1 Only weeks to save euro, feels Soros (BBC) Billionaire
investor George Soros has warned European leaders they have a "three-month
window" to save the euro. He said he believed Greece would elect a
government willing to abide by loan conditions imposed by the EU in this
month's elections. But he said the German economy would begin to weaken in the
autumn, making it much harder for Chancellor Angela Merkel to provide further
support. He said leaders did not understand "the nature of the
crisis". He said that while European leaders were focusing on debt levels,
the crisis was "more of a banking problem and a problem of
competitiveness". For this reason, he said, they had "applied the
wrong remedy".
"You cannot reduce the debt burden by shrinking
the economy, only by growing your way out of it," he added. Mr Soros was
referring to the drastic austerity measures that have been implemented across
Europe, measures that are now being questioned by a growing number of
politicians and commentators. Without policies to boost growth, which would
enable governments to raise revenue to pay down debt, Mr Soros said time was
running out for the euro.
"The crisis is likely to come to a climax in
the [autumn]. By that time, the German economy will also be weakening, so that
Chancellor Merkel will find it even more difficult than today to persuade the
German public to accept any additional European responsibilities. "That is
what creates a three-month window.” A report from the credit ratings agency
Standard & Poor's said there was "at least a one-in-three chance of
Greece exiting the euro in the coming months".
2 Facebook stumble hurts other IPOs (San Francisco
Chronicle) Facebook led US initial public offerings to their worst monthly performance
since Lehman Bros. collapsed, as Europe's debt crisis scuttled IPO plans from
New York to Hong Kong. The Bloomberg IPO Index, which tracks US equities in the
first year after their IPOs, sank 15% last month, with Facebook posting the worst
one-week performance among the 30 largest IPOs since 2011. The index's decline
is in line with the drop in October 2008, the month after Lehman's bankruptcy
led to the worst financial crisis since the Great Depression.
Kayak Software Corp. and Russian social-networking
company VKontakte shelved listings last week, while Graff Diamonds Corp.
delayed a Hong Kong sale and the Formula One auto-racing series said its
Singapore IPO may not occur until later this year. Facebook's 22% slump since
going public has shaken investors already reeling from tumbling equity markets
and the dismal European economy, said Jeffrey Sica of Sica Wealth Management.
"We've reached a breaking point where sentiment
is so negative and scrutiny is so high that companies don't want to go public
and investors aren't prepared to look at them," said Sica. "You're
talking about long-standing damage to the psyche of companies wanting to go
public and investors." At least 13 IPOs have been withdrawn or postponed
globally since Facebook began trading May 18.
3 Eurozone unemployment at 11% (BBC) Unemployment in
the eurozone was 11% in April, unchanged from March, but still the highest
since records began in 1995. Spain had the highest rate in the eurozone at
24.3%, while Austria had the lowest at 3.9%, according to the official figures
from Eurostat. A seasonally adjusted total of 17.4 million people were
unemployed in the eurozone, up from 17.3 million. In the 27-nation European
Union, the jobless rate was 10.3%, up from 10.2%. "Today's grim
unemployment figures provide a sober reminder that the eurozone economy is in
desperate need of a more expansionary policy stance," said Martin van
Vliet, an economist at ING.
4 Fear of India growth story ending (Soutik Biswas
on BBC) ‘Prepare for worse’, a newspaper warns its readers on Friday, on the
back of reports that the Indian economy has grown at its slowest pace in nine
years. Goodbye 2020, Hello 1991!, says another, alluding to the 1991 meltdown,
which sent India scurrying to the IMF for a bailout. Are things so dire with
Asia's third-largest economy? Is the India growth story coming to an end?
Bimal Jalan, former governor of India's central bank
and a respected economist, says "There's something happening that we are
not quite in grips with so something needs to be done." He believes that a deeper structural and
systemic problem is wreaking havoc with the economy. "You can import as
much oil as you want, you can pay for it because your reserves are high, and
your exports are doing reasonably well even though they may not have done so
well in one or two quarters. Your current account deficit is higher than you
expected, but still we can afford it, there is no great problem. So what is it
that's lacking and that we don't have?" he wonders.
What India doesn't have is a bipartisan, mature
political consensus on the direction that the economy must take. How can a
small group of politicians in the parliament stymie major reforms? Has India's
politics and economy become hostage to petty interests, helped abundantly by a
government which is seen as effete and weak? A broken politics makes for a
broken economy. Does India need political reforms first before it can even
dream about moving on significant economic reforms?
5 India’s two seasons – monsoon and mango (The New
York Times) India arguably has only two seasons: monsoon season and mango
season. Monsoon season replenishes India’s soil. Mango season, more than a few
literary types have suggested, helps replenish India’s soul. Mangoes are
objects of envy, love and rivalry as well as a new status symbol for India’s
new rich. Mangoes have even been tools of diplomacy. The allure is foremost
about the taste but also about anticipation and uncertainty: Mango season in
the region lasts only about 100 days, traditionally from late March through
June; is vulnerable to weather; and usually brings some sort of mango crisis,
real or imagined.
In Mumbai, India’s financial capital, this season’s
trouble involves the Alphonso, the variety of mango grown along the western
Konkan coast. Prices have spiked. Cold weather interfered with the growing
season, producing fewer (and smaller) Alphonsos. In New Delhi, many residents
belittle the Alphonso and favor the varieties grown in northern India. Almost
every state has its own mango jingoism; if love of mangoes is nearly universal
in India, so is disagreement over which variety is best.
6 Poking fun at Gurgaon, in Berlin (The Wall Street
Journal) A show by Jiten Thukral and Sumir Tagra, the art duo known for
satirical and pop-inspired works about Indian identity and its projection
worldwide, has just come to the end of its run in Germany. Entitled “Longing
for Tomorrow,” the pair’s show at the Nature Morte gallery in Berlin poked fun
at the haphazard development of residential Gurgaon courtesy of a rising middle
class that has appropriated a variety of classical and modern architectural
style motifs in its homes.
“Their work picks up the aesthetic of the nouveau
riche in India, especially in their current home town Gurgaon, which is full of
architecture influenced by Western buildings,” says Julia Prezewowsky, director
of the Nature Morte gallery in Berlin. “So there is an interesting import and
export of culture going on.” For this, their latest commentary on India’s
economic progress and its side effects, the artists collaborated with German
fine porcelain makers Meissen. In addition to pedestals, wallpaper and painted
Meissen vases, Mr. Thukral and Mr. Tagra included canvases depicting scenes
becoming all too familiar around the hodgepodge residential areas of Gurgaon,
to the south of Delhi.
7 Brazil’s biggest landfill closes (BBC) Brazil's
biggest open-air landfill has been closed on the outskirts of Rio de Janeiro
after 34 years in operation. The Jardim Gramacho dump, a mountain of rubbish
near the city's main airport, will be replaced by a modern recycling plant. The
move, while welcomed by environmentalists, is expected to leave more than 1,700
people out of work. For decades, rubbish pickers have made their living by
manually selecting materials to be recycled.
"Gramacho will become a reference in
sustainable development and an example to be followed by other dumps in
Brazil," said minister Izabella Teixeira. The decision to close Gramacho,
postponed several times, comes only weeks before the United Nations conference
on the environment, Rio+20, which begins on 20 June. For decades,
environmentalists have denounced the open-air landfill, which received 9,000
tonnes of rubbish a day. The rotting rubbish generates greenhouse gases, which
will now be turned into fuel. Run-off from the piles of rubbish also leaked
into the nearby sea, adding to the pollution in Rio's Guanabara Bay.
But a local community leader, Nilson Jose dos
Santos, says the prospects are not good for young people who live in the area. "Many
people left the local drug gangs to work here, as no questions were asked and
they didn't need any qualifications," he told Globo Online. "I wonder
if those people will be able find new jobs elsewhere or whether they will have
to go back to the drug trafficking gangs."
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