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ECONOMICS – FINANCE – WORLD NEWS – GREEK DEBT

EU getting ready to pay, China-Japan conflict boosts German car production

There won’t be a news brief tomorrow and Wednesday, 09/10 October 2012.

Hugo Chavez won another six-year term in Venezuela’s national elections held on Sunday. By the end of the new term, he will have been in office for 20 years. Chavez is planning to step up effort to nationalize companies in areas like finance, nutrition and healthcare. Prior to Sunday’s elections, Chavez underwent cancer treatments in Cuba; his illness may pose a threat to his upcoming term as president, commencing on January 10. read article

The Eurogroup of Finance Ministers is meeting today to officially launch the ESM, concluding the day with a press conference in the evening. The second bailout fund will hold €80bn paid-in capital (mostly by Germany, as we know), with €620bn of callable capital, which will be used as a base to borrow money in the public markets, reaching full capacity in 2014. The focus of the meeting will be next steps for Spain and possible the progress of Greece, where Angela Merkel and an army of 7,000 policemen will observe the situation tomorrow. read article

Following last month’s conflict between China and JapanToyota, Honda and Nissan are cutting their production targets for Chinese plants by about half until further notice, due to a slump in Chinese demand. In direct response, sales for South Korea’s Hyundai rose 15%, while German brands Audi, BMW and Mercedes-Benz rose 20%, 55% and 10% respectively last month. read article

Also in ChinaHan Hoi Precision Industry, a subsidiary of Foxconn that assembles iPhones, iPads and other Apple products, is the bullseye in a labor rights dispute that is igniting in China. Foxconn employs 1.2 million people in China, some of which were involved in a strike last week Friday. The strike regarded increasing working hours and quality assurance, was supported by China Labor Watch and involved employees working on the new iPhone 5. According to WSJ:

Labor groups have criticized Hon Hai for its work practices after several workers at the company’s massive manufacturing base in China jumped to their deaths in separate incidents in 2010. Hon Hai has since increased salaries and outfitted worker dormitories with safety nets in an effort to prevent such incidents.

In the US, earnings season is starting tomorrow evening with Aluminum producer Alcoa. Expectations are depressing and will underline the poor performance of the Western economies despite government efforts to boost growth. But a quarter doesn’t make a year, according to the FT, “S&P 500 companies are on course for record cash profits in 2012.”

Also in the news, Google is tapping into its massive cash reserves and will launch its own credit card. The card will be exclusively linked to its AdWords business and make it easier for clients to purchase advertising space. This is following Amazon’s announcement to make loans to their vendorsread article

Otherwise, applications for the position as Governor of the Bank of England have closed. Alphaville considers the contestants Paul Tucker and Lord Turner.

So long.
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