Tuesday, September 4, 2012
Turin, 3 Sept. (AKI) - Fiat chief executive officer Sergio Marchionne said August car sales in Italy dropped 20 percent, marking the worst sales performance he has seen.
"I've never seen a number so low in my entire life," he said Tuesday, commenting on the 20 percent drop in annual sales.
The economic crisis that has cast Italy and some other economies that use the euro currency, along with a European market flooded with cars, has caused sales to plummet in the Turin-based company's home market.
The glut in the European market means that companies will shutter assembly plants to save on overhead costs, putting workers out of work.
He said Italian sales run counter to Brazil and North America where "they went really well.''
Investors risk being disappointed as they hope for the European Central Bank to this week unveil emergency measures to tackle the eurozone debt crisis, the German finance minister warned.
Wolfgang Schaeuble sounded a note of caution ahead of Thursday, when markets expect ECB president Mario Draghi to announce a massive bond-buying programme to shore up struggling nations.
“We have to be very careful that we don’t raise false expectations,” he said. “It has to remain very clear, state debt can’t be financed through monetary policy. Therefore we can’t have a decision — we would think it very wrong — that’s not covered by the ECB mandate.”
His words reinforce German opposition to the ECB financing states, and suggest that investors may be expecting too much from eurozone central bankers.
Many are betting that the ECB governing council’s monthly policy meeting on Thursday will see the bank announce it will buy up the debt of Spain and Italy to bring down their borrowing costs.
Andalusia yesterday became the fourth Spanish region to say it will seek help from the central government, requesting €1bn (£630m) to provide “liquidity” as it waits for a €18bn regional rescue fund to be set up. The regions’ struggles put more pressure on Madrid’s position.
Spain’s finance minister predicted that central bankers will act. “I think the ECB knows perfectly well what the problem is with the euro and that it will act in consequence,” Luis de Guindos said. Spain’s “number one” priority is to reduce its deficit from last year’s 8.9pc of GDP to the target 6.3pc this year, he added.
He spoke as data from the ECB yesterday showed that the bank has not bought sovereign bonds for 25 weeks in a row.
However Jens Weidmann, a member of the ECB council and the head of Germany’s Bundesbank, is opposed to massive bond purchases and reportedly considered resigning over the issue. He has argued that it verges on the outright financing of governments, which the bank’s statues make taboo.
Any programme announced is expected to require a country which wants the ECB to buy its bonds to seek help from the eurozone’s rescue funds first, to which conditions would be attached.
But while Mariano Rajoy, the Spanish prime minister, has said Spain will consider seeking additional aid on top of its €100bn bail-out for its banks, he said he did not see the need for any more fiscal conditions.
Kathleen Brooks, research director at Forex.com, said this “flies in the face of the ECB’s argument - that it won’t buy the bonds of eurozone member states unless the International Monetary Fund is involved in setting conditions in return for financial aid.”
The disagreement could mean that even if the ECB announces a new bond-buying effort, Spain and Italy’s refusal to accept more austerity could render if useless. “The market is expecting a lot from the ECB,” said Gustavo Reis, a Bank of America Merrill Lynch economist. “The likely market disappointment should intensify the pressure on Spain.”
“It just keeps getting worse,” said Alistair Thornton and Xianfang Ren from IHS Global Insight. “The government has underestimated the pace of the slowdown and is behind the curve.”
The HSBC/Markit manufacturing index for China fell to 47.6 in August, the lowest since the onset of Great Recession in late 2008. Inventories are rising. The index for new export orders fell to the lowest since March 2009. “Beijing must step up policy easing to stabilise growth,” said Hongbin Qu from HSBC.
China’s official PMI manufacturing index – weighted to big companies – also fell through the contraction line of 50, though services are holding up better.
Evidence of a hard landing over the summer is becoming clearer. Rail volumes fell 8.2pc in July from a year before. The Japanese group Komatsu said its exports of hydraulic excavators to China – a proxy gauge for Chinese construction – fell 48pc in August from a year before.
The twin effect of China’s downturn and Europe’s double-dip recession has turned into a full-blown shock for much of Asia. Hong Kong and Singapore both contracted in the second quarter and are probably in technical recession.
South Korea’s exports fell 6.2pc in August, with car sales down 18.2pc. India’s exports fell 14.8pc in July, an extra blow as it grapples with its own post-boom hangover. “The coming days ahead are tough,” said Indian commerce secretary S R Rao.
Stephen Jen from SLJ Macro Patrners said we are starting to see Phase III of the global crisis as “the eye of the storm moves East”, with China and emerging markets succumbing at last to the effects of debt leverage.
Mr Jen said markets have already discounted any likely trouble in Europe and America, but have yet to “price” the mounting risks in Asia correctly. “There seems to be a big gap between the prevalent view on China, and what is likely to happen: the sanguine consensus view that China can do no wrong will likely be proven to be incorrect,” he said.
Jim O’Neill from Goldman Sachs said the Chinese government will “surely step in” if the calibrated soft landing slips control. The central bank has kept monetary policy tight to keep a lid on property prices and rein in rampant loan growth, up by almost 100pc of GDP in five years.
The authorities cut the required reserve ratio for banks in May to 20pc – still very high by global standards – but have refused to ease further despite ever louder pleas for action from the markets. Governor Xiaochuan Zhou opened the door to monetary loosening last week, saying a change in the reserve ratio was “still possible”.
China’s regions have unveiled vast infrastructure and stimulus projects over recent weeks with the blessing of the Politburo, but it is unclear how these can be financed. Beijing-based media group Caixin reports that Beijing, Shanghai and other cities already face a “budget crunch” as land-sale receipts fall sharply.
Local governments have $1.7 trillion (£1.07 trillion) in debts through 6,000 arms-length vehicles, described by Cheng Siwei from Beijing’s International Finance Forum as China’s “sub-prime” crisis.
The state-run banks can clearly crank up lending if told to do so, but Fitch Ratings says the law of diminishing returns has already set in, with each extra yuan of debt generating less than half a yuan in extra growth.
Overdue loans at major banks jumped 27pc in the first half of the year. The steel industry alone has $400bn of debts.
China will have to steer a delicate course, offering just enough stimulus to keep the show on the road without reverting to the dangerous excesses of the last five years.
Bandarlampung - Volcanic ash from the increasingly active Anak Krakatau has reached a number of areas in Lampung, prompting officials on Monday to issue a warning for local residents and tourists.
"The ash was carried by wind from the southeast to the south, reaching Bandarlampung," Nurhuda, who heads the observation and information section of the Meteorology, Climatology and Geophysics Agency (BMKG) in Lampung, said according to state news agency Antara.
Nurhuda said the ash fell over several subdistricts in Bandarlampung, about 130 kilometers away from Anak Krakatau.
"It is rather unusual for the dust to be this thick," said Juniardi, a resident of Bandarlampung who complained that the falling dust was also hampering visibility.
Officials warned that the ask posed health hazards and asked local residents to wear masks when going outdoors or driving motorcycles.
"We also advise fishermen and tourists not to come within a radius of 3 kilometers of Anak Krakatau. The thick plumes of smoke sent off by Krakatau contain toxic material that is hazardous for your health," said Andi Suhardi, head of the Anak Krakatau observation post in Hargo Pancuran village.
A report from the volcanology office in Bandung shows that the activities of Anak Krakatau has been on the rise over the past few days, reaching almost 90 eruptions per day.
Nurhuda said the report showed the volcano spewed red hot lava up to 300 meters above its peak. "More than 100 volcanic quakes and tremors have been recorded," he added.
Anak Krakatau, or child or Krakatau, about 130 kilometers west of Jakarta, was created by the same tectonic forces that led to the 1883 Krakatoa eruption that killed tens of thousands of people.
French Foreign Minister Laurent Fabius warned on Monday that an Israeli strike on Iran's nuclear facilities would backfire, the DPA news agency reported.
"I'm absolutely hostile to Iran having nuclear weapons but I think that if there were an Israeli attack, unfortunately it could come back to haunt Israel by (allowing) Iran to cast itself as a victim," Fabius, was quoted as saying. The minister made the remarks in an interview with France's BFM TV.
"We're saying we should increase sanctions and, at the same time, continue negotiating with Iran to make it give in," he said.
The United Nations, US and European Union have imposed a series of sanctions on Iran over its uranium enrichment program.
'Sanctions starting to take effect.' Fabius (Photo: Reuters)
According to the report, Fabius said the sanctions, which were expanded in July to include an EU oil embargo, were "starting to be effective". He did not expand on what any forthcoming sanctions, saying only: "We are studying all formats."
Clear red line
Fabius' comments echoed remarks made recently by US officials, who appear to be making efforts to deter Israel from employing the military option.
Last week Chairman of the Joint Chiefs of Staff General Martin Dempsey reiterated his stance that the IDF cannot stop Iran's atom aspirations, saying that "I don't want to be complicit if they (Israel) choose to do it."
Two weeks ago, the US general stressed that an Israeli attack could only delay the Islamic Republic's nuclear program.
On Monday, Yedioth Ahronoth reported that the US indirectly informed Iran, via two European nations, that it would not back an Israeli military operation against the country as long as Tehran refrains from attacking American interests in the Persian Gulf.
The White House adamantly denied the report.
Prime MinisterBenjamin Netanyahu, who met with American and Israeli war veterans on Monday, said that the "cruel regime" in Iran is forging ahead with its nuclear program because it cannot see "a clear red line." He urged the international community to show its determination against the Islamic Republic's nuclearization in order to minimize the risk of conflict.
Earlier Monday, Iran's air defense commander, Farzad Esmaili, said that his country has completed roughly 30% of a missile defense system that is meant as an alternative to the Russian S-300 system, which Moscow refused to sell Tehran. He said the system is slated to be completed by next year.
Chinese researchers have unveiled a system that allows users to control drones with their thoughts. The technology was designed to help handicapped people, but could have ample applications in other fields as well.
A video posted to YouTube by researchers at Zhejiang University shows how the system, called Flybuddy2, works. And it appears that you don’t have to be a nuclear scientist to build one. All you need is an EEG headset with a Bluetooth connection to a laptop – plus a quadrotor Parrot AR Drone linked to the computer.
“The computer can receive EEG signals via Bluetooth and convert them to specific commands to control the AR drones through WiFi,” a presenter explains.
To get the drone to raise or to land, a user would need to “think left” hard. “Think left lightly” if you want to rotate clockwise and “right” if you want it to lurch forward. Give it a lift in the air by thinking “push.” And imagine clenching it if you want to bring it back down to earth.
But moving around is not the only task it can do. Remember how they tell you to avoid blinking when taking photos? Well here it’s the opposite: blinking is the command that tells the drone to photograph its environs.
The video shows a man in a wheelchair using the technology to get a closer view of flowers, to take pictures and even to guide his drone through a battle with another quadrotor controlled through a handheld remote control. Needless to say, mind triumphs over matter and the hand-managed drone is hustled off the mat by its thought-controlled analog.
The students hope their technology will be able to help disabled people become more interactive with the world around them, and are slated to present their invention at the ACM International Conference on Ubiquitous Computing (Ubicomp), which will be held next week in Pittsburg.
While handicap assistance and gaming is one potential application for the system, only the imagination can limit the potential uses mind-controlled drones could have in the future, both for civilian and other purposes.
You are like the miserable coward Barak of the Bible who fled the war in Judges 4
Because you to betray your allies and do not want to lose your bases you will lose your nation
The United States has no intention of joining in a preemptive Israeli strike on Iran and expects the Islamic Republic to refrain from attacking US targets in the case of such an attack, senior Washington officials told their Iranian counterparts, according to a report in Yedioth Ahronoth on Monday.
In recent days, senior administration officials reportedly sent messages to Iran, through diplomats from two European states, addressing the possibility that Israel would launch a unilateral strike and establishing that the US expects Iran to not draw it into a conflict by firing on American army bases and aircraft carriers in the Persian Gulf.
Monday’s report came amid widespread debate over the level of coordination between Israel and the US on halting Iran’s nuclear program, which — despite assurances by US Ambassador to Israel Dan Shapiro on Sunday that the relationship is as good as ever — appeared to be strained.
While Israel has warned that the Iranians are quickly approaching a potential weapons capability and that the use of force must be seriously considered, the US says sanctions and international diplomacy must be given more time to work.
Highlighting the disagreement between the two countries on the use of force were reports of a scaling-down of joint US-Israel missile defense exercises in October, and public comments by the Chairman of the US Joint Chiefs of Staff Martin Dempsey, who said last Thursday that he did not want to be “complicit” in an Israeli attack on Iran.
Earlier on Sunday, Prime Minister Benjamin Netanyahu hinted at criticism of the US position on Iran, telling ministers at the weekly Cabinet meeting that the international community has failed to send a clear message to Iran regarding its nuclear program. Netanyahu said that while international sanctions have harmed Tehran, they haven’t done “anything to stall the progress of the nuclear program.”
On Saturday, former minister Tzachi Hanegbi said the United States is not determined to halt Iran from getting a bomb and last eek’s IAEA report, which indicated that Iran has expanded its capacity for uranium enrichment, granted Israel even more legitimacy to strike Iran on its own.
Meanwhile, the New York Times reported on Monday that the Obama Administration is installing new curbs against Iran as a way to calm Israel and keep Jerusalem from launching an attack. It asserted that the president was considering a declaration of American “red lines.”
Moody's has lowered its outlook for the European Union's AAA credit rating to "negative" and warned that the bloc's rating could be downgraded.
It said the move reflected the negative outlook for the ratings of the EU's key budget contributors.
Earlier this year, Moody's put ratings of Germany, France, Netherlands and the UK on a negative outlook.
It said that these nations were all exposed to the region's debt crisis, hurting their creditworthiness.
The ratings agency said that in case of "extreme stress", the AAA-rated member states were more likely to service their own debt obligations rather than "prioritise their commitment to backstop the EU debt obligations".
It added that if the AAA-rated member states were to default on their debt obligations, there were likely to be defaults on the loans that back the EU's debt and the bloc's cash reserve was also likely be stressed.
"Hence, it is reasonable to assume that the EU's creditworthiness should move in line with the creditworthiness of its strongest key member states," the agency said.
Germany, France, Netherlands and the UK together account for about 45% of the EU's budget revenue.
Moody's warned that if the credit ratings of these member states were downgraded, it could have a knock-on effect on the EU's rating.
"Additionally, a weakening of the commitment of the member states to the EU and changes to the EU's fiscal framework that led to less conservative budget management would be credit-negative," it added.
CHARLOTTE, N.C. — A torrential downpour that struck Charlotte on Saturday afternoon damaged the Mount Rushmore-style sand sculpture bust of President Obama — an ominous beginning to what many fear is a plagued convention.
Workers were trying Saturday afternoon to reform the base of the sculpture, built from sand brought in from Myrtle Beach, S.C., pounding and smoothing out the sand that had washed off the facade of the waist-up rendering of the chief executive.
The sand sculpture was protected from above, and Mr. Obama's face didn't see too much damage. But the storm was so strong that its heavy winds blew the rain sideways, pelting the president's right side and leaving the sand pockmarked and completely erasing his right elbow.
Democrats' choice of Charlotte has drawn criticism from unions that don't like North Carolina's labor laws, and the state seems to be tilting away from Democrats politically.
The large Mount Rushmore-style sculpture drew comparisons to Mr. Obama's 2008 convention in Denver, when he accepted his party's nomination on a stage that looked like a Greek temple.
Read more: http://nation.foxnews.com/obama-sand-sculpture-damaged/2012/09/02/rains-wash-away-mount-obama#ixzz25VZXvuif
To keep the truce with the Islamist terrorist networks in Sinai in place, while avoiding a large-scale military operation to suppress them, Egypt is now releasing dozens of jailed Salafist gunmen in batches every few days, so feeding the Islamists a steady supply of reinforcements. Cairo is also in negotiation with Bedouin tribal elders to grant a body of 6,000 Al-Qaeda-linked Salafi gunmen the status of an approved, independent militia. Armed with up-to-date Egyptian weapons, this militia is to be charged with responsibility for maintaining security in the peninsula.
This may be a neat way out for Egypt and let the Morsi government off the hook of grappling with the violent Islamist networks infesting Sinai. But it leaves Israel squarely face to face with a whole new terrorist outfit which has the freedom to choose between operating in the service of Al Qaeda or Cairo – or playing both sides.
Israeli security circles on the southern front familiar with the Sinai security situation explain that the Egyptian army’s claim Monday, Sept. 3 that it pulled “another 20 tanks” out of the peninsula, marking the tail end of its putative counter-terror military offensive, was therefore the reverse of welcome news for Israel.
All the same, out of certain diplomatic considerations, Israelis officials are collaborating with the US and Egypt in drawing a veil over this dangerous downturn in security along its southwestern border.
Thursday, Aug. 30 Defense Minister Ehud Barak said: ”The Egyptians must combat terror and if they need to bring extra military strength into Sinai [for this purpose], we should let them.”
As he spoke, Egyptian spokesmen claimed the tanks, illegally deployed in breach of the peace treaty with Israel, were being withdrawn at the end of a “successful military offensive” to root out the terrorists.
This statement, say DEBKAfile’s counter-terror sources, contains at least two untruths: The tanks were falsely presented as backing a fictitious Egyptian operation, just as the Cairo communiqué pretended that large numbers of terrorists were killed and wounded “in action” or detained.
There were no terrorist casualties because the entire operation was made of whole cloth, a Sinai desert mirage.
That the Netanyahu government and defense chiefs went along with this fiction is the real issue.
They have committed Israel to accepting the entry of Egyptian military forces into Sinai for the stated purpose of combating terror – a stipulation the Cairo government under the Muslim Brotherhood has demonstrated it has no intention of upholding. Just the reverse: The Egyptian troops positioned in Sinai are ordered to keep their powder dry and stand by as the terrorist cells of the “Mujaheddin Brigades in the Jerusalem Vicinity” - which is closely allied to Al Qaeda in the Arabian Peninsula - goes from strength to strength.
Yet some Israeli media have suggested sympathetically that the Egyptian army was forced to slow down its counter-terror operations for lack of intelligence on the armed cells’ whereabouts.
An Israel officer serving in the sector retorted angrily that every Egyptian and Israeli officer serving anywhere in or near Sinai knows exactly where the gunmen are skulking and their training facilities located. “The trouble is that Egyptian officers who go past those places look the other way,” he said.
The only action the Morsi government has taken on the quiet is to place a security buffer strip along the Egyptian-Israeli border off-limits to civilian traffic.
Our military sources report this strip has been dubbed “The American Highway” of Sinai, because its 260 kilometers were paved in secret by US military engineers. It runs from the MFO peacekeepers' Mediterranean base at Sheikh Zuweid in northern Sinai down to Taba, providing a safe route for the peacekeepers, most of them members of the US 82nd Airborne Division, between their northern base and their headquarters at Sharm el-Sheikh.
Large sections of the American Highway run parallel to Israel’s Route 12 from Nitzana to Eilat, Israel’s southernmost town.
Egypt no doubt intended this buffer strip to serve additionally for keeping terrorists at a distance from its border with Israel. But IDF observers in that area see very little Egyptian military activity for keeping it sterile and closed to hostile movements.
Once the Salafis are organized in a militia and formally recognized as such by Cairo, it will be that much harder to keep them from breaching the buffer strip abutting the Israeli border.