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Tuesday, August 28, 2012

Heading For A Market Shock

Market crash ‘could hit within weeks’, warn bankers

The cost of insuring RBS bonds is now higher than before the taxpayer was forced to step in and rescue the bank in October 2008, and shows the recent dramatic downturn in sentiment among credit investors towards banks.

“The problem is a shortage of liquidity – that is what is causing the problems with the banks. It feels exactly as it felt in 2008,” said one senior London-based bank executive.

“I think we are heading for a market shock in September or October that will match anything we have ever seen before,” said a senior credit banker at a major European bank.

Three unusual reasons September could be a “treacherous” month for stocks

As the market sets sail into what historically has been the most treacherous month of the year (September) – a number of my analog and comparative charts continue to flash warning signals as they extend themselves up to resistance (UST:SPX ratio), into historical extremes (Apple), and into possible momentum downturns (2007/2012 SPX Analog).

Apple continues to defy gravity with its parabolic run over the past year. If past is prologue, this parabolic performance chase of the largest market-cap company in the world will mark a major equity market top when the tide turns. It is not a question of if – but when – and the pronounced head and shoulders formation on the…
This week’s Federal Reserve meeting could “disappoint” the markets

“I don’t think Bernanke wants to make Jackson Hole into a policy-signaling event,” preferring to “reserve that for the FOMC meetings,” said Feroli, chief U.S. economist at JPMorgan Chase & Co. (JPM) in New York.

Two years ago, Bernanke said in his speech that the FOMC “is prepared to provide additional monetary accommodation through unconventional measures if it proves necessary, especially if the outlook were to deteriorate significantly.”

The committee didn’t announce a second round of quantitative easing at its September meeting, though; it waited instead until November 3 of that year.

Dutch Premier Says No to More Greek Aid
Dutch caretaker Prime Minister Mark Rutte, seeking a return to power after Sept. 12 elections, said he would block a third aid package for Greece and defended austerity as the only way out of Europe’s debt crisis.

“We’ve helped twice and now it’s up to the Greeks to show that they want to stay within the euro,” Liberal leader Rutte, 45, said in a debate between the four main party leaders in Amsterdam last night broadcast on RTL television. “The Netherlands has been severely hit by the debt crisis and the solution is to lower taxes, get government finances in order and make room for investment.”

Australia Is Headed For The Disaster Zone
Real estate agents in Australia who assured everyone for years there was no housing bubble and home prices would only ever go up because there was a “shortage of houses” are now telling everyone who is stuck in a house they cannot afford that they have prices too high.

What this means of course is real estate agents are selling few homes, thus making little in commissions so they need prices to come down. What the agents don’t realize is this is the beginning of a trend and home prices, some drastically reduced already, still have much further to fall.

China is entering a “danger zone”
China is entering a “danger zone” where a financial crisis may become more likely because of increases in loans and property prices coinciding with an aging of the population, a Bank of Japan (8301) official said.

“If a demographic change, a property-price bubble, and a steep increase in loans coincide, then a financial crisis seems more likely,” BOJ Deputy Governor Kiyohiko Nishimura said in a speech for a conference in Sydney, posted on the central bank’s website today. “And China is now entering the danger zone.”

Investment Watch

Obama 2nd Term Will Destroy America

Economic Apocalypse

Arctic sea ice reaches record low

BOULDER, Colo., Aug. 28 (UPI) -- The rapid decline in the amount of area covered by ice in the arctic waters suggests there are fundamental climate changes under way, a U.S. scientist says.

The National Snow and Ice Data Center, part of a research institute at the University of Colorado Boulder, said satellite records suggest arctic sea ice cover reached its lowest level in recorded history last weekend.

NSIDC researcher Walt Meier said declining seasonal sea ice coverage indicates there are fundamental changes under way in the arctic region.

"The arctic used to be dominated by multiyear ice, or ice that stayed around for several years," he said in a statement. "Now it's becoming more of a seasonal ice cover and large areas are now prone to melting out in summer."

NSIDC said sea ice covered 1.58 million square miles Sunday, 27,000 square miles less than the record set in 2007. While seasonal, researchers said the sea ice decline was a "strong signal of long-term climate warming."

Environmental advocacy group Greenpeace said trends like these can be stopped by investments in renewable energy and energy efficiency.

Global emissions peaked in 2011 to a level 1 gigaton short of a benchmark needed to limit the increase in the average global temperatures to 2 degrees Celsius, the International Energy Agency said.

Read more: http://www.upi.com/Business_News/Energy-Resources/2012/08/28/Arctic-sea-ice-reaches-record-low/UPI-91671346150459/#ixzz24rBAr3tV

IDF aerial video: Israel airstrike hits Hamas compound in Gaza

Scientists reveal method to 'grow' electronic sensors inside human tissue

Cyborgs melding human and robotic technology together have finally come a step closer to reality.

Researchers at MIT in Boston have revealed a new technique that can place sensors inside human tissue.

To control the three-dimensional shape of engineered tissue, researchers grow cells on tiny, sponge-like scaffolds.

A 3-D tissue scaffold containing tiny sensors - researchers say it could be used to implant medical sensors into patients by 'growing' them into tissue.

These devices can be implanted into patients or used in the lab to study tissue responses to potential drugs.

A team of researchers from MIT, Harvard University and Boston Children’s Hospital has now added a new element to tissue scaffolds: electronic sensors.

These sensors, made of silicon nanowires, could be used to monitor electrical activity in the tissue surrounding the scaffold, control drug release or screen drug candidates for their effects on the beating of heart tissue.

'We are very excited about this study,' Robert Langer, the David H. Koch Institute Professor at MIT and a senior author of the paper said.

'It brings us one step closer to someday creating a tissue-engineered heart, and it shows how novel nanomaterials can play a role in this field.'

The researchers built their new scaffold out of epoxy, a nontoxic material that can take on a porous, 3-D structure.

Silicon nanowires embedded in the scaffold carry electrical signals to and from cells grown within the structure.

'The scaffold is not just a mechanical support for cells, it contains multiple sensors.

'We seed cells into the scaffold and eventually it becomes a 3-D engineered tissue,' Tian says.

The team chose silicon nanowires for electronic sensors because they are small, stable, can be safely implanted into living tissue and are more electrically sensitive than metal electrodes.

The nanowires, which range in diameter from 30 to 80 nanometers (about 1,000 times smaller than a human hair), can detect voltages less than one-thousandth of a watt, which is the level of electricity that might be seen in a cell.

Cyborgs such as Robocop have long been a staple of sci-fi films. Now researchers at MIT have made a big step towards making them reality.

In the Nature Materials study, the researchers used their scaffolds to grow cardiac, neural and muscle tissue.

Using the engineered cardiac tissue, the researchers were able to monitor cells’ response to noradrenalin, a stimulant that typically increases heart rate.

Gordana Vunjak-Novakovic, a professor of biomedical engineering at Columbia University, says the work could help address a great need to engineer cells that respond to electrical stimuli, which may advance the treatment of cardiac and neurological disease.

'This is a beautiful example of how nanoelectronics can be combined with tissue engineering to monitor the behavior of cells,' says Vunjak-Novakovic.

The team also grew blood vessels with embedded electronic sensors and showed that they could be used to measure pH changes within and outside the vessels.

Such implantable devices could allow doctors to monitor inflammation or other biochemical events in patients who receive the implants.

Ultimately, the researchers would like to engineer tissues that can not only sense an electrical or chemical event, but also respond to it appropriately - for example, by releasing a drug.

Read more: http://www.dailymail.co.uk/sciencetech/article-2194265/Scientists-reveal-new-method-grow-electronic-sensors-inside-human-tissue.html#ixzz24rAgUJz4

Homeland Security expands to sports....

New York — The Department of Homeland Security is urging fans at professional sports events to help keep the country safe by reporting anything suspicious they see.

Homeland Security Secretary Janet Napolitano joined New York Police Department Commissioner Raymond Kelly on Monday to announce the security effort. It's an expansion of Homeland Security's "See Something, Say Something" campaign.

The words were coined by the NYPD as a security slogan for the city's transit system after the Sept. 11 terror attacks.

Kelly and Napolitano announced the plan at a news conference along with NBA Commissioner David Stern and Major League Soccer Commissioner Don Garber.

Napolitano says each citizen plays a critical role in identifying and reporting suspicious activities and threats. She says any information will be shared with officials trying to avert security breaches.

From The Detroit News: http://www.detroitnews.com/article/20120827/SPORTS07/208270425#ixzz24r8AyHTu

U.S. troops punished over Koran burning

(Reuters) - The U.S. military said on Monday it was disciplining U.S. troops over two incidents that provoked outrage in Afghanistan early this year, one involving a video depicting Marines urinating on corpses and another over burned copies of the Koran.

The administrative punishments -- which could include things like reduce rank or forfeiture of pay -- fell short of criminal prosecution, and it was unclear whether they would satisfy Afghan demands for justice.

Afghan President Hamid Karzai earlier this year branded the Marine's actions in the video as "inhuman," and he initially called for a public trial for the soldiers over the Koran incident.

A detailed U.S. military investigation showed that up to 100 Korans and other religious texts from a detention center library -- a previously undisclosed figure -- were burned on February 20. The investigation found that warnings from Afghans, including a Afghan soldier, had been ignored and attributed the incident in part to distrust between Americans and Afghans.

"However, I absolutely reject any suggestion that those involved acted with any malicious intent to disrespect the Koran or defame the faith of Islam," the investigating officer, Brigadier General Bryan Watson, wrote.

The question of distrust between American troops and Afghans has come into sharp focus in recent weeks due to a surge of "insider attacks," in which Afghans believed to be friendly turn their guns against U.S. forces.

Such distrust has undermined confidence in a U.S. drawdown strategy that relies on training Afghan forces -- sometimes with very small numbers of Americans partnering with them in remote locations -- so they can take over security. Most U.S. combat troops are expected to leave the country by the end of 2014.


The Koran-burning incident touched off several days of rioting and attacks on U.S. troops after local workers found charred copies among the trash at an incinerator at the Bagram base north of Kabul.

At least 30 people died in the violence that spread across the country after the incident, and two American officers were shot dead in a secure area of the Afghan interior ministry, a crime that remains unsolved.

The U.S. Army announced on Monday that six soldiers received administrative punishments over the incident, four of them officers and two of the non-commissioned officers, a spokesman said.

The investigation found that the texts were removed during a sweep of the library at Parwan detention facility due to concerns that detainees were using books to pass messages.

It partly blamed a translator who warned that up to 75 percent of the books were extremist in nature, including versions of the Koran, but did not instruct American forces how to properly dispose of the texts.

A U.S. official, speaking on condition of anonymity, said he believed the translator was an Afghan and that he no longer worked for the U.S. military.

The disclosures about the Koran-burning incident came the same day the Marine Corps detailed its punishment over a video that surfaced on the Internet in January. It showed Marines urinating on the corpses of dead Taliban fighters. One can be heard saying, "Have a nice day, buddy."

The investigation showed that the incident actually took place on or around July 27, 2011, during a counter-insurgency operation in Afghanistan's Helmand province.

Three Marines pleaded guilty to charges over the video, including one for "urinating on the body of a deceased Taliban soldier." Another wrongfully posed for a photo with human casualties, and the third lied about the incident to investigators.

Their identities were not disclosed, and the Marines said disciplinary actions against additional Marines would be announced at a later date.

Possible punishment includes reduction in rank, forfeiture of pay and punitive letters permanently placed in their records, the Marines said.


Stolen Sovereignty: IMF's grand Greek heist

Gulf sales trigger US defense sales record

The U.S. defense industry is benefiting from the tensions in the Persian Gulf, mainly because of the nuclear disputes between Iran and the West, as the superpower tripled its arms sales to $66.3 billion in 2011 with the help of orders from the region.

The annual defense sales of the U.S. make up more than three-quarters of the global arms market, valued at $85.3 billion in 2011, The New York Times wrote yesterday, citing a Congressional Research Service report.

Russia followed it with $4.8 billion of deals.

These Gulf states – Saudi Arabia, the United Arab Emirates and Oman – do not share a border with Iran, and their arms purchases focused on expensive warplanes and complex missile defense systems.

The agreements with Saudi Arabia included the purchase of 84 advanced F-15 fighters, a variety of ammunition, missiles and logistics support, and upgrades of 70 of the F-15 fighters in the current fleet.
Sales to Saudi Arabia last year also included dozens of Apache and Black Hawk helicopters, all contributing to a total Saudi weapons deal with the United States of $33.4 billion, according to the study.

The United Arab Emirates purchased a Terminal High Altitude Area Defense, an advanced antimissile shield that includes radars and is valued at $3.49 billion, as well as 16 Chinook helicopters for $939 million.

Oman bought 18 F-16 fighters for $1.4 billion.

Most of the weapons purchases, worth about $71.5 billion, were made by developing nations, with about $56.3 billion of that from the United States.

Turkey is also developing its defense industry ties with the Gulf countries and the Arab world in general terms but it is very moderate when compared with the world’s largest defense exporter.

Turkish defense firms have participated in eight international fairs and visited six countries so far this year, and officials have said they raised revenues through deals with Arab countries in the Persian Gulf.

The Turkish Undersecretariat of Defense Industry plans to participate in at least eight international defense and security fairs next year to increase its exports volume, with a rich selection of products to offer, including high-technology military supplies

The most important defense fair next year will be the International Defense Industry Fair (IDEF), which will take place in Istanbul.

Daily News

Banks face "colossal" problem without deeper European union

(Reuters) - Failure to create a deeper euro zone union would represent an enormous problem for banks, the head of Italian bank Monte dei Paschi di Siena (BMPS.MI) said on Monday.

The chairman of Siena-based MPS, the world's oldest bank, said banks will run into trouble without a strengthened single supervision for the region's banks, seen by some observers as the first step towards a European banking union.

"(Banks) have lent out more money than they have collected... If we don't create this European system we will not be able to plug that gap and this will be a colossal problem," Alessandro Profumo said at an event held by Italy's centre-left Democratic Party.

The Italian No. 3 lender, heavily exposed to Italian sovereign debt, aims to borrow 3.4 billion euros by selling bonds to the state to help plug a capital shortfall.

If the bank, which has a market capitalisation of 2.8 billion euros, posts a loss this year it will have to give shares to the Italian Treasury. The bank releases its first-half results on Tuesday.

"MPS has lived for 540 years and wants to live for other 540 years, but this is being put at serious risk," Profumo said, interrupted by whistles from the audience, including some who said they were bank employees.

"The Senese spirit has been lost but we want to regain it," Profumo said.

Italian bank executives are facing pressure to slash costs and shed assets to repair balance sheets hurt by the euro zone debt crisis.

Workers at Monte dei Paschi, UniCredit (CRDI.MI) and Intesa Sanpaolo (ISP.MI) went on strike in July to protest job losses and pay cuts.


New Euro Bailout Fund Could Fall Short

The new fund set up to bail out struggling euro zone economies may face a 150 billion euro ($189 billion) shortfall if Spain and Italy need a full bailout program before the end of 2014, according to analysts at Credit Suisse.

However, its firepower could be significantly improved if the European Central Bank (ECB) intervenes in secondary bond markets – an outcome which has been rumored in recent weeks. (CNBC Explains: How Does the European Central Bank Work?)

The European Stability Mechanism (ESM) is one of the key pillars of euro zone leaders’ attempts to deal with the debt crisis which threatens to spread its tentacles ever further. It’s expected to come into force later this year, as a replacement for the European Financial Stability Facility (EFSF), if the German Constitutional Court rules positively on it on September 12th.

When it was first announced earlier this year, the ESM sparked a rally in markets, as traders hoped it would help break the cycle of hopes rising, then being dashed, for a solution to the euro zone debt crisis.

However, as Spain and Italy have looked more likely to be in need of a full bailout, worries have grown about its size. The ESM is dependent on contributions from euro zone member states, with Germany its biggest contributor. Growing dissatisfaction in Germany about the cost of saving peripheral euro zone economies could threaten its firepower – and limit the potential to increase its size which is written into the treaty.

According to Credit Suisse analysts, the ESM in its current state would at most provide a full bailout to Spain for one year. (Read More: Will Spain Seek Full Bailout?)

The ESM’s full lending capacity, which will be reached in 2014, will be around 400 billion euros, according to the bank’s figures. While the official maximum lending capacity is 500 billion euros, when liabilities for existing bailouts are taken into consideration, the total is 408 billion euros. (Read More: Bailout Fund Should Buy Debt)

The fund’s power may be most felt in its ability to buy government bonds on the primary and secondary markets. This could help keep steady bond yields for Spain and Italy – which in recent weeks have climbed above the dangerous 7 percent level where other countries had to seek bailouts.

“The capacity of the ESM is now of reduced importance,” Credit Suisse analysts wrote in a research note.

It should only be able to buy up to 50 percent of final issued bonds, but if this means that it can match what is bought by the market, it could help reassure investors, particularly if the ECB was also in the market.

Whether the ECB will support the bond market by intervening to support Italian or Spanish bond yields is one of the questions keeping markets awake at night. Germany has maintained a stalwart opposition to the idea, and Jens Weidmann, chief executive of the Bundesbank, warned that it could become “addictive like a drug.”


Iran shields covert nuclear activities from spy satellites

U.S.-based Institute for Science and International Security says suspicious explosives chamber at military base near Tehran now obscured from satellite view, as are nearby facilities • Netanyahu: Iran continues to flout the world and has accelerated its program • No new date for talks after International Atomic Energy Agency and Tehran fail to agree.

Eli Leon, Mati Tuchfeld, Yoni Hirsch and Reuters

GeoEye satellite image showing the suspected high explosives test building and nearby structures covered .

| Photo credit: The ISIS report

In what appears to be another indication of a clandestine military nuclear program in Iran, the U.S.-based Institute for Science and International Security released new satellite imagery on Friday showing suspicious activity at the Parchin military base near Tehran.

The satellite images, dated Aug. 15, show "pink tent-like material over two buildings," which had apparently been used for "high explosive experiments," according to an ISIS report. Earlier this month, ISIS reported that "sanitation and displacement" work had been carried out around these two buildings in late July. This latest report suggests more cover-up activity was undertaken since then. Diplomatic sources told Reuters on Friday that the pink material could in fact be either scaffolding or tarpaulin, which, according to the ISIS report indicates a desire to "hide any sanitization or other activity there from satellite cameras."

According to ISIS, one of the buildings may be an explosives chamber where a neutron initiator was tested. "In such a neutron initiator test, the number of neutrons is very small and many of the activated materials would have had relatively short half-lives" and therefore would be more difficult to detect, ISIS said on Aug. 1.

The latest imagery indicates an attempt to "conceal further clean-up activity from overhead satellites or to contain the activity inside," ISIS said on Friday."Depending on how effective of a seal the tarp provides, the goal could be to continue sanitizing the inside and outside of the building that is suspected to contain particles indicative of nuclear weapons development work. Alternatively, tarps could provide a cover for the demolition of the buildings, or portions of them, while also containing the spread of potentially contaminated debris."

International Atomic Energy Agency inspectors have repeatedly been denied access to Parchin. The issue also came up on Friday, when IAEA and Iranian officials met for another round of talks in Vienna. The two sides failed to reach an agreement over the U.N. nuclear inspection and verification regime relating to Iran's nuclear program. Access to Parchin, as well as to other sensitive sites and facilities, are among the outstanding issues.

"The discussions today were intensive, but important differences remain between Iran and the agency that prevented [an] agreement," IAEA Deputy Director-General for Safeguards Herman Nackaerts said in a statement on Friday. "At the moment we have no plans for a follow-up meeting," he said.

An upcoming IAEA report is expected to show Iran has continued to defy the West. According to Western sources familiar with the report, over the past several months Tehran installed additional enrichment centrifuges in its Fordo facility, which is buried deep inside a mountain to protect it against a military strike.

Iran's representative to the IAEA, Ali Asghar Soltanieh told Iran's English-language PressTV channel on Friday that the two sides "made progress." Soltanieh said the parties held "intensive discussions, under a constructive environment" but still have issues that would have to be "worked out at a later stage."

Asked if Iran's national security concern was raised, Soltanieh said that the Iranian delegation made clear that the issue is very "delicate" as far as Iran is concerned. "Iran's national security should be protected, we need patience and hard work," he said. When asked about the recent report alleging a nuclear cover-up at Parchin, Soltanieh said, "They (the West) just try to exaggerate. [This is] nothing to be concerned about. The IAEA visited the site and reported no evidence of nuclear activity."

In a reaction to the latest report on Iran's activities, Prime Minister Benjamin Netanyahu reiterated his concern over the implications of Iran's defiance.

"Just yesterday, we received additional proof of the fact that Iran is continuing to make accelerated progress toward achieving nuclear weapons while totally ignoring international demands," Netanyahu said in a statement on Friday shortly after meeting U.S. Representative Mike Rogers (R-Mich.), who is visiting the region.

Foreign Minister Avigdor Lieberman (Yisrael Beytenu) also warned against a nuclear Iran over the weekend.

"Those who discount this scenario and cite the examples of the nuclearization of Pakistan, India and North Korea don't know what they are talking about; Israel cannot live with a nuclear Iran," Lieberman told Israel's Channel 2 Friday. Lieberman also attacked what he called the "senseless chatter" over the merits of a pre-emptive attack on Iran, saying this "compromises our deterrence; we stepped up our rhetoric to the point that if we do not do anything we are going to pay a price for that."

Iran has also been front and center in the U.S. presidential campaign in recent weeks. While the White House has repeatedly said a strike on Iran would be premature and stressed that economic sanctions could still prove effective, President Barack Obama's challenger, Republican candidate Mitt Romney, has indicated he would adopt a more aggressive policy toward Iran.

In an interview with CBS on Friday Romney said, "We certainly have to maintain all options that we have. But Iran becoming nuclear and potentially providing fissile material to Hezbollah or another of the groups that are associated with that nation ... that's unacceptable."

"No question in my view that we can put all matter of pressure upon the regime that's there, but they have to also know that a military option is one which we would be willing to consider if they do not take action to dissuade a course towards nuclearization," Romney said.

Asked if Iran could become nuclear under his watch, Romney said, "It's unacceptable for this nation (the U.S.) to have Iran become nuclear [and] have a nuclear weapon."

On Friday, the White House's National Security Council Spokesman Tommy Vietor said the revelations on Iran's new centrifuges were troubling, and accused Iran of "continuing to violate its international obligations."

“The president has led an unprecedented effort to increase the pressure on Iran to live up to its international obligations," Vietor said. "Because of the president's leadership, Iran is under greater pressure than ever before. Just last month [Iran's] President [Mahmoud] Ahmadinejad said they are facing ’the most severe and strictest sanctions ever imposed on a country.’ We continue to believe that there is time and space for our current approach of diplomacy paired with unrelenting pressure to achieve our shared objective — preventing Iran from acquiring a nuclear weapon.”

Vietor said the White House believed a diplomatic solution was still possible, despite the recent reports on the new centrifuges at Fordo.

Over the weekend, The New York Times cited another administration official who said the new centrifuges could “add to Iran’s ability to produce more 20 percent low-enriched uranium."

Converting the high-quality uranium into nuclear fuel would be relatively easy and would constitute what is called a "breakout," the paper reported. The official told The New York Times that “any breakout would not be a quiet affair; the IAEA is in the facility regularly and they would detect a move.”

Israel Hayom

Middle East Region becoming less stable, more Islamist

Israel will face a more unstable, tense, and Islamist environment than in the past, Military intelligence chief Maj.-Gen. Aviv Kochavi told IDF Chief of Staff Maj.-Gen. Benny Gantz on Monday.

The comments were made during a presentation of an annual Military Intelligence evaluation.

"It will be an environment that deals with a series of crises, regional and internal, which raises the level of sensitivity of all players, and which could lead, without prior planning, to an eruption," said Kochavi.

The annual intelligence evaluation is produced by the the Research Division of Military Intelligence, and is based on intelligence gathering by the IDF and the intelligence community at large.

It is designed to create a current regional evaluation and point out strategic and operational challenges. The report will be sent to the government as well.

Last month, during a briefing to the Foreign Ministry, Kochavi estimated that Syrian President, "Bashar al-Assad will not survive the uprising, even if it takes some more time." Kochavi expressed his concern that the Golan Heights region might become a terror hotbed, similar to the Sinai Peninsula.

"Recently over ten infrastructures of deadly terror attacks were dismantled [in Sinai]," he said last month, prior to the deadly terror attack on Egyptian security personnel by al-Qaida-inspired attackers in Sinai, and their failed attempt to subsequently attack Israeli targets.

Jerusalem Post

Unilever sees 'return to poverty' in Europe

The company behind Persil, PG Tips and Flora said it will apply lessons from its Asian business as consumers change their shopping habits amid a financial crisis that has left Greece mired in recession for the past five years and Spain with the highest unemployment rate in the industrialised world.

"Poverty is returning to Europe," Jan Zijderveld, the head of Unilever's European business told the Financial Times Deutschland in an interview.

"If a consumer in Spain only spends €17 when they go shopping, then I'm not going to be able to sell them washing powder for half of their budget."

Unilever has already started to change the way it sells some of its products. In Spain, the company sells Surf detergent in packages for as few as five washes, while in Greece, it now offers mashed potatoes and mayonnaise in small packages, and has created a low-cost brand for basic goods such as tea and olive oil.

"In Indonesia, we sell individual packs of shampoo 2 to 3 cents and still make decent money," said Mr Zijderveld. "We know how to do that, but in Europe we have forgotten in the years before the crisis."

Unilever said last month that "continued sluggish economies and fragile consumer confidence had hampered growth" in developed markets. European revenues grew by just 0.2pc in the second quarter, compared with growth of 16pc in Asia and other emerging economies, the company said.

Mr Zijderveld also said that in order to drive growth, better products would need to be matched by better in-store service. Using the example of Apple, he said: "In an Apple store, everyone thinks: Wow, what an experience."

"But in some supermarkets in Europe, you think: half empty shelves, boxes on the floor, not a sales person in sight - how terrible is that?"

"Why can't we sell food like Apple sells devices? Why are there no genius consultants for chicken?"

The Telegraph