There was rain coming east to west; very heavy,” the source said, asking not to be named because no one is authorised to speak publicly about the investigation while it is under way.

A passenger on board the jet painted a similar picture of an aircraft getting into difficulty only at the last minute. “There was no sign at all it would fall but then suddenly it dropped into the water,” Tantri Widiastuti, 60, told Metro TV.

Lion Air declined to comment on the cause of the crash.

According to the Flight Safety Foundation, bulletins for pilots at around that time indicated a few storm clouds at 518 metres (1,700ft) and a wind blowing moderately but varying in its direction from east-south-east to the west.

The aircraft itself was delivered in February and there had been only one technical problem: a landing light that had to be replaced.

According to Boeing, the 737-800, its most popular current model, is equipped with a system that detects wind shear ahead and warns the pilot audibly to go around.

China’s economic growth slows to 7.7%

Category : Business

Falling factory output and investment hit first-quarter GDP growth – down from 7.9% but still above Beijing’s 7.5% target

China’s economic recovery stumbled unexpectedly in the first three months of 2013, forcing analysts to start slashing full-year forecasts despite official insistence that the outlook was favourable.

The world’s second-biggest economy grew 7.7% in the first quarter from a year ago, slower than the 7.9% hit in the fourth quarter of 2012, below the Reuters consensus forecast of 8% and confounding expectations of a surprise uptick that emerged after surging credit and export data were published last week.

Sheng Laiyun, a spokesman at the National Bureau of Statistics, which released GDP in a flurry of other data on Monday, said: “China’s economic fundamentals haven’t changed. We are confident about future growth and optimistic about achieving this year’s growth target.” China has set a 7.5% GDP growth target for 2013, a level Beijing believes will create sufficient jobs while providing room to deliver structural reforms the government – and international policy advisers – believe are necessary to put growth on a more sustainable long-term footing.

“Employment is very stable,” Sheng said. “Stable employment is a basic indicator of China’s economic stability,” he added, quoting ministry of labour and social securities data showing that China created more than 3m new jobs in the first quarter.

Commodities from crude oil to copper, wheat and corn all fell after the data, share prices were knocked lower and the Australian dollar slid as investors repriced expectations of import demand from China.

A 0.1% downgrade of the World Bank’s 2013 China growth forecast to 8.3% following last week’s cut to the global trade outlook from the World Trade Organisation was a further blow to economists anticipating that broadly brighter global economic data in the first three months of 2013 would underpin China’s recovery.

Industrial output growth of 8.9% on a year ago in March versus expectations of 10% and fixed asset investment growth of 20.9% in the first quarter versus the 21.3% market consensus were big drags on sentiment – as well as GDP.

The most sluggish increase in power generation in six months, up 2.1% year on year in March, and a 3.2% fall in daily crude steel output in the same period, were taken as signs of cooling activity.

That data, released alongside GDP, overshadowed a gentle uptick in retail sales growth to 12.6% year on year in March from 12.3% in February and expectations of 12.5%.

Yen slumps to new low as Bank of Japan unveils stimulus plan

Category : Business

Yen dips against major currencies after Bank of Japan buys government bonds in effort to beat deflation

The yen hit fresh lows against a host of major currencies on Monday, resuming its slide after the Bank of Japan lost no time in launching its new easing policy to underline its determination to beat deflation.

The central bank conducted its first government bond buying operations on Monday and said it will buy 1tn yen of bonds with maturities of between five and 10 years, and 200bn yen of bonds with maturities exceeding 10 years.

The dollar gained 1% to 98.54 yen after jumping more than a full yen to 98.85, its highest since June 2009, according to the EBS trading platform.

“After a big spurt in the morning, it started to stick a bit, but the possibility of it getting to 100 has increased,” said Soichiro Tsutsumi, a trader at eWarrant Japan Securities KK.

Last week, new BoJ governor Haruhiko Kuroda said the central bank would inject about $1.4tn into the economy in less than two years, a gamble that sent bond yields plummeting as prices rose on expectations of massive purchases of debt by the BoJ.

Analysts assume the flood of new money will be partly used by Japanese investors to buy higher yielding assets abroad, putting downward pressure on the yen.

JPMorgan analysts wrote in a client report that they had re-initiated a basket of yen shorts and were recommending the Australian dollar and Brazilian real as carry trades against the yen after the BoJ announced its aggressive stimulus plan.

The Australian dollar was up 0.2% against the yen at 102.12 yen after rallying to 102.32 yen, its highest since July 2008.

The euro climbed as far as 128.43 yen, its highest since January 2010, before pulling back to 127.90 yen, 0.9% higher than late US levels on Friday.

Some analysts said that a flare-up in the eurozone’s problems could ramp up risk aversion, prompting investors to buy “safe haven” yen and put a floor under its slide. Others said signs of cracks in the US economic recovery could weigh on the dollar.

“Getting to 100 yen against the dollar is just a matter of time

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Japanese central bank doubles money supply in fresh bid to spur inflation

Category : Business

New Bank of Japan governor seeks to end long spell of deflation which has hindered investment and economic growth

The Japanese central bank has said it will massively expand the country’s money supply to spur inflation as it strives to get the world’s third-largest economy out of its slump.

The Bank of Japan (BoJ) on Thursday vowed to achieve a 2% inflation target at “the earliest possible time”.

To do so, the central bank has launched “a new phase of monetary easing both in terms of quantity and quality” that will double the money supply, it said in a statement.

The new BoJ governor, Haruhiko Kuroda, has vowed to meet the inflation target within two years, heeding demands from the prime minister, Shinzo Abe, to once and for all end a long spell of deflation which has hindered investment and economic growth.

Abe’s government, which took power late last year, accused the previous central bank governor, Masaaki Shirakawa, of balking at undertaking bold enough monetary easing to get the economy back on track. The steps announced on Thursday under the first policy meeting chaired by Kuroda were in line with expectations and are likely to reassure jittery financial markets of Japan’s resolve to push ahead with its “reflationary” strategy.

The announcement pulled the Nikkei 225 stock average out of the red and sent the yen lower against the US dollar.

The BoJ will conduct money market operations to increase the monetary base by about ¥60tn to ¥70tn (£420bn to £490bn) a year. At the same time it plans to increase purchases of Japanese government bonds to total ¥50tn a year to encourage interest rates to decline, which it hopes will facilitate more lending.

The central bank is also extending the average remaining maturity of the bonds it purchases from three years to an average of seven years. Meanwhile, bonds with all maturities up to 40 years will be eligible for purchase.

As expected, the bank also extended the range of assets it can purchase, to include more risky real estate investment trusts and exchange-traded funds.

As part of the new strategy, the BoJ will end its current asset-purchasing programme, absorbing it into the future purchases of bonds, it said.

Answering concerns that the stimulus programme would further raise Japan’s public debt, the statement said that the government bond purchases would be “executed for the purpose of conducting monetary policy and not for the purpose of financing fiscal deficits”.

The BoJ will “examine both upside and downside risks to economic activity and prices and make adjustments as appropriate”, it said.

Chinese chess grandmaster stranded in Gibraltar after being blocked from UK

Category : Business

Women’s world No 15 Ju Wenjun refused permission to board flight to London as she did not hold a transit visa

A top Chinese chess player has found herself stuck between the Rock and a hard place after an airline refused to allow her to board a flight to London following a tournament in Gibraltar because she did not hold a transit visa to enter the UK.

Ju Wenjun found herself stranded after taking part in the 11th annual Tradewise chess festival held in Gibraltar, having travelled there on 19 January via London from Hong Kong on a British Airways flight. However, when she went to board her return flight to China via Heathrow on 1 February, the day after her 22nd birthday, she was denied entry onto the flight.

“I don’t have a UK transit visa and they let me board (in Hong Kong). When I arrived in the UK, I told them I was going to play in Gibraltar at the Tradewise festival. I showed them my airline ticket and they let me pass through. They let me show my tickets and my invitation,” said Ju on the telephone from Gibraltar.

Ju is a grandmaster, ranked No 15 in international women’s chess and No 3 in China. The

tournament organisers, who have been rallying on her behalf, said she has been told she must send her passport to the UK to be issued a transit visa and then have it sent back to Gibraltar. But Ju doesn’t understand why she should have to go through this when she was allowed to pass through the UK in January on her way to the chess tournament.

“I don’t want to send my passport to the UK. It takes time, and my parents are worried about me,” she said. “I hope this will end soon.”

The tournament director, Stuart Conquest, said Ju is growing increasingly distressed about her extended stay on the Rock. “I think they should use a bit of compassion and let this girl go home. What is the point of making her send her passport to the UK? Everyone’s waiting for her in China,” he said.

A spokeswoman for the Home Office said that the UK Border Agency was not responsible for visa checks made by airline carriers outside the country. “It has nothing to do with us,” she said.

At the time of publication, British Airways was unavailable for comment.

Conquest says this is the first time any incident like this has happened to international players participating in the tournament in the 11 years it has been running.

In the meantime, Ju is being looked after by Conquest and others in Gibraltar, even being treated to a meal out – at Kowloon Chinese restaurant.

Boeing 787 Dreamliner fuel leaks add to safety concerns

Category : Business

Japan Airlines jet out of service after spilling 40 gallons of fuel at Boston airport in separate valve-related problem

A Boeing 787 Dreamliner jet undergoing safety checks in Tokyo after a fuel leak at Boston airport last week had leaked fuel during tests earlier in the day, according to Japan Airlines.

An open valve on the aircraft caused fuel to leak from a nozzle on the left wing used to remove fuel, a spokeswoman said.

The jet is out of service after spilling about 40 gallons (182 litres) of fuel on to the airport runway in Boston, US, after a separate valve-related problem.

In Boston, a different valve on the plane opened, causing fuel to flow from the centre tank to the left main tank. When that tank filled up, it overflowed into a surge tank and out through a vent.

The causes of the incidents are unknown, the Japan Airlines spokeswoman added. There is no timetable for the plane to return to service.

On Friday, the US government ordered a wide-ranging review of the Dreamliner, citing concern over a fire and other problems, but insisted the passenger jet was still safe to fly.

Japan Airlines and its local rival, All Nippon Airways, fly 24 of the 49 Dreamliners delivered last year.

Japan unveils stimulus package

Category : Business

Shinzo Abe, the prime minister, details how £138bn will be pumped into economy in bid to create 600,000 jobs

The Japanese cabinet has approved a fresh stimulus package of more than 20 trillion yen (£138bn/$224bn), aiming to lift the economy out of recession and create 600,000 new jobs.

The prime minister, Shinzo Abe, announced the decision at a news conference where he said the new measures were intended to add 2% to Japan’s real economic growth.

Abe urged the central bank to move more aggressively to encourage lending and meet a clear inflation target to break out of the economic doldrums that have plagued Japan for two decades.

Abe took office late last month after a parliamentary election victory by the Liberal Democratic party, which is touting public works spending and subsidies to strategically important sectors as part of its plan to revive the economy.

“Unfortunately the previous administration failed to work out how to boost growth and expand the economic pie,” Abe said. “It is vital that we have an economic strategy that can create jobs and raise incomes to sustain growth.”

Abe, who also served as prime minister in 2006-2007, has vowed to make reviving the economy his top priority, promising support both to small businesses and big industries such as the auto sector.

The spending package includes 10.3tn yen in extra outlays by the central government. Abe’s administration is pledging to spend 19tn yen through 2015 in support for reconstruction of the coastal areas devastated by the March 2011 disasters.

The stimulus deal, which will be the basis for a supplementary budget for the remainder of the fiscal year through 31 March, required wrangling over tax reform and other issues with the Liberal Democrats’ coalition partner, the New Komeito.

It also includes a request to raise military spending by 100bn yen from the 4.6tn yen budget last year, the first such increase in a decade. The increase is partly aimed at beefing up monitoring and defences around islands in the East China Sea, known as the Senkakus in Japan and the Diaoyu islands in China. A territorial dispute over the uninhabited islands flared into anti-Japanese riots across China last autumn after Japan’s central government purchased them from a private owner.

On the economic front, Abe has urged Japan’s central bank to do whatever it takes to meet an inflation target of 2% to counter a persisting cycle of sinking prices and weak demand.

The change of administration has raised hopes that Abe’s more aggressive approach might help Japan escape recession.

Nat Rothschild and Bumi resume conflict after Takeover Panel criticism

Category : Business

Financier and his partners in Indonesian mining venture turn on each other again

The increasingly vicious spat between the financier Nat Rothschild and his Indonesian mining partners took another twist on Wednesday night after the company was strongly criticised by the Takeover Panel and the warring parties again turned on each other.

The corporate takeover regulator said it was launching an investigation into why Bumi plc, the Rothschild creation that holds stakes in a pair of Indonesian mining ventures, had not disclosed a relationship between two of its major shareholders. The panel said it now views those shareholders – Indonesia’s influential Bakrie family and another Indonesian investor, Rosan Roeslani – as acting together, and restricted the voting rights on their combined 57% stake to 29.9%.

The panel said it was “undertaking an investigation into why it was not previously made aware of the existence of the concert party, and why a … waiver was not sought in relation to the transactions”. Under the takeover code, any person – or persons acting in concert – owning a stake of 30% or more in a company must launch a bid for the whole business, unless the panel approves a waiver.

Bumi plc was created from the flotation of the cash shell Vallar in 2010, which raised £707m to spend on acquiring international mining groups. It subsequently bought 25% of PT Bumi Resources from the Bakries, plus a 75% interest in PT Berau Coal Energy from Roeslani’s company, PT Bukit Mutiara. The Indonesians were issued with new shares in Vallar, which was then renamed Bumi plc.

In a statement, the Bakries said they had now made a formal complaint against Rothschild, blaming him for the failure to disclose the relationship. “Had the Takeover Panel been made adequately aware of the facts in November 2010 and ruled that there was a concert party, as it has now, we would certainly have sought a waiver,” the family’s Long Haul Holdings said.

Bumi plc also attempted to blame its co-creator, Rothschild, saying it wished “to remind shareholders” that Rothschild had brought the flotation to shareholders, had received about 14m shares as a reward for delivering the two acquisitions and had served as a non-executive director from the firm’s creation until he stepped down from the board in October.

A spokesman for Rothschild said: “Vallar’s board, chaired at the time by Sir Julian Horn-Smith, approved the acquisition in November 2010, on the basis of advice from its legal and financial advisers, who led all interactions with the Takeover Panel on behalf of the Vallar board. At the time of the transaction, Vallar’s board was not aware and was not made aware of any concert party issues – indeed in the [share purchase agreement] Bakrie Bros, Long Haul and Recapital [where Roeslani is chairman] warranted to the plc they were not concert parties. The Takeover Panel ruling clearly indicates the sellers breached their warranties to the plc.”

When he created Vallar, Rothschild’s sales pitch involved combining western standards of corporate governance with emerging market levels of investment return.

However, he quickly fell out with the Bakries over corporate governance at the firm, and the spat exploded in the autumn after shares in Bumi crashed by a quarter on a single day when the company hired the law firm McFarlanes to investigate allegations of financial dishonesty Bumi’s main investment. The law firm is yet to report.