Maybe it's the Euro crisis that seems to have turned the brains of the European Union's (probably male) image-makers soft. You can hardly spend all week trying to bail out Greece, hang onto Spain and keep Germany from getting surly (never a good idea) without making a mistake or two somewhere else.
Private security guards on a cargo ship in the Indian Ocean hunts pirates.
The Anti-Counterfeiting Trade Agreement (ACTA) is secretly negotiated, instead of debated by elected politicians. More people need to be informed about this process – pass it on.
Berlin and the European Central Bank (ECB) are deeply divided over the best way to handle the Greek crisis. The dispute reached a new high last week: Should they pursue a soft debt restructuring or give billions of euros in loans for years to come? Influential Germans fear the threat of austerity measures could be greater than a «haircut» of Greek debt.
Source: Barron’s How to Fix Greece. HT: The Big Picture.
Earnings reports: Boeing, Conoco Phillips, United Technologies, Occidental Petroleum, United Continental, Valero Energy, U.S. Airways, General Dynamics, Rockwell Automation, Exelon, St. Jude Medical, WellPoint Health and Xerox.
Reports after the bell: Starbucks, Netflix, Symantec, Varian Medical, Logitech, Lam Research, Motorola Mobility, Citrix and ETrade.
Spain and Ireland to auction off state businesses in bid to calm markets.
Coverage from the Telegraph here.
“Norway may become Europe’s next investor haven as the region’s fiscal turmoil raises the appeal of debt and currency markets in an economy with the world’s smallest default-risk.”
Details are located here.
Google uses a smart legal structure to reduce its overseas tax bill; it has saved the company $3.1 billion since 2007 and boosted last year’s overall earnings by 26%. Since 2007 the rate has been 2.4 percent – lower than its peers in the sector:
“In Bermuda there’s no corporate income tax at all. Google’s profits travel to the island’s white sands via a convoluted route known to tax lawyers as the “Double Irish” and the “Dutch Sandwich.” In Google’s case, it generally works like this: When a company in Europe, the Middle East, or Africa purchases a search ad through Google, it sends the money to Google Ireland. The Irish government taxes corporate profits at 12.5 percent, but Google mostly escapes that tax because its earnings don’t stay in the Dublin office, which reported a pretax profit of less than 1 percent of revenues in 2008.
Irish law makes it difficult for Google to send the money directly to Bermuda without incurring a large tax hit, so the payment makes a brief detour through the Netherlands, since Ireland doesn’t tax certain payments to companies in other European Union states. Once the money is in the Netherlands, Google can take advantage of generous Dutch tax laws. Its subsidiary there, Google Netherlands Holdings, is just a shell (it has no employees) and passes on about 99.8 percent of what it collects to Bermuda. (The subsidiary managed in Bermuda is technically an Irish company, hence the “Double Irish” nickname.)”
A good piece on how globalized capitalism works, there. Full story from BusinessWeek here.
“When tory-leaning U.K prepares to impose some of the deepest spending cuts in a generation, it is doing so with the full throated support of London’s financial elite.”
Full update from the NY Times here.
The Columbia Business School-professor, makes the arguments in an updated edition of his book on the credit crunch, Freefall. In the new material, exclusively extracted in the Sunday Telegraph, he reveals his fears.
“The different needs of countries with high trade surpluses, particularly Germany, and those running deficits such as Ireland, Portugal and Greece, meant that the single currency was under intense pressure and may not survive. He suggests that one way to save the euro would be for Germany to leave the eurozone, so allowing the currency to devalue and help struggling countries with exports.
“Countries that share a currency have a fixed exchange rate with each other and thereby give up an important tool of adjustment,as long as there were no shocks, the euro would do fine. The test would come when one or more of the countries faced a downturn.”
“Industrial production in the U.S. rose modestly in August, about in line with expectations. Production is up at an annualized rate of 6% in the past six months, and has rebounded 9% from the lows of June 2009. As the top chart shows, industrial production has also rebounded all over the world since early last year, with the most notable rebound occurring in Japan.”
View more charts and thoughts on capacity utilization and monetary policy from Scott Grannis on his blog.