Mexican President Felipe Calderon, head of the G20 group of countries, brandished the word with gusto at the World Economic Forum in Davos, declaring “we need to take out the bazooka immediately before the powder gets wet.”
Calderon compared the European situation to the economic crisis in Mexico in 1995. That crisis – referred to as “the first financial crisis of the twenty-first century” – exploded after a boom time and the influx of capital. The country was then bailed by the International Monetary Fund, and another country’s money – in this case the U.S. So far, so familiar.
Calderon pointed to the return of confidence that followed the international aid package, noting the same needed to occur in Europe. “The problem is not the money, the problem is the confidence,” he said.
Davos, Switzerland (CNN) – The secret of a good igloo is its spiral structure, with snow blocks slotting into each other to protect against sub -zero temperatures.
But here at Davos, the Occupy WEF organizers - who’ve built seven igloos as they settle into protests against the World Economic Forum - have found rising temperatures a greater challenge.
Despite the biggest snow dump in decades, one day’s five degree high collapsed an igloo while a protestor was sleeping inside. Apparently it only sunk five centimeters at a time, and created entertainment rather than panic. FULL POST
London (CNN) – Asian markets fell on news of North Korean leader Kim Jong Il’s death, but analysts and ratings agencies say the ongoing economic impact will depend in part on the ease at which power is transferred to his youngest son, Kim Jong Un.
In contrast to Asian stocks, those in Europe and the U.S. were unmoved by the death of North Korea’s self-titled “Dear Leader,” as the rapid naming of his successor appeared to alleviate some fears of a power vacuum.
However, concerns the Korean peninsula would be destabilized by Kim's death prompted ratings agencies Standard & Poor’s and Fitch Ratings to warn the sovereign rating of North Korea’s neighboring South Korea would come under scrutiny.
It also reinvigorated debate around whether the North Korean regime could collapse, and the peninsula be reunified.
London (CNN) – The spectre of a two-tiered Europe has once again muscled its way center stage, as rumblings grow around the discrepancies between the strong and the weak economies struggling to co-exist on the continent.
Suggestions the eurozone is diverging into two groups is hardly controversial: One only has to look the economic performances of its 17 countries during the last 18 months.
Clearly some economies are thriving under the common currency, while others have collapsed. Greece can’t pay its bills and is surviving on the funds of Europe’s bailout pot and the International Monetary Fund. Portugal and Ireland are, of course, in the same club.
London (CNN) - Italy’s bond yields passed 7% Wednesday morning, breaching a psychological point at which markets consider countries at risk of being unable to fund themselves.
The dramatic rise in 10-year bond yields comes the day after Italy’s flamboyant Prime Minister Silvio Berlusconi said he would resign after the country’s budget is passed. The 75-year old Berlusconi has been a dominant force since forming the Forza Italia party in 1994, and his pending departure marks the end of an era for Italian politics.
But while the political spectacle that came with Berlusconi could now fade, the financial show might be just beginning. The pricing – set by traders who are selling Italy’s bonds – hit 7.3% by mid morning after breaking through 7% a short while earlier. “It’s like tectonic plates,” a desk analyst told CNN. “You have this pressure and then it breaks.”
London (CNN) – Greece’s future – and that of Europe – is in disarray after the decision by Prime Minister George Papandreou to call a referendum on its bailout. Now Italy’s soaring funding costs are injecting fresh anxiety into the crisis.
Italy is being crushed by investors, who are now insisting on yields of up to 6.4% to invest in its 10-year bonds. Markets regard 7% as a benchmark which, if breached, makes it extremely difficult for countries to fund themselves.
So these levels are now sending red alerts: Italy is flirting with the danger zone. This, over and above the sheer panic and difficulties which would ensue should Greece decamp to the drachma, is a very real problem.
London (CNN) – The Greek government’s call for a referendum on its aid package is effectively a high-risk game of chicken with its people - and the eurozone peers who have kept the country afloat, analysts say.
Last night’s surprise move by Greek Prime Minister George Papandreou to seek the people’s voice on the unpopular rescue package plunged European markets deep in the red on open Tuesday, as they scrambled to understand the sudden lurch away from last week’s acceptance of the triple-pronged euro crisis response plan.
The European rescue plan - despite a lack of detail - was the substantive response markets had been seeking for months. But Papandreou’s move has thrown the plans into disarray.
Eurozone crisis fears are again sweeping the world - but this time, with more urgency than ever.
London, England (CNN) – Mobile phone giant Nokia unveiled two new smartphones in London Wednesday as it sought to boost its flagging fortunes in the booming market.
The Lumia 800 and Lumia 710 - Nokia's first handsets using the Windows Phone operating system - are the company's attempt to gain traction in the smartphone market, dominated by Apple's iPhones and Google's Android operating system.
As he revealed the Lumia 800 Nokia, Chief Executive Stephen Elop said the company was "signaling our intent right now here today to be today's leaders in smartphone design and craftsmanship."
London (CNN) - Deposed Libyan leader Moammar Gadhafi’s death injects fresh impetus into Libya’s move toward a stable economic and political influence in the region, but the transition remains difficult, according to regional experts.
The export-led country’s huge oil reserves, the largest in Africa, are a key resource to assist the country’s recovery, but a return to prewar output will be slow and complicated. According to the International Monetary Fund, oil has accounted for more than 95% of export earnings and 75% of government receipts in 2010.
If properly managed, they could contribute to the country’s long term prosperity, according to Edward Djerejian, the founding director of the Baker Institute for Public Policy at Rice University. And under Libya's new leadership, the National Transitional Council, there are hopes oil capacity – over time – will increase, helping push down global prices.
London, (CNN) – Liz Pilgrim opened her boutique babywear store, babye, in Ealing seven years ago. She decided to build up her own business after she had her first child, and saw a niche in high quality maternity products.
She has since expanded the business, opening a second retail outlet and online store. But last Monday babye was targeted as part of the violence which swept London and through the UK.
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