Confidence to improve only slightly in Sept.

NEW YORK (AP) -- Consumers' confidence in the economy, which plummeted in August, is expected to show only slight improvement in figures being released Tuesday.

Shoppers haven't yet cut their spending compared with last year, and forecasts for the winter holidays point to slightly higher sales than a year ago. But the gloomy consumer mood isn't good news heading into the crucial winter holidays.

Economists surveyed by FactSet expect that the Conference Board, a private research group, will report Tuesday that its consumer confidence index rose to 46 in September from 44.5 in August. The August reading was the lowest since April 2009, and it was almost 15 points below July's reading of 59.2.

A reading above 90 indicates the economy is on solid footing; above 100 signals strong growth.

Economists watch the number closely because consumer spending -- including major items like health care -- accounts for about 70 percent of U.S. economic activity.

The report on September's mood is to be released at 10 a.m. EDT.

The Conference Board bases its index on results of a survey it conducts the first half of each month with 5,000 of randomly selected households nationwide.

August's reading was skewed by consumer anxiety stemming from Standard & Poor's downgrade of federal debt on Aug. 5, four days into the survey. Renewed concern about the health of European banks didn't help.

Not much has changed since, although the stock market's swings are modulating. Concern persists about a potential crisis in Europe, and traditional worries about jobs, rising costs and the sluggish housing market continue in the U.S.

Net job creation came to a halt in August in the U.S. The official unemployment rate stayed at 9.1 percent. And consumers are spending more for everything from food to clothing as retailers compensate for higher labor and materials costs.

Nevertheless, back-to-school shopping went well for stores, though a weak job market and higher basic household costs are driving a wider wedge between spending among households with incomes over $100,000 and those below, says Alison Paul, vice chairman of Deloitte LLP.

A retail analyst, Paul said shoppers will remain focused on deals into the winter holidays but could spend a little more than last year, barring catastrophic events.

"I think we are going to have an OK Christmas," she said. "What shoppers say and what they do are two different things. Shoppers continue to sound down, but they still show up at the stores."

Deloitte expects stores' revenue to grow 2.5 percent to 3 percent for the period from November through January. Last year, it rose 5.9 percent.

ShopperTrak and the International Council of Shopping Centers trade group are on the same wavelength. For November and December combined, they expect a gain of 3 percent, compared with a 4.1 percent increase in 2010. ShopperTrak measures foot traffic in 25,000 stores in the U.S. and blends those figures with economic data.

And all those holiday predictions are rosier than the actual gain of 2.6 percent on average that the National Retail Federation measured for the last 10 years.

The National Retail Federation, the nation's largest retail trade group, is to offer its revenue forecast next month.

http://finance.yahoo.com/ 

Greece's debt crisis odyssey

Greece and its lenders are locked in discussion. The "Troika" of lenders - the European Union, International Monetary Fund and European Central Bank - say Greece must take more painful steps to cut its borrowing. But Greece faces riots and mass protests on the streets of Athens. The government could lose its grip on parliament - only 155 of 300 MPs backed the last round of austerity in June. At stake is the next 8bn euro tranche of bailout money, which Greece desperately needs to avoid total crisis. Starting from the top, follow the decision tree to decide what happens next.

• Does Greece meet the Troika's austerity demands?
  YES or NO
• Recession deepens: Greece has to cut its borrowing to a target set by the Troika. But austerity deepens Greece's recession. Along with mass tax evasion and strikes by tax collectors, this has already made Greece over-shoot its target twice.
  Does Greece miss its borrowing target again?
  NO YES
• Impasse: Greece has failed to deliver promised austerity and the Troika has threatened to stop releasing bailout loans. But without the cash, Greece faces a crisis.
  Does the Troika release the bailout money?
  YES NO
• Greece has a funding shortfall: Despite the austerity, Greece still needs more cash. The Troika can lend it, or else Greece has to make more cuts.
  Should the Troika...
  demand more austerity?
  or give another bailout?
• Greece has a cash crisis: The government does not have enough money to pay for public services and must choose which payments to skip.
  Does Greece stop repaying its debts?
  YES NO
• Austerity succeeds: After years of painful cuts Greece does not need to borrow any more to fund government spending. But Greece still has huge debts to repay.
  Does Greece renegotiate its debts?
  YES NO
• The Troika blinked: Greece has won the stand-off. The Troika is evidently too afraid of the conse- quences to let Greece go bust.
  Does Greece continue with austerity?
  YES or NO
• Banking crisis: Default leaves Greek banks bust and risks a Europe-wide banking crisis.
  Does the Troika bail Greece out?
  YES or NO
• Severe cash crisis: The government cannot make basic payments like employee wages, benefits and public services, and risks major civil unrest.
• Greek banks collapse. Even after halting debt repayments, the government still can not pay all its bills.
• Economic collapse:Speculation may rise that Greece will leave the euro, prompting a run on the Greek banks.
  Does Greece exit euro?
  NO YES

• PYRRHIC VICTORY
  Greece forces its lenders to write off most of its debts, which probably bankrupts the Greek banks (its biggest lenders), meaning they must be nationalised. Greece still may face years of low growth as its economy is uncompetitive inside the euro.
• DEPRESSION
  Greece may face years of grindingly low growth as its economy is uncompetitive inside the euro. In addition, the government probably has to pass even more growth-sapping austerity to cover the cost of its debt repayments.
• MORAL HAZARD
  Greece has its lenders over a barrel, earning kudos with the Greek public, and allowing it to slow down painful austerity. But Italy and other high-debt countries may copy Greek tactics. Germany - which is now seen as on the hook for bailing out the entire eurozone - may find it much more expensive to borrow, and may consider leaving the euro.
• POLITICAL TURMOIL
  The Greek economy may face total collapse, with banks closed and the government unable to pay for basic public services. This is likely to cause massive civil unrest and a collapse of the government. Greece has already seen rioting and the takeover of government offices. The CIA has warned of a possible military coup.
• GLOBAL MELTDOWN
  Switching back to the drachma leads to a huge financial and legal mess. Italy and Spain may be unable to borrow and face a run on their banks amid fears they may also leave the euro. Major European banks could collapse sparking another global financial crisis. In Greece the drachma is likely to plummet in value, boosting the economy, but causing painfully high inflation.

http://www.bbc.co.uk/

Markets fall on worries of worsening Greece debt crisis

World share markets have fallen, and oil and the euro are also down, on fresh worries about a Greek default.

The Dow Jones index closed 0.9% down, the FTSE 100 ended 2% lower, and France's Cac and Germany's Dax sank about 3%.

Brent crude fell $2.5 to $109.61 a barrel on concerns that a slowing world economy will cut demand for oil.

The falls came after a weekend meeting of European officials ended without a deal on ways to tackle the debt crisis.

"The market is bracing itself for the worst possible outcome, which is a disorderly Greek default," said Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London.

In addition to Brent's fall, US crude was down $2.34 to $85.62 a barrel.

Oil analyst Jonathan Barratt of Commodity Broking Services said the eurozone concern was hitting demand.

"Look at what's happening in Europe. People are beginning to see that it is taking a lot longer than anticipated to resolve the issue," he said.

"Longer uncertainty means the demand outlook for oil remains weak."

On Sunday, Greek Prime Minister George Papandreou chaired cabinet crisis talks, a day after cancelling a trip to the US amid growing fears over the debt crisis in the country.

The talks focused on new austerity measures to enable Greece to secure the country's next bailout loan.

Without the next loan Greece will not be able to meet its debt payments next month.

http://www.bbc.co.uk/news/business-14968090 

Greek PM to hold crisis talks with Merkel, Sarkozy

ATHENS, Greece (AP) -- The leaders of Greece, France and Germany will seek ways to contain the spiraling debt crisis and prevent it from further roiling global financial markets in a teleconference on Wednesday evening.

Fears in recent days that Greece was heading rapidly towards a chaotic default have sent the interest rates on 10-year government bonds soaring to new record highs. On Wednesday, they stood at the alarming level of 25.3 percent, more than 23 points higher than the German equivalent, suggesting investors have all but given up on Greece being able to fix its public finances.

German Chancellor Angela Merkel sought to calm fears this week and distanced herself from comments by Vice Chancellor Philipp Roesler and others who suggested a Greek bankruptcy was possible.

Merkel, French President Nicolas Sarkozy and Greek Prime Minister George Papandreou were to discuss the situation Wednesday evening, after a government meeting Papandreou called to address urgent fiscal reforms. The finance ministers from the wider 17-nation eurozone will meet on Friday in Poland.

Traders hoped that some form of new support would emerge from Wednesday's discussion and pushed Greek shares higher. The main Athens index outperformed its counterparts in Europe, rising 2.4 percent in early afternoon trading.

The main fear of a Greek bankruptcy is that it could destabilize other financially troubled European countries, potentially causing a defaults in Portugal, Ireland, Spain or Italy. It would also have a knock-on effect on banks, many of which are which are large holders of Greek government bonds.

Moody's rating agency on Wednesday downgraded the credit ratings of two French banks, Societe Generale and Credit Agricole, after a period of huge volatility in the markets as investors fret about exposure to Greek debt.

"We are confronted with the most serious challenge of a generation. This is a fight for the jobs and prosperity of families in all our member states," European Union Commission President Jose Manuel Barroso told the European Parliament in Strasbourg, France. "This is a fight for the economic and political future of Europe. This is a fight for what Europe represents in the world. This is a fight for European integration itself."

EU Monetary Affairs Commissioner Olli Rehn warned against a Greek default or speculation that the debt-ridden country should abandon the euro and return to its old currency, the drachma.

"Neither Greece nor the eurozone would be better off," he told lawmakers in Strasbourg. "Whatever way you look at it, it is absolutely certain that a default and/or exit of Greece from the eurozone would carry dramatic economic, social and political costs not only for Greece" but also affect countries throughout the EU and beyond.

Greece relies on funds from last year's euro110 billion ($150 billion) international bailout to continue servicing its debt and pay salaries and pensions. But the lifeline could be cut if the country continues to miss strict fiscal and reform targets set as a condition of receiving the rescue loans.

The quarterly payout of the funds depends on reviews by Greece's international debt inspectors -- the European Commission, European Central Bank and International Monetary Fund, known as the troika.

The next batch, worth euro8 billion, is due in late September, but there were fears the troika would not approve its disbursement after the debt inspectors suspended their review earlier this month. They are due to resume their review in coming days. Without the next installment, the country has enough cash to keep it going only until mid-October.

Greece's government spokesman, Elias Mossialos, said Monday he believed the country would receive the funds.

In July, Greece was granted a second, euro109 billion rescue package, but the terms of that deal have yet to be finalized, with Finland asking for extra collateral guarantees. Solving those requests will be a key topic at this weekend's meeting of eurozone financial chiefs.

Gabriele Steinhauser in Brussels and Nicholas Paphitis in Athens contributed.

http://finance.yahoo.com/news

IMF Başkanı'ndan kriz uyarısı

IMF Başkanı Lagarde, IMF'de küresel ekonomide durumu ciddi biçimde kötüleştiren açık bir kriz inancı olduğunu gördüklerini" söyledi.

BERLİN - Uluslararası Para Fonu (IMF) Başkanı Christine Lagarde, "IMF'de küresel ekonomide durumu ciddi biçimde kötüleştiren açık bir kriz inancı olduğunu gördüklerini" söyledi.

Lagarde, Almanya'da yayımlanan Der Spiegel'e hafta sonu verdiği demeçte, küresel ekonomideki gelişmelerin yanı sıra Avrupa ile ABD ekonomisi hakkında görüşlerini dile getirdi.

"Küresel ekonominin yavaşlaması, piyasalardaki kırılganlık ve bankaların neredeyse tamamının birbirine kredi vermeyi durdurması, ABD'li yatırım bankası Lehman Brothers'ın çökmesinden hemen önce 2008 yılındaki durumu mu hatırlatıyor" sorusuna Lagarde, "Tarihte her an önceki durumlardan farklıdır ve benzetmeler yapmaya çalışmak yanlış. IMF'de biz, özellikle yaz bitiminde durumu ciddi biçimde ağırlaştıran açık bir kriz inancı olduğunu görüyoruz. Bu kısır döngüyü kırmak için önlemlerin alınması gerekiyor" yanıtını verdi.

Lagarde, "dünya yenilenen bir resesyonun eşiğinde mi?" sorusuna da, "Hala resesyondan kaçınabileceğimiz bir durumdayız. Farklı hükümetler ve merkez bankaları için uygun politika spektrumları daraldı, çünkü cephanenin birçoğu 2009 yılında kullanıldı. Ancak hükümetler, uluslararası kuruluşlar ve merkez bankaları birlikte çalışırsa resesyonu savuştururuz" dedi.

Avrupa ve ABD'deki durum

Avrupa'da büyümeyi teşvik edici önlemlerle mali sağlamlaştırma yapılması ve Avrupalı bankaların sermayelerinin artırılması gerektiğini, bu ikisinin birlikte ilerlemesi gerektiğini vurgulayan Lagarde, "Küresel finansal istikrar çalışmamızda, Avrupa'daki duruma bakıyoruz. Daha genel olarak, Avrupalı bankaların, borçlular ve zayıf büyümeden kaynaklanan risklere karşı yeteri kadar direnmesi için sermaye artırmaya ihtiyacı olduğunu görüyoruz. Bulaşma zincirini kırmak için bu önemli" ifadelerini kullandı.

Avrupa Finansal İstikrar Fonunun (EFSF) yeteri kadar esnek olacağını belirten ve EFSF'nin, bankaları desteklemek ve teminat sağlamak için belirli koşullarda ikincil piyasada hükümet tahvilleri satın alma seçeneğine sahip olmasını memnuniyet verici olarak değerlendiren Lagarde, Fransa Cumhurbaşkanı Nicolas Sarkozy, Almanya Başbakanı Angela Merkel ve Avro Bölgesi'ni diğer liderlerinin EFSF ile ilgili gerekli adımları atacağını söylediğini, bunun gerekli olursa EFSF'nin büyüklüğünün artırılmasını kapsayacağını düşündüğünü kaydetti.

ABD'de bütçe açığının azaltılması için federal harcamaların kısılması gibi uzun vadeli taahhütlerin, kamu finansmanını güçlendirmek ve bütçe açığını azaltma eğilimini işaret etmesi nedeniyle iyi bir prensip olduğunu belirten Lagarde, bunun, ülkenin orta vadede bütçe açığını azaltacağını ve büyümeyi teşvik ile istihdam yaratmaya yardımcı olmada kısa vadede önlemleri devreye sokmada hala yeterli alanı bulunacağının göstergesi olabileceğini bildirdi.

Lagarde, ABD'nin orta vadeli düzeltme planını uyguladığı sürece, şimdilik kısa vadeli düzeltmeleri kapsayacak alanı olacağını ve büyümeyi teşvik edici önlemler alabileceğini ifade etti.

Almanya'yı ziyaret eden IMF uzmanlarının, Berlin yönetiminin kabul ettiği mali sağlamlaştırmanın mükemmel olduğu sonucuna vardıklarını belirten Lagarde, herşeyin koşullara bağlı olarak değişebildiğini, Almanya'nın ekonomisinin büyük oranda ihracata bağlı olması gözönüne alındığında dış talebin zayıflaması halinde dengelerin farklılaşacağını ve o zaman bu ülkenin yeniden ziyaret edilmesine ihtiyaç doğacağını kaydetti.

www.dunya.com