Finance & Business World

Thousands of Romanians, including teenage students who cut class, marched through their capital on Thursday to demand the resignation of their government for imposing harsh austerity measures in order to receive international loans for the nation’s battered economy.

It was one of the largest protests in recent times in Bucharest and came after a week of sometimes violent anti-government demonstrations.

As the march reached University Square, protesters blocked traffic and shouted what has become a trademark slogan aimed at President Traian Basescu: “Get out, you miserable dog.”

The square _ a focal point of recent protests _ is historically significant for Romanians because it was a centerpiece of the 1989 anti-communist revolution that led to Romania’s birth of democracy.

On Thursday, some protesters pretended to hang Basescu and his close political ally, Tourism and Regional Development Minister Elena Udrea, by stringing their dummies to gallows set up in the square.

“Resign!” and “Down with Basescu!” other protesters screamed.

Some 14-year-old students at a school located along the route of the march abandoned class to join the demonstration. “To prison with you!” the students yelled at their president.

Police said 7,000 attended the rally, while organizers claimed the crowd was far larger.

In 2009, Romania took a two-year euro20 billion ($27.5 billion) loan from the International Monetary Fund, the European Union and the World Bank as its economy shrank by 7.1 percent. It imposed harsh austerity measures under the agreement, reducing public wages by 25 percent and increasing taxes. Anger has mounted over the wage cuts, slashed benefits, higher taxes and widespread corruption.

On Thursday, Basescu made his first public appearance since the protests began a week ago in an address to ambassadors in Bucharest. He spoke about Iran, the Middle East, domestic reforms and the “Arab Spring,” but did not touch on the demonstrations or the anger over the state of Romania’s economy.

During the Bucharest rally, one protester who only identified himself as Tudor, a 43-year-old locksmith said: “We want decent salaries and pensions. We want change _ from the top to the bottom.”

Another protester, a 55-year-old nurse named Lorelei said, “We wouldn’t have needed to have austerity measures if our governments hadn’t stolen so much and bled us dry.” She said she has attended all this week’s anti-government rallies.

Three opposition parties organized Thursday’s march, with protesters arriving in the capital from all over the country. Opposition leaders and Romanian personalities addressed the crowd before the march.

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Foreign direct investment in China fell for the second straight month in December as global financial turmoil dimmed companies

The Greek government and its creditors return to the negotiating table this week to revive stalled talks on a debt swap as German Chancellor Angela Merkel places pressure on both sides to forge a deal.

Greek Finance Minister Evangelos Venizelos said two days ago that talks with the Institute of International Finance will resume on Jan. 18. The Washington-based IIF, which represents banks holding the bonds, said on Jan. 14 there is a

China is expecting foreign trade growth to slow this year to around 10 percent amid a grim outlook for exports, a state news agency reported Saturday.

The world’s second-largest economy’s foreign trade will be hurt by weak external demand, increasing trade competition, a stronger Chinese currency and other factors, the official Xinhua News Agency cited an official from the country’s top economic planning agency as saying.

“We expect more difficulties in foreign trade and the export situation will be grim in 2012, especially in the first half of the year,” said Zhang Xiaoqiang, deputy director of the National Development and Reform Commission, according to Xinhua.

Last year, China’s foreign trade grew 22.5 percent to $3.6 trillion, according to data from the official General Administration of Customs released earlier in the week.

The data also showed that exports in December rose 13.4 percent, down slightly from November’s growth rate. In a new that sign the economy is slowing, import growth showed an unexpectedly sharp drop, falling to 11.8 percent, barely above half the previous month’s gain payday loans.

On Saturday, Zhang told a forum in Beijing that improving tax and insurance policies and providing financial support for small trading companies could help stabilize export growth, Xinhua said.

China’s relatively robust growth has been a rare bright spot for a struggling global economy. But growth has slowed in recent months after Beijing tightened lending and investment curbs to prevent overheating.

A slump in demand for Chinese goods abroad has prompted the government to reverse course and promise to help struggling exporters and shore up growth with more bank lending and other measures. It is unclear what impact the measures will have.

Chinese export growth has fallen steadily since August as Europe’s debt crisis and high U.S. unemployment hurt demand. But it has stayed in double digits, showing the competitive strength of Chinese exporters in global markets.

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World stock markets rose Friday, driven higher by a successful bond issue in Europe that eased worries over the continent’s sovereign debt crisis.

Benchmark oil rose to nearly $100 per barrel and the dollar fell against the euro and the yen.

European shares rose in early trading. Britain’s FTSE 100 advanced 0.6 percent to 5,694.38. Germany’s DAX gained 0.7 percent to 6,221.96 and the CAC-40 in Paris gained 0.9 percent 3,229.17. Wall Street, too, was set to open higher, with Dow Jones industrial futures up 0.1 percent to 12,424. S&P 500 futures rose 0.1 percent at 1,293.

Asian shares were mostly higher. Japan’s Nikkei 225 index rose 1.4 percent to close at 8,500.02 and South Korea’s Kospi index moved 0.6 percent at 1,875.68. Hong Kong’s Hang Seng index vacillated before closing in positive territory, up 0.6 percent to 19,204.42.

Australia’s S&P ASX 200 was 0.4 percent higher at 4,195.90. Benchmarks in Singapore, Indonesia, India and Malaysia also rose.

But mainland Chinese shares fell as investors continued to cash in on recent gains. The benchmark Shanghai Composite Index lost 1.3 percent to 2,244.58, while the Shenzhen Composite Index dropped 3.5 percent to 845.93.

“The market will be volatile for the next one or two weeks after this correction, since there is just no support for the market to rise in the long term,” said Xu Xiaoyu, an analyst at China Investment Securities, based in Beijing.

PetroChina, the country’s biggest oil and gas company and the Shanghai benchmark’s biggest component, gained 1.4 percent as oil prices rose to near $100 a barrel in Asia on Friday on worries over supply tightness.

Elsewhere, raw materials and industrial companies advanced, following their U.S. counterparts higher. Japanese heavy equipment maker Komatsu Ltd guaranteed payday loans. jumped 4.1 percent and Hitachi Construction Machinery gained 3.8 percent.

Energy Resources of Australia soared 6 percent and Paladin Energy Ltd., an Australian uranium miner, gained 3.1 percent. But shares in Australia’s QBE Insurance group dropped 3.1 percent, after the company warned its earnings could halve following a spate of natural disasters in 2011.

South Korean tech shares advanced, with Samsung Electronics Co., the country’s largest company, up 1.8 percent and Hynix Semiconductor, a global leader in chip-making, surging 4.1 percent. Its largest banking group, Woori Financial Holdings Co., jumped 3.9 percent.

Strong bond auctions in Italy and Spain on Thursday pushed stocks higher. Italy was able to sell one-year bonds at a rate of just 2.735 percent, less than half the 5.95 percent rate it had to pay last month. Spain was able to raise double the amount of money it had sought to raise in its own bond sale as demand for its debt was strong.

Investors have been worried that Italy and Spain might get dragged into the region’s debt crisis. Greece, Ireland and Portugal have been forced to get relief from their lenders after their borrowing costs spiked to levels the countries could no longer afford.

Benchmark oil for February delivery rose 78 cents to $99.88 per barrel in electronic trading on the New York Mercantile Exchange. The contract tumbled $2 to finish at $99.10 per barrel in New York on Thursday.

In currency trading, the euro rose to $1.2843 from $1.2827 late Thursday in New York. The dollar was slightly down at 76.73 yen from 76.76 yen.

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Banks are hoarding the European Central Bank

So the U.S. economy added hundreds of thousands of jobs last month and everything is fantastic, right?

Well, not exactly. More than 40,000 of those jobs were couriers and messengers, which were in demand during the holidays because of the increased focus on online shopping rather than retail. But these jobs tend to be temporary seasonal hires and not permanent additions.

"People are happy to get those jobs for the time they have them, but come January, they’re out looking for jobs again," said Dean Baker, co-director of the Center for Economic and Policy Research.

The U.S. Labor Department reported that the economy added 200,000 jobs, which was stronger than economists expected, and the unemployment rate dipped to 8.5%.

Obama proposes pay hike

But spokeswomen for FedEx (, Fortune 500) and UPS (, Fortune 500) confirmed that they increased temporary hiring during the 2011 holiday season even more than the year before. However, many of those jobs have already evaporated.

"The hiring boost this holiday season was greater than the prior holiday season," said Kara Ross of UPS, noting that her company hired 55,000 temporary workers for the 2011 holiday season, an increase of 5,000 from the year before credit reports free.

Ross said that many of those new hires were drivers, driver helpers, loaders and unloaders. Many of them won’t remain on the payrolls after the holiday season, she said, though the level of attrition is yet to be determined.

"It just depends on our volume loads," she said. "Some of them we might keep on; some of them we might not."

Carla Boyd of FedEx said her company hired 20,000 temporary seasonal workers from October to December, an increase of 17,000 from the prior holiday season.

Unemployment rate, state by state

"There’s an incredible holiday surge," said Boyd. "We had our busiest day in history on Dec. 12."

On that day, FedEx had 17 million shipments, compared to the year-ago holiday peak of 15.6 million. But the annual average is 8.5 million, so FedEx doesn’t need that many workers year-round.

"The problem is that you have a lot of reporters touting this as a really strong report, and if that creates a view among policy makers that the economy is on the mend, then that undermines the need to do anything," said Baker. 

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Maybe the best person to take on issue number one — the economy — should be an economist?

At least, that’s the thought of Laurence Kotlikoff, an economics professor at Boston University. He’s planning on throwing his hat in the ring next week, announcing he’s running for president as a third-party candidate.

"I think I may be the first economist to run for president," Kotlikoff said. "We see economists now running Greece and Italy. It’s not everyday that an economist decides to work this way for his country — but I’m one of those cases."

Kotlikoff has never before run for public office. His goal is to secure a place on the 2012 ballot as an independent through a new online nomination site, AmericansElect.org.

The nonpartisan group, which has raised $22 million so far, aims to put an alternative candidate on the ballot, chosen by online voters through a three-stage primary.

CNN: New group paves way for alternative 2012 choice

In addition to his role as an economics professor, Kotlikoff is the author of 15 books and a regular columnist for Bloomberg.com. He has also served as a consultant to Fortune 500 companies, foreign governments, central banks and international agencies like the International Monetary Fund and the World Bank.

Kotlikoff’s platform centers on what he calls the "Purple Plan." Purple, because he hopes it will appeal to both blue Democrats and red Republicans, and all Americans in between.

Political observers question whether a nonpartisan candidate could have a serious shot at winning, and it’s not as if Kotlikoff is the only alternative candidate out there. Currently 165 people, not in the Republican or Democratic parties, are on file with the Federal Election Commission as presidential candidates.

Still, he hopes his campaign will have an impact saving account pay day loan.

"I’m hopeful that my candidacy will be taken very seriously," he said. "And that young people in particular will realize this is someone who is really focused on their interests."

If he does win, Kotlikoff pledges to eliminate income taxes on both individuals and businesses, as well as estate and gift taxes. Instead, he would institute a progressive sales tax and inheritance tax, and make the payroll tax highly progressive.

Kotlikoff would also replace the current health care system with one under which all Americans receive a voucher each year to purchase a standard health plan from the private-plan provider of their choice. In true economist speak, he says he would reallocate the roughly 10% of GDP that the federal and state government currently spend on Medicare, Medicaid and health exchanges, to pay for this program.

GOP 2012: What they (wouldn’t) cut

"I’m not suggesting that only an economist is qualified to be President, but I am suggesting that, other things equal, economic problems are likely to be better understood and fixed by an economist than a career politician or someone who has, for example, spent his life running a pizza chain," Kotlikoff wrote on his campaign website Kotlikoff2012.org.

Kotlikoff says he does not have a party affiliation and he plans to file an official statement of candidacy with the Federal Election Commission next week.

He previously worked as a senior economist on President Reagan’s Council of Economic Advisors, but voted for President Carter. He has also served as an economic adviser to former Senator Mike Gravel, who switched from the Democratic Party to the Libertarian Party amid his 2008 bid for president. 

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Three Federal Reserve policy makers called on the U.S. government to try new programs to revive the housing market while differing over whether the central bank should take more steps to cut borrowing costs.

New York Fed President William C. Dudley said in New Jersey today that

Europe won modest respite from its debt crisis Wednesday as Germany and Portugal borrowed with relative ease ahead of a hazard-filled few weeks for the 17 nations that use the euro.

But Greece’s new prime minister warned that his debt-crippled country has only three months to come up with new reforms so his country can stay in the eurozone and avoid a potential default _ a reminder of how the crisis can flare up at any time. And the news that a major Italian bank had to offer an unexpectedly large discount to raise new capital showed just how wary investors are of Europe’s shaky banks.

So far this year, markets have pushed concerns about Europe to one side, especially as countries have managed to raise the money they need.

Germany, the biggest contributor in Europe’s bailouts, managed to sell euro4.06 billion ($5.3 billion) in its benchmark ten-year bonds Wednesday at an average yield of 1.93 percent, down on the previous 1.98 percent it had to pay. And Portugal, which was bailed out last April, paid a markedly lower interest rate to borrow euro1 billion ($1.3 billion) in three-month treasury bills.

But Italian bank UniCredit saw its share price tumble over 10 percent on the news it was selling new shares at a large 69 percent discount to Tuesday’s closing price. UniCredit is trying to raise euro7.5 billion ($9.8 billion) to meet new European requirements for banks to thicken their financial cushions against possible losses.

Banks are an integral part of the debt crisis because they hold government bonds. A default or steep fall in the value of government bonds could inflict heavy losses on banks and choke off credit to the European economy. That’s why the regulatory authorities want Europe’s banks to raise their buffers by euro115 billion ($150 billion) over the next few months.

The German and Portuguese auctions come ahead of severe tests for eurozone leaders as they try to navigate their way out of a crisis over too much debt in some countries.

Eurozone governments are struggling to convince financial markets that indebted governments will not default and should be able to borrow at affordable rates to repay debts as they come due. Greece, Ireland and Portugal have needed bailouts, while much larger Italy and Spain have seen their borrowing costs rise ominously.

Italy, the recent focus of the crisis, must borrow to cover euro53 billion ($69 billion) in expiring debt in the first quarter alone in debt auctions beginning Jan. 13. That will test whether the government of new Prime Minister Mario Monti is making progress in regaining market confidence through budget cuts and efforts to improve weak economic growth.

Further trouble could come from a slowing eurozone economy that may already have shrunk in the fourth quarter.

Additionally, Greece must also win approval of a second, euro130 billion ($169 billion) bailout, without which it can’t pay its debts, and strike a deal with creditors for a 50 percent reduction in their holdings of Greek debt to try to put the country back on its feet.

Greek Prime Minister Lucas Papademos warned union leaders and business groups Wednesday that decisions made in the next few weeks, ahead of a new visit by international debt inspectors, will determine whether Greece remains in the 17-nation eurozone or reverts to its pre-2002 currency, the drachma.

Portugal looks like it’s in better shape at the moment. The rate it had to pay at its auction fell to an eight-month low of 4.346 percent. Although Portugal cannot tap long-term bond markets at a reasonable price, it has sought to maintain a market presence by issuing shorter-term debt.

Analysts said the improvement may represent a sign that Portugal is regaining the markets’ confidence as it carries out spending cuts and revenue increases in return for its euro78 billion ($102 billion) bailout.

“There’s been an improvement in the risk perception of Portuguese debt, which has driven rates down” said Filipe Silva, debt manager at Portuguese financial group Banco Carregosa. “Now we just need to see whether it holds.”

Germany’s auction was better than one in November which raised fears that Europe’s debt crisis was spiraling out of control when the government sold only 65 percent of debt on offer.

Still, there was some concern over the amount of German bunds investors actually wanted Wednesday. Bids for euro5.14 billion ($6.7 billion) worth of bonds exceeded the full amount on offer of euro5 billion ($6.5 billion), but only barely, counting euro943 million ($1.23 billion) the government kept back for secondary market operations.

“Yes, it was covered, so that’s a relief,” said Marc Ostwald, a markets strategist at Monument Securities. “On the other hand, the coverage was poor.”

Germany can borrow cheaply because its economy is the strongest in the eurozone but concerns about the costs of bailing out fellow eurozone nations have raised questions about Germany’s finances as well.

Wednesday’s auction results follow a recent trend. On Tuesday, the Netherlands saw its borrowing rates fell to near zero percent in a pair of short-term auctions, in a sign that investors are searching out what they consider to be Europe’s safer assets.

Italy also sold large chunks of debt last week and analysts say the run of smooth auctions may be largely due to a massive euro489 billion ($636 billion) infusion of cheap, 3-year credit to eurozone banks by the European Central Bank.

Some of that cheap money may be being used by some banks to buy higher-yielding short-term debt. Italy’s longer-term borrowing rate in the markets remain at dangerously elevated levels near 7 percent, a point that prompted Greece, Ireland and Portugal to seek bailouts.

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