Goodbye to all that currency instability

Goodbye to all that currency instability

By Ralph Atkins in Frankfurt

Published: December 15 2008 20:13 | Last updated: December 15 2008 20:13

Frankfurt’s Geldmuseum, or money museum, in Germany’s financial capital, contains plenty of reminders of the perils of currency instability.

Visitors can play “the stability game”, using a lever to steer an economy between inflation and deflation. Curiously, its curators are making little of one of Europe’s most significant monetary anniversaries: 10 years of the euro on January 1.

The lack of a special exhibition on the euro’s instability is perhaps a good sign. In fact, a decade on from its launch as a tradeable currency – and seven years since the introduction of notes and coins – the euro has emerged as the secure and globally established currency of 320m people in 15 countries.

There are now more euros in global circulation than dollars, and the euro’s role as an international reserve currency is growing. By the first half of this year, the euro accounted for 27 per cent of official foreign reserves, up from 18 per cent soon after its launch. The dollar’s share fell from 71.2 per cent to 62.5 per cent over the same period.

Yet the global economic slowdown is posing daunting new challenges as the euro enters its second decade. Recessions across the continent are testing Europe’s monetary union, with some of its biggest member states facing painful adjustments.

Video: View from Europe

Other pressing problems today were not even anticipated at the euro’s launch. At the beginning, Germans were worried about price stability and whether the European Central Bank was sufficiently independent to prevent inflation.

“But now the concerns are more about the stability of the financial system and fiscal discipline,” says Nicolaus Heinen, Europe analyst at Deutsche Bank.

Karel Lannoo, chief executive of the Brussels-based Centre for European Policy Studies, argues that financial market turmoil has exposed serious shortcomings in European bank regulation that could pose dangers to the euro.

“There is no single entity . . . to deal with the supervisory issues. The level of discretion left to national authorities is too high.” Worries about eurozone fiscal policies, also set at national level, have intensified as a result of the large-scale bank rescue plans launched by eurozone governments.

Hans Tietmeyer, the president of the German Bundesbank at the launch a decade ago, argues that the euro “is a positive element” in the current crisis. If national currencies had remained, smaller member states such as Belgium would almost certainly have suffered foreign exchange crises on top of everything else.

The experience of the early 1990s currency turmoil suggests that “we would have had a lot of problems in the European Union” without the euro, adds Jean-Claude Trichet, the ECB’s president.

Mr Tietmeyer says the euro has indeed proved itself even to its most cautious backers – the Germans.

“I think it was appropriate to be a little bit sceptical and not to go in without knowing the risks,” he says. “But I think that in the past 10 years, we have seen that the risk could be controlled.” But he now warns “that the question is coming up more and more of whether the economic and political cohesion is strong enough among the participating countries and whether the supervision is appropriate for the banking area in all countries”.

Such concerns have contributed to a dramatic increase in yield spreads, for instance issued on Greek and Italian government bonds, compared with German bonds. “If there are doubts by international investors about the regulatory and supervisory framework, they might start worrying about the euro,” says Mr Lannoo.

He goes on: “The dollar is still accepted and seen everywhere as the ultimate currency of last resort. But the euro is not the currency of last resort. and if the regulatory environment is not put in order, that will undermine the monetary union.”

National adjustments could be difficult. Spain, for instance, like other countries, enjoyed a long housing boom that helped fuel economic growth. But unlike the UK, which has retained the pound, Spain does not have the option of allowing its currency to devalue, so the Spanish labour market may have to bear the brunt of the adjustment.

Still, the eurozone is in no danger of breaking up in the foreseeable future, with “very big” risks for countries that were exiting, especially if a country was quitting because it had failed to keep pace with others, says Mr Tietmeyer.

“I think it is a one-way street,” he adds – and one that may keep the euro out of the Geldmuseum’s focus on instability for some years to come.

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Short View: World According to Zirp

By John Authers

Published: December 15 2008 18:30 | Last updated: December 15 2008 18:30

Are we moving into the World According to Zirp? Tuesday’s bulletin from the Federal Reserve might tell us.

Zirp (zero interest-rate policy) applies when central banks cut rates to zero in an attempt to stimulate growth. Zero interest rates also, of course, imply zero worry that inflation will revive.

The target Fed Funds rate has now reached 1 per cent, and the market is certain that it will be cut on Tuesday to 0.5 per cent or lower. Trading in Fed Funds futures contracts suggests it will fall to 0.25 per cent, and stay there for most of the next year.

Normally the Fed keeps rates at its target through intervening – but now the effective Fed Funds rate has fallen to about 0.125 per cent. This raises the questions of whether the official rate matters any more, and whether the Fed has any ammunition left.

The answers would come through quantitative easing, a term born in the Bank of Japan’s fight against deflation in the 1990s. It refers to interventions by the central bank that force effective interest rates below zero.

One option, floated by Ben Bernanke, the Fed’s chairman, a few weeks ago, would be for the Fed to buy Treasury bonds and push their yields further down.

Exactly how the Fed steps around this technical issue in the few words available to it in Tuesday’s communique could have a big impact on the markets.

Worries about Zirp have helped turn the markets against US assets. On a trade-weighted basis, the dollar is down 6 per cent in a week.

And the relative strength of US equities is over. Starting in June, the S&P 500 outperformed the FTSE World excluding the US index by 38 per cent over four months, as US investors brought money back home.

But since October 28, the US has underperformed the rest of the world by more than 12 per cent. In the world according to Zirp, that could carry on for a while.

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World Food Programme in plea for $5.2bn

By Javier Blas, Commodities Correspondent

Published: December 15 2008 22:31 | Last updated: December 15 2008 22:31

The World Food Programme has launched an “urgent appeal” to governments to donate a record $5.2bn (€3.8bn, £3.4bn), as it confronts an increase in aid recipients because of the economic crisis at a time when food prices are high and its coffers are empty.

The WFP, the United Nations agency responsible for relieving hunger, said in a letter to donor countries over the weekend that it needed a significant proportion of the money immediately as it does not have enough funds left to spend in early 2009.

“There is virtually no back-up,” Josette Sheeran, WFP executive director, told the Financial Times. “We would run out of food for some key operations by March,” she added, warning that countries such as Ethiopia, Congo, Haiti, Sudan and Bangladesh were at risk.

The Rome-based body relies on carry-over cash and food from the previous year to finance its operations at the beginning of the following year, but record food prices earlier in 2008 had exhausted WFP’s reserves.

The letter shows that in spite of a drop in wholesale food prices, the WFP’s funding needs are increasing as more countries ask for food aid relief.

“Not one country is coming off the list of the food crisis, and the financial crisis is putting new countries on the list,” Ms Sheeran said, warning that the combination of sharply lower remittances, lower employment because of plunging exports to the US and Europe and lack of access to credit was threatening poor countries.

“Vulnerable nations have already depleted their food and financial reserves and now are being hit by the financial crisis,” she said. “The drop in remittances is hitting a population that was already suffering from high food prices,” she added.

The WFP needs about 90 days from the time it gets the cash donations to the delivery of the food, so if some money does not arrive before January, it would start rationing food aid.

The programme’s budget will soar next year to $5.2bn, a 10.6 per cent increase from $4.7bn this year, and equal to its combined 2006-07 budgets. It is the second time this year that the WFP has launched such an appeal, after running out of money early this spring.

“It is critical to send a message of hope to the most vulnerable people that they are not forgotten,” Ms Sheeran said. “While we worry about Wall Street and High Street, we are also paying attention to the needs of those who live in places with no street.” She urged governments to donate 1 per cent of their bail-out and stimulus programmes to fight poverty and hunger.

The US is the biggest WFP contributor, having donated almost $2bn this year, mostly in food shipments. Saudi Arabia, with $500m, and the European Commission, with $290m, are the second and third-largest donors, mostly in cash.

The appeal comes after the UN’s Food and Agriculture Organisation said last week that this year’s food crisis has pushed the number of hungry people to almost 1bn.

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Singapore reports fall in shipping traffic

By John Burton in Singapore

Published: December 16 2008 06:09 | Last updated: December 16 2008 06:09

Singapore, the world’s biggest container port, suffered last month its first fall in throughput traffic since 2001 due to a slowdown in global exports that has affected the Asian shipping industry.

Container traffic shrunk by 1.5 per cent in November from a year ago to 2.29m twenty-foot equivalent units (TEUs), the standard industry measurement, Singapore’s Maritime and Port Authority said. Monthly traffic volume has been slowing since July, although total shipments have increased by 9 per cent to 27.8m TEUs through November from a year ago.

PSA, Singapore’s biggest port operator, reported separately that container traffic expanded by 8.8 per cent during the first 11 months of this year, including an 8.9 per cent rise in November from October. The downturn appeared to be most severe at Jurong Port, the country’s secondary port operator, although it did not provide data for November.

A slowdown in the city-state’s container traffic had been expected after Neptune Orient Lines, the Singapore state-owned shipping operator, recently announced that it was cutting capacity by up to 25 per cent on its routes to Europe and North America.

Shipping rates for the Asia-Europe route also have fallen sharply by as much as 90 per cent due to the contraction in global trade.

Singapore serves an important trans-shipment hub for Asia due to its strategic location at the tip of the Malacca Strait.

Economists believe that its container traffic will continue to decline until at least mid-2009 as the city-state is expected to be among the worst-affected Asian countries in the global recession due to its heavy reliance on exports.

Singapore last suffered a contraction in shipping traffic in the aftermath of the technology-led recession that began in 2001.

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Turkey hit by grim growth data

By Delphine Strauss in Ankara

Published: December 15 2008 20:55 | Last updated: December 15 2008 20:55

Turkey aims to close a financing deal with the International Monetary Fund at the start of January, the government confirmed on Monday, as the weakest quarterly growth in six years prompted analysts to forecast a technical recession.

Gross domestic product in the third quarter of 2008 grew just 0.5 per cent from the same quarter of 2007, official data showed, down from 2.3 per cent in the second quarter. That took year-on-year growth for the first nine months of 2008 to 3 per cent – less than half the previous five-year average.

Separate data showed unemployment hit double-digit figures in September, reaching 10.3 per cent compared with 9.3 per cent in the same month of 2007.

The figures belie ministers’ repeated assertion that Turkey will suffer only mild effects from the global crisis and underline the urgency of sealing an agreement with the IMF on a financing package. Investors are hoping Turkey will secure $20bn (€14bn, £13bn) of funding to help plug its financing gap.

“Today’s grim data will remind the authorities just how exposed the country is to the global credit crunch,” said Neil Shearing, at Capital Economics in London.

Since Turkey completed its $10bn, three-year IMF programme in May, the ruling Justice & Development party (AKP) has been reluctant to enter a scheme that would constrain spending before local elections in the spring.

But after weeks of wrangling, the government has accepted it will have to revisit budget plans based on a forecast of 4 per cent annual GDP growth and on revenue assumptions the IMF considers to be wildly optimistic.

The Treasury said on Monday that it had invited an IMF mission to visit Ankara in January. An IMF statement confirmed there had been “considerable progress” in technical discussions that could lead to a programme.

The negotiations in January will determine how much funding Turkey can access and how it balances the budget – although the IMF will stress that productive investments should be postponed rather than cancelled.

There is no agreement yet on the growth assumption that will underpin the programme. But analysts noted on Monday that quarter-on-quarter growth was negative and several predicted the economy would shrink at least until the second quarter of 2009 – meeting one definition of a technical recession.

“A sharp economic downturn and a further currency correction now look almost inevitable,” said Ahmet Akarli, economist at Goldman Sachs, noting that political problems could resurface as recession would hit the AKP’s core supporters among the urban poor and small businesses.

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New York state plans soft drink ‘obesity tax’

By Jonathan Birchall in New York

Published: December 15 2008 20:09 | Last updated: December 15 2008 20:09

New York state could impose an “obesity tax” on high-calorie soft drinks such as non-diet versions of Coke and Pepsi as public concerns over obesity turn potentially fattening foods into a politically acceptable target for taxation.

David Paterson, New York’s governor, is to include a proposed tax of around 15 per cent in a draft budget aimed at closing the state’s $13.3bn deficit.

He is also expected to call for spending cuts, and for other revenue-raising measures including extra fees on sales of luxuries including furs and boats. Mr Paterson has said he will not raise state income tax.

A number of US states have sales taxes on soft drinks, sweets and snacks, while most other foods are tax-exempt. But New York’s proposals would be the first to distinguish between “diet” and “non-diet” products. It would also double the existing 7.5 per cent sales tax, already one of the highest in the US, potentially raising over $400m.

The proposal follows previous efforts by state legislators in New York and California to pass a “fat tax” on high calorie foods. It is expected to face opposition from both Coca-Cola and from Pepsico, which has its corporate headquarters in New York state.

Sugared soft drinks have become a particular target for anti-obesity campaigners, with a 2005 study from the Center for Science in the Public Interest saying they are the single largest source of calories consumed by Americans.

A review of 88 nutritional studies published last year in the American Journal of Public Health also found “clear associations” between the consumption of non-diet soft drinks and increased calorie intake and body weight.

But a rival review of 12 studies published this year in the American Journal of Clinical Nutrition said there was “virtually no association” between drinking sugary sodas and weight gain in children and adolescents.

The American Beverage Association argues that lack of exercise, genetics and other factors need to be taken into consideration in considering the causes of rising obesity rates.

Susan Neely, ABA president, said the idea of taxing a single category in response to obesity concerns was “misguided” and “ridiculous”.

“We think this there will be strong opposition to this kind of tax, given the economic conditions,” she said.

Margo Wootan, director of CSPI, said a modest tax on non-diet sodas was unlikely to have a significant impact on consumption levels. But she said it was “a reasonable way to raise money . . . It is totally a luxury item, an extra that people do not need to have in their diet”.

Both Coke and Pepsi have responded to concerns over obesity by committing to voluntary guidelines that eliminate advertising and marketing of the sugary drinks to children under 12.

Norway has experimented with imposing higher rates of sales tax on high-fat and high calorie foods. The UK saw an unsuccessful campaign last year by the British Soft Drinks Association which pushed for the sales tax on “healthier” fruit juices to be lowered from 17.5 per cent to 5 per cent.

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Supertankers store 50m barrels of oil

By Carola Hoyos in Paris and Javier Blas in London

Published: December 15 2008 23:17 | Last updated: December 15 2008 23:17

Oil companies and traders are storing at least 50m barrels of oil in supertankers in a clear sign of supply outstripping demand as the global economy slows.

The surge in floating storage, – enough to meet France’s oil imports for a month and the biggest since late 2001–, is likely to push the Opec oil cartel, which is due to meet on Wednesday in Oran, Algeria, to make a deeper production cut to reduce stocks. Storing oil in tankers is unusual as it is significantly more expensive than inland.

Abdullah al-Badri, Opec’s secretary general, said on Monday:“Stocks are very high. We have to act. We see a very sizeable reduction [in production].”

Chakib Khelil, Opec president, said: “Everybody is supporting a cut.”

Oil prices rose briefly above $50 a barrel, recovering from a four-year low of $40.50 earlier this month. Oil later traded $1.30 down at $44.95 barrel on concerns that Opec’s cuts would not be enough to prevent further stock building.

Several Opec officials have suggested a 2m barrels-a-day cut, the biggest in recent history, and were also hoping to persuade Russia – the world’s largest oil producer outside the cartel – to make a reduction.

But with Russia’s oil output already declining because of a lack of investment, any commitment is likely to be seen as a political gesture rather than an actual reduction.

Whatever the size of Opec’s cut, the floating storage surge is a clear sign the cartel is losing its battle to cut supplies more quickly than demand falls.

Jens Martin Jensens, managing director at Bermuda-based Frontline, the world’s largest operator of supertankers, said that as many as 25 supertankers – each holding about 2m barrels – were being used as floating storage worldwide. Other traders suggested a similar number, pointing to companies such as BP and Royal Dutch Shell and traders such as Vitol and Koch as the holders of the oil.

Opec ministers said in November they intended to reduce developed countries’ oil stocks from the equivalent of 56 days of demand to 52. But the surge in floating storage indicates that tanks are brimming, in spite of Opec’s having announced 2m b/d in cuts. Indeed, inventories have risen to almost 57 days’ demand.

The International Energy Agency, the western countries’ oil watchdog, said the surge was the “result of abundant prompt supplies having a hard time finding customers”.

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Australia, HK trim export forecasts

By Peter Smith in Sydney and Tom Mitchell in Hong Kong

Published: December 15 2008 14:56 | Last updated: December 15 2008 14:56

With buyers suffering from the global economic slowdown, Australia on Monday trimmed its export forecast and Hong Kong predicted shipments would even shrink next year.

The Hong Kong Trade Development Council predicted that the territory’s exports would decline next year for the first time since 2001, by 3.5 per cent in real terms. Shipments of electronic consumer products are forecast to decline by 5.6 per cent next year to $246.7bn, led by a fall off cell phones and personal computers.

The projection, based on quarterly business confidence surveys, includes ”re-exports” that are transshipped to and from China.

The Australian Bureau of Agricultural and Resource Economics cut its forecast for commodity exports for the year ending June 30 by 10 per cent to A$192bn in response to sharply lower metal and energy prices on global markets.

“The weakening world steel market has reduced demand for iron ore and metallurgical coal, Australia’s two largest export earners,” said the bureau, which in September forecast commodity exports would reach A$214bn.

The new forecast would still represent 37 per cent growth over mineral and energy earnings for the previous year, noted Phillip Glyde, executive director at ABARE. Fuel and mineral shipments rose 15.6 per cent between July and October.

“While world prices for many commodities have declined markedly over the past few months, a significant depreciation of the Australian dollar, if sustained, is expected to provide some support for commodity export earnings,” Mr Glyde said.

ABARE cited contract defaults, mine closures, production cutbacks and requests from overseas buyers to delay shipments of certain commodities, particularly iron ore, when providing its latest estimates.

Farm export earnings are forecast to be A$29.4bn, 7 per cent up from the previous year, and slightly down on September’s A$30bn forecast.

The revisions came as Western Australia’s Chamber of Commerce and Industry lowered its 2008-09 economic growth forecast for the state from 5.5 to 3.5 per cent. It cut its 2009-10 forecast by nearly half from 6.25 to 3.25 per cent.

Western Australia’s resource-based economy, dubbed the “engine room of the nation”, has accounted for half of Australia’s economic growth in recent times due to the commodities boom, the chamber said.

John Nicolaou, the chamber’s chief economist, said there had been delays in a number of major projects in the resources sector.

“With a growing number of small, medium and large businesses expressing concern about the short term outlook, and business confidence at record low levels, the chamber has revised its economic growth forecasts,” said Mr Nicolaou.

The group noted the sudden decline in China’s demand for the state’s key exports as the main reason for its cuts. “The slower rate of economic growth is largely the result of a sudden and significant slowdown in exports, as international demand declines,” Mr Nicolaou said.

Hong Kong’s trade council expects average prices for China-made goods to decline after rising cost pressures forced them up over recent years. ”For next year we are forecasting that there will be a decline [in export prices],” said Edward Leung, the council’s chief economist.

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European unity carries a price

Published: December 14 2008 19:09 | Last updated: December 14 2008 19:09

No one disputes that fighting climate change has become a harder sell as a result of the financial and economic crises sweeping the globe. But the concessions made to heavy industries at Friday’s summit of EU leaders are a high price to pay for political unity.

In a race to protect their economic interests as recession bites, EU member states ensured that the winners in a weakened plan to require utilities and manufacturers to buy pollution permits via auction will be German metalbashers and Poland’s power stations.

The European Union, which created the single market and the euro, should have delivered more last week. Its target to cut carbon dioxide emissions by a fifth from 1990 levels by 2020 requires bold action. But the summit communiqué fell short of what will be needed to inject momentum into United Nations-led efforts to reach a wider international agreement in 2009.

To have struck a deal is a much better outcome than if the meeting had broken up in acrimony. But the questions remains: how can the EU expect to persuade China and India to act when its cement, chemicals, steel and other heavy industries will be shielded from much of the cost of buying tradeable permits, especially since they are being given almost a third of them free?

Many manufacturers will, more-over, be exempted from paying for most of their permits on the grounds non-EU rivals could gain an advantage. Poland, with its partial exemptions, has less incentive to close coal-burning plants soon.

These concessions do not reflect well on Europe. They will frustrate efforts to make polluters pay for emissions, an essential step in fighting climate change. Indeed, the risk is that some of them will reap windfall profits, just as the utilities did under the EU’s original and flawed emissions trading scheme. One of the biggest losers may be the taxpayer as revenues from auctioning permits will be diminished.

It is tempting, now that the world’s richest economies are grappling with recession, to relax about the urgency of tackling global warming. But to focus on the immediate risks to industry and jobs at the expense of the threat posed by rising temperatures misses an important point. Decisions taken today will shape events decades ahead. It may be too late to stop the planet heating up, but the rate at which temperatures rise must slow.

It was easy for Europe to posture as leaders on climate change while George W. Bush was in the White House. The EU now needs to show more conviction if it is to persuade Barack Obama to follow its lead.

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Oversupply fears hurt European bond auctions

By David Oakley

Published: December 10 2008 00:00 | Last updated: December 10 2008 00:00

Governments faced fresh concerns over raising debt in the capital markets on Tuesday as Austria and the Netherlands saw weak demand for their bonds.

The Dutch government failed to raise as much as it had targeted for three bonds – maturing over five, six and seven years, respectively – while the Austrian government saw one of the weakest auctions in years for 12-year paper.

The difficulties highlight potential problems because of the vast pipeline of government and government-backed debt following the announcements of big fiscal packages to stimulate economies and bail out banks.

Analysts stress sovereign bond issuance is not under serious pressure at the moment because of low interest rates and deflation fears, which have depressed yields to historic lows, and are the main drivers of the market.

However, there has also been some switching out of bonds into the more stable stock markets this week, which has also put upward pressure on yields.

Riccardo Barbieri, a strategist at Bank of America, said: “It was not the best time to tap the market as yields have been rising this week and we have seen the equity markets stabilise. There are concerns about supply, although it must be remembered that yields are at historic lows in many countries.”

Analysts warn, however, that these early signs of stress, just after many governments have unveiled big fiscal stimulus programmes, are a harbinger of potential problems next year when record volumes of debt are due to be issued. More than $1,000bn of government debt is expected to be raised in Europe in 2009, while close to $2,000bn is forecast in the US.

This supply could start forcing yields substantially higher, undermining the finances of many governments as their interest rate costs rise. This could lead to curbs in public spending as debt stocks rise.

Martin Weber, at Goldman Sachs, said: “Supply is a significant worry for the government bond markets, although the European markets are solid and deep enough to cope. But the relative supply pressures will have an effect on perfomance and prices. We have already seen significant cheapening in secondary spreads and ahead of certain bond auctions and this dynamic is likely to continue.”

The Austrian government was forced to pay 13 basis points more than comparable 12-year bonds for its €1.1bn issue, while the Dutch government only managed to raise a total of €2.46bn for the three bonds being sold after indicating that it wanted between €2.5bn and €3.5bn.

The Netherlands is considered one of the strongest and safest credits, which does not usually run into problems meeting debt targets. It also took the Dutch Debt Agency nearly an hour to sell the desired amount, much longer than in past auctions.

The UK, however, had fairly strong demand for its £1.25bn offering of index linked bonds, due to mature in 2032.

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Madoff fallout spreads worldwide

By FT Reporters

Published: December 15 2008 19:47 | Last updated: December 15 2008 21:38

The fallout from Bernard Madoff’s alleged $50bn fraud spread through the global financial system on Monday as more banks revealed exposures to his firm and the beleaguered hedge fund industry braced for withdrawals from worried clients.

The potential losses reported by large financial institutions that invested or lent to investors in Mr Madoff’s failed venture reached $10bn after HSBC confirmed the news, first reported in the Financial Times, that it could lose up to $1bn.

The nationalised Dutch arm of Belgian bank Fortis admitted losses could reach €1bn ($1.4bn), while Royal Bank of Scotland joined BNP Paribas and Banco Santander among the high-profile victims of the scandal, saying it might lose up to £400m ($612m). Japan’s Nomura has Y27.5bn ($300m) at risk.

Where is the $50bn loss?

An interactive guide to exposure of investors in Madoff’s venture

The affair has called into question the business model of funds of hedge funds – which run about $685bn in assets – after many of the biggest failed to spot warning signs. London-listed Man Group, Arki Busson’s EIM Group, and Tremont of the US have all admitted holdings in funds linked to Mr Madoff.

Funds controlled by Tremont, owned by the insurer MassMutual, had more than $3bn invested with Mr Madoff, said people close to the situation.

The investments by the hedge funds came despite the fact that some experts and Wall Street traders had raised concerns over the internal controls, business model and suspiciously consistent good performance of Mr Madoff’s business.

“This was the train wreck that happened in broad daylight,” said Jim Hedges, a hedge fund adviser who did not place any investors’ money with Bernard Madoff Investment Securities.

Hedge fund managers said they expected withdrawals as clients and funds of funds rushed to raise money to cover losses from the alleged “Ponzi scheme” – in which investors’ pay-outs are funded not with real returns but with cash from new investors.

The Securities Investor Protection Corp, an insurance body funded by the securities industry, said it had begun liquidating Bernard Madoff Investment Securities.

But as federal investigators and the court-appointed receiver sifted through the New York headquarters of the firm, the list of victims continued to grow.

Banque Benedict Hentsch, a Swiss private bank, on Monday terminated its three-month-old agreement to merge with Fairfield Greenwich, a hedge fund, after Fairfield revealed more than half its $14bn under management was held by Mr Madoff.

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Madoff feeder funds levied high fees

By Henny Sender in New York

Published: December 15 2008 19:29 | Last updated: December 16 2008 00:46

The “feeder” funds that channelled money to Bernard Madoff charged their investors high fees that in some cases exceeded the norms of the hedge fund industry, people familiar with the matter say.

Mr Madoff received much of his funding from feeder funds run by so-called funds of hedge funds. These funds of funds are paid by investors to perform due diligence on hedge funds and allocate money among approved managers.

Typically, funds of hedge funds charge a 1 per cent management fee and take 0-10 per cent of the profits. This would be in addition to the fees charged by the underlying hedge funds – which usually take a 2 per cent management fee plus 20 per cent of the profits, above a certain level, known as the hurdle rate.

Fairfield Greenwich, a feeder fund that invested $7.5bn with Mr Madoff, charged a 1 per cent management fee and took 20 per cent of the profits, according to a person familiar with the matter.

Suzanne Murphy, managing director of Tri-Artisan, a hedge fund consultancy, said she believes other Madoff feeder funds charged fees similar to those at Fairfield Greenwich. At such levels, she claimed, “These organisations were more partners of Mr Madoff than clients.”

In general, generous arrangements such as large performance fees “raise questions about conflicts of interest and caveat emptor,” according to the general counsel of the alternative investment division of one bank. The head of the hedge fund practice at one law firm, added: “At a certain point, if you get outsize compensation, you can argue that you lose the incentive to do due diligence.”

In many cases, the feeder funds that worked with Mr Madoff also did so with few conditions, such as ones requiring that minimum returns be reached before fees would be paid, according to people familiar with the matter.

In some cases, the private wealth arms of banks that channelled money to such feeder funds also received payments from these funds.

Mr Madoff did not charge his investors fees but was paid through commissions on his trades, all of which went through the broker-dealer he controlled. Because he did not charge typical fund performance fees, he earned a reputation among some investors for being a lower-cost manager.

Tremont Group Holdings, which recently gave more than $3bn to Mr Madoff through several channels, received an average 1.25 per cent management fee, which amounted to at least tens of millions of dollars every year, said people familiar with the matter. Most of that money had minimal requirements such as a hurdle rate on performance, though.

Most of the Tremont money was handled through a subsidiary separate from its fund of hedge funds. Only 7 per cent of Tremont’s fund of funds was invested with Mr Madoff, said people familiar with the matter.

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Royal Mail Sale Risks 50,000 Jobs

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A large stake in the Royal Mail could be sold to a foreign postal company - putting 50,000 jobs at risk, it is reported.

In a deal worth around £3bn, at least a third of the state-owned firm would be sold to a private company, the reports say.

Half of the postal service's 71 mail centres could be closed and the business broken up and offered to its rivals.

Collection and sorting could be divided and stakes offered to other operators.

The "last mile" delivery is likely to stay with the Royal Mail.

The unions are reporting up to 50,000 jobs could go, which is one third of the workforce - but ministers consider this figure to be alarmist.

The radical shake-up is believed to be recommended in a report by Richard Hooper, formerly of media watchdog Ofcom.

It was delivered to ministers last week and was being discussed by the Cabinet today.

The report apparently warns the Royal Mail's pensions deficit, which was £3.4bn in 2006, is likely to have doubled when a new valuation is made next year.

It includes calls for a speeding up of modernisation to maintain a "universal service", which include post being delivered six days a week.

The Conservatives have said industry sources suggested the Government was planning to "seize" the £22bn in the Post Office pension fund and use it to make it look as though Government borrowing figures were lower.

Shadow business secretary Alan Duncan said the sale would put the country "further into debt" and leave future generations to foot the bill.

"People will be appalled that the Government has resorted to raiding pension funds in order to plug the black hole in the public finances," he said.

"I fear the Government is going to raid £22bn of pension assets, dump the liability as a mortgage on future generations and dress it up as the salvation of the Royal Mail.

"This is a dangerous plan that must be resisted."

There was no official reaction to the report, apart from a re-iteration from a source close to Business Secretary Lord Mandelson.

"Our concern is to save the Royal Mail and secure its future, not privatise it," the source said.

"We have a manifesto commitment to a publicly-owned Royal Mail and we will not be setting that aside."

Lord Mandelson is expected to publish the investigation and give the Government's initial response in a speech to the House of Lords.

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家計の金融資産、最大の減少　9月末、5.2％減の1467兆円

　日銀が16日発表した2008年9月末の資金循環統計（速報）によると、家計が保有する金融資産残高は前年同期末比5.2％減の1467兆208億円となり、1500兆円の大台を割り込んだ。減少率は1979年度の統計開始以来最大。世界的な金融危機による大幅な株安を受け、株式や投資信託の評価額が目減りした。一方で現預金は増え、安全志向の高まりが鮮明となった。

　資金循環は家計や企業、政府部門などのお金の流れや保有残高を分析する統計。9月末の残高は3年ぶりの低水準で、1500兆円を割り込んだのは3月末以来となる。

　家計の金融資産残高を項目別にみると、株式（出資金を含む）は前年同期末比36.1％減の118兆4157億円となり、3年9カ月ぶりの低水準に落ち込んだ。減少率は過去最大。投資信託も58兆7692億円と同19.1％減った。(11:07)

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11月の造船受注、82％減　海運市況の早期回復困難の見方も

　日本造船工業会（東京・港）は16日、11月の日本の造船受注量が前年同月を82.7％下回ったと発表した。前年実績割れは2カ月連続。世界的な信用収縮と景気後退による海運市況の悪化で、発注主の投資意欲が減退した。同日記者会見した工業会の田崎雅元会長は「来年も造船市況は不透明な状況が続く」と市況の早期回復は難しいとの認識を示した。

　データをまとめた日本船舶輸出組合（東京・港）によると、11月の受注量は22万ＣＧＴ（標準貨物船換算トン数）。前の月に比べて急減した10月（29 万ＣＧＴ）よりもさらに落ち込んだ。海運市況の低迷を受け、造船の新規商談は停滞している。田崎会長は「いつ海上の荷動きが回復し、どれくらいの船が新たに必要になるのか読めない」と話した。

　ただ、造船各社は約4年先まで仕事量を抱えている。高い船価で受注した船が来年以降、相次ぎ引き渡されるため、「今後はコスト削減効果が業績に直結する」と指摘。(20:30)

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モスフード、インドネシアに進出　３年で15店めざす

　モスフードサービスは16日、インドネシアで初の店舗を22日に開くと発表した。出店場所は首都ジャカルタのショッピングセンター「プラザ　スナヤン」で、約100席の規模。1号店で月700万円の売り上げを目指すほか、今後3年で15店程度の出店を見込んでいる。

　品ぞろえは「モスバーガー」や「テリヤキバーガー」など、日本のものをほぼ踏襲するが、国民の多くがイスラム教徒である現地の事情にあわせて豚肉は使わないという。

　店舗の運営には、11月に設立した合弁会社「モグ　インドネシア」があたる。出資比率は、現地で流通業を展開するマスヤグループが70％、オリックスのシンガポール法人が20％、モスフードが10％。(19:29)

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テレ朝の今期、純利益１億円に　単独は開局以来初の最終赤字へ

　テレビ朝日は16日、2009年3月期の連結純利益が前期比98％減の1億円になる見通しだと発表した。10月に公表した予想は26億円だったが、利益面の影響が大きいテレビ広告が想定以上に落ち込んでいるため下方修正した。テレビ事業を手掛ける単独では営業・最終損益ともに開局以来初の赤字となりそうだ。今期見通しの下方修正は3回目。

　連結売上高は2％減の2475億円。テレビ広告のうち、番組の間に流すスポット広告が金融危機などを背景に一段と減少。通期では10.8％減と、 1993年3月期以来の落ち込みが避けられない見通しだ。景気変動の影響を受けにくいとされてきた番組そのものに提供するタイム広告も下期は1％減る。北京五輪で稼いだ上期の貯金を減らし、通期では同1％増にとどまる。

　営業利益は92％減の8億円。出資映画のヒットなど放送外事業の一部は好調だったが、好採算の広告の落ち込みを補えない。保有するインデックス・ホールディングス株など6億円強の株式評価損も追加計上する見通しだ。(19:27)

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小規模企業の景況感が最低に　11月ＤＩ、マイナス77

　全国商工会連合会（東京・港）が16日発表した11月の「小規模企業景気動向調査」によると、産業全体の業況ＤＩ（「好転」と回答した割合から「悪化」を引いた値）はマイナス77.7と、2カ月連続で悪化した。業況ＤＩは、10月に現行の調査方法になった2000年3月以降で最低を記録したが、さらに 5.0ポイント悪化した。

　業況ＤＩは製造、建設、小売、サービスのすべての業種で悪化しており、金融危機や円高、株価低迷などの影響が幅広く及んでいるとみられる。

　売上額ＤＩはマイナス68.9で前月から8.3ポイントの低下。業種別の低下幅を見ると、製造業が10.3ポイント、小売業が10.5ポイントと特に大きかった。製造業では「自動車関連など大幅に受注が減少した」、小売業では「買い物に生活防衛意識が強く出ている」といった声があったという。

　調査は11月末に全国約300の商工会の経営指導員にアンケート方式で実施した。(19:10)

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「ルイ・ヴィトン」のＬＶＪ、銀座の旗艦店出店計画を撤回

　仏高級ブランド「ルイ・ヴィトン」商品を扱うＬＶＪグループ（東京・港）が東京・銀座で計画していた世界最大級の店舗計画を撤回したことが15日、わかった。高額消費不振が深刻なため。積極出店を続けてきたヴィトンが計画を修正したことで、他の海外高級ブランドも日本戦略の見直しを迫られそうだ。

　銀座の数寄屋橋交差点近くに2010年に完成する「ヒューリック数寄屋橋ビル」（地下4階・地上12階建て）をほぼ1棟を借り受け、パリ店に匹敵する旗艦店を造る構想だった。(07:00)

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オフィスやマンション、水道水を高層階に直接供給　貯水槽不要

　東京都は高層ビルに貯水槽（タンク）を設置しなくても、水道水を高層階の家庭やオフィスに直接供給できる新技術の導入を来春認可する。来年2月以降に着工するビルに認めるもので、一度ためた水ではなく浄水場で処理した「新鮮な水」が飲めるようになるという。貯水槽の維持管理が不要になるため、ビル所有者のコスト削減も見込まれる。新技術の導入は全国の都道府県で初めて。

　水道水の供給は、ビルの高さに応じて大きく2つの手法がある。1つは水道水の圧力などを利用して水道管から蛇口まで直接給水する方式だ。ただ、ポンプの能力に限界があるため、従来は一般に16階建て（約75メートル）程度以下にしか対応できなかった。このため、17階建て以上では、屋上などに貯水槽を設置し、ここに一度ためてから、各家庭やオフィスに配水している。

　今回認める新方式は、17階以上のビルで貯水槽がなくても配水できる新型ポンプを導入する。従来のポンプは水の勢いに強弱が出るなどの問題があり、高層階で各部屋に直接水を届けることが難しかった。

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公益法人の天下り規制は「困難」　政府が首相発言を撤回

　政府は16日の閣議で、麻生太郎首相が国会答弁で検討を表明した公益法人の常勤理事への所管省庁からの天下り規制について導入は難しいとする答弁書を決定した。首相の発言を事実上修正した格好で、首相発言の重みが改めて問われそうだ。

　首相は10月20日の衆院予算委員会で、民主党の武正公一氏から「常勤理事のうち所管省庁出身者の割合を3分の1以下にすべきだ」と問われ「検討させていただく」と表明。しかし答弁書では「改めて政府部内で検討した結果、困難との結論に達した」とした。

　公益法人の天下り規制は常勤と非常勤を合わせて所管省庁出身理事を3分の1以下としているが、常勤理事だけを見ると3分の1を超える法人が多い。首相は「やはり常勤も問題なのではないか」と指摘していた。

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遺産申告漏れ、２年連続で増加　国税庁まとめ

　今年6月までの1年間（2007事務年度）に相続税の税務調査で見つかった遺産の申告漏れ総額が、前年度比1.0％増の4119億円だったことが16 日、国税庁のまとめで分かった。増加は2年連続。海外資産が絡む申告漏れが2.1倍の308億円と過去最悪を更新した。国税庁は「大口・悪質な事案を重点的に調査した結果」としている。

　全体の追徴税額は0.2％増の941億円だった。調査総数1万3845件のうち、85.8％の1万1884件で申告漏れが判明。仮装・隠ぺいを伴う遺産隠しだとして重加算税の対象となったのは1914件で、申告漏れ件数全体の16.1％と前年度の15.1％から上昇した。

　海外資産関連の調査件数は407件で、前年度比11.8％増。申告漏れ件数は334件と14.4％増えた。1件あたりの申告漏れ額は9227万円と、遺産の申告漏れ全体の平均（3466万円）を大きく上回った。(20:30)

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救急車の遅れ、過去最悪　到着に７分、搬送に26分　07年全国平均

　救急車が通報から現場に到着するまでの時間が2007年の全国平均で7.0分、現場から患者を医療機関に収容するまでの時間が26.4分と、ともにワースト記録を更新したとする08年版消防白書が16日、閣議で了承された。

　現場到着から収容までの時間は前年より1分、10年間で6.5分も延びた計算。要因について総務省消防庁は、07年8月に奈良県の妊婦が医療機関に10回以上、収容を断られ死産したことに象徴される病院の受け入れ拒否が影響したなどと分析している。

　消防庁は、救急医療は医師不足など厳しい状況で対策を急ぐ必要があるとし、搬送の際に空きベッド状況などを把握できる「救急医療情報システム」に医療機関が積極的に協力することを求めている。

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天皇陛下、定例の誕生日前会見を中止

　宮内庁は16日、毎年定例となっている天皇陛下の誕生日前記者会見を今年は行わないと発表した。天皇陛下は今月初めに不整脈による胸の変調を訴えられ、検査の結果、心身のストレスによる胃腸炎と診断された。同庁ではストレス軽減のための緊急措置としている。代わりに誕生日を迎えられるお気持ちや1年を振り返った「ご感想」が文書で発表される。

　天皇陛下は1989年の即位以来、毎年記者会見に応じられており、会見中止は初めて（99年は直前に即位10年会見があり、2004年は高松宮妃喜久子さまの服喪のため文書回答）。

　陛下は宮内記者会が事前に提出した質問に対し、毎回長文の回答を執筆して会見に臨まれている。会見直前まで文案を練られ、作業が深夜に及ぶこともあるため、医師団から「胃などへの負担が大きい」と会見中止の要請があったという。(17:33)

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マドンナさん、前夫に69億円超分与

　【ニューヨーク＝共同】米人気歌手マドンナさん（50）の広報担当者は15日、マドンナさんが前夫の英映画監督ガイ・リッチーさん（40）との離婚訴訟で、現金や不動産など計7600万ドル（約69億円）から9200万ドル相当をリッチーさんに渡すことで合意したと明らかにした。離婚訴訟で妻側が夫側に支払う額としては過去最高とみられる。米メディアが伝えた。

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運転士のたばこが原因　東京の地下鉄一時運休

　15日夜に東京メトロ南北線と都営地下鉄三田線の白金高輪駅構内で白煙が上がり、両線が一時運転を見合わせたトラブルで、東京メトロと東京都交通局は16日、運転士が捨てたたばこが原因だった、と発表した。どちらの運転士が捨てたかは調査中という。

　白煙が出たのはホームから約150メートル離れたポイント近くで、同駅を終点とする折り返し電車が待機する場所。約8分の待ち時間に運転士が線路に下り、たばこを吸っていたという。規定でこの場所の喫煙は禁じられているが、近くの側溝からは大量の吸い殻が見つかった。

　東京メトロなどが調査したところ、日比谷線八丁堀駅や都営新宿線新宿駅などほかに計8つの駅の電車待機場所でも乗務員が捨てたとみられるたばこが見つかった。

　15日のトラブルでは1時間半後までに全線で運転を再開、計約4万1000人に影響が出た。(13:01)

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ＬＧ：輸入冷蔵庫リコール　発煙事故７件

　経済産業省は１６日、ＬＧエレクトロニクスジャパンが中国から輸入した冷蔵庫で発煙事故が７件あったと発表した。うち、１人が消火の際に煙を吸って軽傷。同社は対象製品約５万台について、リコール（部品の無償交換）を実施する。

　対象製品の型名は０３年９月２５日～０５年３月２７日製造の「ＬＲ－Ａ１７ＰＳ」と、０４年１月３０日～０５年４月１日製造の「ＬＲ－Ｂ１７ＮＷ」。問い合わせは０１２０・００４０・２７。

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足裏マッサージ器：窒息死３件　ローラーに服巻き込み

　電気機械メーカー「的場電機製作所」（埼玉県川越市）は１６日、８３～９０年に製造していた家庭用ローラー式マッサージ器で、利用者が衣服を巻き込んで窒息死する事故が３件起きていたと発表した。いずれも使用上の注意に反し、布カバーを付けずに使ったのが原因とみられる。同社は薬事法に基づく厚生労働省への医療機器の不具合報告を怠っていた。

　製品は「アルビシェイプアップローラー」で、約４２万台が出荷されている。今月２日、北海道紋別市で女性（５５）が窒息死し、厚労省が同社に照会したところ、９９年に栃木県、０３年に香川県でも同様の死亡事故があったとの報告があった。

　同社によると、この製品は足裏用のマッサージ器として開発され、使用上の注意でローラーに装着するカバーを外して使わないよう求めていた。しかし死亡した３人は、カバーを付けない状態でローラーを首に当てたとみられるという。

　事故を報告していなかった点について、同社は「商品の欠陥ではないし、報告義務があるのも知らなかった」と説明。購入者への注意喚起はしておらず、１６日以降にホームページなどで周知するという。また、この製品と８８～９６年に製造された「シェイプアップローラー２」には、過重がかかると止まる安全装置が付いていなかった。

　厚労省も同日、業界団体に対し、利用者に適正使用を呼び掛けるよう通知した。【清水健二】

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君が代斉唱不起立：「処分は適法」　原告、逆転敗訴－－福岡高裁

　入学式と卒業式で君が代斉唱を拒否した北九州市の小中学校教諭らが、市教委などに懲戒処分の取り消しなどを求めた訴訟で福岡高裁は１５日、原告３人に対する処分を取り消した１審・福岡地裁判決の一部を取り消し、原告側の逆転敗訴となった。丸山昌一裁判長は「不起立行為は保護者らに学校教育への不信感を抱かせており、減給処分は適法」と指摘した。訴えていたのは、８９～０４年に処分を受けた同市内の教諭ら１７人と教諭らで作る組合「北九州がっこうユニオン・うい」。

　丸山裁判長は、起立して君が代を斉唱するよう命じた職務命令について「学習指導要領の国旗国歌条項に適するもの」とした。懲戒処分については「儀式的行事の雰囲気を乱し、地方公務員法に違反する。懲戒処分は相当」と判断した。

　０５年４月の１審判決は「学校行事での国歌斉唱は教育の中立性に反しない」とし、校長の職務命令も「必要性、合理性がある」と認めた。一方で「生活に影響を及ぼす減給処分は妥当性を欠く」と述べ、原告３人への減給処分を取り消した。

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独シーメンス汚職：制裁金１２４０億円、米独に支払い

　【ベルリン共同】ドイツの総合電機大手シーメンスは１５日、事業受注をめぐる世界各地での汚職事件に絡み、米国やドイツ当局に総額約１０億ユーロ（約１２４０億円）の制裁金を支払うと発表した。制裁金支払いにより訴追を回避する。

　米メディアによると、過去数年間に各国の当局者らに贈ったわいろの総額は１３億６０００万ドル（約１２３０億円）とされ、０７年にはクラインフェルト前最高経営責任者（ＣＥＯ）ら首脳が引責辞任する事態に発展。金融危機による景気低迷も相まって、今年７～９月期は赤字となった。

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エジプトの通信会社、金融分野でも北朝鮮進出
2008.12.16 22:39

　北朝鮮の朝鮮中央通信は１６日、エジプトの通信会社「オラスコム・テレコム」が投資した合弁銀行「オラ銀行」の開業式が同日、平壌で行われたと報じた。

　オラスコムは１５日に第３世代の携帯電話通信サービスを北朝鮮で開始すると発表したほか、今年から建設が再開された平壌にある１０５階建ての高層ホテルの工事にも投資しており、金融分野でも北朝鮮に進出することになる。

　開業式には呉光哲朝鮮貿易銀行総裁、オラスコムのサウィリス会長らが出席した。