June 21st, 2012
07:43 PM GMT
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London (CNN) – Controversial and caddish to some, funny and forthright to others, former Italian Prime Minister Silvio Berlusconi is arguably the most high profile scalp claimed by the eurozone crisis so far.

Whether it was the ‘Bunga Bunga’ scandal or the unbalanced budgets that booted the former cruise-ship crooner out of office remains a point of discussion.

One thing you can’t argue with however is that eurozone membership has robbed Italy of its traditional tool for tackling boom and bust cycles: The currency devaluation.

Cue Berlusconi, who Italians often call "Il Cavaliere." “Leaving the euro is not blasphemy…” writes the 75-year old on his Facebook page.

"What would happen if Italy, Spain or Greece went back to their old currencies? I don't know, maybe there would be a loss of wealth but I don't understand why," Berlusconi later told Italian news agencies.
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May 1st, 2012
04:20 PM GMT
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Delta Airlines' decision to buy an oil refinery has caught the imagination. It seems to make a lot of sense and if the numbers actually come true it will look like a stroke of genius.

Delta says that it could get savings of $300 million a year by cutting out the middle man and refining its own jet fuel, all for the cost of one medium-size new airliner. It sounds like a no-brainer so I put the question to a CEO of an Asia airline: did he think that individually or as a group that Asian airlines would get together to look at a similar arrangement.

It does make some sense. According to Cathay Pacific Airways, fuel costs accounted for 41.5% of total operating costs last year. That's a lot higher than the 30% average for global airlines. The reason why Cathay and other Asian arilines have proportionally higher fuel bills is that they are mainly long-haul operators, and the fuel component of a long-haul flight can be twice as high as a short-haul flight - 60% fuel cost on long-haul versus 30% on short haul.

Fuel costs were the main reason by long-haul budget airline AirAsia X to cut back its services. Its short-haul flights are still performing strongly.

But buying a refinery is not on anyone's agenda among Asian airlines. Not yet at least. But what is on the radar relating to fuel costs is fracking - the process of extracting gas and oil through hydraulic pressure fracturing of rocks. It has revolutionized the gas industry in the U.S. Gas prices are at a 10-year low, prompting oil-energy users such as power companies to look at switching to gas-fired plants, a relatively easy transtition.

As oil users switch to gas, airlines are hoping there could be a knock-on effect to the price of oil as demand starts to fall. It may be a long shot at this stage, but in the airline industry it's one of the very few bright spots on an otherwise bleak outlook for controlling one of the biggest costs in the business.



April 2nd, 2012
01:49 AM GMT
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(Image: Getty Images)

(CNN) – It was a storybook finish at the world’s richest horse race. After a six-year drought on his home turf (actually a synthetic surface called Tapeta), Sheikh Mohammed bin Rashid Al Maktoum watched with a royal smile that could light up the Meydan Grandstand at the racing venue he built on the outskirts of his emirate Dubai.

Monterosso, ridden by the French jockey he personally picked, Mickael Barzalona, cruised to victory in the $10 million Dubai World Cup. In a CNN interview right off the winner’s circle at Meydan, the Ruler of Dubai and Prime Minister and Vice President of the United Arab Emirates told me, “My heart was in my throat at that time and I didn’t know what to say but thank God we won it and everybody has won - all of the country - I’m double happy now!” FULL POST



January 23rd, 2012
02:05 AM GMT
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What better to revolutionize education than a company with a name like Apple? It almost seems destined. In fact, Phil Schiller, its senior VP of worldwide marketing, kicked off the event saying that "education is deep in the company's DNA," and he didn't waste any time showing exactly what he meant.

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September 15th, 2011
08:12 PM GMT
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(CNN) - UBS stands for the Union Bank of Switzerland. Yet this week's discovery of a $2 billion loss by an alleged rogue trader gave this most conservative of financial institutions the dubious honor of being dubbed the ‘Unauthorized’ Bank of Switzerland across many a dealing room in London.

The trader allegedly responsible has been identified. Police have made an arrest and the bank’s head of risk management will likely be engaged in some serious conversations. All the while, banking sector analysts are furiously adjusting their next earnings forecasts for the company.

In a memo to staff, UBS Chief Executive Oswald Grueber reportedly told staff that management would get to the bottom of the matter as soon as possible.

However, people familiar with the matter tell me Thursday's event may lead to some profound changes for the 157-year-old finance house.
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Filed under: BankingBusinessCrime


August 25th, 2011
07:01 PM GMT
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Is it easy to understand why investors are getting paranoid. On any given day this summer stock markets seem to rally or plummet hundred of points in the matter of minutes for no apparent reason. Today it was the German DAX. Who is to blame? Market veterans increasingly say high frequency traders. This group use super fast, sophisticated computers that chart stock relationships and look for an opportunity to profit. They trade thousands of stocks each day, holding them for only minutes at a time. Fund managers say this churn and reliance on super-computers is feeding the outsized volatility that is spooking all of us and wrecking havoc on our retirement funds.

Or is it?

I went to New Jersey to speak to one of the few high-frequency traders who will talk to the press, Manoj Narang of Tradeworx. He says the idea that high-frequency firms are behind the huge moves is ludicrous. By definition high-frequency traders buy and sell the same amount of stocks each day. They do not make big bets in one direction. If a stock, like a bank stock for example, does sell off substantially it is very likely their computer programs would most likely guess the stock is statistically more likely to rebound and trigger buying of the stock, thereby providing liquidity.

So if they aren’t to blame who is? Narang does acknowledge technology is playing a bigger role and that the changes are disruptive and at times unnerving. But computer-driven trade should not be confused with high-frequency trading strategies. Everyone, including hedge funds and standard pension funds, relies on computers. It appears regulators are not keeping up with what can happen when sell orders cascade.

Narang has voluntarily sat down with the SEC and other regulators to try and clear the air. He says regulators have been receptive, but he worries the environment of blame is counter-productive. As for the fund managers who are pointing the finger of blame his way? "The oldest trick on Wall Street is to find a scapegoat when you can’t explain your own performance."



August 8th, 2011
06:27 PM GMT
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U.S. downgrade or European debt crisis? Which is more important? I keep getting asked this question again and again. And it is a good question to ask. Both crises have enormous implications, some more immediate than others.

The U.S.downgrade has a slow burning effect. For instance, U.S.bonds being used to guarantee Israel's debt have been downgraded. Housing loan groups Fannie Mae and Freddie Mac have also been downgraded because they rely on U.S. treasury bonds as their ultimate guarantee.

And certainly the credit rating downgrade changes the rules forever – as PIMCO CEO Mohamed El-Erian said on Saturday, the global financial system is constructed around the U.S. AAA rating being a constant, it is the cornerstone around which everything is built. Even though it may be restored at some time in the future, the fact is that it has gone, the unthinkable has happened.
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June 16th, 2011
11:40 AM GMT
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Austrian President Heinz Fischer talks about his country's relationship with Russia.

Fischer said: "I know some European countries, because of ther history, are very suspicious vis-à-vis Russia, (but) we have a trustful relationship and we believe it can be expanded economically, politically and strategically."

He says Russia's infrastructure needs development, including the health services, tourism and the energy sector.

Fischer also said it would be better if Russia was a member of the World Trade Organization (WTO).

 

 



June 16th, 2011
11:20 AM GMT
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The State Hermitage Museum is synonymous with St. Petersburg, playing an important cultural and economic role in the Russian city often called the Venice of the North.

Mikhail Piotrovsky, director of the museum, said: "This is a great symbol of culture and Russian history.

"Economy of culture is a very import part of the world culture and the economy of the city, we bring a lot of tourists here."



June 15th, 2011
01:25 PM GMT
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Armenian export was worth 20% of GDP in 2000 but it is only 12% of GDP today; the trade balance is still negative.

Armenian Prime Minister Tigran Sargsyan says the Armenian economy is not sufficiently diversified and he wants to boost the country's industrial base.

He says promoting export is still a primary concern and he also discusses the country's complex relationship with neighbor Turkey.



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