Billionaire investor George Soros said a fracturing of the euro area would have
South Korean consumer confidence fell to a three-month low in December, as concern the political outlook in the North will worsen in the wake of Kim Jong Il
+%3Cp%3E+As+expected%2C+BlackBerry+maker+Research+In+Motion+said+Thursday+that+it+had+a+miserable+past+three+months%2C+reporting+a+quarterly+profit+that+got+squeezed+by+slumping+sales+and+service+outages.%3C%2Fp%3E%3Cp%3EWhat+wasn%27t+expected+was+such+a+miserable+outlook+for+the+current+quarter.%3C%2Fp%3E%3Cp%3E%3Cp%3E%3C%2Fp%3E%3Cp%3E%3Cp%3E%3C%2Fp%3E%3C%2Fp%3E%3C%2Fp%3E%3Cp%3EThe+company+said+it+expects+to+earn+between+80+cents+and+95+cents+a+share+on+revenue+of+between+%244.6+billion+and+%244.9+billion.+That%27s+way%2C+way+below+analysts%27+profit+forecasts+of+%241.16+per+share+on+sales+of+%245.1+billion.+%3C%2Fp%3E%3Cp%3ERIM+also+said+it+expects+to+ship+just+11+million+to+12+million+BlackBerry+phones%2C+a+truly+disappointing+forecast+that+is+just+barely+higher+than+the+company%27s+smartphone+shipments+from+a+year+earlier.%3C%2Fp%3E%3Cp%3EMaking+matters+worse%2C+the+company+also+said+that+its+future+platform%2C+BlackBerry+OS+10+–+the+cornerstone+of+RIM%27s+turnaround+plans+–+will+be+delayed+until+late+2012.+The+company+says+it+is+waiting+on+the+development+of+a+special+chipset+for+its+new+devices.+%3C%2Fp%3E%3Cp%3EShares+fell+by+8%25+after+hours%2C+even+though+RIM+%28%29+had+already+warned+investors+two+weeks+ago+that+its+financial+results+would+fall+short+of+the+company%27s+earlier+expectations.+%3C%2Fp%3E%3Cp%3EThe+company+blamed+its+bad+third+quarter+on+lackluster+demand+for+its+new+PlayBook+tablet%2C+on+consumers+opting+for+cheaper+BlackBerry+smartphones%2C+and+on+its+three-day+service+outage.+%3C%2Fp%3E%3Cp%3E%26quot%3BThe+last+few+quarters+have+been+some+of+the+most+trying+in+the+history+of+this+company%2C%26quot%3B+said+Jim+Balsillie%2C+RIM%27s+co-CEO%2C+on+a+conference+call+with+analysts.+%26quot%3BWe+understand+shareholders+may+feel+like+we+let+them+down.+%5BCo-CEO%5D+Mike+%5BLazaridis%5D+and+I%2C+as+two+of+RIM%27s+largest+shareholders%2C+understand+that+sentiment.%26quot%3B%3C%2Fp%3E%3Cp%3EBalsillie+said+that+he+and+Lazaridis+have+decided+to+take+a+salary+of+just+%241+a+year%2C+effective+immediately.+Last+year%2C+both+made+%241.2+million+Canadian%2C+which+was+around+%241.15+million+U.S.+at+the+time.+They+also+each+took+home+a+%241.2+million+cash+performance+bonus.%3C%2Fp%3E%3Cp%3EDespite+the+terrible+results%2C+RIM%27s+co-CEOs+remained+upbeat+in+their+discussion+with+analysts.+BlackBerry%27s+user+base+grew+to+75+million%2C+up+35%25+from+a+year+ago%2C+they+pointed+out.+%3C%2Fp%3E%3Cp%3EThey+also+said+that+the+company+is+%26quot%3Bmore+determined+than+ever%26quot%3B+to+overcome+its+execution+challenges.+They+preached+continued+patience+and+said+that+RIM%27s+transition+to+new%2C+improved+BlackBerry+OS+software+will+slowly+gain+traction+–+once+it+finally+releases.%3C%2Fp%3E%3Cp%3E%26quot%3BWe+ask+for+your+patience+and+confidence%2C%26quot%3B+said+Lazaridis+on+the+call.%3C%2Fp%3E%3Cp%3EBy+the+numbers%3C%2Fp%3E%3Cp%3EThe+Waterloo%2C+Ontario-based+company+said+net+income+for+the+third+quarter%2C+which+ended+last+month%2C+fell+to+%24265+million.+That%27s+down+19%25+from+a+year+earlier.+%3C%2Fp%3E%3Cp%3ERIM%27s+results+included+a+one-time+charge+of+%24485+million+write-down+due+to+underperforming+PlayBook+sales+and+a+%2454+million+charge+for+the+outage.+Without+the+charges%2C+RIM+said+it+earned+%241.27+per+share.+Analysts+polled+by+Thomson+Reuters%2C+who+typically+exclude+one-time+items+from+their+estimates%2C+had+forecast+earnings+of+%241.19+cents+per+share.%3C%2Fp%3E%3Cp%3ERIM%27s+sales+in+the+quarter+rose+24%25+to+%245.2+billion%2C+missing+analysts%27+reduced+forecasts+of+%245.3+billion.%3C%2Fp%3E%3Cp%3ERIM+said+that+it+shipped+14.1+million+BlackBerry+phones+last+quarter.+While+RIM%27s+third-quarter+smartphones+shipments+were+in+line+with+the+company%27s+forecast+of+between+13.5+million+and+14.5+million%2C+RIM+said+phones+were+sitting+on+store+shelves%2C+as+it+sold+fewer+devices+to+end-users+than+it+had+expected.%26nbsp%3B+%3C%2Fp%3E++%3Cp%3E%3Ca+href%3D%27http%3A%2F%2Fmoney.cnn.com%2F2011%2F12%2F15%2Ftechnology%2Frim_earnings%2Findex.htm%27+rel%3D%27nofollow%27%3ESource%3C%2Fa%3E%3C%2Fp%3E+
LONDON/PARIS (Reuters) - A European summit deal to strengthen budget discipline in the euro zone failed to restore financial market confidence on Monday, forcing the European Central Bank to step in again gingerly.
The euro fell, stocks slid and borrowing costs for Italy and Spain rose as investors weighed the outcome of last week’s summit that split the European Union, with Britain blocking treaty change and forcing euro zone countries to negotiate a fiscal accord outside the Union.
Friday’s initial market rally petered out in less than 24 trading hours due to legal uncertainty surrounding the new pact and the absence of an unlimited financial backstop for the single currency.
French President Nicolas Sarkozy said the legal basis of a new accord to enforce debt and deficit rules in the 17-nation euro area with quasi-automatic sanctions and intrusive powers to reject national budgets would be worked out before Christmas.
“In the next fortnight, we will put together the legal content of our agreement. The aim is to have a treaty by March,” Sarkozy told newspaper Le Monde in an interview.
“You have to understand this is the birth of a different Europe — the Europe of the euro zone, in which the watchwords will be the convergence of economies, budget rules and fiscal policy. A Europe where we are going to work together on reforms enabling all our countries to be more competitive without renouncing our social model,” he said.
Traders said the ECB intervened to buy short-term Italian debt after yields on Italian and Spanish debt spiked. But ECB sources told Reuters last week that purchases would remain limited with a maximum ceiling of 20 billion euros a week.
There is no prospect of a “big bazooka” to shock the markets.
Despite the central bank dabbling, Italian 5-year bond yields shot up above 7 percent, widely seen as a danger level while 10-year yields spiked above 6.8 percent and Spanish 10-year yields topped 6 percent.
Investors’ appetite for short-term paper drove Italian one-year borrowing costs down just below 6 percent at an auction but yields remain uncomfortably high.
“Let’s not raise expectations too high, there will be more summits,” credit ratings agency Standard & Poor’s chief European economist Jean-Michel Six said.
“Time is running out and action is needed on both sides of the equation, on the fiscal and monetary side,” he told a business conference in Tel Aviv.
S&P has put 14 euro zone governments on watch for a possible rating downgrade in the coming weeks, arguing that the deepening debt crisis and looming recession will increase their potential liabilities and reduce their ability to cope with them.
If some of the euro zone’s ‘AAA’-rated members are downgraded, it would call into question the solidity of the euro zone’s rescue fund, which would likely suffer a similar fate fast cash loans.
“There is probably yet another shock required before everyone in Europe reads from the same page, for instance a major German bank experiencing difficulties in the market,” Six said. “Then there would be a recognition that everyone is on the same boat and even German institutions can be affected by this contagion.”
Interbank lending rates in the euro zone fell to their lowest level since May after the ECB threw cash-starved banks a lifeline last week by offering unlimited three-year liquidity to counter a credit crunch.
Political aftershocks from Friday’s historic rift between Britain and the rest of the 27-nation bloc continued to shake Europe on Monday with Prime Minister David Cameron facing tension in his coalition and doubts in the business community.
Cameron was assured of a hero’s welcome from Eurosceptics in his Conservative party in parliament but faced a backlash from his Liberal Democrat coalition allies when he explains a veto that has cast Britain adrift from its continental partners.
LibDem Deputy Prime Minister Nick Clegg said on Sunday he was “bitterly disappointed” with an outcome that would diminish Britain’s global influence and was bad for jobs and business.
In business, the chief executive of the world’s largest advertising group, Martin Sorrell of London-based WPP, told Reuters that Britain’s interests would be better serviced “inside the EU tent” than on the sidelines.
In Brussels, officials were groping for a strong legal basis for the planned fiscal compact, with Britain arguing that the euro zone cannot use the EU treaty institutions — the European Commission and the European Court of Justice.
European Economic and Monetary Affairs Commissioner Olli Rehn told Reuters most of the practical measures to strengthen budget enforcement could be implemented immediately under a set of rules known as the “six-pack” agreed in October.
Euro zone finance ministers may hold an extra meeting before the end of the year to try to nail down details of the agreement before their winter break, diplomats said.
The euro area faces the next potential crunch point in mid-January when Italy, which has a debt mountain of 1.9 billion euros or 120 percent of its annual output, has to start issuing tends of billions of euros in bonds towards a 2012 total of 340 billion euros needed to roll over maturing debt.
Michael Leister, rate strategist with German bank WestLB in Duesseldorf, said the summit outcome had done little to restore confidence in the absence of stronger central bank action.
“The question is will this help to stabilise sentiment? I don’t believe so, given that those comments from
Summoned by Congress, Jon Corzine embraced a bold strategy Thursday to distance himself from MF Global’s fall and $1.2 billion in missing clients’ money:
Answer each question. Be courteous. And don’t huddle with your lawyer before replying.
He said very little. Nevertheless, it was a risky strategy, even for a risk-taking financial executive. Anything Corzine might say could be used against him in a courtroom, should he ever be charged in the MF Global case.
Yet the former CEO of the securities firm never declined to answer questions by invoking his Fifth Amendment right against self-incrimination.
The one-time senator and New Jersey governor was subpoenaed by his former colleagues to explain how MF Global collapsed just over a month ago in the eighth-largest bankruptcy in U.S. history. It’s the first time in more than 100 years that Congress has subpoenaed a former senator to testify, according to Senate historian Don Ritchie.
Looking strained and speaking hoarsely during nearly three hours of testimony, Corzine said he never intended to break rules that require firms to safeguard client funds. He said he doesn’t know what happened to the missing money, but added that customers’ losses weigh on his mind “every day, every hour.”
He said several times that he did not become aware of the shortfall in client accounts until Oct. 30, one day before MF Global filed for bankruptcy following its disastrous bets on European debt.
“I’m not in a position, given the number of transactions, to know anything specific about the movement of any specific funds,” said Corzine, who took over as CEO more than a year and a half ago.
In his testimony to the House Agriculture Committee, Corzine sought to deflect blame for the company’s collapse, arguing that he inherited a firm already doomed by his predecessors’ bad financial decisions.
Legal experts said they were surprised by Corzine’s decision to answer each question, however vaguely, given the legal risks. The FBI and federal regulators are investigating MF Global.
It’s hard to see how the testimony will benefit Corzine, said Robert Mintz, a defense attorney in Newark, N.J., who specializes in white-collar cases.
Mintz said Corzine’s answers leave him open to “a barrage of questions about facts and circumstances that will no doubt be the subject of review by prosecutors and regulators.”
Two other congressional panels have also voted to subpoena Corzine.
His testimony provided his first public comments since the firm’s spectacular collapse. A lawyer who handles white-collar criminal cases accompanied Corzine and sat behind him during the hearing. But Corzine never turned to seek his advice.
The hearing wasn’t particularly confrontational, though a few members expressed disbelief that Corzine could be so detached as CEO.
Rep. David Scott, D-Ga., told him it strained belief “for you to sit there and say instant payday loans… you know nothing about” the missing customer money. A lot of farmers in Georgia need to know, Scott said. “The key to this is you. You’re the CEO.”
Corzine said he was confident that others at MF Global were checking daily to ensure that the firm’s money and clients’ fund were being kept separate.
“I simply do not know where the money is, or why the accounts have not been reconciled to date,” he said.
He said MF Global toppled, in part, because of a large quarterly loss caused by his predecessors’ accounting moves. Rating agencies responded to the loss by downgrading the firm’s credit rating, which panicked investors and trading partners.
“The marketplace lost confidence in our firm,” he said.
He disputed media reports that he personally pushed the company to make big, doomed bets on risky European debt using too much borrowed money.
He said he made the high-stakes bets only after discussions with company executives who traded European debt long before he arrived. And he said he reduced MF Global’s investment risks in some ways.
Some outside experts challenged some of his assertions.
Janet Tavakoli, an expert on the transactions MF Global specialized in, said Corzine’s remarks seemed to divert attention from the firm’s fundamental flaw under his leadership: It lacked the cash to cover its bets after investors started to fear that a major European nation would default.
“His entire testimony looks like a very skilled way to try to detract from that key issue,” said Tavakoli, president of Tavakoli Structured Finance.
Lawmakers have heard from farmers, ranchers and small-business owners who are missing money deposited with the firm. Agricultural businesses use brokerage firms to help reduce their risks in an industry vulnerable to swings in oil, corn and other commodity prices.
A Democrat, Corzine represented New Jersey in the Senate from 2001 through 2005. He later served a single four-year term as governor, losing a re-election bid in 2009. Before entering politics, he was CEO of Goldman Sachs.
Several class-action lawsuits on behalf of shareholders have been filed against Corzine and three other top executives, accusing the firm and its leaders of making false statements about MF Global’s stability.
Stephen Gillers, a professor at New York University School of Law, said lawyers typically advise clients in Corzine’s situation not to answer questions.
“When you answer a full day’s worth of questions, you’re committing yourself to a story that could come back to haunt you,” Gillers said.
Mintz added: “It only makes sense if your answers can satisfy those posing the questions. Short of that, the risks far outweigh the benefits.”
The chairman of the Federal Communications Commission has come out against the merger of cellphone giant AT&T and T-Mobile USA.
Julius Genachowski made his position known in a document he circulated to fellow commissioners Tuesday.
Genachowski recommended sending AT&T Inc.’s proposed $39 billion takeover of T-Mobile to an administrative law judge for review and a hearing. That’s what the FCC does when it opposes a merger.
According to an FCC official familiar with the matter, an agency analysis concluded the merger would result in higher prices for consumers, less innovation, less investment in the U.S. and fewer U.S. jobs.
The review also cast doubt on AT&T’s claim that only the merger would allow it build out “4G” high-speed wireless Internet access to cover 97 percent of the population, up from about 80 percent. The agency concluded AT&T would likely do so anyway to remain competitive with Verizon Wireless.
The official wasn’t authorized to speak publicly.
AT&T spokesman Larry Solomon said in a statement that the chairman’s action was “disappointing.”
“It is yet another example of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the U.S. economy desperately needs both,” he said. “At this time, we are reviewing all options.”
The FCC would be the second government agency to oppose the deal. The Justice Department filed a lawsuit with the U.S. District Court in Washington in August to stop it, and that trial is expected to start Feb. 13.
Genachowski’s proposed order recommends the administrative law judge begin the hearing after the trial is done.
The deal announced in March would vault the combined No. 2 carrier AT&T and No. 4 T-Mobile into the top spot ahead of Verizon.
Dallas-based AT&T has about 101 million wireless subscribers. T-Mobile, the Bellevue, Wash.-based subsidiary of Deutsche Telekom AG of Germany, has 34 million. Verizon Wireless, a joint venture between Verizon Communications Inc. and Vodafone Group PLC, has about 108 million, while Sprint Nextel Corp. has 53 million.
Fierce competition for top-tier credit card customers appears to be leading some banks to look in elsewhere for new business: borrowers with spotty credit histories.
Data shows that more new cards went to consumers with less-than-stellar credit scores in the third quarter, while fewer new cards went to those with the best scores.
In the three months ended Sept. 30, credit reporting agency TransUnion found that 25.2 percent of the new card accounts went to consumers with a score below 700.
That was up from 23 percent of cards going to riskier borrowers in the same quarter of 2010.
That translates into almost a quarter million more cards going to consumers who have had some trouble with credit in the past, according to Ezra Becker, vice president of research and consulting in TransUnion’s financial services business unit.
And since TransUnion found that the overall number of cards opened during the quarter was essentially flat from a year ago, that means those were cards that did not go to more creditworthy consumers. In fact, the number of new card accounts opened by borrowers with scores of 800 or better slipped to 45.9 percent, from 49.7 percent a year ago.
The findings were based on the VantageScore system for measuring creditworthiness developed by TransUnion and its peers Experian and Equifax as an alternative to the better-known FICO score. VantageScore says its system, which uses a scale of 501 to 990 and awards higher scores to the least risky borrowers, is used by the top five credit card issuers in the country.
Like FICO, VantageScore’s ratings are based a number of factors regarding an individual’s past use of credit, including their history of making on-time payments, keeping balances below credit limits and the length of their credit history.
Scores around 700 would merit a “C” on the VantageScore scale, which implies that those borrowers had some problems making payments or ran up balances in the past.
Opening up new credit to struggling consumers is an important step. A year ago, TransUnion said about 8 million people had left the credit card market in the prior 12 months, either by choice or because their cards were shut down.
The uptick in lending to consumers who have had trouble with payments in the past “counteracts everything that’s been happening in the last few years,” said Bill Hardekopf, CEO of the card comparison site LowCards.com. He noted that demand is high for consumers in that group because of the dearth of available credit in recent years.
Meanwhile, card companies have been pushing ever-more-enticing offers to consumers with the best scores _ beefing up rewards, trimming interest rates and lengthening the time for no- or low-interest balance transfers. About 80 percent of all new card offers go to those with the top credit scores, according to market research firm Synovate.
But those same top-tier borrowers aren’t trying to open as many new accounts or increase their balances faxless payday advance. “They have plenty of credit available to them,” Becker said, noting that card users have been paying down their balances. In the third quarter, TransUnion found the average combined balance on bank-issued credit cards _ MasterCard, Visa, American Express and Discover_ fell 4.1 percent to $4,762, from $4,964 last year.
Data from credit card companies also shows that while the most affluent consumers are using their cards more, they’re also paying off their balances in full each month.
That means that to increase profits in their card businesses, banks need to find new borrowers who will pay higher interest rates and are more likely to carry balances each month.
“If financial institutions are going to grow, eventually they’re going to have to dip their toes into the water of riskier borrowers,” said Greg McBride, senior financial analyst for Bankrate.com, which tracks credit offers.
Another factor that’s likely playing into more willingness to lend to consumers with lower scores is that there are more individuals on the riskier end of the scale due to the lengthy economic downturn, high unemployment and ongoing foreclosure crisis, noted Bruce McClary, a spokesman for ClearPoint Credit Counseling Solutions. “Sooner or later the people who got bumped out of the credit world have to start re-establishing credit,” he said.
One problem is that the increase in higher-risk borrowers also had an immediate impact on the rate of late payments during the quarter.
TransUnion found that the rate of payments late by 90 days or more _ known in the industry as the delinquency rate _ rose to 0.71 percent, from 0.60 percent in the second quarter.
That’s still down from 0.83 percent in the third quarter a year ago, and a long way off from the 1.32 percent peak in delinquency recorded in the first quarter of 2009.
Although the delinquency rate in the third quarter was still below the historical norm _ the second-quarter rate was the lowest seen since 1994 _ it marks the first quarter-over-quarter increase in almost two years.
“When you have such low delinquency, there’s generally only one direction you can go,” Becker observed. Plus, lenders must take risks if they want to earn anything. If lenders wanted to achieve zero delinquency, he said, they would have to stop lending.
The expansion of new card offers to riskier borrowers also present an interesting bit of timing for the industry, notes Hardekopf.
Card companies “want to get these cards in their hands so they have the ability to use them during the holiday season,” he said. “The time when we all put more on our cards is the fourth quarter.”
Italian Premier Silvio Berlusconi has won a much-watched vote in Parliament but it shows he can no longer count on an overall majority in the Chamber of Deputies.
In parliament, 308 voted in favor, 321 abstained and no one voted against.
The opposition immediately demanded that Berlusconi resign to calm financial markets, although he has always refused those calls.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP’s earlier story is below.
ROME (AP) _ Premier Silvio Berlusconi geared up for one of the most critical votes of his long political career Tuesday, as his main ally urged him to resign and Italy’s political uncertainty rocked financial markets for yet another day.
Berlusconi did not immediately respond to the demand, but he has repeatedly resisted all calls for his resignation before his term ends in 2013.
Berlusconi’s government is under intense pressure to enact quick reforms to shore up Italy’s defenses against Europe’s raging debt crisis. However, a weak coalition and doubts over Berlusconi’s leadership have ignited market fears of a looming Italian financial disaster that could bring down the 17-nation eurozone and shock the global economy.
“We asked him to step aside, take a step to the side,” Northern League leader Umberto Bossi told reporters ahead of a key vote in Parliament that could force Berlusconi’s resignation. Bossi is the volatile ally who also brought down Berlusconi’s first conservative government in 1994.
On the face of it, Tuesday’s vote is just a routine measure to approve 2010 state finances, but it has now become a test of Berlusconi’s political strength.
Italy’s center-left opposition said it would abstain in Tuesday’s voting, to make it clear just how fragile Berlusconi’s forces in Parliament are. If he is backed by fewer than 316 deputies _ or less than half of the 630-member chamber _ it would show the prime minister can no longer count on a majority in the lower house of Parliament, even though the government could still mathematically win the vote.
Bossi said the man Berlusconi has already picked as his successor, former Justice Minister Angelino Alfano, should now lead the government.
But it would be up to the Italian president, Giorgio Napolitano, to decide whether to appoint a new leader or dissolve parliament and call early elections. He would likely sound out political leaders before deciding.
Added Bossi: “Today, nothing will happen.”
Italy is the eurozone’s third-largest economy, with debts of around euro1.9 trillion ($2.6 trillion). Representing 17 percent of the eurozone’s gross domestic product, it is considered too big for Europe to bail out like the continent already has done for Greece, Portugal and Ireland.
Even worse, a substantial part of Italy’s debt needs to be rolled over in the next few years _ the nation needs to raise euro300 billion ($412 billion) in 2012 alone _ just as interest rates for it to borrow have been soaring.
Italy’s borrowing rates spiked Tuesday to their highest level since the euro was established in 1999. By mid-afternoon, the yield on Italy’s ten-year bonds was up 0.08 percentage point at 6.62 percent, down from an earlier high of 6.74 percent. A rate of over 7 percent is considered unsustainable and proved to be the trigger point that forced the other three eurozone nations into accepting financial bailouts.
Even the business leaders who once enthusiastically backed the media mogul’s leadership have been upset for months, saying Berlusconi’s government has failed to revive Italy’s stalled economy.
“(Italy) cannot go forward” with the soaring spread. “The country cannot stay in these conditions,” said Emma Marcegaglia, who leads a politically influential Italian business lobby.
The opposition center-left has long demanded the 75-year-old leader’s resignation, citing sex scandals, criminal prosecutions and legislative priorities it says are aimed at protecting his own business interests rather than those of the country. However, it has failed to come up with a leader who can unite the opposition.
Berlusconi appeared to be frantically trying to line up vote after vote, with at least two party dissenters visiting his Rome residence Tuesday as parliament resumed debate ahead of the vote.
One, lawmaker Isabella Bertolini, told reporters upon leaving she would vote in favor of the government. She said Berlusconi had laid out for her “all the possibilities and options that he’s evaluating: Stay, step back, step aside.”
Finance Minister Giulio Tremonti hurriedly left a eurozone finance ministers meeting in Brussels to get back to Rome for the vote.
But at least one deputy from Berlusconi’s People of Freedom Party won’t be there. Lawmaker Alfonso Papa, who is being investigated in a corruption scandal, is under house arrest.
If he gets through Tuesday’s hurdle, Berlusconi has indicated next week’s vote on the austerity measures would be a confidence vote. If it loses that, he would have to resign.
Antonio Di Pietro, a leader of a small center-left opposition party, told Sky TG24 TV that Berlusconi’s “political adventure has been over for a while now.” However, he doubted that Berlusconi would voluntarily leave.
One of Berlusconi’s closest allies, lawmaker Francesco Cicchitto, told reporters that coalition leaders will take stock immediately after the vote.
“One thing at a time. First the vote, let’s let it happen. Then we’ll reflect,” he said.
International financial officials and the markets, meanwhile, fretted over how long it was going to take for Italian lawmakers to approve measures promised weeks ago by Berlusconi to rein in Italy’s galloping public debt.
“I’m not making any judgment on Mr. Berlusconi personally. But I think there is a problem of confidence,” French Foreign Minister Alain Juppe told French radio RTL.
During a G-20 summit last week, Berlusconi had to take the humiliating step of asking the International Monetary Fund to monitor the country’s reform efforts. On Wednesday, a separate European Union monitoring mission is to begin work in Rome to review financial reforms taken so far.
Who feels like a panini?
Sorry, this column isn’t about the panini you eat, rather the one you are — that is if you are a member of the sandwich generation with aging parents or other family members who need assistance and children, often into their mid to late 20s, still partially or completely dependent financially.
In 2002, Statistics Canada estimated that 2.6 million Canadians between the ages of 45 and 64 had children under 25 living with them and approximately 27 per cent of them were also providing some kind of elder care. After the financial collapse and recession the trend has accelerated.
Many of my friends are being sandwiched, as am I. My youngest daughter, nearly 26, is deaf. She’s still at college and may require financial help for some time to come. Until recently, my parents also needed considerable care. My mother died in 2009 and, fortunately, my father is relatively healthy and able to live in a nice retirement home. But now and then, the needs of daughter and father collide with my own busy life and I feel pulled in a dozen directions.
Most of those sandwiched between two generations are baby boomers, the first of whom started collecting their old-age pension in 2011. The advancing wave of this group is bringing with it a whole set of new financial challenges. “My daughter and son have student loans of $42,000 between the two of them. Despite their best efforts they’re semi-employed and living in an expensive city (Toronto),” Helen, 59, emailed recently. Helen is widowed and lives in a small northern Ontario town where jobs are limited. “I have enough to retire in a couple of years but not if I help them, especially if their situations don’t improve pretty fast. But I can’t see turning my back on them.”
The choices being forced on the sandwich generation often leave the caregivers feeling damned if they do or don’t. Should I stop RRSP contributions to help my family? Do I postpone my retirement? Will my employer let me go if I take time off to care for my parents? Should I withdraw from my savings? Do I kick out my kids so I can downsize?
Many of the difficulties facing sandwiched boomers are magnified for entrepreneurs. Even with great employees the buck stops with the boss and stepping away is rarely a satisfactory option.
Winnipeg-based bestselling tax author and president of the Knowledge Bureau, Evelyn Jacks juggled a successful business while being the primary caregiver of two ailing family members and also involved with the care of two others. All four died over an 18-month period. “Caring for the sick and the dying is difficult and exhausting and so sharing the journey with your support network is very important,” she says in retrospect.
“A strategic, consistent and all-inclusive communications plan within the family is very important. When everyone stays in the loop in an orderly way — we used email a lot to cover all the time zones — everyone can seamlessly step in as required. It also means everyone needs to work hard to stay healthy — physically and emotionally — in very stressful times.”
Being sandwiched between the needs of two and sometimes three generations isn’t a new phenomenon. My parents brought “the grannies,” as we called them, from England while I was young. One drank like a fish and gave away money to whomever asked and the other frequently wandered off only to be found settled on someone’s porch happily singing “It’s a Long Way to Tipperary”.
But the extended care-giving facing the boomers is unique because this generation is so large, our parents are living longer and our children carry a far higher student debt load than past generations. According to a 2010 Vanier Institute of the Family Study, university graduates have $18,000 in student loans, not including family debt or lines of credit.
To compound the problem young adults are also earning less relatively. Statistics Canada figures show that the wages of those 20 to 34, across all levels of education levels declined significantly in the 1980s and the trend has continued to present day, though at a slower pace.
These financial and emotional stresses prompted Credit Canada, the country’s leading not-for-profit credit counselling charity, to choose the sandwich generation as the theme for its fifth Credit Education Week — part of November’s Financial Literacy Money, which kicks off on Nov. 14.
“Credit Canada has seen more and more people trying to support their children and aging parents who don’t have the income to support themselves while struggling to pay their own bills including their children’s education,” notes executive director Laurie Campbell.
Credit Education Week Canada has published a very useful magazine, The Sandwich Generation. Among some of the do’s and don’ts to avoid being crippled emotionally and financially:
1. Set up a power of attorney
2. Update wills and ensure health-care directives are in place
3. Consolidate the debts and assets of the elderly to make management simpler
4. Don’t bleed your own savings, especially RRSPs, or increase your debt load (except in the direst circumstances) for the young or the old
5. Don’t allow unemployed kids to hang out at home doing nothing.
6. Don’t excuse siblings or other relatives from their responsibility
NYSE Euronext on Thursday said the summer’s unusually heavy trading helped lift third-quarter profit by 56 percent.
The owner of the New York Stock Exchange and other operations reported net income of $200 million, or 76 cents per share, for the three months ended Sept. 30. That compared with net income of $128 million, or 49 cents per share, in the year-ago quarter.
Adjusted for costs related to the planned combination with German exchange operator Deutsche Boerse, a one-time tax benefit in Europe, and other items, profit came to 71 cents per share.
Revenue rose 20 percent to $1.26 billion, from $1.05 billion last year.
Analysts, on average, were expecting profit of 69 cents per share on revenue of $701.8 million, according to data provided by FactSet.
The strong results come as the exchange awaits a decision by European regulators on the $10 billion all-stock deal to create the world’s largest exchange operator that was announced in February.
The two companies reportedly have until Nov. 17 to address objections from the European Union’s competition watchdog that center on the potential for the combined company to potentially dominate the trading of derivatives, a very lucrative business for exchanges. Derivatives are complicated financial products that allow investors to bet on developments in things like commodity prices or interest rates.
CEO Duncan L. Niederauer said in a statement accompanying the results that the companies recently took part in a hearing before the EU regulators. “At the hearing, both companies were able to crystallize the compelling nature of our merger, which will bring significant benefits to customers, regulators and intermediaries.”
A decision on the deal is expected by late December. The two exchanges have stated the goal of completing the deal by the end of the year.
In conjunction with the deal, both companies last week announced plans to coordinate stock repurchases. NYSE Euronext it will buy back up to $100 million of its stock shares, while Deutsche Boerse AG said it would repurchase shares valued at around 100 million euros ($141.2 million). The two programs will take place simultaneously to preserve the ownership percentages of 40 percent and 60 percent to be held by former NYSE Euronext and Deutsche Boerse shareholders, respectively, in the combined company.
During the third quarter, trading volume on NYSE Euronext exchanges in both the U.S. and Europe surged amid the worst quarter for the markets since 2008. The European debt crisis, the U.S. debt ceiling debate and fears of another recession fueled the volatility.
The higher volume pushed up revenue from derivatives trading by 20 percent to $226 million. Average daily volume of global derivatives rose 33 percent to 9.3 million contracts.
Revenue from cash trading and listings gained 18 percent to $353 million. Average daily volume in Europe surged 40 percent to 1.9 million transactions. Average volume in the U.S. rose 9 percent to 2.6 billion shares traded.
During the most quarter, the New York Stock Exchange led 11 initial public offerings in the U.S., raising $3.2 billion.
The company’s revenue from information and technology services increased 11 percent to $125 million during the quarter.
Cost-cutting measures also helping NYSE Euronext’s results during the quarter.
Excluding merger-related costs, operating expenses slipped to $416 million, from $419 million last year. Excluding the impact of acquisitions, new initiatives and a $10 million negative impact attributable to foreign currency fluctuations, fixed operating expenses dropped 5 percent, the company said.
NYSE said it expects to meet its full-year guidance for operating expense of less than $1.65 billion, excluding merger expenses and exit costs. Factoring in certain portfolio changes and the impact of currency fluctuations, full-year 2011 expenses are expected to be about $1.68 billion.
In afternoon trading, NYSE Euronext shares gained 95 cents, or 3.7 percent, to $26.48. The stock is down 12 percent for the year.
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