US & World News

Japanese stocks ended up Thursday, the figures for economic growth in January-March quarter have offset the worries about Greece and its banks.

The Nikkei gained 0.9% or 75.42 points to 8876.59 points, while the Topix broader took 1.12% or 8.28 points to 747.16 points.

Japanese gross domestic product increased by 1% from January to March compared with the previous quarter, helped by a rebound increase in consumption. In this context, investors have taken advantage of the recent decline of 12% of the Nikkei to do some shopping on the cheap.

Values, Credit Saison ended with a gain of 3.88% to 1,658 yen. Society of consumer credit has posted an annual net profit above market expectations.

Societe Generale has crossed the threshold of 5% stake in Vivendi, becoming with a participation of 7.86% the largest shareholder in the group of media and communications confronted with rumors, dice ; menties, decommissioning.

This rise of the French bank, announced Friday by an opinion of the Financial Markets Authority (AMF), comes as the businessman Vincent Bollore could rise, according a source familiar with the matter, up 5% stake in Vivendi against 1% currently.

According to the AMF, Societe Generale said to have crossed over on April 20 the threshold of 5% of share capital and voting rights of Vivendi and Vivendi hold 98,045,823 or 7.86% of share capital and voting rights. 

This total includes a participation of 5.25% effective in custody and the balance by assimilation.

The bank was not immediately available for comment on whether share purchases had been made for herself or on behalf of a client.

Bollore announced in September 2011 a proposed sale to Vivendi of free TV channels Direct 8 Direct and Star in exchange for remuneration in Vivendi shares up of 22.4 million shares.

The source familiar with the matter, Bolloré could reach 5% stake in Vivendi by the combined effect of the implementation of this agreement and new purchases of securities on the market. 

Citing people familiar with the matter, the Bloomberg news agency reported Wednesday that the conglomerate was considering an overhaul of its structure that could lead to a dismantling of the group, which was denied by Vivendi.

The public deficit of Greece for 2011 amounted to 19.6 billion euros, or 9.1% of GDP. The public debt reached 355.6 billion euros, to 165.3% of GDP. The Standard & Poor's downgraded the long-term CC and C short term rating of Greece to SD (Selective Default). (REUTERS / Pascal Rossignol)

The public deficit of Greece for 2011 "is estimated at 9.1% of GDP, to 19.6 billion euros", said Monday the Greek Statistical Authority (Elstat) in a statement. "The Greek government debt for 2011 reached 355.6 billion euros, to 165.3% of GDP", according to this text. These figures are very close to the forecast contained in the budget of the country voted in December, which foresaw a deficit of 9% of GDP, against 10.6% in 2010 and a debt of 161.7% of GDP, against 144, 9% in 2010.  

"Greece has managed to reduce by two years the general government deficit of 6.5 points (…), which we will soon have primary surpluses," said Finance Minister Philippos Sahinidis, quoted in a statement. Mr. Sahinidis predicted in March that the deficit would amount to around 9.2% of GDP. First country affected by the debt crisis, Greece is subject to a strict austerity program to consolidate its public finances. This program, dictated by its creditors EU and IMF, was agreed in exchange for international loans and a debt restructuring that enabled the country in March, erasing about 105 billion euros.

"The need for continued effort to restore fiscal and financial recovery is the goal of next year (…), which will also benefit the Greeks" to justify "their sacrifices," said Mr. Sahinidis. According to budget estimates, the country targets a deficit of 7% in 2012 and a reduction of its debt to 145.5% of GDP after the restructuring. The Minister visited during the weekend in Washington, where he met with the Executive Director of the IMF, Christine Lagarde, on the sidelines of the meeting of the General Assembly of the organization and a ministers' meeting G20 finance.

"The discussion with Ms. Lagarde was held in a positive atmosphere. We have addressed the issue of recapitalization of banks in Greece after the successful restructuring of debt of the country and the progress made in implementing the sanitation program of the economy, "said Mr. Sahinidis, quoted by the Greek news agency, Ana (semi-official). "Today there is greater optimism about the country's exit from the crisis," added the Minister.

BNP Paribas and Societe Generale Wednesday reaffirmed their commitment to carry through their plan to reduce balance sheet.

Speaking at a conference organized by Morgan Stanley in London, Jean-Laurent Bonnafe, the CEO of BNP Paribas, has announced that the bank would be able to completed by the end of her program initiated in the second half of 2011, at the height of the debt crisis in the euro area.

He recalled that the group had given the end of February to the U.S. bank Wells Fargo loan portfolio to oil companies and sold in early March a 28 , 7% in the property company Klépierre. 

"Our number one priority remains the implementation of our plan to reduce balance (…) In all, we have already achieved 70% of the program," said ; John Lawrence Bonnafé.

BNP Paribas announced in September will reduce by 10% the size of its balance sheet by the end of 2012. In late 2011, its assets amounted to 1.965 billion euros against 1.998 billion at end-2010.

Speaking at the same conference, the CEO of Société Générale Frédéric Oudéaa assured that SocGen, whose market capitalization has shrunk by half last year, was also determined to achieve the reduction of its balance sheet.

"The deleveraging will continue," said Frederic Oudéa. "We have clear objectives."

During the fourth quarter of 2011, SocGen sold for 10 billion euros in assets, but analysts still expect the bank's most significant disposals to strengthen its solvency.

"BNP CLEARLY IN ADVANCE"

"On the 'deleveraging' (reducing balance, Ed), BNP Paribas is clearly ahead, with an impact on NLP ('profit and loss', Ed) quite limited. It's rather good news, "said Alex Koagne, an analyst at Natixis

." However, the Company General ; eral, I think they come to do their 'deleveraging' on the sale of loans but they are now waiting on disposal of business units, "he says ……

… "It's been several months since they announced they would sell assets and there was still nothing yet."

To strengthen their financial strength undermined by the crisis in the euro area and alleviate tensions in interbank liquidity, European banks have also begun to re reduce and diversify their funding sources and reduce their financing needs

. Their difficulties in dollar funding has also forced the European Central Bank has injected over $ 1.000 billion euros of liquidity to three years (LTRO) in the European banking system.

BNP Paribas said the bank had reached since the beginning of the year 60% of its funding needs for 2012, raising 12 billion euros between January 1 and March 22.

Societe Generale, for its part said it has raised 7.6 billion euros of debt since the beginning of the year, with a maturity average of 6.3 years.

SocGen is continuing its efforts to restructure its BFI, said its CEO. This table and a reduction of 50 to 60 billion euros of liquidity needs by 2013 in these activities.

In exchange, like most European banking stocks, securities of French banks have closed in the red Wednesday because of investor concerns about growth in the U.S. and the budgetary situation of Spain.

In Paris, BNP Paribas and Societe Generale ended the session down 1.3% and 2.89% respectively. Credit Agricole – who canceled his participation at the London conference – sold 2.82%. The European banking index ended down 1.45%.

Sales of new homes fell again in February in the United States. The lack of foreclosures flooding the housing market of goods at bargain prices. Average prices of back nine, however.

The housing market is still recovering from nine United States. Sales of new single in February fell for the second consecutive month, according to figures released Friday by the Washington Department of Commerce. They fell 1.6% from January, seasonally adjusted data, to 313,000 annualized transactions. He had declined by 5.4% the previous month (revised up).

Sales of new single are depressed for several years in the United States. Over the whole of 2011, sales fell 5.3%. The government has identified this year that 306,000 sales, is the lowest number ever recorded in its annals, dating back to January 1963. Sales of new homes suffer from competition caused by the high number of foreclosures caused by the crisis, resulting in the housing market an influx of goods sold at bargain prices detrimental to developers.

Despite the decline in sales, the average transaction price in February rose 2.2% on month and 1.8% yoy, to $ 267,700 dollars.

The ministry said there were 150,000 new homes for sale in the U.S. in late February, as much as a month earlier when the supply of such goods had fallen to its lowest level since January 1963 at least.

Declining in most European countries, the activity has only slightly slowed in France in the fourth quarter 2011 before stagnating earlier this year, according to INSEE, which had considered the possibility of a recession. Better resistance does not prevent unemployment to continue rising. French executives come to the business district of La Defense

France is going through a little better air hole that affects the entire euro area. After avoiding a decline in activity in the fourth quarter – unlike Germany, it should just happen to stabilize its GDP over the first three months of the year before starting to rebound slowly, according to forecasts revised upwards published Thursday by the National Institute of Statistics.  

"For France, we expect a stable activity in the first quarter, zero percent growth, and then a sluggish 0.2% in the second quarter," he told reporters Sandrine Duchene, head of the Department of conditions of INSEE. In December, INSEE had planned a short recession with contraction of economic activity in the last quarter 2011 and first quarter 2012, before there is a growth of 0.2% on October to December last year. "We had a shock on the euro area in the summer of 2011 we are coming out" and "recovery is slow," noted Ms. Duchene presenting the note of economic INSEE March. But gross domestic product (GDP) "regain its pre-crisis level in the forecast horizon," that is to say, late June, said during a press conference an analyst of the INSEE, Dorian Roucher.  

The institute has also revised sharply upwards its forecast of growth acquisition for 2012 that would be achieved by mid-year: 0% predicted in December, it would increase to 0.5%. This represents growth of GDP this year if the last two quarters remained the same as the second quarter. Ms. Duchene explains this revision by the better than expected growth in the last quarter of 2011 and the upward revision of its forecasts for the first half.

Consequently, the Minister of Economy and Finance Baroin announced an increase in the government's forecast for growth of the French economy in 2012, now expected at 0.7% against 0.5% previously.

The engines of growth remain low

Optimism, however, must be very measured. The chief economist at INSEE emphasizes that household consumption, the traditional engine of growth in France, "remains low". She would grow by 0.2% in the first quarter before stagnating in the second. And because "a 0.3% decline in purchasing power in the first half."

Several factors contribute to this weakness. Purchasing power would suffer first the relatively high level of inflation (2.2% yoy). In addition, earned income will slow due to the deteriorating labor market. This will not only result in further loss of 49,000 jobs in the first half but it will also affect wage negotiations. Finally, household incomes will be further tapped by taxes, supported by measures enacted in Finance Act which come into force in 2012.

France can not be counted as late last year on exports. Thanks to sales of Airbus, they have indeed been the main driver of growth in the fourth quarter that helped prevent the recession. But their contribution to the activity will become neutral due to weak demand in the euro area.

The context would finally have some good investment: the business outlook remains bleak, the conditions for granting loans were tightened before the massive intervention of the ECB and the margin of the companies is at an historic . Besides factors such as more timely consequences of the cold wave on construction.L business investment would decline so slightly in the first quarter 2012 (-0.4%), before rebounding in the second quarter (+0.8% ).

But the big downside of these forecasts is unemployment. INSEE entails loss of 49,000 in the market sector in the first half after a fall of 54,000 over the last six months of last year. Total employment would nevertheless be supported by intensified supported employment. Finally, the unemployment rate should continue to increase to 9.7% in France in June (10.1% including Dom).

Finance ministers of the euro area have endorsed Monday night the second aid package to Greece after the success of the restructuring process of the Greek debt, announced the Eurogroup President Jean-Claude Juncker.

He said that the Greek debt level should be reduced to 117% of gross domestic product (GDP) by 2020 through in terms of private sector involvement (PSI ) carried out last week via a bond exchange.

"We discussed the second Greek plan, including of course the issue of the PSI. With the completion of previous steps and the success of the PSI, the new plan is not only Greek in the starting blocks but has been adopted by political Eurogroup this (Monday) evening, "said one who is also Prime Minister of Luxembourg

. The formalization of this agreement in principle should be Wednesday morning, during a technical meeting of the euro area, said Jean-Claude Juncker

. He praised the high turnout private creditors to exchange debt and recalled that the initial objective was to reduce the level of debt at 121.5% of Greek GDP …….

.. "We agreed that this result better than expected should not be spent by the Greek authorities but retained as a safety cushion ;, "he said

.

The gross domestic product (GDP) of Finland increased by 1.4% yoy in the fourth quarter of 2011, after an increase (revised) 3.3% in the third I, Statistics Finland said on Friday (SF).

Over the whole of 2011, GDP in one of four countries in the euro area still have a "AAA" from the three major rating agencies has advanced 2.9%.

European shares ended sharply up Thursday, supported by jobless claims near their lowest in four years in the U.S. and the new massive injection of liquidity from the European Central Bank (ECB) yesterday.

The CAC 40 index closed up 1.37% to 3499.73 points, new peak of year, having stumbled in the afternoon against the bar psychological 3,500 points. London took 1.02%, Frankfurt and Milan 1.25% 2.93%. The pan-European Euro Stoxx 50 index has been 1.45%.

The increase was particularly driven by the banking sector, which jumped 1.85% after the sharp decline in borrowing costs of Spain and Italy on the market ; s bond.

Other U.S. indicators have yet been considered disappointing, including the ISM manufacturing index, which signals an unexpected slowdown in growth in industry in February, and spending construction, which fell against all odds in January for the first time in six months.

Standard & Poor's on Tuesday cut score of 15 large banking groups, mainly in Europe and the United States as a result of a major review of its rating criteria.

In total, the U.S. agency has reviewed the status of 37 major global banks. In particular, it confirmed the notes of BNP Paribas and Societe Generale."The lowering of S & P both on European and U.S. banks has undermined confidence in the markets," said Terry Pratt, IG Markets.

"This decision has overshadowed the progress made in Brussels on the issue of scaling the EFSF."

Another analyst, Guy Lebas of Janney Montgomery Scott, said that these banks will see their funding costs rise.

This month, officials from S & P indicated that they would gradually announce the ratings updated for more than 750 banking companies in the world, starting with the principal. New announcements are expected in the coming weeks.

For large banks, the rating adjustments are larger than S & P has provided for the entire industry.