Finance & Business World

Chancellor Angela Merkel swept aside calls to cut taxes now rather than wait until after next year’s national election, saying that her party “must have the courage to swim against the tide” to tackle the economic slowdown.

A meeting of her coalition on Jan. 5 will review the economic situation and consider whether further steps are needed to mitigate the worst recession in 12 years, Merkel said today in a speech to a convention of her Christian Democratic Union in Stuttgart.

“Germany will keep all its options open to combat the impact of the global crisis effectively,” she said. “I emphasize: all options.” At the same time, “what we won’t do is undertake a structural overhaul of the tax system.” Instead, any measures will be “temporary economy stimuli that have immediate effect.”

The chancellor’s resistance to immediate tax cuts flies in the face of calls from industry, economists and sections of her own party to provide a fiscal stimulus to help the economy, Europe’s biggest, ride out the global downturn. Retail sales unexpectedly fell in October, the Federal Statistics Office said today, suggesting a more severe recession than first predicted.

Election ‘Promises’

“Merkel wants to keep her tax gifts as promises for the election — that’s irresponsible and possibly even a grave mistake,” Thomas Mayer, chief European economist at Deutsche Bank AG in London, said in an interview. “The economy is faltering and she needs to stimulate private consumption, which has been stagnating for years.”

Merkel’s position was strengthened after leading party members yesterday backed her proposal to postpone any tax overhaul until after the national election in September 2009. She received further support today when she was re-elected party chairwoman with 94.8 percent of the ballots cast, an increase on the 93.1 percent backing she won in 2006.

Still, Germany has attracted criticism from economists and international media for the value of its stimulus measures in comparison to other countries. Merkel’s Cabinet last month agreed on a program of measures costing 32 billion euros over two years, equivalent to 1.3 percent of its gross domestic product, the chancellor said today. That compares to Italy’s 80 billion-euro package and a program of 38 billion euros in Spain.

‘Senseless Competition’

Germany won’t get into a “senseless competition” with other countries over how many billions to spend bolstering the economy, Merkel said.

In Britain, Prime Minister Gordon Brown’s government last week reduced the U.K.’s sales tax to 15 percent from 17.5 percent to spur consumer demand. Merkel should follow suit with a temporary cut in value-added tax, a sales tax, to stimulate purchases of goods from cars to computers, according to Deutsche Bank’s Mayer. “The U.K.’s move to cut VAT is the right in decision in the wrong country,” he said payday loans cash.

Bild, Germany’s biggest-selling newspaper, meanwhile urged Merkel in today’s edition to emulate Ludwig Erhard, “the father of Germany’s economic miracle” after World War II, and “save prosperity for all.” Lowering taxes “offers hope” to consumers and business, Bild cited Erhard as having said.

“The earlier the reform of taxes, the better for growth and jobs,” Economy Minister Michael Glos, from the CDU’s Bavarian sister party, the Christian Social Union, said in an editorial published today on the ministry Web site.

Glos joins Merkel’s five independent economic advisers, or “wise men,” who called on the government in their annual report published Nov. 12 to stimulate the economy by increasing disposable income. They urged additional measures of as much as 1 percent of GDP, or about 25 billion euros, on top of the program already agreed on.

‘Year of Bad News’

“Germany will continue to analyze the economic situation,” Merkel told as many as 1,000 delegates registered for the convention. “Since we know that 2009 will be a year of bad news, we will with our stimulus measures build a bridge for investment and employment, a bridge for our citizens and companies, ensuring that recovery takes place in 2010.”

The Social Democrats, Merkel’s coalition partners and rivals at next year’s election, oppose tax cuts, arguing that the government should hold to its commitment to balance the federal budget.

‘Gunpowder Dry’

“We should keep our gunpowder dry for now,” Foreign Minister Frank-Walter Steinmeier, the Social Democrat who will be Merkel’s opponent for the chancellorship, said in an interview today with the newspaper Handelsblatt. “I’m skeptical of taking a watering can and spreading benevolence across the country — that goes for tax cuts for people who seem to be able to save enough already.”

The coalition’s economic-stimulus package and 500 billion- euro bank-rescue program have already forced it to abandon a plan to balance the budget by 2011. The government will not “lose sight” of its budget goal, and will pursue the target in the next legislative period after the election, Merkel said.

Merkel, whose party faces a state election in Germany’s financial heartland of Hesse on Jan. 18, followed by three more state elections in August before the national vote in September, said 2009 will be a “super-election year.”

Even so, faced with the global economic crisis, “electioneering by the main parties is definitely on a low flame right now,” Hans-Juergen Hoffmann, managing director of Berlin-based polling company Psephos GmbH, said in an interview. “The parties have to pull together and voters know this.”

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Scheduled airlines seats to Hawaii between November and January are expected to drop 14.5 percent.

According to the Hawaii Department of Business, Economic Development and Tourism, 2.2 million seats are scheduled on nonstop flights to Hawaii for the period.

U.S. Mainland flights are expected to decrease 16.8 percent to 1.5 million, led by a 16.5 percent decline in visitors from the U.S. West region. The number of seats from Las Vegas is projected to be down 40.2 percent to 49,632.

The number of seats from California is projected to be down as well. DBEDT expects arrivals from Oakland to be down 76.9 percent to 24,288; Sacramento and San Diego are forecast to be down 39 percent and 61.3 percent, respectively. Los Angeles is projected to be down 6.9 percent to 487,913 seats.

Flights from Anchorage, however, are expected to increase 144 percent, as seasonal service aboard Alaska Airlines has begun payday advance loans.

Flights from the U.S. East are expected to drop 18.6 percent.

Flights from Japan are projected to be down 11.8 percent to 3987,118 seats. Meanwhile, airlines traveling from Sydney and Auckland will have 13 percent fewer seats.

Canada flights are expected to dip 11.1 percent to 86,264 seats.

Air seats to Honolulu, Kahului and Kona are projected down 4.1 percent, 7.5 percent and 0.2 percent, respectively. Meanwhile, Lihue will benefit from a 16.7 percent increase to 27,336 scheduled air seats.

The DBEDT analysis is based on scheduled flights as noted in the Official Airline Guide flight schedules as of October and are subject to change.

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The University at Buffalo’s Engineering Awareness for Minorities received an award this month from the U.S. Department of Labor for its efforts to promote equal employment opportunities.

BEAM is the winner of the 2008 Exemplary Public Interest Contribution award. It is one of two non-profit organizations to receive the award. F.E.G.S. Health and Human Services System in New York City is the other recipient.

BEAM works with middle school and high school students in the Buffalo-area who want to attend college to pursue science and engineering degrees freecreditreport. Since it began in 1982, it has allowed more than 10,000 students to get involved in science, math and computer projects at after-school clubs, summer programs and career days, the university said.

It is funded by contributions from companies, educational institutions, community organizations and individuals.

The award was presented Oct. 16 in Washington, DC.

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Commercial real estate brokerage firm Cushman & Wakefield of Arizona Inc. is changing spaces at the Camelback Esplanade to make way for law firm DLA Piper LLP.

Cushman is the leasing agent for the office tower complex near 24th Street and Camelback Road and has relocated its team to the third floor at 2555 E. Camelback Road. Cushman’s new lease is for 21,000 square feet.

Meanwhile, DLA Piper LLP will take over Cushman’s former space on the 10th floor of 2525 E. Camelback Road. The firm will move into the 19,000 square foot space in January faxless payday advance.

Venture capital firm Winfield Investment Partners is relocating its offices from Scottsdale to nearly 5,200 square feet at 2575 E. Camelback Road.

Cushman brokers Jerry Jacobs and Larry Downey represented the landlord, MetLife. DLA Piper was represented by Mark Robbins and Bill Zurek of Transwestern Commercial Services. Winfield Investment Partners was represented by Adam Tolson of Lee & Associates in Phoenix.

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NEW YORK–Burger King Corp. said Thursday it is now cooking with trans fat free cooking oils at all of its restaurants nationwide.

The No. 2 hamburger chain also said all of its menu ingredients, including its baked goods, will contain zero grams of trans fat by Nov. 1.

Trans fats are partially hydrogenated vegetable oil. They can raise bad cholesterol and lower healthy cholesterol, increasing the risk of heart disease, according to doctors. Trans fats are used to increase the shelf life of foods and preserve flavor.

Many of Burger King's restaurants have already been using trans fat free oil for months. Burger King first announced in July 2007 that it would switch to trans fat free oil in all of its U.S. restaurants by the end of 2008.

"Our suppliers were able to manufacture enough quantity to get us there sooner than our committed deadline," said chief executive and chairman John Chidsey.

Chidsey did not offer any details about the new oils being used at Burger King restaurants, saying the information is “proprietary.''

He said customers who have tried the trans fat free foods either do not notice any difference in taste or told the company they tasted better. Eliminating trans fat can change the flavor of foods – a side effect that has made extensive testing of new oils a necessity (no qualifying payday advance. restaurants to trans-fat free oil as fast as its competitors.

Yum Brands Inc.'s KFC and Taco Bell switched in 2007 and Wendy's International Inc., the No. 3 burger chain, cut out trans fat oil a year earlier.

Chidsey said given the scale of its restaurant system – the company operates 11,500 restaurants worldwide – the timeline for making the switch nationwide was mostly up to suppliers particularly since there is some overlap in the oils used by other companies.

"We're at the mercy of our suppliers," he said.

McDonald's Corp., the leader in the fast food business, has also lagged behind in switching its oils and in making its baked goods trans fat free.

It began using trans fat free oil to make its french fries in all its restaurants in May and said it would use the oil in its baked goods, pies and cookies in all locations by the end of the year.

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Gov. Arnold Schwarzenegger sent an open letter on Thursday to all members of the California Congressional delegation urging them to vote in favor of the $700 billion federal financial bailout package, formally called the Emergency Economic Stabilization Act.

“This plan is critical to the well being of every community in California and across the nation. Swift action in Congress is needed to restore confidence in our financial system,” the letter states.

“This is how serious the situation is: Our State Treasurer warns that the credit market has already frozen up to the point that it chills even the state of California’s ability to meets its short-term cash flow needs,” he wrote, adding that the state will be unable to sell voter-approved bonds for highway, school, housing and water construction projects.

He says the “situation is urgent” and that the crisis demands swift and bipartisan leadership.

California members of the U.S. House of Representatives voted 29 to 24 in favor of the failed bailout package on Monday. This is how they voted, as reported by the Associated Press:

• Voting for the legislation:

Democrats: Howard L. Berman (Valley Village), Lois Capps (Santa Barbara), Dennis Cardoza (Atwater), Jim Costa (Fresno), Susan A. Davis (San Diego), Anna G. Eshoo (Menlo Park), Sam Farr (Carmel), Jane Harman (Venice), Michael M. Honda (San Jose), Zoe Lofgren (San Jose), Doris Matsui (Sacramento), Jerry McNerney (Pleasanton) George Miller (Martinez), Nancy Pelosi (San Francisco), Laura Richardson (Long Beach), Jackie Speier (Hillsborough), Ellen O no fax payday loans. Tauscher (Alamo), Maxine Waters (Los Angeles), Henry A. Waxman (Beverly Hills).

Republicans: Mary Bono Mack (Palm Springs), Ken Calvert (Corona), John Campbell (Irvine), David Dreier (San Dimas), Wally Herger (Chico), Jerry Lewis (Redlands), Dan Lungren (Gold River), Howard P. “Buck” McKeon (Santa Clarita), Gary G. Miller (Diamond Bar), George Radanovich (Mariposa).

• Voting against the legislation:

Democrats: Joe Baca (Rialto), Xavier Becerra (Los Angeles), Bob Filner (Chula Vista), Barbara Lee (Oakland), Grace F. Napolitano (Norwalk), Lucille Roybal-Allard (East Los Angeles), Linda T. Sanchez (Lakewood), Loretta Sanchez (Garden Grove), Adam Schiff (Burbank), Brad Sherman (Sherman Oaks), Hilda L. Solis (El Monte), Pete Stark (Fremont), Mike Thompson (St. Helena), Diane Watson (Los Angeles), Lynn Woolsey (Petaluma).

Republicans: Brian P. Bilbray (Carlsbad), John T. Doolittle (Roseville), Elton Gallegly (Simi Valley), Duncan Hunter (Alpine), Darrell Issa (Vista), Kevin McCarthy (Bakersfield), Devin Nunes (Tulare), Dana Rohrabacher (Huntington Beach), Ed Royce (Fullerton).

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The world may face “Japan-like'' economic stagnation as turmoil in financial markets weighs on growth and challenges the ability of policy makers to manage the crisis, Government of Singapore Investment Corp. said.

Global growth will probably be weak in the next few years, and protectionist and populist policies are likely to emerge, said Tony Tan, deputy chairman of GIC, in a speech in Geneva yesterday. The sovereign fund, which oversees more than $100 billion, has pumped billions into UBS AG and Citigroup Inc. after they posted writedowns linked to U.S. subprime mortgages.

“Policy responses so far have tried to minimize the likelihood of a Japan-like deflationary spiral but the adjustment could take a couple of years and be very painful,'' Tan said. “Over the near term, debt deflation and deleveraging in the U.S. and other major developed economies will exert downward pressure on growth in many economies.''

An asset-price bubble in Japan burst in the early 1990s, triggering a property and stock market collapse that heralded a decade of stagnation in the world's second-largest economy. Financial institutions worldwide have reported more than $500 billion in losses and writedowns since the beginning of 2007 and the credit-market collapse erased $11 trillion from global stocks in the past year.

The worst U.S. housing slump since the 1930s is showing little sign of abating and more than 10 lenders in the world's largest economy have collapsed this year. The U.S. Treasury Department and the Federal Housing Finance Agency this month seized control of Fannie Mae and Freddie Mac after the biggest surge in mortgage defaults in at least three decades threatened to topple the companies.

`More Severe'

“If house-price declines are significantly greater than expected, larger financial institutions could become insolvent, the credit crunch would be more severe and economic growth could weaken considerably,'' Tan said. “A vicious deflationary cycle with falling house prices, failing financial institutions and weaker growth could then ensue.''

Lehman Brothers Holdings Inc. is preparing to file for bankruptcy after Barclays Plc and Bank of America Corp. abandoned talks to buy the U.S. securities firm, according to a person with direct knowledge of the firm's plans.

Goldman Sachs Group Inc. last month estimated that half of the world economy already faces recession, with richer nations faring the worst as emerging markets continue to expand faxless payday loan. The global economy faces a 25 percent chance of recession in the next year, according to UBS AG economists.

Emerging Markets

Japan's economy shrank 3 percent last quarter, the steepest decline since 2001, while the euro-area economy contracted 0.2 percent in the same period. The U.S. economy, which expanded at a 3.3 percent annual pace in the second quarter, has lost 605,000 jobs in the first eight months of the year.

Emerging markets will account for more than half of the world's growth in the next decade, from about a fifth in 2000, Tan predicts.

“Growth in emerging markets can be expected to remain relatively robust,'' he said. “Emerging economies will displace the G-7 as the world's largest economies over the next two to three decades.''

A rising “middle-class'' in emerging markets will also increase demand for commodities and increase supply constraints that may spur competition for resources, he said.

Natural Resources

“International tensions could rise as countries compete for natural resources, especially food, energy and water,'' Tan said. “Commodity-producing countries are likely to exert stronger control over their natural resources, potentially exacerbating supply concerns. Countries that are reliant on imports of commodities could be more aggressive in their pursuit of supplies.''

Weaker employment and income growth could lead to a rise in protectionist policies, especially in the U.S. and Europe, Tan said. Governments need to increase conflict-resolution mechanisms and boost cooperation to solve issues amid the emergence of new major economies, he said, citing the World Trade Organization Doha Round of talks as an example.

Trade ministers have tried and failed to reach a breakthrough in the so-called Doha Round talks in each of the past three years. A nine-day summit at the WTO in Geneva collapsed on July 29 after India and the U.S. disagreed over how poor nations could increase duties to protect their economies from surging farm imports.

“Significant stagnation as well as inflation risks suggest that challenges and potential conflicts arising from both protectionism as well as resource nationalism could seriously jeopardize globalization of production and markets,'' Tan said.

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Origin Energy Ltd (ORG.AX: Quote, Profile, Research, Stock Buzz), fending off an $11 billion hostile bid from Britain’s BG Group Plc (BG.L: Quote, Profile, Research, Stock Buzz), is to spin off its coalbed methane assets into a joint venture with U.S. oil major ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz).

Origin and Conoco said in statements on Monday that Conoco would contribute up to $8 billion toward a joint venture that will develop the massive coal-seam gas (CSG) assets and build a liquefied natural gas (LNG) project.

A BG spokeswoman declined to comment immediately on the move but analysts said it could force the UK gas producer to raise its A$15.50 per share bid which was aimed at growing BG’s Asia-Pacific LNG production arm to feed its booming Asian LNG sales business.

Origin’s shares rose nearly 28 percent to a record high of A$19.99 on news of the venture.

“Obviously, ConocoPhillips’ joining is a positive fast payday loan no faxing. I suppose it shows that there is good market out there for what Origin has got,” said Peter Chilton, a fund manager with Constellation Capital Management, which does not own Origin shares.

Conoco said it would pay $5 billion to the joint venture and would carry Origin Energy for their first A$1.15 billion ($950 million) in joint venture expenses.

It will also pay $500 million into the venture when the partners agree to proceed with each train or phase of the planned four-train CSG to LNG project.

The deal would take the financial burden of developing the reserves off Origin, whose main business currently is retailing power and gas. 

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VeriFone Holdings Inc. said Tuesday that its Board of Directors has appointed Robert Dykes to serve as senior vice president, effectively immediately and assume the title of chief financial officer following the filing of the company's quarterly report on Form 10-Q for the third fiscal quarter ended July 31.

Dykes will succeed Clinton Knowles, who has been serving as San Jose-based VeriFone's (NYSE:PAY) interim chief financial officer.

Since 2007, Dykes has been chairman and CEO of NebuAd Inc., a provider of targeted online advertising networks. From 2005 to 2007, Dykes was executive vice president, Business Operations and chief financial officer of Juniper Networks Inc. Dykes also has held C-level positions with Flextronics International Ltd. and Symantec Corp.

Douglas G free credit report online. Bergeron, chief executive officer of VeriFone, said, “Bob Dykes brings to the CFO role 30 years of financial and operational management experience in public and private companies and an established reputation in building world-class organizations. His deep knowledge and experience with complex international supply chains will greatly benefit our company. We look forward to his leadership and contributions to VeriFone’s continued growth and stability.”

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InBev said Monday it received a request for additional information from the U.S. Department of Justice about its $52 billion takeover of Anheuser-Busch.

The Belgian brewer said it plans to “respond expeditiously” and “to work toward a prompt closing of the transaction.” The request deals with antitrust regulations.

“This request for additional information from the DOJ is a normal and expected part of the regulatory process,” InBev said in a statement. “InBev remains confident that the transaction will receive regulatory approval and continues to expect to close the transaction by the end of this year.”

St. Louis-based Anheuser-Busch Cos. Inc. (NYSE: BUD), through its Anheuser-Busch Inc. subsidiary, is the leading domestic brewer, holding a 48.5 percent share of U.S no fax payday loan. beer sales.

The company, which accepted a $52 billion takeover offer from Belgian InBev, brews the world’s largest-selling beers, Budweiser and Bud Light. Anheuser-Busch also owns a 50 percent share in Grupo Modelo, Mexico’s leading brewer, and a 27 percent share in the China brewer Tsingtao, whose namesake beer brand is the country’s best-selling premium beer.

Anheuser-Busch’s Fairfield brewery has a capacity of 4.4 million barrels per year and produces Budweiser, Bud Light, Busch, Busch Light and Natural Light. It serves Northern California, Alaska, Northern Nevada, Oregon, Washington and Hawaii.

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