Experts are afraid of a new crash at the stock exchange!

It was certainly the biggest depression since the crisis in the 30’s but now we see a growing gap between the evolution of the stock exchange and the economic activity. The investors are too enthousiastic about the economic growth and when they will notice their mistake, professor Roubini expects a correction (a new decrease) of the stock exchange. Last week the stock exchange fell by 2% because the American production didn’t increase fast enough. Investors stay uncertain about a new growth and Michael Georghegan, magnate of the giant bank HSBC, is even more pessimistic, he doesn’t only see a new decrease at the stock exchange but also a further fall in the whole economy.

De Standaard

Matthias Goeminne

Boxing camp in Fortis Bank

Can you imagine to lose almost everything you own, to live with a lack of money and still stay calm and rational under these circumstances? Allow me to tell you that this is exactly what happened to quite a few shareholders from Fortis bank and insurance, when the shares plummeted to almost zero.
Some of the victims, overwhelmed with feelings of anger and disappointment and certain that they had been betrayed, couldn’t bear this situation any longer and therefore threatened and even physically attacked their investment advisors, who now live in a constant fear to go back to their work. But we mustn’t forget that ‘we shouldn’t fight a battle if we don’t gain anything by winning’, like Erwin Rommel once said.

Joost Dumeez

Down under interest rates rise

Interest Rates in Australia have been raised by the central bank to 3.25%, a rise by 0.25 percentage point. According to Glenn Stevens, the bank's governor, the rise is due to stronger economic conditions than expected. Australia's banking system has held up well, national banks avoided subprime lending with the result that some banks made profits during the financial crisis. Due to its financial health, Australia's trading position with China is flourishing, now being its largest trading partner.

source: The Economist

Joren Mertens

Fortis group selling Fortis Luxembourg

Fortis has decided to sell its activities in Luxembourg to a Swiss insurance group, La Baloise, for €23 million. Fortis recently stated that all of its activities are to meet certain criteria, such as being sizeable enough to considerably contribute to the bigger picture of Fortis’ insurance profits. In light of these criteria, they assessed that the €22 million that the Luxembourg division was earning in 2008 wasn’t good enough to keep.

Dimitri Martens

Source

How To Play A Recovering Economy

If we can believe Ben Bernanke - he claims that the recession is likely over - the moment has come to invest in high-end retail stocks.

In the last months, people had to adapt their consumer spendings because of the worldwide recession. But, if the economy recovers, people will be able to consume more money, with as result rising retail stocks. The Producer Price Index indicates that the sector is going in the right direction, maybe also you have to take your chance?

Koen Flament

Forbes

Puppy love between Kyoto and economic crisis

Thanks to the persisting recession, the world carbon dioxide emission, which accounts for about 63% of greenhouse gas emissions, could decline by 3% this year. A recent study of the International Energy Agency (IEA) revealed the surprising, pro-Kyoto news. According to Fatih Birol, an expert in economics of this organization, it would be the largest downfall in 40 years. An average year in normal economic conditions counts for a 3% increase instead of the predicted decrease. Apparently the economic crisis might have positive consequences after all!

http://www.tijd.be/nieuws/economie-financien/-CO2-uitstoot_tot_3-_lager_door_crisis-.8241249-600.art

Charlotte De Waele

Wanted; 53 billion euro

According to JP Morgan’s study which appeared in L’Echo, financial institutions need 53 billion euro to pay off their debts.

To confirm to the recommendations of Basel 2, financial institutions have to come up with 78 billion dollar, or 53 billion euro. This deficit is a global problem because we are talking about financial institutions in whole Europe; Germany, Ireland, France even Belgium. KBC Belgium needs 2.2 billion euro to be free of their debts, what JP Morgan can see happen in a period of 2 years.

Hannah Merki

http://www.hln.be/

Aviva announces flotation Delta Lloyd

Yesterday, the British insurer Aviva announced that it would raise over £1.3 billion through a partial flotation of Delta Lloyd, its Dutch subsidiary.
Aviva aims to float between 30 and 40% of Delta Lloyd by next month on the Euronext stock exchange in Amsterdam. Aviva owns 92% of the Dutch group, which is valued at about £4 billion, and its market value at flotation is expected to be similar to this amount. The IPO (Initial Public Offering) would allow Britain’s largest insurer to reallocate capital and to make acquisitions in both the UK and overseas; for Delta Lloyd the new shareholder base would further bolster growth in the Benelux region.

Times Online

Fran De Vriendt

Economic crisis is Mother Nature’s best friend

It seems that Belgium will be able to achieve the Kyoto norm as a result of economic crisis. Some companies had to reduce their production which automatically led to a lowered CO₂-emission. Although this seems great news at first sight, the BBL thinks it will have negative side-effects in the long term. The crisis eliminates any chance of investments in technologies of a higher energy efficiency level.

source

Guillaume Kindt

Dollar will be replaced as monetary unit for oil

According to the British newspaper "The Independent" Russia, France, Japan, China and the Arab Gulf States are considering to replace the Dollar as monetary unit for oil by a basket of currencies. This basket would then contain some of the more important currencies of this moment, like the euro, the yen, the Chinese yuan and the future single curency of the Arab Gulf States. Gold could be used as a transitional currency in anticipation of getting off the dollar. The head of the Saudi central bank, Mohammed al-Dschassir, however, has declared that Saudi Arabia has never even considered this.

Ruben De Schrijver

De Standaard

Developing countries get more voting power in IMF

Since the foundation of the International Monetary Fund in 1945 the organization has been criticized for numerous reasons, one of them being the way in which members obtain their voting power. At the moment this is still determined by the height of the monetary input of a member country. Given the fact that poor countries have more to suffer from the raging crisis this voting distribution doesn’t work anymore. Now the organization, which relies on this monetary input, is willing to shift five percent of voting power currently hold by rich countries to developing countries, a process that will take a lot of time.

Joeri Maes

More details can be found here.

Augmentation in Forged Euro Notes

The European Central Bank (ECB) has announced a rise in forged Euro notes in the first half of this year.

413,000 forged notes were detected and were withdrawn from circulation. That is a rise of 17% compared to the second half of 2008.

According to the ECB, this is all due to a big spread of certain types of counterfeit money.

This means there is an augmentation in existing types of forged notes, not an augmentation of new types of counterfeit banknotes.

Considering the total amount of euro notes in circulation -12.5 billion euros- the amount of forgeries stays modest according to the ECB.

Data Source: ECB

Article Source: Knack

Matthias De Smet

BNP trying to bypass government rulings.

Bnp Paribas announced a rights issue in order to pay off its debts to the French government rather than accepting the governments bail-out scheme. After the Pittsburg-meeting, which made clear that higher capital ratios would be demanded in the near future, the turmoil amongst banks has increased and most of them are trying to find a way out of the government’s regulations. To avoid government interference in bank policies, BNP is the first in Europe to announce a rights issue, after two Italian banks had already refused state aid.
Many other banks, like Société Générale, are expected to follow the lead of the second-biggest bank in Europe in the near future.

Laura Langenaken

Financial Times

Gold price reaches a peak

A new record was established as gold prices in London and New York rose up to 1036,30 and 1038 dollar per ounce, breaking the 1033,9 dollar record of March 2008 and reaching the highest gold price in history. According to specialists, the main reasons for this high demand for gold are the speculations of increasing inflation caused by the frequent money injections of the central bank. Furthermore the value of the US dollar continues to decline. This causes investors looking for stability to turn to gold as a safe investment.

De Tijd

Koen Lauryssen

Belgium loses popularity in the global economy

A recent report of IBM shows that the number of foreign investments made in Belgium fell down from 240 projects to 192 projects in 2008 and an even bigger decrease is seen in employment statistics: in 2007 there were 10,000 jobs created by foreign investments whereas only 6,700 in 2008. In comparison to the rest of the world Belgium is doing worse concerning job creation and therefore dropped from place 27 to 33 on the Global Location Trends index. Striking news is that the companies, mainly from the US, Germany and the Netherlands, invested more in the metal and chemistry industry than in informatics, biotechnology, services and the pharmaceutical sector. There are also a few geographical differences, two-thirds of the investments went to the Flemish part of Belgium, where Antwerp and not Brussels is the most popular.

DeMorgen

Nathan Goddefroy

The end of US supremacy?

It seems to be we are heading for a multi-polar world. This past year it became clear the absolute power of the United States has begun significantly to decline. The US economy has been in recession for almost two years, while emerging economies have grown.. “The US economic power is declining as a result of the financial crisis” the head of the World Bank has said. The loss of US economic power has also political consequences. The Group of 20 including emerging economies, appears to have replaced the G7.

BBC
moneyweek
Reuters

Joachim Faingnaert

Michael Moore, critic or storyteller?

The controversial film producer Michael Moore went looking for who to blame for the economic crisis. In his new documentary Capitalism: A Love Story, he criticizes or mocks –depending on the source- the American (merciless) greed. He visits the common man as well as the banking industry on his quest for the truth. Will he or will he not succeed in clearing out the dense fog hanging over Wall street?


Julie De Smedt

The Washington Post