Wednesday, June 27, 2012

Bank of England fears worse for UK; News Corp may sever publishing arm; Extreme poverty gives SA Prez sleepless nights

1 Bank of England fears worse for UK (The Guardian) A sharp deterioration in the outlook for the global economy over the last six weeks provoked Bank of England governor Mervyn King to back an extra £50bn of quantitative easing, MPs heard on Tuesday, adding to the gloom surrounding the UK's prospects for recovery. King said the spillover effects of the eurozone crisis in Asia and the US had forced him to rethink his view on the financial crisis and vote for more QE. "What has particularly concerned me in the last several months – why I have voted for more easing policy – was my concern about the worsening I see in the position in Asia and other emerging markets," King said. "And my colleagues in the United States are more concerned than they were at the beginning of the year about what is happening to the American economy," he added.

The world was not half-way through a deep crisis and the eurozone turmoil was creating enormous uncertainty, leaving Britain at risk of a downward spiral if businesses postponed investment, he told the all-party Treasury select committee. "We are in the middle of a deep crisis, with enormous challenges to put our own banking system right and challenges for the rest of the world that they are struggling with," King the committee. "I am pessimistic [about the eurozone outlook]. I am particularly concerned because over two years now we have seen the situation in the euro area get worse and the problem being pushed down the road," he said.

2 News Corp may sever publishing arm (The New York Times) After years of defending its financially underperforming newspapers, News Corporation is now in talks to break up the company and sever its publishing assets, like The Wall Street Journal, The Times of London and The New York Post, from its lucrative entertainment units. The possibility signals a sharp reversal in the thinking of Rupert Murdoch about his $53 billion media conglomerate. For years, investors and senior News Corporation executives have pressed for a spinoff of the newspapers, but Mr. Murdoch, a newspaperman at heart who built his company from a single paper in Adelaide, Australia, has consistently rejected those proposals.

3 Extreme poverty gives SA president sleepless nights (Johannesburg Times) South Africa has reached boiling point and needs radical policy changes to quell the rising anger of ordinary citizens. Explaining his backing of the hotly debated "second transition" policy proposal, President Jacob Zuma said the ANC could no longer sit back and watch its people live in squalor. Zuma, now three years in office, confessed to sleepless nights after seeing extreme poverty. But, he warned, South Africa could not afford to be a country of "social grants".

Zuma said South Africa needed solutions to rising poverty and unemployment. "I have paid visits to a number of areas where you can't believe that you are in South Africa. Why should I see that as the president of the country, not even of the ANC, and think that I could sleep peacefully when I know there are people who live in things you can't even describe as a house? It's a very serious matter. If I didn't know, or if I had forgotten [why I joined the struggle and fought to liberate people of this country], then I could sleep peacefully. I can't," he said.

4 Globe cartoon on Rio+20 summit: One participant -- "If we don't act, can you imagine the horror 20 years from now?" Responds another -- "Yeah, another summit!"

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