Category: World

Lagarde woos Saudis, says debt top IMF target for her | Reuters

French Finance Minister and IMF candidate Christine Lagarde said on Saturday tackling sovereign debt troubles would be a priority of the International Monetary Fund if she led the Washington-based rescue lender.  Lagarde, competing with Mexican central bank chief Agustin Carstens, was in Saudi Arabia as part of a world tour where she needs to drum up support among emerging market economies for her IMF candidacy.

South Africa’s Trevor Manuel ruled himself out of the race for the IMF’s top job on Friday, making Lagarde an even firmer favourite, although she remains under threat of a judicial inquiry in her home country. Lagarde is backed by the European Union and a handful of smaller countries from Georgia to Mauritius. Paris is hopeful that Washington and Beijing will also stand behind her.

Brazil, Latin America’s biggest economy is leaning towards supporting Lagarde but has not yet made up its mind, officials said on Friday. Lagarde said that the IMF should also support countries affected by the pro-democracy protest movement sweeping North Africa and the Middle East.

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Lateral Thinking | 05/04/2011

The BOJ ( Central Bank of Japan ) answered the question that nobody does. What is causing the rally in Commodities :

“While the strong increase in commodity prices has been driven by global economic growth propelled by emerging economies, speculative investment flows into commodity markets have amplified the intensity of the price surge. The dynamics of global commodity prices has been changing as well, in accordance with the growing presence of financial investors in commodity markets. The entry of new financial investors has paved the way for the “financialization of commodities”. Consequently, global commodity markets have become more sensitive to portfolio rebalancing by financial investors, which has made commodity markets more correlated with other asset markets, including major equity markets. Furthermore, globally accommodative monetary conditions have played an important role in the surge in commodity prices, both by stimulating physical demand for commodities and driving more investment flows into financialized commodity markets.”

So thank you Mr. Bernanke for such a wonderful job !!!

Global Hunger Needs Urgent Attention

A study commissioned by the UK government called for urgent attention into food security to avert global hunger. The Foresight Report on Food and Farming Futures said the current system had to be redesigned to address to end global hunger immediately. The study involved 400 experts from 35 countries, BBC reported. The study provides compelling evidence for the governments to act now.

The report stressed changes to farming were required in order to see that the464 increasing yields might not disturb sustainability of the agriculture sector. It recommended curbing of the resource-intensive food types and minimizing waste in food production. In next 20 years, the world population will reach 8.3 billion and 65-70 percent of the population will be living in urban areas. Increasing prosperity and population will increase food consumption, the report said.

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ICC Continues to Target Sudanese President

The Chief Prosecutor of the International Criminal Court continues to target Sudanese president Omar al-Bashir. He accused him of siphoning off up to $9 billion of his country’s funds. Luis Moreno Ocampo, the Chief Prosecutor of the ICC previously charged Mr Bashir with crimes against humanity in March 2009 based on which the ICC issued an arrest warrant on Bashir, a working president of the independent sovereign country, Sudan.

BBC News reported that Moreno’s allegation of siphoning off funds had originally become knownOmar al-Bashir after Wikileaks revelation. He said the court had "strong reason to believe that Bashir has a lot of money" held in personal accounts outside Sudan – but that he could not be sure of the precise amount, with estimates ranging from hundreds of millions of dollars up to $9bn.

In the leaked diplomatic cable, US diplomats report Mr Ocampo as saying that "Lloyd’s Bank in London might be holding or knowledgeable of the whereabouts of his money". However, Lloyd’s has denied holding any funds in Mr Bashir’s name, and in his BBC interview, Mr Ocampo agreed that the money was not held in a London account.

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Oil Prices Hit Post-Crisis Peak Levels

Article first published as Oil Prices Hit Post-Crisis Peak Levels on Technorati.

Oil prices are at its peak for the first time after the worst financial crisis since the great depression in1930s that erupted in September 2008 worldwide. Peak levels have been reached on both sides of the Atlantic Ocean i.e. in North America and Europe.

In Europe, Brent crude futures hit $91.58 per barrel while West Texas Intermediate in the US touched $89.35 per barrel, both being highest levels since the financial crisis of September 2008. However, these levels are well below the pre-crisis peak levels. Prior to the financial crisis, due to speculative bubble in House building sector, all commodities prices along with crude price were flying high in the sky. Brent Crude price was pushed up to $147.50 per barrel. oil prices

Factors of Crude Rally

There are several reasons that drove crude price to its peak level. Primary factors have been:

The relatively rising demand due to global recovery though not equalled with pre-crisis demand: This is a long-term factor assuming that a double dip does not occur. The US spent $1.7 trillion as part of “Quantitative Easing 1” that extended unemployment benefits, reduced tax rates for both corporates and consumers and increased liquidity in the market and absorbed toxic mortgage housing loans that became biggest impediment for post-crisis growth of the economy. In addition to this, the US government announced QE2 programme i.e. second stimulus programme in November to buy treasury bonds thereby releasing more printed dollars into the economy. Reports are coming that the Fed is thinking of increasing QE2 money, originally set at $600 billion. If that happens, prices of all commodities including crude oil will increase further.

Cold weather in Europe: This is a short-term factor, which will last up to the end of winter season. All European countries are shivering with cold weather spread across Europe continent. Cold weather increases the consumption of fuel, which in turn increases fuel prices as demand increases.

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Hopeful of pact on G20 policy coordination – India

Reuters | Nov 11, 2010 | 3:18pm IST

Group of 20 nations should not be too demanding in respect to policy coordination because it has never been tried before, but eventually "some agreement" should be possible, India’s chief G20 negotiator said on Thursday.

G20 SeoulEfforts by several nations to hold down their currencies to prop up exports and growth and the U.S. Federal Reserve’s bond-buying spree blamed for the dollar’s weakening have spurred fresh calls for coordination of national policies.

But Montek Singh Ahluwalia told Reuters nations needed to be realistic in their expectations of what could be achieved. "The real issue is given that it is a problem, how do we coordinate policy? I don’t think you should be too demanding … because such policy coordination has never been attempted before," he said on the sidelines of a G20 summit. "I am hopeful we will get some agreement and I’m sure it will take time."

Germany and several other nations have hit out at a U.S. plan to consider setting specific limits on current account imbalances, while some countries, notably China, have come in for criticism for intervening in currency markets.

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Trichet says EU fiscal reform too weak for euro zone

Reuters | Oct 23, 2010 | 9:34pm IST

European Central Bank President Jean-Claude Trichet said on Saturday that new European Union fiscal rules pushed by France and Germany were too weak to safeguard the euro zone. EU finance ministers agreed on Monday to toughen the bloc’s budget rules to prevent future sovereign debt crises after an agreement struck in France between President Nicolas Sarkozy and German Chancellor Angela Merkel, which diluted initial plans.

TrichetGerman magazine Spiegel reported that Trichet had warned French and German officials at Monday’s meeting of European Council President Herman van Rompuy’s taskforce on fiscal reform, that their actions could threaten the coherence of the euro zone. However, Trichet said he had simply stuck to the ECB’s position that semi-automatic sanctions were required to ensure the efficacy of any fiscal pact for the 16-nation currency bloc.

"All that I have said … was that I did not subscribe to all elements of the report by the taskforce," said Trichet, who was himself a member of Van Rompuy’s group. Trichet said there was a huge difference between measures which were appropriate for the 27-nation European Union, and those which would bring stability to the 16-country euro zone, which shares monetary policy and institutions.

"The proposal which was agreed by the Commission and the Van Rompuy taskforce report is only appropriate for the 27. For the 16, we think that it could be more ambitious," Trichet said. The ECB had originally called for semi-automatic punishments for countries running up large deficits, including stopping access to European funding and aid.

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