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Hong Kong (CNN) -– If you’re a glass “half full” or a glass “half empty” kind of person, you’ll see what you want to see in China’s latest inflation number. The hard number: March CPI came in at 3.6%.
On the positive side, March is the second month in a row that inflation was below 4%. Last month, China’s Premier Wen Jiabao announced a 4% inflation target for the country. FULL POST
Copenhagen (CNN) – Jens Bjorn Andersen, boss of Danish transport giant DSV, has a message for Europe’s politicians: Deal with Europe’s crisis like he has streamlined his business. Stop over-spending, trim the headcount and get a grip on costs.
Those struggling to rein in the eurozone’s ongoing debt problems might want to listen. DSV is one of those companies that you probably haven’t heard of but, once you do, you’ll see their logo everywhere.
After interviewing Andersen at DSV’s Copenhagen headquarters, we spent eight hours on the road. To pass the time, we played a game spotting DSV transporters. They have around 17,000 trucks on the road every day, and we spied at least one a minute.
(CNN) – Turn on CNN, open the ‘papers, check your emails. If you hadn’t noticed yet, the European economy is pretty close to crumbling around us. Or is it?
Meet the shining stars of the European business world and the big picture is more boom than doom. At least that was the message we got at the European Business Awards in Barcelona.
The Marketplace Europe team headed to Barcelona for the Awards ceremony this week. The event is designed to showcase innovation, drive and resourcefulness from companies of all sizes, nationalities and sectors around Europe.
So far, so predictable. But what made it more than just another date in the November “events season” diary was that we weren’t baffled by power-point presentations or bored with a load of corporate-speak. We were buoyed by the upbeat mood.
Hong Kong (CNN) – China's mighty industrial machine is stalling. New figures today show something that will be worrying authorities.
First the broad numbers: An index put together by HSBC – with no government input - shows a reading in November of 48. Anything over 50 shows that factories are increasing production, under 50 they are cutting back.
The figure is perhaps not surprising given that China's two big export regions, Europe and the U.S., are in deep trouble. But it's not exports that are drying up, it is local demand. And that could be a problem.
Export orders actually grew in November, while domestic demand shrank as a result of all the moves taken by the Chinese authorities over the last 18 months to cool the overheating property market.
London, England (CNN) – By the end of Thursday, Britain will have the ability to get four percent of its electricity consumption from wind, thanks in part to the addition of 100 turbines 11 kilometers off the coast of Kent.
The new site is Vattenfall’s "300 MW Thanet Offshore Wind Farm," a major renewable energy initiative spearheaded by the previous British government. It could supply more than 200,000 homes.
The four-year-old project has been delayed by two years, and at one point was owned by a hedge fund. But now, under Vattenfall, it’s ready.
It seems to me that Britain is getting less praise than Denmark and Germany, or less notice. And today changes that. Britain is so windy it’s estimated an offshore turbine in the UK generates 50 percent more power than a turbine in Germany.
Of the 16 offshore wind farms now under construction around Europe, half are in Britain according to the European OffShore Wind Industry.
That translates to much more wind farm capacity being constructed in the UK (2.4 gigawatts) during the first half of 2010 than the rest of Europe combined (1.5 gigawatts).
In total, wind is close to supplying energy to nearly three million British homes, according to UK energy association RenewableUK.
The challenge is to find places where locals won't complain, which is why offshore wind farms are so desirable. The wind there is also stronger.
Of course, the farther offshore you go, the more it costs to construct and carry power back to shore.
Thanet will not keep its crown as the world largest operational offshore wind farm for long though.
In late 2012 or 2013, the London Array wind farm - a project being funded by energy companies E.ON, DONG Energy and Masdar - is scheduled to start generating electricity just north of the Thanet site.
The owners say the 300 proposed wind turbines could become the world's first one gigawatt offshore wind farm.
When up and running, the London Array will go a long way to helping Britain reach the UK government’s target of providing 15 percent of its electricity from renewable sources by 2015.
How does that compare to where you live?
I never cared much about the currency markets before moving out of the U.S.
Euro, yen, dollar… those words zoomed by on the bottom of the business news tickers, the numbers behind them always fluctuating up and down, seemingly meaningless in my single currency world.
Then I moved to Japan, and like many American expatriates, I got a crash course on the impact of the currency market on my wallet.
When I moved here almost three years ago, the Japanese yen was hovering around 120, 110 versus the U.S. dollar. Now mid-August 2010, the yen is smack dab in the 80’s. The cost of living for me, and many people who are paid in dollars but live in a yen world, has gone up percentage wise double digits, through no fault of our own except for a weakening dollar.
Michigan native Paula Shioi remembers the days of the 300 yen versus the dollar, when she was in high school a few decades ago. Since then, the value of dollar has done nothing but go “down, down, down,” said Shioi. If the dollar strengthens versus the yen, “then I’d make a lot more money,” sighed Shioi.
But that’s not the way the markets are heading, said Professor Eisuke Sakakibara, at Aoyama Gakuin University.
Sakakibara has the unusual nickname of “Mr. Yen” in Japan, known for accurately predicting the trading level of the yen. But the public started calling him Mr. Yen in the late 90’s, when he worked at the Ministry of Finance, trying to influence the dollar-yen exchange rates through public comments.
Sakakibara continues to make public comments and forecasts where he feels the yen will head. Earlier this year, he predicted the yen would strengthen into the 80’s. I sat down with Professor Sakakibara recently, the yen 85 versus the dollar.
“I think it will head down to 80,” said Professor Sakakibara dispassionately, as I cringed at his words. “And I think by the end of the year, it will break the highest level of the yen in 1995, which is 79, 78.”
Really? Can it be? I asked, secretly hoping he’d take it back.
“Of course it’s possible,” said Sakakibara.
50? 60? Is that possible?
“No, I don’t think so,” he said, much to my relief. Then with the professorial kindness you’d expect from a wizened elder, Sakakibara explained the currency markets are not as important for the impact on American expatriates like me, but as a sign of the world’s changing economy order.
“It’s not necessarily the yen strength we should be talking about, but weakness of the dollar, weakness of the dollar and euro. The center of the gravity of the world economy is now shifting towards Asia. China, India, and East Asia, are gaining strength, relative to countries like the US and Europe. This is the trend.”
It’s why Sakakibara also doesn’t advocate currency intervention, absent sudden and large spikes or dips, because the currency reflects the changing world economy. Sakakibara talked on about his predictions of a common Asian currency, like the euro, for China-India-Japan. A currency that might one day take over the dollar as the world currency, as the U.S. economy loses its dominance in the next century.
Americans living overseas are just getting a front seat to the changing world economy. Personally painful at times, but a change that Mr. Yen says is coming, ready or not.
(London, England) Ascot is literally a festival of colors – especially under clear skies as we enjoyed during the start of the racing fixture. Women want to outsmart their counterparts by balancing style with uniqueness as they unveil their latest hats. Men sport their top hat and tails and add their creative touches with bright neck wear.
Ahead of the first race, we pause on the recommendation of one polite usher. Queen Elizabeth II and Prince Philip pass by in their carriage, and the latter acknowledges the person I am with a tip of his hat accompanied by a warm smile.
I am walking to the winner’s paddock as a guest of H.H. Sheikh Mohammed bin Rashid Al Maktoum, the Ruler of Dubai and Prime Minister of the UAE, and his wife Princess Haya. Both are avid equestrians and had 27 horses running at Royal Ascot under the Godolphin stable. His son Crown Prince Hamdan’s Philly Rainfall won the Jersey Stakes setting a course record. The family is together to collect the first trophy of the week.
My stroll with H.H. and the broader entourage including his trainer Saeed bin Surror and his manager Simon Crisford was a case of déjà vu. The previous year my wife and I were invited to the venue by a friend on the final day of racing and saw the Dubai Royal Family from a distance in the saddling paddock, nearly six months before the debt challenges of Dubai set in.
The tour around Royal Ascot followed a twenty minute interview in his private box above the finish line, the first such interview since the restructuring was completed at Dubai World.
We had a frank exchange about the concerns the International Monetary Fund has about a “persisting” recession in Dubai. “We didn’t create the recession, it happened,” says Sheikh Mohammed, “And I don’t call it a recession, I call it a challenge. And when things go wrong, a true leader comes through.”
Asked whether he sees growth in Dubai in 2010, I receive a one word response: “Yes.”
The Ruler of Dubai is in the midst of an intense race – even if some within the Emirate may not see it that way – to rebuild investor confidence. On the eve of Eid, Dubai hit the pause button on Dubai World’s debt, then spent the next quarter working out a structure between what are deemed corporate entities and the holdings of the government and its Ruler. Bankers believe a bottom has been reached, but the $6.2 billion loss of Dubai Holding Commercial Operations Group was not a real confidence builder.
Businessmen I spoke with worry about the forming of a potential continuous downward cycle on property prices. The recent stability will loosen up borrowing, which will lead to a restarting of unfinished projects and more capacity will come onto an already full property market.
As the interview progresses, I asked the Ruler of Dubai if neighboring Abu Dhabi will stand by him. “Abu Dhabi will always stand with any emirate and Dubai with any emirate.” Will additional external support be needed from Abu Dhabi? He responds by saying he is “not worried about the companies” and that the relationship “is very good between the emirates.”
But it is clear from our time in the interview and then our discussion while touring the grounds afterward that Sheikh Mohammed is eager to keep focused on the sectors that built “Brand Dubai” – trade, tourism and financial services.
Our interview came a week after Emirates Airlines ordered another $11.5 billion in new planes and a week before cargo services started at Dubai World Central Al Maktoum International. The Dubai Ruler told us that there are more plane orders to come in July at the Farnborough Air Show.
Asked why he placed a similar size order two months after 9/11, which matches his most recent strategy he replied, “You have to grab the opportunity.”
(Abu Dhabi) On our program, Marketplace Middle East, we have a special segment called “Bright Sparks” that features the rising stars of the next generation, those that are coming up with bright ideas that create companies, jobs and fulfil dreams.
The flotilla attack not only amounted to another real setback for long-term peace, but also a major setback of economic activity.
Prior to this week’s negative turn of events in the Palestinian Territories, investors have commented about the relative stability leading to real growth in the West Bank. They spoke to soon.
Last year, economic growth surged 8.5 percent riding on the back of government aid pledges, sizable private investment from the Arab region and an incredibly active Diaspora.
In 2010 alone, donor governments are contributing $100 million of direct budget support.
A back-of-the-envelope tally indicates that some $2 billion have been poured into the West Bank and Gaza in the past five years. That is a huge sum of money for a population of less than four million people.
This investment translates into a flotilla full political and business goodwill for a community that is known for its survival, especially its entrepreneurs – the Bright Sparks that want to make things happen.
Dubai-based private equity group Abraaj Capital launched a $50 million Palestinian fund for small and medium-sized enterprises in January at Davos, part of a broader $1 billion initiative to support SMEs. Small business in any corner of the world usually generate 90 percent of employment.
In his office at the Dubai International Financial Center, the founder of Abraaj, Arif Naqvi said the first response to the flotilla attack has to be an emotional one, since we are witnessing another lost opportunity.
Naqvi is not part of the Palestinian Diaspora, but of Pakistani descent. He does however make up what we can call the choir of investors who believe that economic activity and opportunity will be the best recipe for stability.
Investors like Naqvi have been attempting to look at the Territories in their entirety, but the reality is quite different.
In the West Bank where Prime Minister Salam Fayyad has introduced another reform and development programme, commerce not dependent on the free movement goods is burgeoning - financial services, telecom operators and outsourcing.
Many want to see road blocks removed and the start of the predictable movement of goods so that internal trade can take hold. It is difficult to ship perishable items if you don’t know the roadblock will last 20 minutes or 20 hours.
In Gaza, the situation has been described as a humanitarian crisis - and the numbers reflect such. According to the United Nations, unemployment is at 44 percent; 70 percent of the population is living on $1 a day; 80 percent is dependent on aid. The people of the territories are cut from the same cloth, but are treated very differently.
The attacks on the aid flotilla coincided with the Palestinian Investment Conference in Bethlehem. If there is one gathering to illustrate external government, NGO and business support for the territories, this was it. Palestinian Authority President Mahmoud Abbas renamed the meeting the "Freedom Conference" in light of this week’s confrontation at sea.
This could translate on the ground to freedom of aid to reach Gaza, but also for the Bright Sparks who need lasting stability to prosper.
(CNN) – Mayfair has been the playground of London's super rich for centuries.
Berkeley Square, one of London's most exclusive addresses, has lost some of its luster.
Since the 1990s, it's also been home to the hedge fund and private equity crowd, joining the private banks dotted around Berkeley Square in Georgian townhouses or low key new buildings.If you've shopped on New or Old Bond Street or Savile Row, if you've stayed at Claridges or the Dorchester or just played Monopoly, then you know Mayfair; the ritzy area surrounded by Piccadilly, Regent Street, Oxford Street and Hyde Park.
The past decade, Mayfair's players have attempted to keep a low profile. You'd never know you were walking by the headquarters of Blackstone, Carlyle or, at No. 1 Curzon Street, AIG Financial Products where many of the losses occurred and where many of those infamous bonuses were paid.
And you certainly would not have known that the small townhouse known as No. 12 Berkeley Street was the London offices of Madoff Securities International Ltd.
Those offices are now up for rent. Someone I talked to recently said he had a good look around at place to relocate now that Mayfair has become more "affordable" but felt the place had bad karma.
He noted as well that the office had swipe card entry access to every cabinet which he thought excessive. That goes along with reports that Madoff had a camera installed in the London office so he could keep in better contact from New York.
Property group CB Richard Ellis estimates that rental prices in Mayfair have fallen between 25-30 percent since prices topped £120 ($173) per square foot in 2007, the most expensive place on earth for office space at the time. Now new rent prices have fallen behind rents in New York and Tokyo and likely Hong Kong.
Still, occupancy stands at 94 percent so it's not as if the property market has collapsed. After all, a hedge fund might be three people and a secretary in one small office. The impact would be much greater if a private equity group were to move out.
On the day I walked around Mayfair, there was a Rolls Royce and Maserati outside Gordon Ramsay's at Claridges. There were plenty of Bentleys roaming as well. No surprise really since one of the premium corner spots is filled by the Jack Barclay Bentley dealership (there is a Porsche dealer opposite).
And that seems to be the key to Mayfair; after private money flies into London and checks into Claridges or the Dorchester or the Hilton, it wants a private banker or wealth advisor within walking distance. Then it's lunch nearby at Ramsay's or Nobu and maybe a drink at Mayfair's most exclusive (and hardest to find) club, Annabelle's.
AIG, UBS and other big names all have big offices in the City of London or in the Docklands, but they want their private banking and alternative investments arms separate.
Whether its Mayfair or Greenwich, Connecticut, the super wealthy and those who cater to them like to be off on their own, tucked away from the day-to-day banking operations.
Yet, thanks to Mr. Madoff and those at AIG getting big bonuses, the spotlight is uncomfortably focused on them and the neighborhoods they like to walk around - usually without a tie.
Watch my report on how the financial crisis is hitting Mayfair.
LONDON, England - Have you seen the cover of this week's Economist with Brown, Sarkozy and Merkel having to pay the "dinner" bill to rescue Eastern Europe? If you did you would have seen the artwork of Kevin Kallaugher - or Kal as he signs his work.
An example of Kal's witty and perceptive cartoon talent.
American-born Kal has contributed more than 100 Economist covers during the past 30 years. He's also been published in my hometown paper; the Baltimore Sun. Kal was discovered during the recession of the late 1970s drawing caricatures on the streets of London and Brighton.
He has benefited from Reaganomics, Thatcherism, Bill Clinton (fish in a barrel all of them) but is now tasked with describing the "credit crunch" with pen and ink.
Some commentators speculate that the end of the Bush era might mean the end of cartoon satire to reflect today's news. Not Kal.
"Certainly it (the Bush presidency) was the golden era to a certain degree," he told me during an interview at the Political Cartoon Gallery in Central London last month.
"I mean also what we're seeing in Obama's case - although the satire may not be immediately directed at him as an individual - is that we're going through such historic changes, politically, economically, around the world, it's going to supply a lot of material."
The challenge for Kal and his contemporaries is to describe the credit crunch in one drawing. Kal hopes his craft actually helps people make sense of the global recession. "You not always just react to the news. I like to think that we're in the business of kind of clarifying the news," he said.
He is very busy these days trying to "draw" the recession and also the new president. "It's this early phase, where we as the cartoonists are helping to establish in the public's mind what these people look like, this is an interesting time for us."
Kal has drawn many a character during his career. He often has to hear their voice to capture their essence. If you want to hear his imitation of one famous voice (he says it drives his wife crazy as he talks to himself in character as he draws some people) and see his efforts to capture the character of a certain CNN employee, watch Quest Means Business on Thursday night or check out cnn.com/international on Friday.
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