The Fed has launched "Operation Twist" on Wednesday. Following a two-day extraordinary meeting of its Monetary Policy Committee (FOMC), the U.S. central bank announced its intention to sell by the end of June 2012 for $ 400 billion of treasury bills maturity of three years or less, to buy an equivalent amount of maturity from six to 30 years.
This mechanism, which takes its name from the famous dance that was all the rage in the 1960s, had just been used for the last time in 1961. Its objective is to reduce interest rates in the long run to give a boost to business investment and the demand for housing loans, which use these rates as reference.
The Fed, however, chose not to touch interest rates that determine the short-term rates. They remain between 0% and 0.25%.And they will remain at historically low levels until mid-2013, said a statement.
Market disappointment
In addition to this twist, and in order to support the mortgage market, the Fed will also buy real estate securities without increasing the size of its portfolio. For this, it will continue to reinvest the securities-backed real estate it owns as they fall due. But the FOMC said, instead of buying Treasury bonds as it did previously, she will buy securities backed by mortgage-agency mortgage refinancing para as Fannie Mae and Freddie Mac.
This double operation shows that the Federal Reserve, the economy remains very depressed. The Fed also believes that global economic growth will remain slow.Conclusions that are similar to those of the IMF, which announced Tuesday it had seen very sharp fall in its growth forecast for the U.S., in theory at a level insufficient to expect a decline in the unemployment rate, which remains very high to 9.1%.
On Wall Street, where the launch of Operation Twist was widely anticipated, the operators retain the gloomy perspective of the Central Bank on the economy. Shortly after the news release of the Fed, the Dow Jones was digging his losses and gave up 1.10% at 11,283 points.
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Societe Generale against attack. According to information from Figaro, the bank has launched a summons for defamation against the British tabloid Mail on Sunday. The Sunday newspaper had published an article on August 7 with Societe Generale "at the brink of bankruptcy after terrible losses from its exposure to the Greek debt." This article was the catalyst for the spread of rumors and scare many of the French bank, throughout the months of August and since the beginning. With the key, a downward spiral of its share price.
After obtaining an immediate apology from the British publication, the Company generally does it not stop there. She wrote, according to our sources, from August 18, by law, a letter of assignment to the Mail on Sunday, saying she has suffered damages and seeking compensation instant payday loan lenders.The next day, the newspaper responded by acknowledging his mistakes and offered to pay 1000 pounds to a charity. On 1 September, the French bank has sent a second letter, noting that the magazine acknowledged its mistakes and requesting payment, this time a million pounds to the "charity" of choice. Last week, the tabloid merely replicate that he would study the issue.
Both parties are there. If the Mail on Sunday does not comply, according to our sources, the Company generally will rise to the second phase of its assignment by entering a London court.
Reportedly, the government is preparing to raise the fee paid by social enterprises to 8% in 2012, while it is currently 6%. The Elysée and Matignon are still far from having the entire refereed austerity plan which will be unveiled Wednesday by François Fillon. But the rise in social package, which was already in the pipeline even before the crisis erupted, has very strong chance of being selected.
The social package is a kind of social contribution, which weighs on the amounts paid under the profit sharing, participation, savings and pensions pay extra. Paid by companies, was established in 2009 at a rate of 2%. He has since been increased by two percentage points each year by the government! The draft budget for 2012 should not be an exception to the rule cash advance. The increase of 6% to 8% could yield 400 million euros to Social Security.
Similarly, two other measures related to loss carry-on profits, have very likely to be retained in the austerity plan. The carry-back would be limited to one year. And regarding the carry forward losses from the profits would be capped. In Germany, the losses allocated may not exceed 60% of earnings in excess of 1 million euros.
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Tuesday, Nicolas Sarkozy and François Fillon discussed the new austerity measures that will be presented Aug. 24. Measures required for France to retain its credibility in the markets and keep its target of reducing the public deficit to 4.6% in 2012.
What was planned
In late June, the government thought it had completed the expenditure side of the budget in 2012. Apart from 30,401 job cuts in civil servants (to respect the rule of non-replacement of retiring in two), he foresaw no drastic measure. On the revenue side, the executive thought to stick to 2012 an increase of 3 billion euros of taxes.The measures passed in the fall of 2010 allowing themselves to raise $ 2.4 billion in 2012 (as on marriages and divorces, the solar panels, the plane niche), there were only 600 million small to find, mainly on fiscal and social niches.
The extra effort
In early August, speculation about the note of the French debt, and the publication of zero growth in the second quarter have changed the situation. The government announced Aug. 24 that he would introduce austerity measures complementary form of cuts in niches and expenditure savings. Measures that will be added so the plan stalled in late June. Given the number of the second quarter, many economists believe that French growth will not reach the levels anticipated by Bercy, 2% in 2011 and 2.25% in 2012.But it is not clear that the government revise its forecast from August 24. He fears that a premature review discourage households and businesses. The additional austerity measures could then be presented as a safety cushion. It evokes a total effort (including 3 billion already provided) between 5 and 10 billion.
The tracks for households
Arbitrations are not made but many tracks are on the table. The tax loopholes should have a new movement of the plane (that is to say, a lump sum reduction of the benefit), this time for devices on the income of 2012. Plane and 10% voted last year to 2011 revenues could be increased. "I especially hope that this plane does not, like this year, a score of niches, but more generally," said Philippe Marini, the UMP rapporteur of the Budget in the Senate one hour payday loan.His counterpart in the Assembly Gilles Carrez is on the same line. MPs also want to lower the overall ceiling of niches, now fixed at 6% of income over 18 000 euros. However, the idea developed by the UMP Jérôme Chartier limit to 50% of tax due from the advantage of niches does not seem to hold the rope. The niches on the overseas are in the spotlight, such as real estate. A lowering of Scellier to 15% in 2012 (instead of 18%) would be driven by Bercy. Alternatively, introduce a condition of income in the new interest-free loan, now open to all. He had already planned to eliminate discounts that apply to real estate gains (10% per year after five years), but only for undeveloped land for building. The system of all real estate gains could now be cured without jeopardizing the exemption for primary residence.Allowances on capital gains would also be looked securities. Gilles Carrez calls for taxation over the water, so each year of life. "This is something artificial, complex and betray the government's promise not to touch the life," Storm Bernard Spitz, the president of the FFSA (French federation of insurance companies). Finally, the government wants to tax the very high incomes. A track is preferred because it has the preference of parliamentarians: a new tax of 1% to 2% for annual revenues in excess of one million euros.
The tracks for business
The regime of worldwide profits (BMC) should be preserved. As the exemption of capital gains on the sale of subsidiary. "It is wrong to believe as Martine Aubry niche that weighs 22 billion. These cover 22 billion three years, "says one at Bercy.However, the carry back of losses could be limited to one year. Regarding the carry forward losses from the profits would be capped. Another idea: in the tax consolidation groups, 5% of the dividends would be taxed (whereas now they are exempt). Advantage of these measures: they affect large groups.
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The leaders of the euro area have increased their telephone calls all day Friday, but failed to contain the fire in financial markets. The European stock markets recorded a tenth straight session of declines, despite employment statistics better than expected in the United States.
The pressure was at its height on Friday night Silvio Berlusconi, Italian Prime Minister. According to Reuters, the European Central Bank had asked him to commit to implement fiscal reforms quickly, a prerequisite for debt it bought the Italian Treasury. This would include an amendment to the Constitution so Italian and to introduce a "golden rule".Rome could make announcements to that effect from this weekend, in exchange for which the ECB would intervene in the markets next week to support the Treasury of Italy. These rumors had the effect to strengthen the euro against the dollar.
Sign of financial globalization accelerated the past three years, Asia is now that Western countries face their responsibilities. Major creditors of the United States and the eurozone, Japanese and Chinese have expressed their annoyance. "We hope that the United States adopt measures to ensure the safety of assets held in the U.S. by other countries," said Chinese Foreign Minister Yang Jiechi.The latter also called on the world's major economies to strengthen their "communication" and improve "global economic governance."
The Minister of Finance of Japan, Yoshihiko Noda, for his part called "to discuss" problems of market distortion currency, debt crisis and U.S. economic issue. Asia calling the West to deal with its imbalances, the G7 in reverse!
Calls to Action
Side the euro area, the calls begin to be heard. According to the Commission President José Manuel Barroso, who has asked Member States to vote as soon as the new aid package to Greece, the Commissioner of the Economy, Olli Rehn, has increased calls for the Friday action. He acknowledged that "the current crisis is not just Europe cash advance now."He said the solution may be to the world and "international coordination through the G7 and the G20 is very important," two bodies currently chaired by France. In this context, Nicolas Sarkozy has held since his vacation spot in Cape Negro a telephone conference with German Chancellor Angela Merkel, Italian Prime Minister Silvio Berlusconi and Spanish Prime Minister Jose Luis Zapatero. He also had talks on Friday with Barack Obama. But as in previous crises, Europe is still far from offering a united front to the markets. Spanish Finance Minister, Elena Salgado, has sharply criticized the European Central Bank, which, she said, created "confusion in the markets."Implicitly, Madrid surprised that Jean-Claude Trichet at a press conference on Thursday, has announced the resumption of purchases of debt of Ireland and Portugal, two countries with financing needs are in principle already covered by the European Solidarity Fund (EFSF), even if it is unable to avoid tension on the secondary market.
However, the ECB has done nothing yet for Spain and Italy, which are in turmoil.Another sign of division: several Anglo-Saxon sources have suggested that the decision to resume the buyback of sovereign debt was opposed by the Germans, Dutch and Luxembourg in the Council of the ECB.
"The market seems to have understood that the European Summit of 21 July has finally brought a DIY solution to alleviate the difficulties of the peripheral countries of the Union", are economists Natixis. Principal is the day the bond markets, the rate loans to ten years in Italy increased over Spain, 6.12% and 6.03% respectively.Hence the pressure on Berlusconi by the ECB, and behind its main shareholder, Germany.
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The state coffers can thank the cell regulation. Active from April to December 2009, this unit has urged the French assets hidden abroad to come into line with the Inland Revenue. The repentant pay the tax due – 7 years EWB, 3 years of income tax and potential inheritance tax – but in return he received a discount on penalties. With this offer, Bercy recovered to date almost one billion euros: 887 million overdue taxes plus 70 million in penalties. These figures were provided by the Budget Ministry to Jerome Cahuzac, President (PS) of the Finance Committee of the Assembly.
500,000 French accounts in Switzerland
This billion may seem weak against 5.6 billion earned by the Italian tax authorities. But Italy had offered an amnesty to his repentant, who paid a fine.France, including the budget minister at the time, Eric Woerth, refused amnesty on principle. Explaining that a political choice less than 5000 people (4725) are gone in the cell, whereas, according to some experts, there are 500,000 French accounts in Switzerland. In short, France has preferred to draw little repentant but take a good revenues. Revenue which, after being estimated at 700 million in early 2010, will certainly exceed the billion ultimately. For all the records are not curly. Only 1600 have paid all repented their due. For 2605 of them, the transaction is entered into with the IRS but there are still remnants of income tax and penalties to settle. Finally, 523 cases are being processed.Everything should be completed by the end of 2011, according to Bercy.
In detail, the cell has recovered 497 million ISF 233 million inheritance, 157 million income tax (IR), the 7.3 billion in assets reported by the French who are reported guaranteed payday loan. "Those who have regularized their situation are often people who have inherited their parents' accounts in Switzerland. These assets traditionally reported little income. And the crisis has aggravated the situation, "says Bruno Gibert, Partner at law firm CMS Bureau Francis Lefebvre. That's why the IRS has collected little IR.
HSBC list
Penalties have so far brought only 70 million. "This amount seems low. I ask for clarification Philippe Parini, the director of public finances, at a committee hearing in May, "said Jerome Cahuzac.This figure corresponds to an average penalty amounting to 7.8% of the tax, is nevertheless consistent. Indeed, Bercy was decided to limit the penalty to 5% for those who did qu'hériter hidden assets and 20% for those who actively concealed the money, instead of the 40% effective usually. "Furthermore, with the payment of taxes due those who have settled have left a total of between 10% and 15% of their capital. This is not nothing! "Says Bruno Gibert.
Today, although the cell has closed its doors, the lawyers continue to file folders regularization Bercy. "But for now, they are not treated," says one of them. The tax is especially busy launching the 3000 fiscal controls on persons from the list of accounts with HSBC hidden in Switzerland. And despite the fact that the Court of Appeal of Paris has declared illegal the file from a flight. "This case concerns me.It should not be that tax evaders are doing, "says Jerome Cahuzac.
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A great location, exceptional measure. Faced with soaring yen and Japan's request, the central bankers of the G7 have decided on the night of Thursday to Friday to take action "concerted" on the foreign exchange market to counter the outbreak of the Japanese currency. First time since 2000. The decision had an immediate effect: the dollar has fallen to 81.71 yen over early Friday in Tokyo yesterday after beating a record at 76.36 yen, a level not seen since the Second World War. The Tokyo Stock Exchange also restarts forward: the Nikkei was awarded 2.72% to 9206.75 points at close Friday.
Germany, Canada, the United States, France, Italy, Japan and the United Kingdom and will provide liquidity.The economy minister, Christine Lagarde, on the initiative of the conference call while France chairs the G7, however, reported not being able to provide "the amount of intervention unsecured personal loans." "Excess volatility and disorderly movements in exchange rates have adverse consequences for economic and financial stability," say members of the G7 and promise to continue to "work if necessary."
Further intervention by the Bank of Japan
One analyst said that the chances of a return to normalcy in the markets "are more important when you have a concerted action rather than mere intervention of the Bank of Japan (BoJ). And the BOJ has continued to act. The agency issued 3,000 billion yen (28 billion euros) this Friday to avoid a liquidity crisis.Since the beginning of the week, the Bank of Japan has injected 37,000 billion yen (333 billion euros) in the money.
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LVMH adds another jewel to his empire of luxury. After the stake (20% now) of Hermes, the world leader in luxury sign a new breakthrough by taking the third world jeweler Bulgari.
The operation will be done through a share swap with the Bulgari family, principal shareholder of the jeweler. After the transaction, the group headed by nearly 60 luxury brands including Louis Vuitton, Moet et Chandon or Christian Dior, hold 51% stake in Bulgari.
Then, LVMH will launch a friendly takeover of the remaining shares at a price of 12.25 euros per share Bulgari. The title was trading at 7.59 euros Bulgari Friday at the Milan Stock Exchange, valuing the company about $ 2.3 billion. The premium would be well over 60%!
The price may seem excessive, but it nonetheless seems "justified" in the eyes of analysts from Natixis.First because Bulgaria is a "high quality assets' means the company has a brand and an established network and has also completed a major restructuring over the past two years. Second, because the operation makes a good "complement existing marks the division Jewelry & Watches (Chaumet, Tag Heuer, Hublot, Zenith …) that is missing a critical size (5% of sales of LVMH 2010), "they said.
For Natixis, "financing the buyout of minority, for about 1.8 billion euros, should be fully absorbed by the strong cash generation that the group performs each year."
Bulgari: 2nd shareholder of LVMH
In exchange for the sale of the stake, the Bulgari family becomes the second largest family shareholder of LVMH and have two positions on the supervisory board of LVMH, one without voting rights.Francesco Trapani, Bulgari family member and its current CFO, will be one of them, it takes over the division of LVMH Watch & Jewellery (Philippe Pascal take other functions) and will have a position on the executive committee .
This operation comes at a rebound of the luxury market which had suffered badly during the recession. Bulgari has published a 21% jump in quarterly revenue in January, while the group headed by Bernard Arnault saw its net profit soar by 73% over 2010.
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As on Wall Street Thursday, investors are reluctant Paris. After playing all day in the red, the CAC 40 is the road to recovery in the afternoon. An hour of closing, the benchmark index of the Paris Stock Exchange returns to balance and slowly gaining 0.05% to 4015.30 points. The threshold of 4000 points, which had secretly escaped the markets to 13 hours, was saved.
The index in Paris lost somewhat less than 4% since the beginning of the week. "This cons-performance is justified by the need for investors to breathe and to find new entry points, after the CAC 40 has risen sharply since the beginning of the year, Barclays says Renauld Murail Exchange. In addition, it broke several technical support (4013 points in particular).
Having "ignored" the events in Tunisia, preferring to focus on the good macroeconomic indicators or satisfactory business results, financial markets adopt the opposite behavior with Libya. "We spent a higher level," says Renaud Murail. The confrontations are more violent and especially the country exports 80% of its black gold to Europe, especially Italy. " Exports, however, that Libya has temporarily interrupted.
The big question is the extent to which lower levels of the CAC 40 will continue."If the political crisis in Libya does not spread to Saudi Arabia, Algeria or Iran, this does not justify the CAC 40 index goes below 3950 points," says portfolio manager Barclays Exchange.
Temporary suspension
The day was also marked by a trading halt due to unexpected technical problems. For nearly three quarters of an hour, investors have made a good scare.
"This is an incident related to the calculation of changes in European indices of NYSE Euronext (index levels), says it at NYSE Euronext. It has however had no impact on trading. " On Tuesday, the Milan Stock Exchange was suspended for six hours for "technical problems".No reason had been advanced.
On the stock market in Frankfurt, the Dax lost 0.99% to 7123.31 points and the FTSE-100 from the London Stock Exchange was down 0.23% at 5909.67 points.
Announced unemployment down sharply in January
About unemployment, which figures will be released at 18 hours, the Labour Minister, Xavier Bertrand, assured that he would be in sharp decline for the month of January.
Moreover, consumer sentiment remained stable in February to 85 points and remains "well below its long-term average, said Thursday the National Institute of Statistics (INSEE).
For the euro area, the confidence index of entrepreneurs and consumers in February was unveiled in late morning: Economic sentiment restarts up to 107.8 points.
United States, enrollment in weekly unemployment benefits declined again during the week of February 13 to 19, according to figures released Thursday by the Labor Department in Washington. The number of unemployment claims is thus increased to 391,000, against 413,000 the previous week.
In addition, orders for durable goods rebounded sharply from 2.7% in January from December, seasonally adjusted data, according to the index of the ministry, whose increase is consistent with the median forecast of analysts.The ministry has revised down its estimate of 1.9 percentage point decline the previous month to 0.4%.
By contrast, sales of new single relapsed in January by 12.6% from December, seasonally adjusted data, the ministry said, adding that it was their sharpest drop since May.
On the currency markets, the euro continues to gain ground against the dollar, quoting the single currency in mid-session 1.3772 (+0.16%).
Oil is approaching $ 120 in London
A barrel of Brent North Sea crude for April delivery was just under $ 120 Thursday around 10:00 at 119 business cards design.79 dollars, before retreating, supported by the unrest in the Arab world, including Libya, a major producer black gold.
Credit Agricole + 4.25% to 12.27 euros
Credit Agricole posted Thursday a net profit in 2010 increased 12% to 1.263 billion euros, despite a loss in the fourth quarter due to an impairment charge.
France Telecom: -2.10% to 15.85 euros
France Telecom on Thursday posted a 2010 turnover of 45.5 billion euros, up 0.6% excluding regulatory measures, while its net profit also rose to 4.88 billion, in line with analysts' expectations.
The board of directors of the telephone company has formalized Wednesday, the eve of the publication of annual results of the group, the appointment of Stephane Richard as CEO from 1 March 2011.
Saffron: -0.76% to 24.71 euros
The aerospace and defense OEM French Safran announced Thursday it made a profit adjusted net up 29% in 2010 and is optimistic for 2011 with the objective of increasing its operating income by at least 20% .
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Edenred: -1.56% to 18.89 euros
The prepaid industry, Accor, Edenred, reported Thursday a net profit of 68 million euros for 2010, against a pro forma net loss of 57 million euros a year earlier.
Vallourec: -4.19% to 74.40 euros
Vallourec 2010 results on Wednesday declined due to lingering effects of the crisis on its activity and said that its margins are under pressure in the first half of 2011.
After the publication of disappointing results on Wednesday, Accor fall of 4.34% to 32.43 euros.
Dexia: -2.99% to 3.12 euros
Dexia announced the results below expectations in 2010 but maintained its financial targets for 2014.
EADS: -0.34% to 20.78 euros
The Pentagon is expected to unveil Thursday its decision on the mega contract for refueling tankers to the U.S. Air Force, for which the U.S. aviation giant Boeing and Europe's EADS are competing for several years.
Air France postpones Paris-Tripoli
Air France-KLM: + 1.46% to 11.79 euros
Air France-KLM has decided to postpone until further notice the opening of its Paris-Tripoli, scheduled for March 29 because of the situation in Libya, said the airline.
Vilmorin: -0.89% to 87 euros
Vilmorin has confirmed its full-year after a first half marked by a reduced loss from one year to another through the bond of its activity.
Ipsos: -1.45% to EUR 34
Ipsos has announced plans to increase its operating margin to 11% and do better than market growth studies expected 5% in 2011, having exceeded its targets for 2010.
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Technicolor: -1.29% to 5.19 euros
Technicolor announced Wednesday it had received a firm offer for the activities of headends from Grass Valley, balances and its assets in the subsidiary being restructured and terminating its program of asset disposals. The group is in advanced talks with Orange to build its next generation of decoders in France.
Jemini: + 13.85% to 8.30 euros
The specialist licensed products, Jemini, lists on Alternext Thursday.
In meeting, Crédit Industriel et Commercial release its quarterly results.After market, it was the turn of Thales, Saint-Gobain, Valeo and Eiffage present their annual results.
Gecina: -1.03% to 89.47 euros
The property company has announced that its recurring earnings continue to decline in 2011 mainly because of an increase in the burden of debt. Recurring profit before tax fell by nearly 6% in 2010 to 327.4 million euros and the company expects a decline of 7% in 2011.
Like all central bank presidents, he attended the 18 and 19 February to the G20 forum organized by France in Paris. Asked on Sunday at the Grand appointment Europe1-Le Parisien, Jean-Claude Trichet, Governor of the Central Bank (ECB) has been a champion of the integrated global economy, including the G20 is in his opinion, the best illustration . "The G20 is now the place in which we organize cooperation among major countries that have a systemic influence on the global economy so that we can coordinate the best possible economy. progressivment was created an integrated global economy, "he said. For him, despite the minimal agreement on Saturday ripped through France on the extent of economic imbalances, the forum was a success."It is a G20 which has been very useful, serious, positive," said President of the ECB.
Asked about the influence of China has succeeded in imposing his conditions, he believes that "the victory of one over the others is not the concept." He explained that he needed more hold that all States have cooperated closely. "I think China is obviously an extraordinarily large economy, which contributes most significantly to the growth of the global economy," but "the essence of the G20 is to ensure that each sovereign country may consider to both its national interest and the best interests of this new entity we have before us is the integrated international economy, considering that it is obvious that the prosperity, stability of the global economy is an integrated the major properity and stability at the national level, "he summarized.
The agreement signed by the participants reaffirmed for Jean-Claude Trichet, so extrêmenent clear, the idea of "creating the conditions for global sustainable high growth and balanced. For this, we must make to reduce imbalances and excessive imbalances notament balance of payments current. It proceeds with a precise coordination of various policies based on appropriate indicators on which there was an agreement. " It acknowledges that we face challenges. Think that the G20 has "resolved all the problems" would be a "frightening naiveté," says Jean-Claude Trichet.
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