Tuesday, June 8, 2010

Bernanke Says Recovery Unlikely to Lower Joblessness Quickly

Bernanke Says Recovery Unlikely to Lower Joblessness Quickly

By Scott Lanman and Joshua Zumbrun

June 8 (Bloomberg) -- Federal Reserve Chairman Ben S. Bernanke said the U.S. recovery probably won’t quickly bring down the unemployment rate, which is likely to stay “high for a while.”

Given the depth of the recession, the recovery is “moderate paced,” Bernanke said last night in a question-and- answer session with Sam Donaldson, the ABC News journalist, in Washington. In Europe, policy makers “are committed to avoiding default in Greece” and elsewhere, he said.

While the Fed will raise interest rates from a record low before the economy returns to “full employment,” Bernanke said officials don’t know when that process will start. The banking system isn’t fully healthy and lenders are “cautious” in providing credit, he said.

“The unemployment rate is still going to be high for a while, and that means that a lot of people are going to be under financial stress,” Bernanke said at the event, part of a dinner hosted by the Woodrow Wilson International Center for Scholars.

Bernanke’s stance is consistent with that of several Fed colleagues. Atlanta Fed President Dennis Lockhart said June 3 that the central bank may need to raise rates even with “unacceptable levels of unemployment,” while Eric Rosengren of the Boston Fed said last month it wouldn’t be “appropriate” to have rates close to zero with the economy at full employment.

Kansas City Fed President Thomas Hoenig, the longest-serving Fed policy maker, is calling for an increase in the federal funds rate target to 1 percent even sooner, within a few months. Traders don’t expect the Fed to start raising rates until the first quarter of 2011, based on futures on the Chicago Board of Trade.

Toll on Americans

Last week, Bernanke said he’s concerned about the toll that joblessness is taking on Americans. U.S. companies hired fewer workers in May than forecast and workers dropped out of the labor force, a government report showed June 4.

Private payrolls rose by 41,000, trailing the 180,000 gain forecast by economists, while the jobless rate fell to 9.7 percent from 9.9 percent, according to the Labor Department report. Including government, employment rose by 431,000, boosted by a jump in hiring of temporary census workers.

The jobless rate, which fell to 9.7 percent last month from 9.9 percent, was 4.6 percent at the start of the financial crisis in August 2007.

At the Federal Open Market Committee meeting on April 27- 28, policy makers raised their U.S. growth estimates for 2010 and lowered forecasts for unemployment and inflation. Officials said the economy will expand in a range of 3.2 percent to 3.7 percent this year, and the jobless rate will average 9.1 percent to 9.5 percent in the fourth quarter.

Updated Projections

Bernanke and his colleagues will give updated economic projections when they next meet in Washington June 22-23.

The Fed chief reiterated yesterday that the central bank’s “extended period” of a record low interbank lending rate is conditioned on high unemployment, low inflation and stable price expectations.

“We have right now a very accommodative, very easy monetary policy,” Bernanke said. “We can’t wait until unemployment is where we’d like it to be” or inflation gets “out of control” to tighten credit, he said.

European finance ministers this week put the finishing touches on a rescue fund backed by 440 billion euros ($526 billion) in national guarantees, seeking to halt the spread of Greece’s debt crisis. The Fed last month restarted emergency currency-swap lines with central banks around the world.

Work to Be Done

“It’s a lot of money,” Bernanke said of the European plan. “It certainly covers the obligations of Greece and Portugal and Spain for a number of years.” He said “there still needs to be work done,” and “investors aren’t completely convinced” the problems are resolved.

Equities in the U.S. have dropped almost 14 since April 23, with investors battered by the widening debt crisis in Europe. The Standard & Poor’s 500 Index yesterday slumped to 1,050.47, the lowest level since Nov. 4. The euro fell below $1.19 for the first time since March 2006.

The U.S. and China have a “great deal” to gain from regular discussions, and officials in Beijing understand their “co-dependency” with the world’s largest developed economy, Bernanke said.

The U.S. Senate approved regulatory-overhaul legislation last month, setting up a conference with House lawmakers to reconcile it with a bill approved in December. Under both bills, designed to prevent a repeat of the crisis that prompted government bailouts of financial firms including American International Group Inc., the Fed would keep its authority to supervise banks and get the power to oversee other large, nonbank financial firms.

‘Sensible Approach’

Bernanke, 56, said the legislation represents “a pretty sensible approach and the many pieces fit together,” even after Dallas Fed President Richard Fisher and other colleagues criticized it for not doing enough to prevent further bailouts of financial firms.

The Fed chief said he wouldn’t support completely breaking off banks’ proprietary trading under the so-called Volcker rule. Even so, “as one of the regulators we’ll certainly work with our colleagues to try to make it operational” under the law, Bernanke said.

To contact the reporter on this story: Scott Lanman in Washington at slanman@bloomberg.net; Joshua Zumbrun in Washington at jzumbrun@bloomberg.net.

Last Updated: June 8, 2010 00:00 EDT

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"While the Fed will raise interest rates from a record low before the economy returns to “full employment,” Bernanke said officials don’t know when that process will start. The banking system isn’t fully healthy and lenders are “cautious” in providing credit, he said.

“The unemployment rate is still going to be high for a while, and that means that a lot of people are going to be under financial stress,” Bernanke said at the event, part of a dinner hosted by the Woodrow Wilson International Center for Scholars.

Bernanke’s stance is consistent with that of several Fed colleagues. Atlanta Fed President Dennis Lockhart said June 3 that the central bank may need to raise rates even with “unacceptable levels of unemployment,” while Eric Rosengren of the Boston Fed said last month it wouldn’t be “appropriate” to have rates close to zero with the economy at full employment. "


の箇所、何度か読み返してしまった。
今までになく(議長としては)利上げに踏み込んだ見解ではないかな、と思って。

Florida Officials Want to Run Cleanup With BP’s Funds (Update1)

Florida Officials Want to Run Cleanup With BP’s Funds (Update1)


By Kim Chipman and Mary Jane Credeur

June 7 (Bloomberg) -- BP Plc should hand over the effort to clean up its oil washing onto Florida beaches because the company is failing to take forceful enough action, local government officials said.

“They can write the checks,” Gene Valentino, a commissioner for Escambia County, which includes Pensacola Beach, told reporters at a briefing yesterday. “In the meantime, we need action. We need boots on the ground. We need specific remedies and solutions to respond to the impacts as they occur.”

Floridians are preparing for the worst as oil spilling from a BP well in the Gulf of Mexico threatens the state’s $60 billion tourism industry. Officials of Escambia County in Florida’s northwest Panhandle, where tar balls and clumps of oil began soiling white-sand beaches last week, said hundreds of residents have called and sent e-mails asking how they can help, with little response from BP on what to do.

One area resident improvised a tool to sift tar balls from the sand by attaching a cat-litter scooper onto a piece of plastic pipe, Grover Robinson, chairman of the Escambia County Commission, told reporters today.

“That worked better than anything BP has been using,” Robinson said. Tar balls, clumps of unrefined oil and impurities, have the consistency of peanut butter and often rest on top of the sand after the tide goes out.

Some BP workers have been improvising by using “cut-in- half Pepsi bottles” to scrape up the tar, he said.

BP ‘Ready, Prepared’

Lucia Bustamante, BP’s spokeswoman in Florida, said the London-based company is committed to helping the state.

“We are ready, we are prepared,” she said in an interview yesterday. BP is training people “as fast as we can” and working to ensure that all of the clean-up workers are local residents, she said.

Twenty skimmer boats are being brought to the Pensacola area from elsewhere in the country, and some won’t arrive for a week or two, Florida Attorney General Bill McCollum, a Republican, said today at a press briefing.

“I’m outraged by that,” McCollum said. “Why are we waiting this long to do this? Why is the Coast Guard, Obama, BP waiting? They’ve seen it coming, so why are we waiting?”

Skimmer Boats, Booms

McCollum called for more skimmer boats, material for double and triple layers of boom and exploration of other materials such as oil-absorbing polypropylene sheets.

Valentino said the crews cleaning up local beaches, including BP workers, county employees and volunteers, will increase to about 1,000 people today from about 550 yesterday.

The Deepwater Horizon Response, consisting of BP and almost a dozen federal agencies, posted an update on its website yesterday saying a June 5 flyover by the National Oceanic and Atmospheric Administration and the Florida Department of Environmental Protection saw only a “light sheen, one ten- millionth of a meter thick” off the coast of Florida.

“They may be spinning it to say the effects so far have been minimal in Florida, but unfortunately I suspect this will worsen,” Manley Fuller, president of the Florida Wildlife Federation, said in an interview yesterday.

Beaches remained open to visitors yesterday as workers roamed the shore with gloves and garbage bags cleaning up clumps of oil.

Closing Beaches

The decision on whether beaches should be closed or swimming advisories issued rests largely with Florida’s health department and the unified command, which includes BP and the Coast Guard, according to the local officials.

Valentino, who is planning to be part of dive team to study the oil underwater, said he wouldn’t swim in the ocean if it weren’t necessary.

“But I don’t know the level of toxicity,” he said. “So I’m cautious not to convey a sense of ‘the sky is falling’ when it’s not there yet. The beaches are still open and inviting.”

Jim Sanborn, host of “Good Morning Pensacola” on WCOA, a local AM radio station, said he saw “thousands and thousands of tar balls” on Pensacola Beach yesterday morning.

‘Ruined Our Beach’

“It was extremely depressing,” said Sanborn, 55, in an interview. “As far as I’m concerned, they have totally ruined our beach because for years and years to come you are going to have tar balls always on the Pensacola Beach.”

Florida draws about 80 million visitors a year, bringing in $60 billion and making tourism the state’s No. 1 industry, according to Kathy Torian, spokeswoman for Florida’s tourism office in Tallahassee. Tourism accounts for almost one-quarter of the state’s sales-tax revenue, she said.

Of Florida’s 19 million residents, almost 1 million work in tourism, Torian said.

Escambia County, which includes Pensacola and Pensacola Beach, has committed $3 million for the cleanup so far, Robinson said yesterday. The county is seeking reimbursement from a $25 million state fund provided by BP.

Fear that oil may be on its way has spread beyond the Panhandle beaches. U.S. Representative Kathy Castor, a Democrat from the state, met June 3 with hoteliers, business owners, fishermen and environmentalists in St. Petersburg in west- central Florida.

“There’s tremendous anxiety,” Castor said in an interview.

Patricia Hubbard, whose family owns a deep-sea fishing charter business and seafood restaurant in Madeira Beach, Florida, near St. Petersburg, said she noticed a slowing in business immediately after the spill, though she is most concerned about the summer season ahead.

“We are under attack,” Hubbard, 62, said in an interview yesterday. “It’s not a terrorist attack, but it’s terror. The biggest fright is the unknown. We feel powerless.”

To contact the reporters on this story: Kim Chipman in Pensacola Beach, Florida at KChipman@bloomberg.net; Mary Jane Credeur in Pensacola Beach, Florida at 1322 or mcredeur@bloomberg.net.

Last Updated: June 7, 2010 11:31 EDT




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私がBPのCEOだったら真っ先に駆けつけて住民に謝罪し、
被害拡大阻止に全力で当たるだろうと考えるのだけれど。

一般の庶民の平凡な感覚なんでしょう。

それにしてもあまりにひどすぎる。

Monday, June 7, 2010

‘Who Will’ Buy?

------------According to the Bloomberg News---------------

G-20 Coordination Fails as Governments Clash on Recovery Recipe

By Simon Kennedy and Mark Deen

June 7 (Bloomberg) -- Global policy makers are starting to clash over their individual prescriptions for recovery as Europe demands lower budget deficits while the U.S. warns against pushing exports instead of domestic demand.

At a meeting of Group of 20 finance chiefs in Busan, South Korea, June 4-5, Treasury Secretary Timothy F. Geithner said the world cannot again bank on the cash-strapped U.S. consumer to drive growth and urged other nations to stimulate their own demand. European Central Bank President Jean-Claude Trichet said fiscal tightening in “old industrialized economies” would aid the expansion by shoring up investor confidence.

Each strategy carries threats for the global rebound that the G-20 said faces “significant challenges.” Continued stimulus risks bondholder revolt over rising debt burdens, while spending cutbacks could worsen unemployment. Relying on exports leaves the world prone to trade wars and competitive currency devaluations as countries seek to give their companies an edge.

“The world may end up in a period of sub-potential growth for two or three years,” said Venkatraman Anantha-Nageswaran, who helps manage about $140 billion in assets as global chief investment officer at Bank Julius Baer & Co. in Singapore. “We need to accept that all of us cannot simultaneously grow our way out of trouble.”

The fragility of the recovery from last year’s worldwide recession was evident as the G-20’s finance ministers and central bankers gathered to shape the agenda for this month’s summit of their leaders in Toronto.

Stocks Tumble

The Standard & Poor’s 500 Index closed at a four-month low on June 4 after government figures showed U.S. employment rose less than forecast in May. The same day, the euro fell to its weakest level against the dollar since 2006 amid concern Hungary is nearing a debt crisis.

G-20 officials signaled deeper concern about the economic and fiscal outlooks than when they last met in April. In a statement released after their talks ended June 5, they promised to “safeguard recovery,” yet replaced an endorsement of budget stimulus with a pledge to pursue “credible, growth-friendly measures to deliver fiscal sustainability.” Countries can still fan domestic growth “within their capacity,” they said.

Officials separately targeted deadlines of November to design new rules to raise the quality and quantity of capital held by banks and December 2012 to introduce them. Chancellor of the Exchequer George Osborne was among those to say the process for enactment may be extended. A European and U.S. proposal to tax banks globally to cover the cost of bailouts was defeated.

Capital Standards

Banks have warned that the capital proposals may impinge on credit and growth. UBS AG, Switzerland’s biggest bank, has estimated the proposals may force banks to raise as much as $375 billion in fresh capital.

In a sign of tension among the world’s economic policy chiefs, Geithner flagged concern that others are turning to cheaper currencies and fiscal restraint, leaving their rebounds reliant on foreign rather than domestic buyers for strength.

“Stronger domestic demand in Japan and in the European surplus countries” is needed, Geithner said in a June 5 press briefing in Busan. “The value of the G-20 is to help each of us individually recognize the importance of economic policies that are in our broad collective interest.”

The conundrum is that governments are all trying to harness a rebound in trade, which the Netherlands Bureau for Economic Analysis last week estimated grew 3.5 percent in March, more than double February’s pace.

Pernod, Toshiba

Companies from French beverage maker Pernod Ricard SA to Japan’s Toshiba Corp. and Nissan Motor Co. are counting on foreign demand to stoke earnings. Pernod said last month that for every 1 percent drop in the euro versus the dollar, its earnings before interest and taxes rise 12 million euros ($15 million).

Toshiba, Japan’s biggest memory-chip maker, said May 11 it aims to quadruple profit in three years as foreign sales climb. Nissan, Japan’s No. 3 automaker, the next day forecast earnings to more than triple in a year on North America and China sales.

In the U.S., President Barack Obama aims to double exports over five years, while China is refusing to bow to international pressure to allow an appreciation in the yuan, which it has held at 6.83 per dollar for almost two years to help its exporters.

Japan’s new prime minister, Naoto Kan, enters office with a reputation for favoring a weak yen after saying as finance minister that he wanted the currency to fall “a bit more.” French Prime Minister Francois Fillon said June 4 the euro’s drop below $1.20 is “good news” after a gain that was “penalizing our exports.” Britain’s Osborne said last week in Beijing he is “keen” to make the U.K. more trade-driven.

‘Who Will’ Buy?

“If everyone’s expecting to export their way out of trouble, who will be buying?” said Alvin Liew, a Singapore- based economist for Standard Chartered Plc. “Countries may resort to inward-looking policies and protectionist sentiment.”

The upshot for a global economy chasing weaker exchange rates is a “zero-sum story,” according to Michala Marcussen, head of global economics at Societe Generale SA in London. She calculates that while a 10 percent depreciation of the euro boosts euro-area growth by 0.7 percentage point, that is offset by weakness in the U.S. and China, leaving overall world GDP just 0.2 percentage point stronger.

Deficits Widen

Governments are looking overseas for growth because they need to pare fiscal deficits at home. The International Monetary Fund calculates the G-20 nations’ budget shortfalls will average 6.8 percent of gross domestic product this year, up from 0.9 percent in 2007.

“For the vast majority, addressing finances, budget consolidation, is priority No. 1,” French Finance Minister Christine Lagarde said in Busan. “There are some voices, definitely a minority, that insist on the need to underpin growth.”

European officials said June 5 in Busan that budget tightening must come next year, while Geithner advocated a “mid-term” horizon for deficit reduction.

IMF Managing Director Dominique Strauss-Kahn said at a press briefing that efforts to cut deficits in rich countries could hurt growth over the next two years. Stimulus measures implemented in the last two years that haven’t expired yet should remain in place in advanced economies, he said.

A study by the fund showed that fiscal consolidation, without market deregulations that would bolster domestic demand, could shave as much as 2.5 percentage points off global growth and cost 30 million jobs.

To contact the reporters on this story: Simon Kennedy in London at skennedy4@bloomberg.net; Shamim Adam in Busan, South Korea, at sadam2@bloomberg.net

Last Updated: June 6, 2010 11:01 EDT

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