Money talk at conventions

Money talk at conventions
When roughly 5,000 museum professionals from across the country descend on Philadelphia this week for two conventions, they will represent institutions that exhibit everything from Old Masters to old rocks.

But despite the multiplicity of interests and the range of institutional sizes and locations, there will be one thing on everyone's mind.

Money.

"That is topic A, B, C, and D," said Dewey Blanton, spokesman for the American Association of Museums, which holds its annual meeting at the Convention Center from Thursday through next Monday.

The same could be said for members of the Association of Children's Museums, which meets at the Sheraton Philadelphia City Center tomorrow through Thursday.

While museum attendance is largely steady - or even up - and tickets have not taken a heavy hit, contributed income is down almost everywhere. Corporations are just not in a giving mood these days. Public funding from states and municipalities is down across the country. And endowment investments have been uniformly walloped.

So museums, like other nonprofit groups, are in pain. Budgets have been frozen, staffs cut, and costs reduced wherever possible. At the same time, fiscal angst has forced a relentless rethinking of operations and programming. The isolated, high, and mighty temple of culture is out; the networking community partner is in.

Nancy Kolb, head of the Please Touch Museum at Memorial Hall, host of the children's museum convention, said that despite building recessionary pressures, the number of U.S. museums for young people continues to grow. Her museum's move into Memorial Hall in West Fairmount Park, she said, has produced attendance numbers well ahead of projections.

The UK economy could decline for another year and take a further two years to recover

A National Institute of Economic and Social Research study says the current economic decline is "very similar" to the slowdown at the start of the 1980s.

The latest estimate predicts a 1.5% decline in the first quarter of 2009.

In a separate study by Nationwide, UK consumer confidence fell in March as worries continued about jobs.

The building society's consumer confidence index dropped two points to 41.

The Bank of England's Monetary Policy Committee (MPC) begins its latest interest rate-setting meeting on Wednesday, with its decision due to be announced at midday (1300 GMT) on Thursday.

The MPC is not expected to cut the Bank rate further from its current record low of 0.5% having cut the rate six times since October in attempt to boost the economy.

Jobs market

UK unemployment recently hit two million for the first time since 1997.

Nationwide said consumer confidence was "broadly stable since the start of the year, but feelings about the current labour market have weakened".

"Further reports of job losses are likely to have affected consumers' views of this," the report said.

Nationwide said consumers' confidence fell for the ninth consecutive month in March.

The building society's survey came as a report from the Recruitment and Employment Confederation/KPMG showed little sign of a strong recovery in the number of permanent jobs available in the UK.

Although its "permanent placements indicator" rose to 33.5 in March from 30.3 in February, that was still well below the 50 level, where growth begins.

"These latest figures leave no doubt that the UK jobs market is at its worst in the 11-year history of the survey and recovery might take longer and be more protracted than many hope," said Mike Stevens, partner and head of business services at KPMG.

However, the Nationwide's survey of 1,000 consumers indicated that they had became more optimistic about UK economic conditions.

"Increased optimism towards the current and future economy is encouraging," said Nationwide's Fionnuala Earley.

The Australian share market ended higher Monday amid growing expectations U.S.

Australia Shares End 2.4% Higher on US.The Australian share market ended higher Monday amid growing expectations U.S. Treasury will please investors with details of its plans to rid troubled banks of toxic assets.

The big local banks and miners led the S&P/ASX 200 up 2.4%, or 84.5 points, to 3550.3 despite the Dow Jones Industrial Average falling 1.65% Friday.

U.S. Treasury Secretary Timothy Geithner is expected to reveal a three-pronged program to deal with troubled assets on banks' books later Monday involving a series of public-private investments.

A senior trader at a large investment bank noted that DJIA futures had risen 1.7% in anticipation of Geithner's announcement.

"There are press reports circulating that it's going to be a pretty proactive plan of significant size," the trader said.

There is also mounting speculation that Japan is devising another national stimulus package, the trader said. Asian stocks rose in afternoon trading Monday, with the Nikkei up 2.5% and the Hang Seng up 3.1%.

Australian banking stocks all posted solid gains with Australia & New Zealand Banking Group up 4.8% to A$15.25 and Westpac Banking Corp. up 4.3% to A$18.95.

Market leader BHP Billiton added 3.5% to A$33.32 and rival diversified miner Rio Tinto surged 7.9% to A$50.53.

The senior trader said that in the short-term, there still seems to be momentum behind a recent two-week rebound in global equities. "But what we're finding is more clients would like to see the market consolidate for a while before continuing the recovery," he said. "But in these extraordinary markets, who knows."

Lisa Jarvis, a private client advisor at ABN AMRO Morgans in Sydney, said sentiment remains cautious, with the market still watching for signs of whether the U.S. stimulus and bailout packages are making a significant impact.

Also making news Monday, Oz Minerals requested a trading halt on its shares ahead of an announcement on regulatory approvals relating to the A$2.6 billion takeover offer for the struggling copper, gold and zinc miner by China Minmetals Nonferrous Metals Co.

The U.S. mantra of spend, spend, spend is starting to wear thin on the other side of the pond.

Treasury Secretary Timothy Geithner testifies on Capitol Hill Thursday before the Senate Budget Committee.

Europeans Could Balk at Geithner's Call for More Spending.the U.S. calls for more spending to jumpstart the global economy, more Eastern European countries are coming to the table hat in hand, looking for financial help from the International Monetary Fund and other groups .

European countries appear to be at odds with Treasury Secretary Timothy Geithner's fresh calls to unleash more stimulus money and free up a half-trillion dollars to lend to struggling countries.
It could lead to a tense discussion as Geithner heads to Britain to meet with finance officials from the Group of 20 nations Friday and Saturday. Those meetings come ahead of an April 2 summit of the G-20 in London.
As the U.S. calls for more spending, more Eastern European countries also are coming to the table hat in hand, looking for financial help from the International Monetary Fund and other groups -- but does the rest of the world have the money to give?
"We're just getting into the worst of the crisis in a global sense," said Ralph Bryant, a senior fellow at the Brookings Institution who specializes in international economic issues. "Many developing countries ... are just beginning to feel the really bad effects."
But European Union leaders recently rejected a request from Hungary for $241 billion in bailout money for the region.
"I think they're on a different page," Bryant said of U.S. and European financial officials. He said the calls by the U.S. for more stimulus money and international aid likely will stir controversy at the upcoming meetings.
Geithner on Wednesday called for a tenfold increase in the size of an emergency fund the IMF uses to help countries in trouble -- to as much as $500 billion. He also endorsed the IMF's call for countries to enact stimulus packages worth, on average, 2 percent of their GDP.
But in a report last week, the IMF said the U.S. was the only one of the world's seven rich industrial nations -- the Group of Seven -- on track to meet that goal.
"I think that the United States has actually taken a significant lead on a number of these steps that are required," President Obama said Wednesday, calling for "concerted action around the global to jumpstart the economy" at the G-20 meeting.
Some European nations are reticent to take on the kind of national debt the United States has been accumulating in recent months. European critics have charged that the United States' demand for increased stimulus spending was an effort to divert a European call for a major overhaul of regulations governing the financial system to curb the types of excesses in the U.S. that spawned the crisis. At a meeting this week of finance ministers of the 27-nation European Union, officials said they were doing enough already to support the world economy.
"Recent American appeals insisting that the Europeans make an additional budgetary effort to combat the effects of the crisis were not to our liking," Luxembourg Finance Minister Jean-Claude Juncker was quoted as saying after the meeting.
German Finance Minister Peer Steinbrueck recently said finance ministers from the EU's 27 nations were not pleased at U.S. suggestions that Europe has not done enough to stimulate the global economy.
Germany has been criticized for its reluctance to spend and stimulate its economy, Europe's largest. Their stimulus package was about 1.5 percent of its GDP this fiscal year, according to the IMF report. France's was about half that. (Meanwhile, countries like China and Saudi Arabia met or exceeded the United States' level of stimulus spending.)
However, European nations apparently are preparing to sign on to at least a partial version of the calls by the U.S. for more IMF funding.
The Times of London reported Thursday that the European Union was considering lending between $75 billion and $100 billion to the IMF to boost its lending ability. The Union also reportedly is calling for countries to help double IMF resources from $250 billion to $500 billion.
That $250 billion includes the $50 billion fund that the United States is talking about increasing. Calls to boost the fund have mounted as developing countries hit hard by the global downturn, particularly in Eastern Europe, have so far tapped about $50 billion from the IMF since November.
It's unclear whether European nations will go as far as Geithner is suggesting in helping the IMF, however. Bryant said a number of European countries favor raising some of the money from powerhouses like China, rather than shouldering so much of the cost.
The IMF reacted favorably to Geithner's announcement.
"We welcome the proposal from the U.S. Treasury. It's a very positive step toward assuring the global financial system that the IMF has the appropriate level of resources to meet the needs of its members," IMF spokesman William Murray said. He said the IMF is "optimistic" it can at least double its resources in the way the EU is suggesting.
Japan already has committed to lending an additional $100 billion.
Obama and Geithner kept high hopes about the upcoming meetings.
"I'm actually optimistic about the prospects," Obama said Wednesday, citing recent meetings he had with British Prime Minister Gordon Brown and Japanese Prime Minister Taro Aso.
"Everybody understands that we're in this together. I think the G-20 countries are going to be seeking a lot of cooperation."
Geithner said he would seek to build a "new consensus" in London on how to establish a "substantial and sustained program of support for recovery and growth."

Switzerland is relaxing key bank secrecy laws

UK Prime Minister Gordon Brown yesterday hailed announcement that Switzerland is relaxing key bank secrecy laws .Switzerland, Austria and Luxembourg announced a relaxation of their banking secrecy laws on Friday (13 March) following mounting pressures on both sides of the Atlantic to crack down non-cooperating tax zones.
The news comes only one day after Liechtenstein and Andorra made similar declarations, as a number of financial centres around the world attempt to pre-empt any decision coming out of the G20 leaders summit on 2 April.

As western governments feel the pinch due to expensive stimulus spending projects coupled with reduced tax receipts, the spotlight has been turned on a handful of geographic locations that profit by harbouring capital owned by companies and wealthy individuals from abroad.

The Swiss government said on Friday that it intends to adopt OECD standards on the sharing of banking information between different countries, citing its desire to avoid being placed on the organization's 'black list' of tax havens.
UK Prime Minister Gordon Brown said the changes were "the beginning of the end of tax havens." "Tax evasion, which costs the global economy billions of pounds each year, will become more difficult in future."

The European Central Bank has cut its key interest rate to 1.5% from 2.0%

Jean-Claude Trichet, President, ECB
Overall inflation rates have decreased significantly and are now expected to remain well below 2% over 2009 and 2010.


Euro rates hit record low of 1.5% .The European Central Bank (ECB) has cut its key interest rate to 1.5% from 2.0%, the lowest since it started setting euro rates in January 1999.

It followed a cut in UK rates by the Bank of England. US and Japanese rates are, in effect, already at zero.

At a news conference, ECB president Jean-Claude Trichet slashed his forecasts for eurozone growth.
The ECB is now predicting GDP this year in the 16-nation bloc will shrink by between 2.2% and 3.2%.

Its last prediction, made in December, was that growth would be between no change and a fall of 1% in 2009.

For 2010 it was predicting growth of between 0.5% and 1.5%. It is now forecasting growth of between 0.7% and minus 0.7%.

Non-standard measures

The revisions reflect Mr Trichet's view that the global economy has "weakened substantially in recent months" but that it will "gradually recover" in 2010.
But there were no new measures announced to help stimulate the eurozone economy, with Mr Trichet stressing that he was already using various "non-standard measures" and saying that the ECB's rate-setters were considering various others.

Slowing growth was confirmed by revised economic growth figures issued earlier on Thursday.

GDP for the last three months of 2008 was down 1.3% from the same quarter of the previous year, worse than the initial estimate of 1.2%.

The figure for the previous quarter was left unchanged at a 1.5% fall.

Thursday's decision was the ECB's fifth rate cut since October 2008, which has brought eurozone rates down from 4.25%.

Mr Trichet said that interest rates could still fall further from their current level, although he pointed out that they are already at a very low level.

He also said that inflation would stay below the ECB's target of below, but close to, 2%.

"Overall inflation rates have decreased significantly and are now expected to remain well below 2% over 2009 and 2010,"

Economic Concerns Send international Shares inferior

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A global sell-off set in motion by losses on Wall Street came back home on Friday morning, sending markets in New York sharply lower.

The Dow burrowed even lower, a day after it recorded at its lowest close in six years. Gold prices flirted with $1,000 an ounce. And markets from Hong Kong to London fell sharply on more glum economic data and a round of disappointing corporate news, including the bankruptcy filing of the automaker Saab.

“You can look at everybody’s trading screen and see nothing but red,” said Tim Smalls, head of United States stock trading at Execution LLC in Greenwich, Conn.

At 10:45 a.m., the Dow Jones industrial average was down 65 points to 7,402, while the broader Standard & Poor’s 500-stock index was off o.8 percent. The technology-heavy Nasdaq fell essentially unchanged.

Financial stocks slid the farthest, with shares of Bank of America falling below $3.35 a share and Citigroup sinking to less than $2.10 a share — a tenth of what it cost a year ago.

Analysts said that fear and uncertainty were driving trading once again. They said investors remained skeptical about the Obama administration’s plan to shore up the banking system and were uncertain that the $787 billion economic stimulus package would be able to prop up the floundering economy.

The Dow Jones Euro Stoxx 50 index, a benchmark for the euro region, was down 3.6 percent in late-afternoon trading, to its lowest level at least five years. The DAX in Frankfurt slid 3.6 percent as investors shed financial and industrial stocks, while the CAC 40 in France was down about 3 percent and FTSE 100 in London fell 2.4 percent.

“We thought the low points of last fall were behind us, but we seem to be in for more disappointments,” said Vincent Juvyns, a strategist at ING Investment in Brussels. “The markets have lost all sense of direction, which makes it hard to take a position.”

Jean-Claude Trichet, president of the European Central Bank, said Friday that markets were experiencing an “ongoing correction,” but would not put a timetable on when the crisis might lessen.

“We have to be very cautious in qualifying the duration,” Mr. Trichet told the European American Press Club.

The Labor Department reported that consumer prices had increased 0.3 percent in January, rising for the first time since July. The increase eased fears that the American economy was heading into a deflationary spiral of lower prices and lower economic growth, but consumer prices remained flat year-over-year, a sign of continuing pressure on prices as the recession deepens.

“It’s not terrible to see a break in the disinflationary spiral we’re in even if such a break is only temporary,” Dan Greenhaus, an analyst with the equity strategy group of Miller Tabak & Company, wrote in a note.

Corporate news across the region seemed to confirm fears.

Anglo American, the mining giant, was down nearly 16 percent by midday after announcing it would cut 19,000 jobs, or a tenth of its work force, and suspend dividend payments for 2008 as its business deteriorated on weak global demand.

In France, Compagnie de Saint-Gobain, which supplies construction materials, tumbled 16 percent after announcing it would seek to sell shares to raise 1.5 billion euros, or $1.9 billion, in capital, while confirming yet more job cuts.

And UBS, the Swiss bank, is facing more problems with prosecutors in Washington. A day after the bank agreed to pay $780 million to settle claims that it defrauded the Internal Revenue Service, the federal government went to court seeking the release the names of 52,000 wealthy clients. UBS shares fell more than 16 percent at midday, after rallying almost 5 percent Thursday on news of an initial settlement.

AXA, on of the largest insurers in Europe, was down nearly 14 percent in Paris after Standard & Poor’s downgraded its credit rating, citing uncertain earnings.

The Swedish automaker Saab filed for bankruptcy to seek protection from its creditors after General Motors said it would cut ties with the company after decades of losses.

“We’re at a stage in the economic cycle where we have to prepare for the worst,” Mr. Juvyns said. “Companies are firing to cut costs, since we face a contraction in G.D.P. for the first half of the year.”

Arnaud Cayla, a fund manager at Barclays Asset Management France in Paris, said that while most companies would survive the crisis, they would have to adjust to lower demand.

“We’re flirting with deflation,” Mr. Cayla said, “but it’s still too early to say.”

Discouraging economic news for the euro zone added to the slide. The purchasing managers’ index, which estimates business activity, showed the downturn accelerating in the first weeks of February in the 16 nations that share the euro. The index is based on a survey of purchasing managers by Markit Economics.

The composite index of activity in services and manufacturing slipped to 36.2 in February, from 38.3 in January, with services hit hardest. Any number below 50 indicates an economic contraction.

In Britain, the Council of Mortgage Lenders reported Friday that 40,000 people had lost their homes in 2008, an increase of 54 percent on a year earlier, and the number is expected to nearly double in 2009 to 75,000.

“The next trap for the financial markets is state debt,” Cayla said. “We’re concerned about the health of governments, and what their signatures mean.”

Asia saw a less dramatic sell-off, led by the Kospi index in South Korea, which fell 3.72 percent dragged down by financial and industrial stocks. In Japan, the Nikkei 225 slipped 1.6 percent, with equities in banks, retail and communications falling furthest. The Hang Seng in Hong Kong dropped 2.49 percent, with financials there also seeing the heaviest losses.

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European economies contracted in the fourth quarter of last year

Europe hit by economic slowdown

The French economy minister has warned of tough times ahead
Germany is being punished for its heavy dependence on exports
European economies contracted in the fourth quarter of last year, with some countries registering the worst figures in decades, official data shows.

The eurozone economy shrank by 1.5% in the previous quarter and 1.2% on the year, Eurostat said.

Germany's economy shrank by 2.1% compared with the previous quarter, its worst quarterly performance since 1990.

France shrank by 1.2%, initial data shows, while Italy registered a drop of 1.8%, the steepest drop since 1980.
The data puts pressure on the European Central Bank to cut interest rates.

In the whole of 2008, the economy in the 15 countries using the euro grew by 0.7% against the previous year, Eurostat said. Slovakia joined the eurozone on 1 January 2009, making it a 16-country club.
The Dutch economy shrank 0.9% during the quarter while the Austrian economy eased by 0.2%, the first drop in nearly eight years. In the same quarter, Portugal's economy contracted by 2% on the previous quarter and 2.1% on the previous year.

"These are huge contractions in Europe, the largest in living memory in most cases," said Ken Wattret, economist at BNP Paribas.

Companies have cut investment and exports have dropped as the global recession has taken hold.

European companies hit by the slowdown include Air-France KLM, which reported a third-quarter operating loss on Friday, and Michelin, whose final-year profits fell as the crisis in the global car industry took its toll on the tyre maker.

The decline in demand for cars was further highlighted by data released on Friday.

The number of new cars sold in Europe in January was down 27% compared with January 2008, the European carmakers' association, Acea, said.

German gloom

The slowdown was the most dramatic in Germany, which registered the biggest fall since German reunification in 1990.
The 2.1% contraction was the third consecutive quarterly drop in Europe's biggest economy, according to the initial data from the Federal Statistics Office, worse than the 1.8% anticipated by analysts.

Year-on-year, the German economy shrank by 1.6%, after growing by 1.4% in the third quarter.

Many are now gloomy about the prospects for 2009.

"This shows things went downhill sharply at the end of the year," said Juergen Michels, an economist at Citigroup. "We'll likely head down again the first and second quarter."

"This number makes it plain that we're in a very serious recession - the most serious since World War Two. It's no surprise that exports and investment have tumbled," said Dirk Schumacher at Goldman Sachs, adding that the rise in inventories did not bode well for the first quarter.

The situation "can hardly get worse," said Carsten Brzeski at ING Financial Markets.

"The German industrial production has run out of steam with companies working only off their backlogs. Foreign demand has plummeted over the last months," he added.

Last month, the German government forecast that the economy would shrink by 2.25% this year.

France slowdown
The slowdown in the French economy was slightly worse than analyst expectations of a 1.1% drop.
The French economy expanded slightly in the third quarter, by 0.1%, which means that France has not officially entered a recession - which is defined as two consecutive quarters of contraction.

With consumer spending up by 0.5%, some analysts found cause for hope.

"Consumer spending has held up quite well so you can say there is still money out there to be spent and French households are spending it," Alexander Law, chief economist at Xerfi said.

Companies also reduced their inventories in the fourth quarter, shaving 0.9% off gross domestic product, a fact that could bode well for industrial production in the first quarter. With warehouses emptier, companies may increase production.

Many say that tough times lie ahead. "The first quarter will be difficult," Christine Lagarde, France's economy minister, said. "We will have a difficult year. "

The data increases pressure on the European Central Bank to cut rates. The bank cut the benchmark rate to 2% in January, the lowest in the bank's 10-year history and kept the rate unchanged in February. Its next decision is due on 5 March