Monthly Archives: December 2011

December gains fail to make up for bad year

Global stock markets eked out a modest gain in December but not enough to ameliorate what has been yet another bad year for the global financial system, as Europe’s sovereign debt crisis worsened. Despite a slight recovery this month, global equity markets have lost almost $6.3tn in value in 2011, according to Bloomberg data. A range of other risky assets…

Forecasts for a future imperfect

Will the eurozone survive intact? Yes. The commitment of member governments and, above all, of the European Central Bank to maintain the eurozone looks strong enough to keep it together for another year, at least. The governments of vulnerable countries will continue their austerity drives. The impact will be cushioned by International Monetary Fund programmes in the cases of Greece,…

Foreign central banks cut US treasuries

Holdings of US Treasuries by foreign central banks has fallen by a record amount over the past four weeks according to the latest Federal Reserve data. The net $69bn drop in Treasury holdings registered at the Fed by foreign official institutions comes as benchmark yields ended 2011 near record low levels and when the US central bank is conducting Operation…

The Euro Clouds

ATHENS. The spotlight opens on George Papandreou, who is at home in bed, tossing in his sleep. Papandreou (waking up): Great gods! Will these nights never end? Will daylight never come? I heard the cock crow hours ago, but my indolent and totally corrupt people are still snoring away! Curses on this debt crisis! Curses on Pasok! I can’t even…

China slowdown fears hit commodities prices

Commodities markets looked set to post their first annual fall since 2008 as they faced headwinds from the European sovereign debt crisis and weaker growth in China. After a strong first quarter, commodities investors spent most of the year watching their investments lose ground. In New York midday trading on Friday, the benchmark Reuters-Jefferies CRB index – a basket of…

European banks suffer as crisis grows

European equity markets had a largely unremarkable last week of 2011, but few investors were likely to forget this year, particularly if they managed to escape unscathed with their profits and portfolios intact. The FTSE Eurofirst 300 lost 11.3 per cent over the year, closing on Friday at 1001.39. The index hit its high point of 1,191.56 in February and…

Poor results add to fears over Hot Tuna

Hot Tuna’s shares shed nearly half their value on Friday after disappointing results added to investor fears that the lossmaking company, which put itself up for sale last month, might not be able to find a buyer. “It’s going to have to be a rethink on strategy if we don’t find a buyer,” said Matthew Kelly, the surfwear company’s financial…

Flat US stocks outperform global peers

With only a few hours of trading left in 2011, the S&P 500 was just in positive territory for 2011. At 1,261.74, the benchmark index was up 0.3 per cent for the year, a recovery of more than 14 per cent from October lows, but still 7.5 per cent short of April highs. But despite a gut-wrenching August, when 4…

Currencies

When Alan Greenspan told Congress in 2002 that “there may be more forecasting of exchange rates, with less success, than almost any other economic variable,” foreign exchange strategists were not amused. After 2011, they may admit that the former Federal Reserve chairman had a point. This was a year in which the euro largely defied the growing sense of impending…

Price and tax drive illicit tobacco trade

The working-class Harehills neighbourhood in Leeds is an unlikely cross-roads for global criminality – a jumble of down-market stores, pungent take-aways and immigrant-owned mini-marts featuring adverts in Arabic and Polish. But behind a false wall in one local shop, past the halal meat counter, lies a stash of some 10,000 untaxed cigarettes from eastern Europe – a modest slice of…