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Posts posted by acidreign

  1. Seagate on the way up again?


    A massive £60m investment was today announced by US technology firm Seagate, with almost 100 jobs to be created at its Derry base and Queen’s University in Belfast.

    Enterprise Minister Arlene Foster made the announcement this morning at Seagate’s regional headquarters at Springtown in Derry, where 85 jobs are to be created.

    The new investment from the company is to be channelled through two research and development projects, with Invest Northern Ireland offering £12.7m towards the total funding.

    A further 10 related research posts are to be created at the Physics Department at Queen’s.

    The announcement comes just 16 months after Seagate closed the gates on its Limavady plant, with the loss of almost 1000 jobs. Seagate was also singled out as being the single biggest recipient of Invest NI funding in the recent Independent Review of Economic Policy, getting at least £19m between 2002 and 2008.

    Mrs Foster said the new investment and jobs could “easily have gone elsewhere within the Seagate corporation” but for the strong case made by local management and support offered by Invest NI.

    “In making these investments in the North West, Seagate is once again demonstrating its confidence in our local workforce and suppliers and is helping send a very strong signal to other potential international investors that the North West is a competitive and compelling location” she said.

    Mrs Foster was joined in Derry by Seagate Technology’s chairman Steve Luczo and chief technology officer Bob Whitmore.

    She added: “Encouraging innovation and boosting business research and development are hugely important to our economic future and will be key drivers in helping us deliver the productivity goal contained in the Programme for Government.

    “Securing highly credible investors and developing value added supply chain opportunities through collaborative research was one of the key recommendations I brought to the Assembly on Monday in taking forward the findings of the Independent Review of Economic Policy.”

  2. I think most worrying is this nugget...

    He said: "We still face a real and serious threat to the UK from international terrorism, so I would urge the public to remain vigilant and carry on reporting suspicious events to the appropriate authorities and to support the police and security services in their continuing efforts to discover, track and disrupt terrorist activity."

    Mr Johnson said the new level meant people needed to be "more aware".

    This is a swing in a very Brave New World.

  3. Even O'Leary is trimming the payroll at Ryanair...


    320 jobs to go as staff at retailer and airline face axe

    THERE was a double jobs blow yesterday after it emerged that department store Debenhams is to slash 170 jobs across its Irish branches, while 150 staff at Ryanair face the axe after the airline slashed one-fifth of its flights at Dublin Airport.

    A spokesman for Debenhams said it was confident the reductions could be met through voluntary redundancies. The company employs 2,400 workers in its 11 stores. A workers' representative blamed cross-border shopping for the job losses.

    The company remained "committed" to its Irish operations.

    "It spent €45m in the Republic in the last few years and it wants to open more stores. But before that can happen, it needs to change work practices and right-size the workforce," the spokesman added.

    Linda Tanham, assistant general secretary of Mandate, said cross-border shopping was a "major contributor" to the loss of jobs at the department store.

    "More and more jobs are being lost in the retail sector as a direct result of the downturn in the economy and in particular, customers going over the border to do their shopping.''

    Ryanair boss Michael O'Leary blamed rising airport charges and the Government's travel tax for the cuts at Dublin Airport, which will start coming into effect from the end of March.

    He also warned fares would rise out of Ireland by at least 10pc, with no more free seat sales over the next 12 months.

    Ryanair is preparing to file a case against the Dublin Airport Authority (DAA) in the High Court alleging the semi-state body has breached competition law by abusing its dominant position at Dublin Airport.


    The challenge is to be made within a couple of weeks.

    The chief executive claimed that as a result of the reduced summer capacity, the number of passengers carried by Ryanair through Dublin would decline by two million between 2010 and 2011; while at Shannon it would carry one million fewer in the same period.

    Mr O'Leary said the decline in Ryanair's passenger numbers at Dublin would result in the loss of more than 2,000 jobs at the facility, including the reduction of Ryanair positions at Dublin by 150. But the DAA claimed Ryanair was reducing flights due to the state of its own business environment. The decision was not based on passenger charges at the airport.

    - Breda Heffernan and John Mulligan

    Irish Independent

  4. More on the deflation argument...


    Stiglitz Deflation Threat Pushes Fed to Stay at Zero (Update1)

    Oct. 2 (Bloomberg) -- The U.S. faces the possibility of deflation for the first time since the Eisenhower administration, a threat that may prompt the Federal Reserve to keep interest rates near zero through next year.

    Executives at Kroger Co., the largest U.S. supermarket chain, blamed deflation for a 7 percent drop in earnings in the second quarter, while falling prices for food, gasoline, and electronics left August sales unchanged at Costco Wholesale Corp. A sustained price drop might set off a chain reaction in which lower profits force employers to pare wages and payrolls. That would erode consumer demand, exacerbating wage cuts and firings.

    Such a spiral led to Japan’s “lost decade” of slow economic growth in the 1990s. A more vicious version in the U.S. helped create the Great Depression six decades earlier. Bond investors are forecasting retreating consumer prices, as shown by the yield they demand to hold a one-year bond versus a similar inflation-protected bond.

    “Deflation is definitely a threat right now,” Nobel laureate Joseph Stiglitz, 66, a professor at Columbia University in New York, said in a Sept. 22 interview. “The combination of the deflation threat and the sluggish recovery should keep the Fed on hold for quite a while.”

    Consumer prices are experiencing deflation, with the consumer price index sliding for six straight months from year- earlier levels, the longest stretch of declines since a 12-month drop from September 1954 to August 1955, according to the Labor Department.

    So far, the core consumer-price index, which excludes food and energy, is facing disinflation, a slowing in the pace of increase. The core index rose 1.4 percent in August from a year earlier, down from 2.5 percent in September 2008.

    Fed Trio

    Regional Federal Reserve Bank Presidents Janet Yellen, of San Francisco, James Bullard, of St. Louis, Richard Fisher, of Dallas, and Charles Evans, of Chicago, have expressed concern in past weeks about the possibility of declining prices.

    “Disinflationary winds are blowing with gale-force effect,” Evans, 51, said in a Sept. 9 speech in New York.

    While the economy contracted 2.7 percent during the 1953 recession, it shrank 3.8 percent in the current recession, the most since the 1930s. Economists at New York-based JPMorgan Chase & Co. and Goldman Sachs Group Inc., the second- and fifth- biggest U.S. banks by assets, say there’s so much deflationary excess labor and plant capacity in the economy that the Fed won’t raise interest rates until at least 2011.

    Gross Pessimism

    “The potential for a deflationary downdraft continues for several years” if economic growth doesn’t accelerate, Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co. in Newport Beach, California, said in a Sept. 29 interview with Bloomberg Radio.

    At their most recent meeting on Sept. 23, Fed policy makers agreed to leave the benchmark interest rate in a range of zero to 0.25 percent, where it’s been since December 2008.

    Only 69.6 percent of the country’s factories, utilities and mines were in use during August, close to the record low of 68.3 percent reached in June.

    Former Fed Chairman Alan Greenspan said the economic rebound won’t prevent a further slowing of the pace of price increases. “We are still, by any measure, in a disinflationary environment,” Greenspan, 83, said in a Sept. 30 Bloomberg Television interview in Washington.

    At the same time, recent reports on manufacturing, housing, and consumer spending suggest that any investor concerns about the danger of deflation are overblown, said Dean Maki, chief U.S. economist at Barclays Capital Inc. in New York.

    Growth Outlook

    The median projection of economists surveyed by Bloomberg News is for first quarter growth of just 2.4 percent, compared with a decline of 6.4 percent in the first quarter of 2009. Maki sees a 5 percent expansion in the first quarter of 2010.

    That would translate into higher prices.

    “Inflation is driven more by the level of demand and pace of growth than by the size of the output gap,” said Stephen Stanley, chief economist at RBS Securities Inc. in Stamford, Connecticut. “As the economy returns to solid growth in 2010, we are quite confident that, in sharp contrast to the consensus Fed view, core inflation will be creeping higher.”

    Fed officials are already planning for that, and publicly discussing an exit strategy once the economy does pick up. At that point, the Fed may have to move with “greater force” than some anticipate to keep inflation from accelerating too rapidly, Fed Governor Kevin Warsh, 39, said in a Sept. 25 speech in Chicago.

    Fed Purchases

    That day is far off for bond investors. Inflation fears, raised by the more than $1 trillion the Fed has pumped into the economy by lowering rates and buying Treasuries and mortgage- backed securities, are fading.

    “There’s been a significant flattening on the long end of the curve,” reflecting concern about deflation, said Pacific Investment’s Gross, 65, who is buying longer-maturity Treasuries in response. The yield on the 10-year note, which was 3.95 percent on June 10, was 3.18 percent at the close of New York trading yesterday. The difference in yield between nominal and inflation-protected Treasury securities maturing in one year is negative 0.4 percent, suggesting investors expect deflation during the next 12 months. Over five years, that inflation premium is now 1.21 percent, down from 1.86 percent on June 10.

    The Fed needs to “keep inflation expectations from slipping to undesirably low levels in order to prevent unwanted disinflation,” Vice Chairman Donald Kohn, 66, said Sept. 10 in Washington during a speech at the Brookings Institution.

    Oil Role

    Falling consumer prices are partly a reflection of a 52 percent decline in oil prices to about $70 a barrel yesterday from $145.45 a barrel on July 3, 2008.

    The slowing in core prices is more of a concern, said Michael Feroli, an economist at JPMorgan. The core rate fell following three prior recessions in which unemployment rose above 7 percent. That “suggests that core inflation could well be below zero within two years,” Feroli said in an interview.

    Core CPI fell 5.3 percent following the recession of 1973- 1975, 10.7 percent following the recession of 1981-1982 and 3 percent following the recession of 1990-1991.

    Unemployment rose to 9.8 percent in September, a Labor Department report showed today, and it will likely climb to 10 percent in the fourth quarter, according to the Bloomberg survey of economists. The jobless rate was estimated to average 8.8 percent in 2011.

    With unemployment elevated, companies may not need to raise pay to attract workers, even when the economy picks up.

    ‘Enormous Slack’

    “My personal belief is that the more significant threat to price stability over the next several years stems from the disinflationary forces unleashed by the enormous slack in the economy,” Yellen, 63, said Sept. 14 in San Francisco.

    Wages for U.S. workers fell for eight months in a row, dropping 5.6 percent from October 2008 to June 2009, according to Commerce Department figures. In contrast, wages continued to grow in the 1954-1955 deflation period.

    Stagnating wages and fading job prospects are sapping demand. Consumer spending may increase in the fourth quarter by just 1 percent and in 2010 by an average of only 1.6 percent, according to the median estimate in the Bloomberg survey of economists.

    Consumption rose by an average 5.7 percent a quarter in the five years before the recession began in December 2007.

    “A weak labor market in a competitive environment puts downward pressure on wages,” said Stiglitz, who won the Nobel prize for economics in 2001. “So, the possibility of another actual decline in wages cannot be ruled out.”

    Declining Incomes

    The deflation danger is compounded by household debt, said Paul Ashworth, senior U.S. economist at the consulting firm Capital Economics in Toronto. U.S. homeowners owed $13.9 trillion in the third quarter of 2008, compared with an average of $8.5 trillion in the 57 years the Fed has kept records.

    “As incomes start to fall, that debt gets bigger in real terms: You have a smaller income to pay off that debt,” Ashworth said. “Deflation combined with high indebtedness can be very problematic.”

    Inflation happens when too much money chases too few goods. Gary Shilling, president of the investment research firm A. Gary Shilling & Co. of Springfield, New Jersey, said that even as the Fed continues to pump money into the economy, the money supply, as measured by the central bank’s M2 index, has dropped 1 percent since mid-June.

    “Look what is happening to money supply, it is actually contracting now when supposedly the economy is picking up,” Shilling said in an interview on Bloomberg Television Sept. 21. The economy is facing deflation “because you’ve got basically an excess-supply world,” he said.

    Profits Dwindling

    Profits have evaporated as companies lose pricing power. The 419 non-financial firms in the S&P 500 reported earnings down 28 percent in the quarter ending June 30. Analysts surveyed by Bloomberg anticipate a 30 percent decline for the third quarter, which ended this week.

    “Businesses trying to sell products and services feel they are pushing on a string and are adjusting their behavior accordingly,” Fisher, 60, the Dallas Fed president, said in a Sept. 3 speech at the University of California in Santa Barbara. “They are cutting prices.”

    Rodney McMullen, president of Cincinnati-based Kroger, blamed price reductions for second-quarter earnings that fell 10.5 percent short of analysts’ estimates.

    “We certainly sold more units. But lower retail prices and profit per unit pressured” results, McMullen told analysts in a Sept. 15 conference call. “We began to see deflation.”

    The average amount spent per transaction in August at Issaquah, Washington-based Costco was about 7 percent below last year, Bob Nelson, vice president for financial planning, said on a Sept. 3 conference call with investors.

    At Wal-Mart Stores Inc., the world’s largest retailer, “headwinds” from deflation were in part responsible for a 1.4 percent drop in second-quarter revenue to $100.9 billion, chief financial officer Thomas Schoewe told analysts Aug. 13.

  5. A bit of good news in Construction sector for a change and could have great potential especially for Southerners if Sterling continues its downward spiral. Plus only 15minutes down the road from Belfast:

    Supermarket Asda has begun construction work on what will be its largest store in Northern Ireland, the company has said.

    The store will be located at Junction One Retail Park in Antrim next to the Outlet Shopping Centre.

    Asda has said that the flagship store will create around 150 jobs during the construction phase and another 400 full and part-time jobs in store when the supermarket is completed in spring 2010.

    Shamus Jennings, director of Culzean Estates, the joint venture partnership which owns Junction One, said: “We are delighted to see construction starting on this project as it has been eagerly anticipated for some time. Across the whole 80 acre site, Junction One has already created over 1,500 jobs and it is even more important during this difficult economic downturn that further progress is being made to provide much needed work in both the construction and retail sectors.

    “We are very grateful for the support and encouragement offered by Antrim Borough Council throughout the process, and are confident that their assistance will be well rewarded by the contribution this new development will make to the local economy.â€

    Asda’s regional operations manager in Northern Ireland, John Deasy, added: “We are delighted to have begun construction on our largest store in Northern Ireland at Antrim Junction One.

    “Our plans illustrate ASDA’s commitment to investing further in Northern Ireland, bringing low prices, choice and excellent customer service to more communities and shoppers.

    “I would like to thank the local community and local representatives for their support, and we look forward to meeting customers when our new store opens next year.â€

    Alistair Kennedy, from Culzean Estates, said the centre had attracted over three million visitors a year and is now well established as a mixed-use destination for retail, leisure and restaurants.

    Read more: http://www.belfasttelegraph.co.uk/business...l#ixzz0S1ZRAlU8

  6. Mike, I'm a lazy fecker and hence cannot be bothered to click on links. Anyone of the same attitude here you go :lol:

    Passengers face new tax to halt rise in air travel

    Tens of billions of pounds will have to be raised through flight taxes to compensate developing countries for the damage air travel does to the environment, according to the Government’s advisory body on climate change.

    Ticket prices should rise steadily over time to deter air travel and ensure that carbon dioxide emissions from aviation fall back to 2005 levels, the Committee on Climate Change says. It believes that airlines should be forced to share the burden of meeting Britain’s commitment to an 80 per cent cut in emissions by 2050.

    The Times has learnt that it may challenge the Government’s decision to approve a third runway at Heathrow, suggesting that this would be inconsistent with that commitment.

    The committee was established under last year’s Climate Change Act. It has a strong influence on government policy and proposed the 80 per cent target accepted by ministers.

    It says that initially the cost per passenger of compensating for climate change would be small but would rise over time and eventually reach a level that would put people off flying.

    Industry estimates suggest that the average passenger would pay less than £10 extra per return ticket when aviation joins the EU emissions trading scheme in 2012. This would depend on the price of allowances to emit CO2, which is expected to rise over time.

    The committee proposes a global cap on aviation emissions, with airlines required to buy allowances, and that the revenue generated should be given to developing countries to help them to adapt to climate change — for example, by building flood defences to cope with rising sea levels.

    In a letter to the Government published today, the committee says that an increase in global temperatures is inevitable and that developed countries must pay for the consequences. It says that the EU trading scheme does not go far enough and could result in airlines making windfall profits.

    Under the scheme, airlines will be given free carbon permits covering 85 per cent of their emissions and will have to buy permits for the remaining 15 per cent. The committee says that they should have to pay for all their emissions. This would more than double the cost to passengers.

    The Greenskies Alliance, a coalition of environmental groups, estimates that the EU scheme would add £4 to the cost of a return ticket from London to Madrid and £18 for a round trip from London to Los Angeles. These would rise to £10 and £40 if the committee’s proposal was accepted.

    David Kennedy, chief executive of the committee, said: “A global scheme could raise tens of billions of pounds a year. You can still go on holiday abroad but there isn’t going to be room for massive increases in flying.â€


  7. About 4 weeks ago this article was probably fairly accurate but since August 3rd a friend of mine who works for a large travel firm reckons they are recording record numbers booking holidays to Spain, more than any August he has known in his 14 years. The assured way in which they claimed August was going to be a washout following a very wet July meant that all those who had claimed to be holidaying in the UK or having one of these "Staycations" suddenly realised they had messed up and booked a sunshine trip.

    Yes I'm in disagreement on this too.

    I'm currently living in Spain and have seen numerous reports on TV (possibly the BBC equivalent, who knows :ph34r: ) but the beaches all around the country here seem to be packed at present. They are saying that it is not as crowded as before but still no sign of slowdown on the costas here be it just Spanish people staying in-country or foreigner visits...

    Edit: Spelling

  8. A little follow on from the initial poster:

    Foreign banks can't save everyone

    A big Spanish bank bought the remains of failed Texas thrift Guaranty. But most overseas giants have their own problems.

    NEW YORK (Fortune) -- Foreign banks are starting to nibble at America's failed-bank buffet. But don't expect them to clean it out.

    Spain's Banco Bilbao Vizcaya Argentaria (BBV) has emerged as the winning bidder for the remains of Texas thrift Guaranty Financial Group (GFG).

    Guaranty was seized by federal regulators late Friday. With $13 billion in assets, Guaranty is the third-biggest bank failure of 2009 and tied for the 11th-largest ever.

    The arrangement makes BBVA the first overseas-based bank to buy a troubled institution this year from the Federal Deposit Insurance Corp. It may not be the last, given that dozens of additional failures are expected over the next year.

    Even so, a big wave of foreign bank investments probably isn't on the horizon, given the problems most of those institutions are dealing with at home and the poor results many have reported on previous forays into the U.S. market.

    "The Europeans are suffering from the same problems as we are," said Robert DeYoung, a finance professor at the University of Kansas business school. "Everyone is trying to recapitalize, which means less money for expansion."

    BBVA is based in the northern Spanish port city of Bilbao, but it already operates the fourth-biggest banking chain in Texas, by deposits, following a series of Lone Star state acquisitions at mid-decade. BBVA followed up those deals with the acquisition of Alabama-based Compass Bancshares in 2007 for $9.1 billion.

    Guaranty, which operates more than 150 branches in Texas and California, would fit in perfectly with BBVA's so-called retail footprint -- a factor that DeYoung says is one of the leading drivers of bankers' decision making.

    "Geography matters a lot in banking, because acquiring retail deposits is a cheap way to grow," he said. "A lot of these banks have niche markets, and this is a way to add to that."

    BBVA isn't the only foreign bank dipping a toe in the failed bank waters. The TD Bank unit of Toronto Dominion (TD) bid in May for failed Florida thrift BankUnited but lost out to a private equity group led by former NorthFork Bank chief John Kanas.

    A number of other big foreign banks have significant U.S. operations. BBVA's Spanish rival Santander (STD) bought Pennsylvania's Sovereign Bank this year, and Britain's HSBC (HBC) owns more than 400 branches, mostly in New York.

    But while the big foreign banks clearly have the scale to handle acquisitions, their impact probably will be muted by their own problems and the mixed results of earlier investments here.

    In Spain, for instance, unemployment is running well into the double digits and house prices are falling. While Spanish banks have been lauded for their conservative loan loss reserve policies, further declines in property prices -- and defaults by property developers who have been big borrowers -- could expose the likes of Santander and BBVA to damaging losses.

    Meanwhile, foreign owners of U.S. banks haven't been universally pleased with the returns their investments have brought in. Royal Bank of Canada (RY), which operates 442 branches in the Southeast, posted a $142 million loss last year in its international banking operations, which are mainly U.S.-focused.

    "Our U.S. banking operations have been significantly impacted by the ongoing stress in the U.S. housing market and the weakening U.S. economy," CEO Gordon Nixon told shareholders in February. "It has been the weakest of all of our businesses."

    The Guaranty deal comes as the FDIC, facing mounting bank failures in the wake of a massive housing bubble, seeks to draw new capital into the banking system.

    Most failed banks are sold, in whole or in part, to domestic banking institutions. But with 77 banks having failed in 2009 and dozens more expected to collapse, regulators are preparing for an onslaught of nontraditional buyers -- notably leveraged buyout firms and other private investors.

    The FDIC is expected to rule next week on the terms under which buyers outside the banking system may operate banks.

    "The private equity talk tells you how serious the situation is," said DeYoung. "That's really a symptom of how desperate the regulators are to find buyers."


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