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Official Urges Greater Accountability by Euro Members

January 11, 2013 by Leave a Comment

BRUSSELS — Olli Rehn, the European Union commissioner in charge of the euro currency, on Friday defended the bloc’s austerity policies and urged legislators to pass a law that would let him push countries even harder to shore up their finances.

Signaling little let-up in the need for wrenching adjustments in Europe, Mr. Rehn also issued warnings to a wide range of countries — including some with the region’s largest economies — to keep to the reform path and contribute to overall growth.

France and Finland need to address their declining competitiveness while Germany should do more to open up its services market, Mr. Rehn told a meeting organized by the European Policy Center, a research group.

Meanwhile Cyprus, which is negotiating a European bailout, needs to ease suspicions its financial sector is a hub for money-laundering, he said.

Mr. Rehn acknowledged the value of recent studies by economists at the International Monetary Fund suggesting that damage created by austerity was up to three times more severe than previously thought. But Mr. Rehn also warned those studies may not take sufficient account of the need to restore faith in countries blocked from borrowing money on international markets.

“We have not only the quantifiable effect, which is something that the economists like to emphasize, but we also have the confidence effect,” said Mr. Rehn.

“What would have happened if Italy would have loosened its fiscal policy in November 2011?” he asked, referring to a period when Italy’s borrowing costs were rocketing upwards. That situation threatened “both an economic crisis and political dead-end,” but recent reforms and belt-tightening had helped Italy’s economy to stabilize, he said.

Mr. Rehn said efforts were underway among the European Commission, the I.M.F. and the European Central Bank to reach a consensus on the impact of austerity policies.

Mr. Rehn also highlighted evidence showing that public debt levels in excess of 90 percent of Gross Domestic Product — a level in many parts of Europe — meant that economies were more likely to lack dynamism and to experience low growth lasting many years.

Underscoring the plight of Cyprus, the ratings agency Moody’s on Friday cut the country’s debt rating by three notches because of the capital needs of its banks that were heavily afflicted by an earlier debt write-down in Greece. Cypriot banks had invested heavily in Greek bonds, in large part to make use of money that had flooded into the banks by Russian depositors seeking a non-ruble haven.

In a sign of how difficult it will be to help Cyprus out of its financial black hole, Mr. Rehn gave no indications of when an assistance package would be finished. That package was still “very much a work in progress” and any decision would be made “in due course,” he said.

Cyprus still needed to implement “new laws against money laundering” as a precondition for aid, he said. Once “Cyprus reforms its financial sector in line with European principles, we will work alongside Cyprus as we did in Spain,” said Mr. Rehn. He was apparently referring to an agreement reached last year with the government in Madrid to extend tens of billions of euros in loans to restructure and recapitalize its banking sector.

Mr. Rehn also urged members of the European Parliament to speed up an agreement on fiscal legislation.

Those rules would require member states to present their public finance plans to the European Commission in greater detail, and sooner, than is currently required. The commission could then demand revisions, as deemed necessary. For member states that are already in financial trouble, those rules would let the commission conduct regularly scheduled reviews and require more information about a country’s financial sector than is currently the case.

The rules would give “stronger possibilities of pre-emptive oversight as to national budgets before they are finally presented to national parliaments” in order “to ensure that the member states practice what they preach,” said Mr. Rehn.

Failing to pass the law could invite a rerun of events in the middle of the past decade, when Germany and France essentially ignored their deficit-cap provisions, contributing to the current debt-crisis in Europe, warned Mr. Rehn.

“It’s a very serious issue,” he said.

Article source: http://www.nytimes.com/2013/01/12/business/global/official-urges-greater-accountability-by-euro-members.html?partner=rss&emc=rss

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I.H.T. Special Report: Egyptian Economy Caught in a Political Bind

December 19, 2012 by Leave a Comment

Days before the vote on the new charter, Mr. Morsi postponed a request for a $4.8 billion loan from the International Monetary Fund and delayed tax reforms that had been drawn up under an economic program negotiated with the I.M.F., prompting economists and opposition groups to accuse him of appeasing the public to gain the popular vote.

The government, which has been caught between recognizing the need for strict economic overhauls and simultaneously fearing a public backlash, has stalled on important measures that would give the nation its best chance of recovery. The president has delayed reforms of energy subsidies, the biggest burden on the budget, and reneged on other cost-saving plans, including a curfew on shops and restaurants that was intended to conserve energy at a time of critical gas shortages.

Now the Muslim Brotherhood’s political future rests on its ability to make an impact on the economy, but economists and politicians say political turmoil has made that nearly impossible.

“The government is on the one hand fully convinced they should have an agreement with I.M.F., but at the same time they are reluctant to take any steps that were agreed because of the voting that took place on the Constitution, and because of the impending elections of a new Parliament,” said Samir Radwan, who was appointed finance minister by President Hosni Mubarak in January 2011, when the regime faced unprecedented protests.

The Muslim Brotherhood has claimed a narrow victory in the first round of the constitutional referendum, with unofficial polls showing that 56.5 percent voted in favor of the draft. Critics say Mr. Morsi held off on any unpopular reforms to gain the popular vote. But the close vote is likely to inflame the political situation and further divide the Islamist political majority and the mainly secularist opposition.

“They couldn’t square the circle here and sudden postponements have led to confusion,” Mr. Radwan said.

Egypt struck a preliminary staff-level agreement with the I.M.F. last month that encompassed an economic plan that would change the energy subsidy and overhaul the tax system.

But in an unusual turnaround, especially after a public announcement, Mr. Morsi said the loan would be delayed, creating anger and buoying the criticism that the government makes most decisions behind closed doors, despite promises of increased transparency.

With public support sorely lacking, reforms needed to rebalance the budget will be hard to make, analysts say.

The “missed opportunity to unite the country around a clear economic vision has undermined the economy,” said Rachel Ziemba, a director at Roubini Global Economics in London.

Tax increases, which had initially been publicized by the government as progressive, in fact have fallen on many of the lower and middle classes. The reforms include taxes on essential items like water, oil and electricity, as well as on discretionary goods like cigarettes, soft drinks and alcohol.

Meanwhile, a coupon system for subsidized gas and fuel price increases were touted to start this month, but there has been no sign of any changes to the energy subsidy program.

Historically, there has been an unwillingness by Egyptian leaders to take any drastic actions. Mr. Mubarak was loath to make any changes to popular subsidies following the 1977 so-called bread riots when President Anwar Sadat tried to terminate state subsidies on basic foodstuffs. The government quickly rescinded the decision to halt the protests.

Economic advisers to Mr. Morsi concede that harsher reforms will be a hard sell but say they are discussing options that would soften the blow.

Abdallah Shehata, chairman of the economic committee in the Muslim Brotherhood’s Freedom and Justice Party and an economic adviser to the president, said the “key is to stimulate the economy” before making reforms.

“The government has to invest more in order to convince people of any type of reform. The people need to feel there is growth,” Mr. Shehatta said.

Article source: http://www.nytimes.com/2012/12/20/world/middleeast/egyptian-economy-caught-in-a-political-bind.html?partner=rss&emc=rss

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S.& P. Raises Greek Credit Rating to B- From ‘Selective Default’

December 18, 2012 by Leave a Comment

The agency said the upgrade to B-, the highest grade it has given Greece since June 2011, reflected its view that the other 16 European Union countries using the euro are determined to keep Greece in the currency union.

It also gave Greece a stable outlook, meaning it is less likely to change its rating again soon.

“The stable outlook balances our view of euro zone member states’ determination to support Greece’s euro zone membership and the Greek government’s commitment to a fiscal and structural adjustment against the economic and political challenges of doing so,” the agency said in a statement.

Greece’s finance minister welcomed the upgrade. “It’s a decision that creates a mood of optimism, but we are well aware that we still face a long uphill course ahead,” the minister, Yannis Stournaras, said. “We are not relaxing in our efforts.”

An upgrade was expected since S. P. this month had temporarily lowered Greece’s rating to the bottom of its scale — “selective default” — because the country was buying back its own debt. The agency said that because the buyback had not forced any investors to sell their bonds back — which would have constituted a default — it was raising the rating back up.

The bond buyback was successfully completed last week, and will reduce the country’s debt by about $26 billion.

The size of the upgrade suggests European leaders are seeing results in bringing Greece’s debt load under control. But the credit rating is steadily losing relevance as there are few private investors still holding Greek bonds. Greece today owes most of its debt to euro zone states, the International Monetary Fund and the European Central Bank.

Article source: http://www.nytimes.com/2012/12/19/business/global/s-p-raises-greek-credit-rating-to-b-from-selective-default.html?partner=rss&emc=rss

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Greece Buys Back Debt, Clearing Way for More Aid

December 11, 2012 by Leave a Comment

The complex and contentious debt buyback, financed by a 10 billion euro, or $13 billion, loan from the country’s creditors, will allow Greece to erase 20 billion euros of its 344 billion euro debt, and in so doing, secure the backing of the International Monetary Fund, which has said it cannot lend any more money to Greece unless its stack of debt is reduced.

As a result, Greece will soon be able to receive more than 40 billion euros in desperately needed loans to recapitalize its banks and keep the government functioning.

“The buyback only helps to get debt down next year to around 176 percent of G.D.P. and annual debt servicing costs are reduced by just a marginal amount,” said Dimitris Drakopoulos, a sovereign debt expert at Nomura in London. “However, it does help Greece move on from the debt sustainability roadblock it hit this summer.”

What remains undecided is whether Greece’s creditors will lend the country extra funds — perhaps as much as 1 billion euros — to buy back the additional 2 billion euros in bonds offered above the original target of 30 billion euros.

Finance ministers from euro zone countries were set to discuss the buyback on a conference call on Tuesday afternoon, and the final results are expected to be announced on Wednesday.

The deadline for the debt swap had been extended from last Friday to noon on Tuesday after it became clear that the deal was about 4.5 billion euros shy of completion. Responsible for the bulk of the shortfall were Greek banks, which, having tendered 10 billion euros last week, reluctantly agreed to add 4 billion euros or so and have now sold most of their restructured bonds.

Hedge funds, which have tendered about 15 billion euros in bonds, came in with a much smaller figure. Despite thinly disguised threats from the government that their bonds might take a big hit in a future transaction, many foreign investors preferred to keep half, if not more, of their bond holdings in the belief that a successful buyback would improve Greece’s standing in the markets and thus increase the value of their bonds.

With Greek bonds trading at 36 cents on the euro — up more than 100 percent from the early summer — that belief seems to have been justified. Investors, once frightened that Greece might leave the euro, have piled into the bonds, betting that the economy is on the way to recovery.

Still, the country’s economic condition remains dire and there are few signs of economic growth.

Article source: http://www.nytimes.com/2012/12/12/business/global/greece-exceeds-target-in-debt-buyback-plan.html?partner=rss&emc=rss

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Euro Zone Finance Ministers to Meet Again on Greek Bailout

December 2, 2012 by Leave a Comment

Euro zone finance ministers are to gather in Brussels on Monday for their fourth meeting in four weeks. Last week, they hashed out a plan under which Greece can try to unlock a long-overdue bailout loan installment. The country needs the money desperately to avoid bankruptcy, to pay wages and pensions and to carry out economic overhauls demanded by its international creditors.

The finance ministers are expected to vet Greece’s planned response to a central provision of that plan: a buyback of some of the Greek bonds held by investors, at a discount, as a way to reduce its staggering debt load.

Greece has until Dec. 13 to make that happen, if it hopes to receive its next round of bailout money.

With the Greek economy continuing to fall, the meeting of finance ministers is coming against a backdrop of grim new data for the euro region as a whole. Despite an optimistic forecast Friday from the European Central Bank president that the euro zone would emerge from recession sometime in the second half of next year, the nearer-term data indicate that things may get worse before they possibly get better.

Figures released Friday showed euro zone unemployment rising to a new high in October, with nearly 19 million people — 11.7 percent of the 17-nation currency bloc’s work force — without jobs.

Greece’s international lenders froze aid in June because they perceived the government to be dragging its heels on fulfilling the terms of its bailout program. Since then, the country has accelerated the economic revamping and budget cuts that creditors have demanded.

But the economic outlook for Greece has worsened significantly in the interim — some critics blame the austerity program, in part — prompting the International Monetary Fund to put pressure on lenders, including Germany, to relieve some of the debt burden.

A centerpiece of those efforts, agreed upon last week, is the debt buyback. The plan is for the authorities in Athens to borrow European funds to purchase Greek bonds that are already trading at a deep discount from their face value.

The buyback plan may have allayed fears of an imminent Greek default, but how well it will work remains to be seen. Some in the financial sector have complained about the prospect of having to sell bonds at fire-sale prices.

The Market Monitoring Group of the Institute of International Finance, a global association of banks and other financial institutions, said last week that it was “critical that any buyback be conducted on a purely voluntary basis.” But Yannis Stournaras, the Greek finance minister, warned Greek banks holding many of the bonds that participation was a “patriotic duty.”

But unless Greece reduces its debt, the I.M.F. could still refuse to approve aid. That would probably mean another flurry of emergency meetings to draw up yet another plan.

In a sign that at least some investors are eager to sell back their Greek bonds, if the price is right, some big hedge funds have been accumulating the bonds on the open market.

Those funds, including Third Point and Brevan Howard, are betting that to make the buyback succeed — so Athens can get its next loan installment — the Greek government will have to meet their price demands. On the open market, the bonds in question are trading at about 30 cents on the euro — in other words, about 30 percent of their face value. The most aggressive hedge funds are insisting that they will not sell for less than 35 cents on the euro.

That raises a risk that investors will push the price up to a point at which it does not make economic sense for Greece to complete the buyback.

“There is a limited amount of money to do this,” Mr. Stournaras said in an interview Saturday. “But in the end, I do think it will be successful.”

To seal the debt overhaul deal last week, after three late-night, marathon meetings in three weeks, Christine Lagarde, managing director of the I.M.F., had to fight to persuade reluctant finance ministers like Wolfgang Schäuble of Germany. She argued that Greece was sinking so far that without immediate relief, it might never repay its loans.

Article source: http://www.nytimes.com/2012/12/03/business/global/03iht-ministers03.html?partner=rss&emc=rss

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Greece Struggles Again to Come Up With Funds

November 28, 2012 by Leave a Comment

Finance Minister Yannis Stournaras said the strategy of buying back debt from bondholders at a discount needed to succeed as a matter of “patriotic duty.”

Mr. Stournaras did not say outright that the buyback was a firm requirement for the release of €34.4 billion, or $44.5 billion, in funding next month, though the International Monetary Fund, one of Greece’s troika of creditors, signaled as much this week. The Greek debt management agency is to disclose details of the buyback program next week.

Mr. Stournaras said that if the program failed to attract sufficient interest from the banks and insurers that hold the government’s debt, officials had drawn up a “Plan B.” He refused to elaborate.

The loans needed to carry out the buyback would come on top of the funding that European officials and the I.M.F. committed to release after marathon talks in Brussels this week.

The troika has calculated that if successful, the debt buyback, together with other means of debt relief, could help Greece reduce its staggering debt to 124 percent of gross domestic product in 2020 from around 175 percent of G.D.P. now.

But a number of hurdles remain that could mean delays in reducing Greece’s debt. For one, Athens will also have to convince bondholders to sell back their debt at a price that is attractive to the government. Bondholders will hold out for as much as they can get.

In addition, some of those bondholders are beleaguered Greek banks. The government bonds they hold count as bank capital and they pay a high rate of interest, reflecting the risk attached to the debt. Writing down the value of the bonds, and forgoing that capital and income, will eventually leave the banks even worse off than they are now. That may require the troika to send even more aid to Greece in the future to recapitalize the banks, analysts say.

As it is, nearly 85 percent of the forthcoming installment of bailout aid has been set aside to shore up Greek banks, which have virtually stopped lending.

Since Greece appealed for foreign support to avoid default in April 2010, the troika — the European Commission, European Central Bank and the I.M.F. — have committed to two loan programs worth a total of €240 billion. In exchange, three increasingly weak governments in Athens have imposed a raft of austerity measures that have crippled Greek households.

European and I.M.F. officials on Tuesday agreed to release a total of €44 billion in aid. Of that, €34.4 billion is to be disbursed by Dec. 13. The remaining €9.3 billion is to be released in the first quarter of next year on the condition that Greece meets the troika’s targets for implementing austerity measures and carry out fiscal and economic reforms.

Mr. Stournaras said the agreement in Brussels “creates the conditions to keep us in the euro zone and the opportunity to emerge from the vicious cycle of recession and indebtedness.” But he said there was no cause for celebration.

“Now the hard part begins,” he said.

Liz Alderman reported from Paris.

Article source: http://www.nytimes.com/2012/11/29/business/global/greece-struggles-again-to-come-up-with-funds.html?partner=rss&emc=rss

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Greece Approves Austerity Budget in Bid for Foreign Aid

November 12, 2012 by Leave a Comment

ATHENS — Greece’s fragile government pushed a tough budget of spending cuts and tax increases for 2013 through Parliament early Monday, moving a step closer to unlocking crucial rescue financing from the country’s foreign creditors.

The vote occurred as about 20,000 demonstrators gathered outside Parliament to protest austerity measures, the second such protest in a week.

The budget passed comfortably in a 167-to-128 roll-call vote after three days of vehement debate.

Most members of Parliament from a three-party coalition voted for the budget, which calls for 9.4 billion euros, or $12 billion, in cuts to salaries, pensions and social benefits, raising the retirement age to 67 from 65 and higher taxes. Four lawmakers voted “present” which amounts to a blank vote, and one was absent.

Addressing Parliament before the vote, Prime Minister Antonis Samaras said the new cuts would be the last and appealed to Greece’s lenders, the European Commission, European Central Bank and International Monetary Fund, to support the debt-ravaged country.

“Greece has done its part, now it’s the turn of the lenders,” Mr. Samaras said, referring to the release of a rescue loan of 31.5 billion euros, without which default looms this month. He said the money would be given “in due time and in full.”

Accusing Greece’s creditors of reneging on their pledges to Greece by postponing the release of financing, Mr. Samaras’s main political rival, Alexis Tsipras of the left-wing party Syriza, called for the annulment of all austerity measures and the write off of Greece’s debt.

“This is the only alternative plan,” said Mr. Tsipras, whose party is leading in opinion polls, describing the new cuts as a “sacrifice” of the Greek people and the government as “dangerous, politically bankrupt and incapable of negotiating.”

The budget vote was widely regarded as a test of confidence in Greece’s shaky coalition after the vote last Wednesday on a 17-billion-euro austerity and change package for the next four years. That measure narrowly passed Parliament, 153 to 128, after several coalition members voted “no” or abstained, most in opposition to an overhaul of laws protecting workers in the private sector.

But the government faces several more hurdles. It is awaiting a report by the so-called troika — the European Commission, the European Central Bank and the I.M.F. — on the progress of changes Greece pledged to make in exchange for two bailouts worth 240 billion euros. Another obstacle is a dispute in the troika about how to secure the sustainability of Greece’s huge debt burden, estimated at 175 percent of gross domestic product this year and 189 percent for 2013.

Euro zone finance ministers are to discuss Greece’s debt problems at a meeting in Brussels on Monday but are not expected to sign off on the 31.5-billion-euro aid package.

Article source: http://www.nytimes.com/2012/11/12/business/global/greece-approves-austerity-budget-in-bid-for-foreign-aid.html?partner=rss&emc=rss

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Euro Watch: Finance Ministers Add to Pressure on Greece Bailout

November 1, 2012 by Leave a Comment

“We called on the Greek authorities to solve remaining issues so as to swiftly finalize the negotiations with the troika institutions,” the so-called Eurogroup of finance ministers said in a statement issued shortly after a scheduled conference call.

The troika, a reference to the European authorities and international lenders supervising the Greek bailout, consists of representatives from the European Commission, the International Monetary Fund and the European Central Bank.

Greece and the troika have been negotiating for weeks over an austerity budget package that would require the approval of the lenders, and be passed by the Greek Parliament, before a loan installment of €31 billion, or $40 billion, can be unlocked. Without that money, Greece could face default by the end of the month.

Greek politics continue to add uncertainty to the process. After the government on Wednesday released details of the austerity package — including raising the retirement age by two years, to 67; cutting salaries and pensions, and increasing taxes — the country’s labor unions responded by announcing a 48-hour strike next week when the parliamentary vote is expected to be held. The Democratic Left, the smallest member of Greece’s shaky three-party coalition government, has said it will not give its full support to the budget package if it includes changes to labor laws that the party opposes.

Adding to the political tension, the Parliament on Wednesday passed only narrowly a bill aimed at speeding the process of raising money by selling publicly owned Greek assets. Several members of Parliament from the Democratic Left and the other coalition partner, the Socialists, voted against the measure, and the leaders of the parties abstained. Afterward the leader of the Socialists, Evangelos Venizelos, hastily convened his party’s members of Parliament for an emergency meeting, in an apparent effort to contain dissent ahead of the vote next week on the budget package.

But Greece, in perhaps the most dire circumstances of the 17 members of the euro zone, is hardly alone in its economic problems. Data released Wednesday by the European Union indicated that euro zone unemployment set another record in September, with 18.49 million people out of work.

The jobless rate in the 17-nation currency union ticked up to 11.6 percent from 11.5 percent in August, according to Eurostat, the E.U.’s statistical agency. The August figure, which had itself been a record level for the euro zone, was revised upward from the 11.4 percent initially reported.

Meanwhile, in Portugal on Wednesday, the Parliament passed the biggest tax increases in modern Portuguese history in an effort to meet the budget targets of its European bailout program. While the nation’s center-right ruling coalition supports the tax increases, the opposition Socialists are challenging them in court.

The Eurogroup finance ministers, in their statement Wednesday on Greece, said any decision to release the next round of money “was subject to the completion of prior actions by the Greek authorities” — a reference to commitments already made by Greece to overhaul labor laws and raise the retirement age.

The group said it hoped to finish assessing Greece’s progress by Nov. 12.

“Even if the troika report has not (yet) been officially released, it seems clear that the euro zone is willing to give Greece somewhat more time for the adjustment,” Carsten Brzeski, an economist at ING Belgium, wrote in a briefing note issued Wednesday. But, he wrote, “Filling the funding gap for Greece will again require some creativity.”

Many economists still contend that without some form of debt forgiveness, Greece will ultimately have to leave the euro union.

The German finance minister, Wolfgang Schäuble, said Wednesday after the Eurogroup conference call that no decisions had been made at the meeting. He said he did not expect the next status report by Greece’s troika of lenders to be issued before Nov. 11. “There are a lot of difficult issues that still need to be resolved,” he said.

At a news conference, Mr. Schäuble said the country’s relatively strong economy and low unemployment would expand Germany’s tax receipts by €29 billion this year, for a total of €602.4 billion.

But in the European unemployment figures released Wednesday it was not Germany, with a jobless rate of 5.4 percent, that had the lowest figure. Austria, at 4.4 percent, had the lowest. Most euro zone nations are faring much worse, particularly Spain, where the jobless rate reached 25.8 percent. Close behind was Greece, at 25.1 percent in July, the most recent month for which data were available for that country.

In contrast, the United States had an unemployment rate of 7.8 percent in September, and joblessness in Britain was at 7.9 percent in the three months through August.

The euro zone economy is expected to have contracted again in the third quarter, after a 0.2 percent quarterly decline in the three months through June. With the global economy showing signs of slowing and European governments cutting spending to balance budgets, economists say the contraction could extend into next year.

David Jolly reported from Paris. Niki Kitsantonis contributed reporting from Athens, and Melissa Eddy from Berlin.

Article source: http://www.nytimes.com/2012/11/01/business/global/euro-zone-unemployment-hit-new-high-in-september.html?partner=rss&emc=rss

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You’re the Boss Blog: This Week in Small Business: Gangnam Style!

October 29, 2012 by Leave a Comment
Dashboard

A weekly roundup of small-business developments.

What’s affecting me, my clients and other small-business owners this week.

The Economy: Big Bird Wants Out

Small-business confidence remains at recessionary levels. Wholesale sales and inventories (pdf) are soft. The International Monetary Fund lowers its global growth forecast. Both imports and exports were weak in August. However, machine-tool orders rebounded, and the Federal Reserve reports that the economy “expanded modestly” in September. A team of investment professionals believes that a fiscal cliff solution will be reached. David Rothkopf wonders if world leaders understand the third industrial revolution that’s taking place. Neil Irwin explains what’s really going on. Shale gas could lower manufacturing costs. Meanwhile, there was a vice-presidential debate, and Big Bird just wants out.

The Data: To Trust or Not?

For each job available, there are three and a half people looking for work, and Lance Roberts wonders if the unemployment rate is 7.8 percent or 22 percent. Bill McBride demystifies how the rate is computed: “Most of the decline in the overall participation rate has been due to changing demographics.” Mark Thoma believes we can trust the data. Meanwhile, no one knows why a single mysterious computer program that placed orders (and then subsequently canceled them) made up 4 percent of all stock market quote traffic last week.

Your People: Tracking Employee Hours?

Brad Farris answers the big question: what to pay employees. Here are five tips for paying part-timers. The Evil HR Lady explains why tracking employee hours is dumb. Kevin Kruse says the Taj Hotels have five ways to recognize employees. Here are a few ways to nurture creativity. Sajjad Masud believes there are five characteristics to look for when hiring talent. A study concludes that there is no evidence that increasing the employment of older people reduces job opportunities or wage rates for younger people. Are your unpaid interns suffering? Here are five things entrepreneurs can learn from art students. And wait, is this really a university for monsters?

Starting Up: The Making of K-Pop

A new platform provides tools for young people to set up a business. YouTube adds 50 new channels, including hip-hop choices from Russell Simmons and Jay-Z. John Seabrook looks at cultural technology and explains the making of K-Pop and the “Gangnam Style” craze. A start-up offers failed entrepreneurs a million-dollar signing bonus. Hermione Way wonders whether you can have a start-up and still be sexy. Stella Fayman explains why fake it until you become it should be every entrepreneur’s mantra. Here’s the secret to getting paid to do what you love. Rieva Lesonsky shares tips on starting a business without losing your shirt.

Marketing: It’s All About Image

These are six things your customers won’t tell you — unless you ask. Some franchises are incorporating the election into their marketing. Pamela Wilson explains the business of images. A new technology can recognize and grab information from products that appear in online images and video so they can be offered for sale. Stephanie Miles shares five ways small businesses can expand their e-mail marketing lists. Stephen Shoff says that a good e-mail marketing tool can make it easier to follow best practices. And Sonia Thomas shares her e-mail marketing tips. This infographic describes the needs of online shoppers. James Gardner takes a look at the conversion rates of eight small-business landing pages.

Social Media: Ask a Teenager

Online reputation management is important to non-Internet businesses, too. Here are four easy ways to monitor what’s being said about you online. Matt Owen gives tips for optimizing LinkedIn’s new company pages.  A team of search engine optimization consultants makes predictions for 2013. There are three types of social businesses. Terri Cettina explains how teenagers can help with social media marketing: “If you’re using social media for your business, you’ll look more knowledgeable if you know the latest abbreviations and language. Have a teenager point out important online phrases and conventions.” A social media expert says your business will suffer if you ignore the iPhone.

Management: The Scent of a Business

Lisa Evans says lavender is one of six scents that can transform your mood and productivity. Christopher Walken reads Honey Boo Boo. A life-changing experience led this chef to look for efficiencies. Jon Stow has a story on how not to run a business. A new season of Project Grow starts off with how to make a million this year. Gil Garcia shares his experiences at the Boulder Outdoor Survival School.

Around the Country: Gas Prices

Florida and California dominate the list of the 10 weakest markets. Brad Plumer explains why California’s gas prices are going haywire. Here’s how to prepare for Small Business Saturday. In Pennsylvania, the Internal Revenue Service and state troopers raid 197 video poker locations. The 2012 wife-carrying champion is announced. A new General Motors tech center in Michigan will employ 1,500. A restaurant group in Massachusetts says that a pending bill will put a chokehold on small businesses. EBay unveils same-day delivery. Here are 10 American industries with surprisingly poor prospects.

Around the World: The Price of Eggs in Mexico

A new report from the World Bank looks at whether entrepreneurship can be taught in poor countries. Valeria Maltoni says happiness is the world’s best brand. Mexicans are coping with egg shortages and price spikes. Growth in Britain is the fastest in five years but industrial output falls. Prank signs show up on London’s Underground. A group argues that Britons should work a four-day week: “We would all be happier and healthier if we spent more time outdoors, taking up ‘gardening leave.’” Iraq could become the world’s second biggest oil exporter. This is how a Chilean start-up initiative is changing Latin America. A Paris-based music streaming company raises $130 million.

Cash Flow: Is Google a Better Bank?

Google introduces a credit card for small businesses, and Martha White wonders if companies like Google and Wal-Mart can provide a better banking experience than actual banks. Most venture capital money flowed into the same funds last quarter. Kevin Kaiser offers some tips on managing your new office space. A woman gets a $15 quadrillion phone bill.

Red Tape: The Chaos of Online Sales Tax

Lou Carlozo explains what the end of tax-free online shopping would mean for small businesses. Jim Tierney says online sales taxes would create e-commerce chaos, but a business owner believes that they would restore competitive balance. Your tax filing extensions have run out! New York State has the worst tax climate (pdf) in the country. The Small Business Administration’s loan dollars in the 2012 fiscal year reached their second highest total ever. The Obama administration gives $20 million to 10 public-private partnerships to support American manufacturing and encourage investment. Olive Garden’s owner puts President Obama’s health care law to the test. A District of Columbia board approves forcing small businesses into its health exchange. NASA is gung-ho about small business. Al Gore cashes in on green tech.

Technology: The iPhone Is a Miracle

PC shipments are set to decline for the first time in 11 years, and one analyst thinks Hewlett-Packard’s stock is worth negative $2 a share. Groupon introduces a point of sale system for restaurants, and the retailer Urban Outfitters says it will never buy a cash register again. Apple, Facebook, Google, Microsoft and others join forces to start a new resource for Web standards. A new report finds that two-thirds of small-business mobile-device users believe their companies would lose competitive ground without them. Apple is expecting to ship 10 million iPad minis. Farhad Manjoo of Slate thinks the iPhone 5 “is a miracle.” Allen Gannett explains what big data can mean for small businesses. Verizon introduces a new tool to accelerate productivity for small and medium businesses. Microsoft will introduce Office 2013 for both iOS and Android. A cloud-based operating system is in the works. Natural gas trucks are gaining momentum. Here’s how to set up free text-message alerts when your Web site goes down. Polycom is trying to build a better conference call. Autos become the center of innovation. A life-altering way to make a grilled cheese sandwich is invented.

Tweets of The Week

‏@ConnectedStrat Busy people get things done. Busy people don’t use being busy as an excuse for delays, non-responses dropped balls.

@LeadToday
When you tell people it’s your way or the highway the highway starts looking pretty darn good.

@MeghanMBiro
Hire someone who understands what culture you’re trying to build

Bests of the Week

Eric Pangburn explains why you aren’t born great – and why that’s O.K. “When you understand that failure is your own fault, it’s easy to get depressed about it – but that’s not the real lesson here. … Rejection can be a great tool for self-improvement. Think of rejection as a form of free education. Whenever something you wrote gets rejected by a client or by a blog owner, ask why. Sometimes they’ll provide their reasons; sometimes you’ll be left to figure it out by yourself.”

Alice Walker says to go to the places that scare you. “If you want to have a life that is worth living, a life that expresses your deepest feelings and emotions, and cares and dreams, you have to fight for it. You have to go wherever you need to go, and you have to be wherever you need to be, and place yourself there against the forces that would distort you and destroy you.”

This Week’s Question: How would an online sales tax affect you?

Gene Marks owns the Marks Group, a Bala Cynwyd, Pa., consulting firm that helps clients with customer relationship management. You can follow him on Twitter.

Article source: http://boss.blogs.nytimes.com/2012/10/15/this-week-in-small-business-gangnam-style/?partner=rss&emc=rss

Filed Under: Small Business Tagged With: , ,

Markets Cautious as Greece Meets Creditors Again

January 20, 2012 by Leave a Comment

LONDON (AP) — Financial markets were cautious Friday ahead of another round of debt-reduction talks between Greece and its private creditors that could determine whether Europe’s debt crisis flares up again.

While meeting with debt inspectors from the European Union, the European Central Bank and the International Monetary Fund, the Greek government is also holding a third day of talks with creditors over a deal to get them to reduce the value of their Greek bond holdings. Greece is seeking to get creditors to agree a euro100 billion ($129 billion) writedown.

Heads of the inspection team are meeting with Finance Minister Evangelos Venizelos ahead of the next round of discussions with the creditors. A deal is necessary if Greece is to get the next batch of bailout cash that would prevent a devastating debt default — Greece does not have enough money to cover a euro14.5 billion bond repayment in March.

Last October, Greece’s partners in the eurozone sanctioned a deal whereby private creditors would take a cut in the value of their bond holdings to help lighten the country’s debt burden.

Hopes for such a deal as well as a run of successful European bond auctions and solid economic and corporate news, not least from the U.S. and China, have helped shore up market sentiment in recent days. Many stock indexes have risen to five-month highs, while the euro has clambered off 17-month dollar lows.

Having booked such gains, investors were more cautious on Friday.

“Optimism of a deal beginning to fade as the weekend approaches,” said Michael Hewson, markets analyst at CMC Markets.

In Europe, the FTSE 100 index of leading British shares was flat at 5,741 while Germany’s DAX fell 0.5 percent to 6,385. The CAC-40 in France was down 0.5 percent too at 3,312.

The euro gave up some recent gains, and was trading 0.5 percent lower at $1.2898.

Wall Street was poised for a subdued opening, too — Dow futures were down 0.1 percent at 12,571 while the broader Standard Poor’s 500 futures fell 0.3 percent to 1,307.

Analysts warned that the recent optimism in the markets could disappear if Greece fails to successfully conclude its debt-reduction negotiations with the Institute of International Finance, which represents private sector bondholders.

A deal is unlikely to bring an end to Greece’s debt problems, which is the heart of Europe’s debt crisis.

Investors may conclude that a restructuring in Greece is not a one-off, but may be repeated in other debt-hobbled countries across the troubled 17-nation eurozone.

Ireland and Portugal have both been bailed out too. Portugal is widely-considered to be more at risk of needing further help than Ireland because of a lack of economic growth.

“There remains the danger for bondholders that at some stage Portuguese politicians decide to follow the Greek example,” said Gary Jenkins, director of Swordfish Research.

Earlier in Asia in the last trading day before Chinese New Year holidays begin Monday, the Shanghai Composite Index climbed 1 percent to 2,319.12. Japan’s Nikkei 225 index rose 1.5 percent to close at 8,766.36. Hong Kong’s Hang Seng added 0.8 percent to 20,110.37 and South Korea’s Kospi jumped 1.8 percent to 1,949.89.

Oil prices tracked equities lower — benchmark oil for February delivery was up 84 cents to $99.55 per barrel in electronic trading on the New York Mercantile Exchange.

___

Pamela Sampson in Bangkok contributed to this story.

Article source: http://www.nytimes.com/aponline/2012/01/19/business/AP-World-Markets.html?partner=rss&emc=rss

Filed Under: Global Business Tagged With: , ,
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