|« Evangile dominical / Sunday's Gospel||Politics this week - Jul 14th 2012 »|
American jobs figures disappointed. Non-farm payrolls rose by only 80,000 (less than 0.1%) in June, the third straight month of meagre growth, though crumbs of comfort were found in a slight rise in earnings and hours worked. The unemployment rate remained at 8.2%. Mitt Romney, the Republican presidential candidate, described the news as a “kick in the gut” to American families.
Other gloomy employment reports abounded. The OECD, a rich-country think-tank, predicted that Germany would be the only euro-zone economy to see a fall in its unemployment rate by the end of 2013. Meanwhile, the International Labour Organisation warned that the euro zone may lose another 4.5m jobs over the next four years.
European finance ministers agreed on more details of a bail-out package for Spain. It will receive the first €30 billion ($37 billion), out of a potential €100 billion, for its ailing banks by the end of July. The country’s budget-deficit target is also to be eased. Spain’s prime minister set out more austerity measures designed to save €65 billion by 2015.
Central banks tried to help stalling economies. The Bank of Korea lowered its key interest rate for the first time in three years, by 0.25% to 3%. Brazil’s central bank cut the Selic rate by 50 basis points to 8%. The European Central Bank cut its main lending rate to a record low of 0.75%. The Bank of England announced more asset purchases, of £50 billion ($78 billion).
China’s central bank also acted, cutting interest rates for the second time in a month. The economy is stuttering. The annual inflation rate plunged to 2.2% in June from 3% in May. China’s trade surplus leapt to $31.7 billion because import growth slowed to a rate of 6.3% compared with 12.7% in May.
The LIBOR scandal rumbles on. The European Union’s financial regulator said he intended to make the manipulation of benchmark rates a crime. In Britain the chairman of Barclays and the deputy governor of the Bank of England were grilled by a parliamentary committee. In America it emerged that the Federal Reserve Bank of New York may have been informed of alleged manipulation of LIBOR some time after 2007.
The US Commodities Futures Trading Commission filed a complaint against Peregrine Financial Group and its founder, Russ Wasendorf senior, a day after he attempted suicide. The firm’s futures-brokerage unit, PFGBest, is alleged to have a $200m “shortfall” in client funds. The firm filed to liquidate.
Russia’s Duma, the lower house of parliament, ratified the country’s entry to the World Trade Organisation. It acted a day after the Constitutional Court ruled that a deal made in December, after 18 years of talks, was lawful.
WellPoint, an American health insurer, offered to buy Amerigroup, a rival company, for $4.9 billion. The deal follows a recent Supreme Court decision upholding President Barack Obama’s health-care act, which sets up a market for all Americans to shop for coverage. The new company will be one of the largest private providers of Medicaid.
Intel, a chipmaker, agreed to pay €2.5 billion ($3.1 billion) for a 15% stake in AsmL, a Dutch semiconductor-equipment company. Intel will also invest €829m to develop wafer and circuit technology that will raise processing power. Intel will buy the resulting tools, due in a few years.
Miners Glencore and Xstrata said a postponed shareholder vote on their mega-merger would take place on September 7th. Xstrata was forced to amend its pay deals for bosses following objections by shareholders.
Samsung Electronics said it would make an operating profit of $5.9 billion in the second quarter, a 79% increase on the same period a year ago. Much of the rise is due to soaring sales of its smartphones. By contrast, HTC, a Taiwanese phonemaker that was the first company to produce an Android phone, announced a 58% fall in profits to $248m over the same period.
In a victory for Samsung’s sales, if not its style, a British judge declared that its Galaxy tablet did not infringe any iPad patents because it was “not as cool” as Apple’s product.
Yahoo! and Facebook settled a patent lawsuit brought by Yahoo! in March. The former web star’s case was considered aggressive because many of the patents at issue covered common practices such as online advertising, privacy controls and internet messaging. In a rare example of congeniality the companies eschewed damages and have formed an advertising alliance, saying they would cross-license innovations and collaborate in future.
(From The Economist, Jul 14th 2012)
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