02/01/2012 (9:36 am)

China announces $2.5B fund for small businesses

Filed under: legal, online |

China announced more help Wednesday for its struggling private business sector, unveiling a $2.5 billion fund to finance new small businesses and promising tax breaks and more lending for entrepreneurs.

The Cabinet announcement was one of the first concrete measures announced by the government following repeated pledges to help entrepreneurs who have been squeezed by a slump in U.S. and European demand and curbs on bank lending.

Entrepreneurs generate most of China’s new jobs and wealth, but thousands have been driven out of business. The survivors have slashed payrolls, raising concern among China’s communist leaders about possible unrest.

A Cabinet statement issued after a meeting led by Premier Wen Jiabao, the country’s top economic official, said small companies were essential to helping China keep growth fast and stable despite the global downturn.

The government will create a 15 billion yuan ($2.5 billion) fund “primarily to support the start-up of small and micro-enterprises,” it said.

It gave no details but also promised a cut in taxes and fees and said small businesses will be guaranteed a portion of government purchases of goods and services.

Beijing ordered the state-owned banking industry to lend freely to help China’s economy rebound from the 2008 global crisis. But it clamped down on credit to preventing overheating after annual economic growth soared above 10 percent in 2010.

Economic growth fell to a 2 1/2-year low of 8.9 percent in the final quarter of 2011.

Two surveys released Wednesday gave mixed signals on manufacturing activity in January but both showed it largely unchanged.

The state-affiliated China Federation of Logistics and Purchasing said its purchasing managers index rose 0.2 points to 50.5 from December’s 50.3 on a 100-point scale on which numbers above 50 indicate growth.

HSBC Corp. said its HSBC China Manufacturing PMI was little changed at 48.8 from December’s 48.7, suggesting a “moderate deterioration.”

The credit clampdown battered entrepreneurs as banks channeled their limited lending to politically favored government companies. Entrepreneurs turned to high-interest underground lenders. Thousands went bankrupt, leaving employees and suppliers unpaid.

The government responded in October by ordering banks to step up lending to small businesses, though it is unclear whether credit has increased.

Wednesday’s statement promised to create more small-scale financial institutions to serve entrepreneurs and rural companies.

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01/30/2012 (11:52 am)

Wendy’s reports lower adjusted profit, revenue up

Filed under: legal, term |

Wendy’s Co. says its adjusted earnings fell 29.5 percent in the fourth quarter, while its revenue rose 5.6 percent,

The hamburger chain said Monday its income from continuing operations was $4.3 million in the period ended Jan. 1. That was down from $6.1 million a year ago.

The adjusted number stripped out one-time charges like costs related to selling Arby’s and writing down the value of some assets. The company didn’t report what net income would be if those charges were factored in.

Earnings were 4 cents per share, in line with the predictions of analysts polled by FactSet. After adjusting for the one-time charges, earnings were 1 cent per share.

Wendy’s says revenue rose to $615 million, beating the $613 million predicted by analysts polled by FactSet. More visitors and higher prices helped.

Shares fell 2 percent in early trading to $5.10.

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01/28/2012 (11:12 pm)

Indonesia

Filed under: management, term |

Jan. 29 (Bloomberg) –Indonesia may sustain its economic growth, Trade Minister Gita Wirjawan said, as

01/08/2012 (6:52 pm)

Pro-Gingrich group to air film critical of Romney

Filed under: money, online |

An independent political committee supportive of Newt Gingrich is planning to release a film critical of Mitt Romney’s tenure at a private-equity firm, just days after a Las Vegas billionaire contributed $5 million to the group to bolster the former House speaker’s White House run.

The Gingrich-leaning Winning Our Future PAC said Sunday that the 28-minute video _ which assails Romney for “reaping massive awards” while head of Bain Capital _ will be posted online soon and could show up on TV ahead of this month’s primary elections.

Meanwhile, a person familiar with the development said Sheldon Adelson, a casino mogul and longtime donor to Republican candidates, made the contribution Friday to Winning Our Future, which is run by Gingrich allies. The person, who was not authorized to discuss the matter publicly, said Adelson is expected to contribute to groups backing the Republican nominee, be it Gingrich or one of his rivals.

Both the film and the large contribution highlight the growing role that new “super” political action committees are playing this election. Just weeks ago, a Romney-leaning super PAC called Restore Our Future hammered Gingrich with $3 million in negative ads that largely contributed to his eroding support before the Iowa caucuses. Gingrich finished in fourth place.

Now, the tables have turned: Winning Our Future’s case marks the first time Gingrich and his allies have targeted Romney’s time at Bain. They have said Romney’s record is fair game, but up until now have restricted attacks to his time in government.

The film, called “When Mitt Romney Came To Town,” assails Romney for “reaping massive awards” for himself and his investors. Bain has been credited with turning around dozens of companies, including well-known brands like Domino’s Pizza, but its record has been criticized _ notably by the Democratic National Committee _ for slashing jobs in the process.

Rick Tyler, a former Gingrich aide who is now working for Winning Our Future, said the full video would be posted online “soon.” Some segments could be used in shorter TV ads, he said, although there were no immediate plans to run the full piece on television.

Super PACs have sprouted up from a series of federal court rulings, including the Supreme Court’s Citizens United case in 2010 that stripped away restrictions on corporate and union spending in elections. The groups can’t coordinate directly with campaigns but many of them active in this election are staffed by longtime supporters of the candidates.

While some super PACs have to disclose their contributors’ names later this month, many will never be known. Some super PACs have established nonprofit arms that are permitted to shield contributors’ identities as long as they spend no more than 50 percent of their money on electoral politics low fee payday loans. Crossroads, the giant conservative outfit tied to former George W. Bush political adviser Karl Rove, operates both a super PAC, Crossroads GPS, and a nonprofit, American Crossroads.

Crossroads GPS and other Republican-leaning super PACs played a significant role in the 2010 midterm elections, helping deliver the House to the GOP and boost the number of Republicans in the Senate. The 2012 contest is the first to test the influence of such groups in presidential politics.

But no candidate has seen his fortunes affected by the emergence of super PACs more than Gingrich.

Riding high in polls just a month ago, he became the target of a $3 million advertising barrage sponsored by Restore Our Future, a super PAC supporting Mitt Romney run by several of the former Massachusetts governor’s allies. The ads, which pounded Gingrich for his ties to federal housing giant Freddie Mac and his reversal on issues such as climate change, sent his political fortunes plunging in Iowa.

Romney and Gingrich tangled over the role of super PACs in a nationally televised debate Sunday. Romney said he had not seen Restore Our Future’s ads but defended their content.

“Governor, I wish you would calmly and directly state it is your former staff running the PAC,” Gingrich said to Romney, warning his own allies would be on the air soon.

Gingrich has pledged to carry on and is hoping to resuscitate his campaign in South Carolina, which holds its primary Jan. 21. With Romney heavily favored to win the New Hampshire primary Tuesday, his rivals are looking to slow his momentum when the contest moves to the South.

Several super PACs have already played a role in the Republican campaign. They include Make Us Great Again, a super PAC backing Texas Gov. Rick Perry; Our Destiny, supporting former Utah Gov. Jon Huntsman; and the Red White and Blue Fund, which helped revive Santorum’s campaign in Iowa and is running ads in South Carolina.

Priorities USA Action, a super PAC backing President Barack Obama’s re-election campaign, has spent modestly during the Republican nominating contest and is expected to step up its role in the general election.

___

Gillum reported from Washington. Associated Press Writer Shannon McCaffrey in Atlanta contributed to this report.

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01/06/2012 (6:28 am)

Markets recover on hopes for US jobs gains

Filed under: economics, management |

European stocks rose on Friday as investors set aside concerns about the euro’s debt crisis to focus on the impending release of monthly U.S. jobs data, which many hope will confirm a mild recovery in the world’s largest economy.

Asian market indexes closed lower as they reacted to poor economic and financial indicators out of Europe the previous day. That stream of poor European data continued on Friday, with new information showing a drop in retail sales and economic sentiment among consumers and businesses. Unemployment in the 17-nation eurozone, meanwhile, remained at a worrying 10.3 percent.

Traders expect 2012 to be a tough one for Europe, as it slides back toward recession, and appeared relieved to have more upbeat U.S. economic indicators to focus on Friday.

Analysts are projecting hiring gains of about 150,000 when the U.S. Labor Department issues the December jobs report. That would mark a six-month stretch in which the economy generated 100,000 jobs or more in each month. Expectations of the data rose on Thursday, when the private payrolls agency ADP said its own calculations for hiring gains were much stronger than forecast.

An improvement in the U.S. labor market is crucial for global markets because American consumer spending accounts for a fifth of the world’s economic activity. A recovery in the U.S. would also mitigate the impact of the sharp slowdown in Europe.

Britain’s FTSE 100 rose 0.4 percent to 5,644.55, while Germany’s DAX rose 0.6 percent to 6,131.25. France’s CAC-40 rose 0.8 percent to 3,170.85. Ahead of the opening bell on Wall Street, Dow Jones futures rose almost 0.1 percent to 12,334 and S&P 500 futures gained 0.1 percent to 1,274.50.

Although upbeat U.S. data could push stocks higher, gains were likely to be limited by the lingering fears about Europe’s debt crisis. Italy’s benchmark 10-year bond yield edged further above 7 percent, a borrowing rate that is considered unsustainable over the longer term.

Italy, along with many other European governments, has to roll over huge amounts of debt in coming months. It is trying to restore investor confidence in its public finances to get those bond yields down and pay lower rates when it auctions its bonds to raise cash from capital markets.

Traders will watch comments from Italian Premier Mario Monti, who will hold talks in Paris with French President Nicolas Sarkozy on Friday.

Banks, meanwhile, are hurting due to fears that they will take big losses on their holdings of government debt and will struggle to raise new cash to plug those holes.

Trading in UniCredit, Italy’s largest bank, was halted on Thursday after the stock lost a quarter of its value in two days. The bank said Wednesday it would need to offer huge discounts to investors to raise money in a new share sale. The stock was down another 11 percent on Friday.

Longer-term concerns about the euro and the region’s financial system pushed the common currency to 15-month lows on Thursday. It recovered slightly on Friday, rising 0.1 percent to $1.2808.

Outside the eurozone, Hungary was sliding deeper into its own financial crisis. It had to pay a staggeringly high interest rate of 10 percent on its 12-month debt. That is far above the 7 percent level that forced Greece and Portugal to seek emergency bailouts to prevent them from defaulting on their debts.

Investor confidence in the country has deteriorated to the point that the country is considering asking the International Monetary Fund for a standby rescue loan.

Asian indexes ended mostly lower as they reacted to the previous day’s European market jitters. Japan’s Nikkei 225 Index closed 1.2 percent lower at 8,390.35. Hong Kong’s Hang Seng index fell 1.2 percent at 18,593.06 and South Korea’s Kospi fell 1.1 percent to 1,843.14. Benchmarks in Taiwan and Indonesia also fell. India and Singapore rose.

In mainland China, the benchmark Shanghai Composite Index gained 0.7 percent to 2,163.39, while the smaller Shenzhen Composite Index gained 0.5 percent to 817.78.

Japanese stocks are hurt by the yen’s rise against the dollar, which makes exports less competitive internationally. On Friday, the dollar dropped another 0.1 percent to 77.07 yen.

Benchmark oil for February delivery rose 60 cents to $102.41 per barrel in electronic trading on the New York Mercantile Exchange. The contract fell by $1.41 to end Thursday at $101.81 in New York.

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01/03/2012 (12:40 am)

Franklin County reels from the loss of Chrysler jobs

Filed under: Mortgage, Uncategorized |

FRANKLIN COUNTY • The wound left when Chrysler shuttered its plants in 2008 and 2009 hasn’t healed in nearby Franklin County, where residents for years relied on those paychecks.

The county has seen the sharpest rise in poverty in the metro region since the recession, according to recently released census figures. In 2006, a year before the recession officially began, 10.3 percent of residents lived below the poverty level. That figure hit 17 percent in 2010, the most recent statistics available.

When asked why the county was hit so hard, those who work with the poor unanimously cite the Chrysler closure in Fenton and its lingering effects on jobs.

“I think disproportionately we were hit harder than other areas, and that showed in our unemployment rate,” said Presiding County Commissioner John Griesheimer.

Many in the county haven’t found a way to replace good-paying jobs, and the county is about to be dealt another blow with ties to the auto industry.

Harman-Becker Automotive Systems plans to start shutting its plant in Washington, Mo., as soon as this month, leaving nearly 300 people without jobs, said Sandy Lucy, the city’s mayor.

Most of those jobs are in manufacturing. Many workers earn $40,000 to $60,000 a year assembling auto accessories such as car radios and navigation systems. The company supplied parts to the Chrysler plant.

Harman-Becker’s closure was announced more than a year ago but wasn’t supposed to begin until summer. The plant is now expected to be shuttered by spring.

The plant is an example of efforts to create county jobs. The state and city bent over backward to lure Harman-Becker to Washington in 2005, with incentives worth nearly $3 million.

The company has repaid the state almost $540,000 under a “clawback provision,” which allows the state to recover tax money from businesses that fail to meet economic commitments, according to the Missouri Department of Economic Development.

The company did not have to repay nearly $40,000 it received through the Missouri Quality Jobs program because it created and maintained jobs for three years. Harman-Becker did not respond to an email request for comment.

The pending closure worries Sandy Crider, executive director of Loving Hearts Outreach food pantry in Washington. She sees people coming to the pantry who lost jobs in the auto industry that paid $25 or $30 an hour with health benefits and retirement plans, and who have continued to struggle after those jobs disappeared.

“Now they’re working two part-time jobs for minimum wage and no health insurance,” Crider said. “They’re embarrassed because they can’t find jobs to bring them back to the point where they were in the past.”

A 58-year-old freelance Web developer standing in line recently at the Agape House food pantry in St. Clair said the loss of the plants has crippled the county and sent ripples beyond the auto industry. His own workload is down 40 percent from before the recession, said the man, who asked to be identified only by his first name, Bill, so his customers wouldn’t know his financial situation.

“I could see if you’re a bad person, you’re not going to hold a job,” he said. “But I see a lot of good, hardworking people who want a job and there’s nothing for them.”

Crider said more families are becoming homeless and must move in with other family members, also on fixed incomes.

“That’s what the homelessness looks like in Franklin County,” she said.

Ellen Dietrich, director of community relations of the Jefferson Franklin Community Action Corp., has seen the uptick in poverty, too.

Not long ago, a woman who used to donate came into the social service agency’s office. Instead of writing a check, she asked for help.

“People come in and give us résumés and say if we know of anyone hiring, please pass it along,” said Tammy Stowe, executive director of the Union Chamber of Commerce.

Franklin County government relies heavily on sales tax, but collections hit a low of $4.9 million in 2009. Since then, sales tax revenue has been on a slight upswing, said county Auditor Tammy Vemmer.

To help balance the budget the last couple of years, county employees have been required to clean their own offices to save on janitorial services. This year, unelected, full-time county employees will get a $700 boost in pay. They have not seen raises since 2008, Vemmer said.

Griesheimer, the presiding county commissioner, said the county had been able to avoid layoffs, unlike the private sector.

From January 2009 through March 2011, unemployment in Franklin County topped 10 percent for all but two months, and peaked at 13.4 percent in February 2010. The rate dipped to 8.8 percent in November, the most recent data available.

Christie Bean, of Gerald, has searched for a full-time job for more than five years. “I call the temp service every day,” she said.

Bean lost her assembly-line position when the Daisy BB bullet factory shut down in Salem, Mo. She’d like a permanent factory job but knows she can’t be picky.

“People who are getting jobs are holding onto them,” said Bean, 42.

Her husband sells scrap metal and fixes cars, but work has dried up. He has resorted to selling firewood door to door.

“He’s working hard and he’s not getting anywhere,” said Bean. He once had a good factory job, too, she said, but he lost it because of back problems.

Last month, Bean and her sister stopped at the Loving Hearts Outreach food pantry in Washington. Bean packed a basket of pasta, tuna, tomato soup, applesauce and red beans and rice into the back seat of her car and was grateful for it.

Other county residents are slowly digging their way out. Cody Sansom, 27, once made $20 an hour working construction jobs. When the demand for new houses dried up, so did work. He became homeless three years ago and moved to the Agape House shelter three months ago.

He recently landed a job as a cashier and pizza cook at a convenience store, where he earns minimum wage.

“It’s the lowest I’ve ever made,” said Sansom, who will start classes at East Central College in Union next month. “But it’s a job.”

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12/13/2011 (10:28 pm)

Asia stocks down as Fed holds off on new stimulus

Filed under: Loans, marketing |

Asian stocks fell Wednesday after the Federal Reserve offered no new initiatives to help a slowly recovering U.S. economy.

Japan’s Nikkei 225 index fell 0.6 percent to 8,498.63. South Korea’s Kospi lost 0.5 percent at 1,854 and Hong Kong’s Hang Seng shed 0.7 percent to 18,326.98. Australia’s S&P/ASX 200 slipped 0.2 percent to 4,184.80. Benchmarks in Singapore and Taiwan fell while mainland China rose.

U.S. stocks gave up gains Tuesday after the Fed released a policy statement that made clear it was not offering any new steps to help the economy.

The Dow Jones industrial average fell 0.6 percent to close at 11,954.94. The Standard & Poor’s 500 index fell 0.9 percent to 1,225.73. The Nasdaq composite fell 1.3 percent to 2,579.27.

The Dow dropped more than 70 points in the last hour of trading and had risen as high as 126 points earlier Tuesday after two strong auctions of European debt. The Spanish government was able to sell short-term debt at much lower interest rates compared with a month ago, a signal that markets are becoming less fearful about the government’s ability to repay its debt.

And in its first sale of short-term bills, the European Financial Stability Fund raised 1.9 billion euros ($2.6 billion).

Still, investor sentiment remained fragile amid threats by Standard & Poor’s to downgrade the credit ratings of 15 countries that use the euro because of the region’s debt crisis.

“We are likely to continue seeing some cautious trading as the threat of S&P coming out to issue some downgrades at some stage this week looms,” said Stan Shamu of IG Markets in Melbourne, Australia.

“Some would argue that this is already priced in, but it will still likely rock the boat should it happen.”

Benchmark oil for January delivery was down 28 cents to $99.86 per barrel in electronic trading on the New York Mercantile Exchange. The contract rose $2.37 to finish at $100.14 an ounce on the Nymex on Tuesday.

In currencies, the euro fell to $1.3031 from $1.3043 late Tuesday in New York. The dollar rose to 77.99 yen from 77.97 yen.

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12/10/2011 (8:24 am)

Ask the expert: Jon Paramore, Olneya Restoration Group

Filed under: Business, Finance |

How might winter weather expose roof deficiencies?

Winter is the time of several holidays. What many people don’t understand is that even a minor roof leak can rob an entire holiday of fun and family time. Winter’s low temperatures can also cost homeowners much money in unnecessary heating expenses as a result of inadequate attic insulation.

Even homeowners with a lot of discretionary income don’t like to spend money on high heating bills. For a fraction of the cost of heating a home for five years, installation of fiberglass attic insulation can save thousands of dollars.

Getting a proper roof and attic inspection is a smart step to take now. Major repairs and large utility bills are not necessary when a simple 30-minute inspection is all that is required to determine what is needed to make a roof weathertight and energy efficient.

Homeowners who suspect their roofs might have suffered damage in this year’s storms should get the free inspections offered by most roofing professionals no fax payday loan. Inspections may reveal damage that is not readily visible to homeowners. These are often the same people whose roofs end up being replaced as a result of storm damage they didn’t even know they had.

The point to all of this is that trying to get a roof to last through the winter might be among the costliest of mistakes a homeowner can make. In addition, wasting money as a result of a poorly insulated attic just doesn’t make “cents.” These two items can save a homeowner thousands of dollars by having a trusted contractor inspect the roof and, at the very least, provide peace of mind during the holiday season. After all, worry-free holidays with more cash in hand always make for a happier season.

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12/08/2011 (7:44 pm)

FDA panel wants more risk information on Yaz pills

Filed under: Mortgage, technology |

Federal health experts said Thursday that drug labeling for Yaz and other widely-used birth control pills should be updated to emphasize recent data suggesting a higher risk of blood clots with the drugs than older contraceptive pills.

The Food and Drug Administration’s panel of experts voted 21-5 Thursday that labeling on the popular drugs made by Bayer is inadequate and needs more information about the potential risk of blood clots in the legs and lungs.

Yaz, its predecessor Yasmin and related prescriptions use a manmade hormone called drospirenone, which mimics the naturally occurring female hormone progesterone. Approved in 2006, Yaz grew into the best-selling birth control pill in the U.S. by 2008, backed by hundreds of millions of dollars in TV and magazine advertising that emphasized its ability to clear up acne and other hormonal side effects. But prescriptions have fallen more than 80 percent in the last two years amid safety concerns.

Panelists spent more than nine hours discussing often conflicting data on the blood clot risk of drospirenone-containing drugs compared with older medications. While the group disagreed on the quality of the evidence, the overwhelming majority said it should be clearly stated in the label, including the potentially fatal nature of blood clots.

“Clearly the wording is inadequate and incomplete,” said Dr. Richard Bockman of New York’s Hospital for Special Surgery. “Adverse events have to be made graphic so physicians and patients are aware of the consequences.”

In an earlier vote, panelists voted 15-11 that the pills remain a beneficial option for preventing pregnancy. The majority ruling amounts to a vote of confidence for keeping the drugs on the market, though well over a third of panelists voted against the drug’s overall benefit, citing numerous alternatives available.

“I can see no real group of patients that this drug benefited over existing alternatives,” said Mark Woods of New York University School of Medicine. “Without any clear benefit, and given the potentially catastrophic risk, I voted no.”

Two large studies conducted by German drugmaker Bayer have shown no difference in blood clots between patients taking the company’s drugs and patients taking older medications.

But since 2009, five large studies have suggested drospirenone-containing pills carry a slightly higher risk of blood clots than older birth control pills, though events in both groups are very rare. Even a slightly higher risk can be critical because blood clots can trigger heart attacks, strokes and blockages in lungs or blood vessels.

The most recent study by the FDA found women taking Yasmin had a 75 percent higher chance of suffering a blood clot than patients taking a combination of older drugs. The absolute risk of a blood clot is still far less than a fraction of a percent.

FDA scientists noted shortcomings with all the recent studies of Yaz and Yasmin, including missing information about patient weight and smoking status, which can increase the risk of blood clots. While not definitive, panelists said the information should be explained clearly in the labeling for physicians and patients no fax pay day loan.

“I think we can do a much better job than labels I have seen,” said Dr. Valerie Montgomery Rice, of the Morehouse School of Medicine.

Panelists said future studies must take into account patients’ lifestyle, race and family history to accurately capture blood clot risk.

With the slogan, “beyond birth control,” Bayer’s advertisements pitched Yaz to women in their 20s as drug with “lifestyle” benefits over older contraceptives. One advertisements featured young women singing the Twisted Sister anthem, “We’re Not Gonna Take It,” while popping balloons labeled “moodiness,” “bloating” and “acne.”

Within two years of its marketing approval, Yaz had grown into the best-selling birth control pill in the U.S. with peak sales of $781 million in 2009, according to data from IMS Health. But sales plummeted from one million per month to about 200,000 per month after the company added information about studies that found a heightened risk of blood clots. Additionally, Bayer was forced to run corrective advertisements after the FDA said the company’s marketing campaign overstated Yaz’s effectiveness in treating premenstrual mood disorders, and used distracting music and visuals to downplay the drug’s side effects.

Earlier in the day, panelists heard more than a half-dozen patients or their family members who blame Yaz or Yasmin for sometimes deadly blood clots.

Cindy Rippee spoke about her last conversation with her 20-year-old daughter Elizabeth Rippee, who died Christmas Eve 2008 when a blood clot traveled to her lung. Rippee said her daughter had been taking Yasmin for about two months, after taking another birth control pill, Tri-Sprintec, for a year previously.

“My daughter was a very smart young woman. If Elizabeth had been clearly told that Yasmin had more risk, maybe twice as much risk, as other pills she never would have switched to Yasmin and would be here today,” said Rippee, of Escondido, Calif.

Rippee is among 4,000 to 6,000 plaintiffs suing Bayer in personal injury lawsuits pending throughout the U.S. court system.

Yaz and other drospirenone-containing pills accounted for 16 percent of the hormonal contraceptives used in the U.S. last year, behind Warner Chilcott’s Loestren, Johnson & Johnson’s Ortho Tri-Cyclen and several other oral contraceptives.

The FDA has not set a timetable for any changes in Yaz’s labeling. For now, many doctors say they don’t expect to stop prescribing the drugs anytime soon. They point out that the risk of blood clots with any birth control pill is still far lower than that associated with pregnancy and birth, when surging hormone levels and reduced blood flow dramatically increase the chances of clotting.

Studies suggest that 10 in 10,000 women taking the newer birth control pills will experience a blood clot, compared with 20 in 10,000 women who are pregnant or have just given birth.

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12/05/2011 (6:28 pm)

Merkel, Sarkozy seek new EU treaty to save euro

Filed under: money, term |

The leaders of Germany and France called Monday for a new European Union treaty to restore confidence in the euro currency and to ensure that the region’s debt crisis never happens again.

French President Nicolas Sarkozy said after a meeting with German Chancellor Angela Merkel that they would prefer a treaty agreed by all 27 members of the European Union but would also accept a treaty among just the 17 countries that use the euro.

The new treaty should include automatic sanctions for countries that violate rules meant to keep government deficits in check.

Investors cheered the two leaders’ comments, with the euro and stocks rising and bond yields dropping.

The meeting comes at the start of a crucial week for the eurozone, as it struggles to convince markets that it is able to solve its debt crisis.

Sarkozy said a jointly issued bond by all the countries that use the euro is not the solution to the continent’s debt crisis.

Many analysts have said that only by issuing bonds backed by the whole eurozone will Europe be able to save its shared currency.

Stronger countries, like Germany and France, have resisted those calls, but some thought that as the crisis worsens they might be forced to relent. Sarkozy reiterated Monday, however, that a common bond was “in no way” the solution to the crisis.

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