WSJ - about the election day ...

WSJ - We begin with the three words everyone writing about the election must say: Nobody knows anything. Everyone’s guessing. I spent Sunday morning in Washington with journalists and political hands, one of whom said she feels it’s Obama, the rest of whom said they don’t know. I think it’s Romney. I think he’s stealing in “like a thief with good tools,” in Walker Percy’s old words. While everyone is looking at the polls and the storm, Romney’s slipping into the presidency. He’s quietly rising, and he’s been rising for a while.

Obama and the storm, it was like a wave that lifted him and then moved on, leaving him where he’d been. Parts of Jersey and New York are a cold Katrina. The exact dimensions of the disaster will become clearer when the election is over. One word: infrastructure. Officials knew the storm was coming and everyone knew it would be bad, but the people of the tristate area were not aware, until now, just how vulnerable to deep damage their physical system was. The people in charge of that system are the politicians. Mayor Bloomberg wanted to have the Marathon, to show New York’s spirit. In Staten Island last week they were bitterly calling it “the race through the ruins.” There is a disconnect.

But to the election. Who knows what to make of the weighting of the polls and the assumptions as to who will vote? Who knows the depth and breadth of each party’s turnout efforts? Among the wisest words spoken this cycle were by John Dickerson of CBS News and Slate, who said, in a conversation the night before the last presidential debate, that he thought maybe the American people were quietly cooking something up, something we don’t know about.

I think they are and I think it’s this: a Romney win.

Romney’s crowds are building—28,000 in Morrisville, Pa., last night; 30,000 in West Chester, Ohio, Friday It isn’t only a triumph of advance planning: People came, they got through security and waited for hours in the cold. His rallies look like rallies now, not enactments. In some new way he’s caught his stride. He looks happy and grateful. His closing speech has been positive, future-looking, sweetly patriotic. His closing ads are sharp—the one about what’s going on at the rallies is moving.

All the vibrations are right. A person who is helping him who is not a longtime Romneyite told me, yesterday: “I joined because I was anti Obama—I’m a patriot, I’ll join up But now I am pro-Romney.” Why? “I’ve spent time with him and I care about him and admire him. He’s a genuinely good man.” Looking at the crowds on TV, hearing them chant “Three more days” and “Two more days”—it feels like a lot of Republicans have gone from anti-Obama to pro-Romney.

US government debt is a cornerstone of the world's financial system, is held in large amounts by foreign creditors such as China and Japan and is used as collateral on a daily basis by banks and investors. While the move has been anticipated by markets since last week's deal in Washington agreed a cut of only $2.5trillion in the deficit, it's unclear how markets will react when they open on Monday. America's debt is still rated AAA by Moody's and Fitch, the two other largest agencies. Analysts at Capital Economics said the move will "surely rock the financial markets when they open on Monday" but added that any moves are likely to be short-lived because the slowing global economy makes US government debt, or Treasuries, an attractive place for investors to park money. At roughly $9trillion in size, the Treasury market has advantages and liquidity that rival government bond markets, including Britain's, cannot match. Despite the threat of the downgrade, the prices for Treasuries are close to their highs for the year as investors seek safe-havens and expectations for economic growth diminish. Whatever the reaction next week, investors are clearer that the downgrade is a severe blow to America's prestige and is also likely to increase the US government's borrowing costs. JPMorgan this month estimated that such a move could add about $100bn a year to America's funding costs as lenders demand more to compensate for the greater risk. The US spent $414bn last year on interest payments. "I have a feeling the dust may settle quite quickly," said David Buik of BGC Partners in London. "The US Treasury market is the most liquid in the world." Either way, it frays nerves further before what was already going to be tense opening of financial markets next week.

IMF - John Lipsky, the acting managing director of the International Monetary Fund, has taken a tougher approach than his predecessor, Dominique Strauss-Kahn. Photograph: Aleofficials and diplomats in Brussels confirmed that the IMF threat to pull the plug on its funding – in stark contrast to the more emollient line of Strauss-Kahn – had been defused because of a German climbdown. As political turmoil continued in Greece on Thursday, with the prime minister, George Papandreou, scrambling to form a new government, the stage was being set for a political struggle between Europe's powerbrokers over the fine print of the proposed new €100bn-plus rescue of Greece. Berlin is deeply at odds with France and with the key EU institutions – the European Central Bank (ECB), the European commission, the presidency of the EU and the head of the eurozone, Jean-Claude Juncker, prime minister of Luxembourg – over the terms of a new deal. Germany was forced to agree to bail out Greece for the second time in a year under strong pressure from the International Monetary Fund following the resignation last month of its head, Dominique Strauss-Kahn, the Guardian has learned. Under its acting chief, the American John Lipsky, the IMF has taken a more hardline stance and it warned the Germans in recent weeks that it would withhold urgently needed funds and trigger a Greek sovereign default unless Berlin stopped delaying and pledged firmly that it would come to Greece's rescue.

AsiaNewsAgencies - China: Xintang: police and army occupy city to stop protests. Climate akin to martial law, with police patrolling every street, road blocks, orders for shops and restaurants to close early, people advised not to go out at night. Tens of thousands of migrants are ready to protest on the streets for justice and recognition, tired of constant harassment.Beijing (AsiaNews / Agencies) - The police are now patrolling the streets and putting roadblocks on main thoroughfares of Xintang in the city of Zhengcheng, to end to urban guerrilla warfare that first broke out June 10. But it is a deceptive calm, with tens of thousands of immigrants ready to explode with further protests and violence. Beijing (AsiaNews / Agencies) - The police are now patrolling the streets and putting roadblocks on main thoroughfares of Xintang in the city of Zhengcheng, to end to urban guerrilla warfare that first broke out June 10. But it is a deceptive calm, with tens of thousands of immigrants ready to explode with further protests and violence. summoned the managers of 1,200 companies in the area telling them to "pay close attention to their employees." In an atmosphere akin to martial law, shops and restaurants have been ordered to close early. Residents have been "advised" not to go out at night and not to post pictures of the clashes on line.
http://www.eucouncilfiles.eu/

George Papandreou should resign

George Papandreou pledges to form a new government - After a day which saw world stocks tumble, on which tens of thousands marched on parliament to oppose the swingeing austerity measures designed to stave off bankruptcy, George Papandreou effectively conceded that he had not been able to muster enough support in parliament for the cuts required by international creditors to enable Greece to balance its books. Papandreou has told his conservative opposite number, Antonis Samaras, that he would stand aside and make way for a new leader if the opposition joined his party in a national unity government committed to sweeping reform to pull Greece's economy out of its tailspin. It remained unclear whether the opposition New Democracy party would agree to the move. Party insiders indicated that it would only do so if the government renegotiated the terms of last year's €110bn (£96bn) international bailout package, designed to save Greece from default. "The most important member of a ship's crew is the captain, and the captain has to go," conservative deputy Theodoros Karaoglou said, according to Associated Press. "If we joined forces, we could go to our [creditors] together to negotiate and the results of course would be better." Greece's economy is drowning in more than €300bn of debt – around one and a half times more than the country's entire annual output. Unemployment has rocketed to 16.2%, and the economy is predicted to contract by as much as 3% this year, making it Europe's worst performing economy – and one of the worst in the world.

With Europe's debt crisis intensifying by the day, fear appears to be the single biggest factor motivating those in charge of policy on the common currency. But as finance ministers from the 17 euro countries debated how to bail out Greece for a second time in a year, before an EU summit on 25 June, the signs are not promising. In Athens, a day after Standard and Poor's gave Greece the lowest rating of any country it covers – lower even than Pakistan and Ecuador – the omens appeared to be particularly poor. Differences over involvement of private investors in the rescue package – which is seen as the key to getting Europe's paymaster, Germany, to agree to it at all – this week pushed the cost of insuring Greek government debt against default up to 1,600 basis points, a record high even by the standards set so far. More than ever, Papandreou appears stuck between a rock and a hard place. Faced with a €340bn (£300bn) debt projected to hit 160% of GDP by 2012, Greece is teetering on the brink of bankruptcy. In a country plagued by a shadow economy that accounts for almost 30% of GDP, the medicine prescribed by the EU, IMF and ECB in exchange for €110bn of emergency loans last May, has resulted in a deeper than expected recession with further cost-cutting measures now seen as crucial if Greece is not only to rein in its debt but make it sustainable.

- Romania’s major grain traders such as Cargill, Alfred C. Toepfer, Glencore and Nidera exported grain worth EUR1.3 billion from June 2010 through 2011, according to Victor Beznea, president of the Romanian Association of Farm Product Traders (ARCPA).

- The record-high EUR1.5 billion raised by the Finance Ministry last week from the foreign markets brings to over EUR4.5 billion the foreign currency debt accumulated by Romania since the beginning of the year.

According to the source, the U.S. carmaker will produce over 70 B-Max prototypes in Romania this summer. The car parts needed to assemble the B-Max models were produced at Ford's car plants in Germany. The B-Max minivans will be tested soon in Belgium, at Ford Lommel Proving Ground and in other countries. After tests are finished, the cars will be dismantled. Ford Romania will start the production of the new car model next year. B-Max will be produced exclusively in Romania. At the end of March, Ford finished installing the production lines for B-Max and a new family of engines at the Craiova car plant. Ford produced about 3,000 Transit Connect light commercial vehicles in Romania. The U.S. carmaker has invested EUR450 million so far in operations carried out in Craiova.

European Union - EU solidarity ?!...

French banks lead exodus of EU lenders from hardest-hit European economiesEuropean banks increase pressure on Greece and other struggling economies by refusing support for business dealsThe crisis enveloping Greece, Ireland and Portugal appeared to deepen after figures showed EU banks were refusing to support business deals in the EU's hardest-hit economies. Figures from the Bank of International Settlements (BIS) show French, German and UK banks have embarked on a mass exodus from Greece, Portugal, Spain and Ireland, in what analysts see as an effort to bolster their balance sheets and conform to new rules designed to protect financial institutions from going bust. The move is expected to add to tensions in Brussels over how to prevent Greece defaulting on its loans because vital business contracts will cost more to insure. French banks cut their exposure to Greece from $92bn (£57bn) to $65bn in the last three months of 2010. They also reduced their involvement in Ireland, Portugal and Spain, slicing their total exposure to the four hardest-hit economies by $112bn. Richard Batty of Standard Life Investments said the reduction in credit derivatives issued by French banks was due to "the reduced risk appetite of the major banks, and in parallel, a shift to bolstering capital positions to reflect the requirements of the Basle III rules". He said stress tests planned by Brussels for the summer could lead to a further exodus as banks sought to insure only the safest risks.

German and French banks held over two-thirds of the Greek government bonds at the end of last year, accounting for 70% of the $54.2bn owned by banks from 24 countries that report to the BIS.

Romania's Government will seek a confidence vote in Parliament to adopt the act on the country's administrative reorganization, Democratic Liberal Party general secretary Ioan Oltean announced in a press conference on Friday. The government's proposal is to reorganize the country into eight counties, from the current 41. According to Oltean, this new system would improve European Union fund absorption and increase the efficiency with which these funds are used. He pointed out that the EU has not explicitly asked Romania to implement a new territorial organization. The new counties would have their capitals at Cluj-Napoca, Brasov, Timisoara, Craiova, Constanta, Iasi, Ploiesti and Bucharest. The ministries' decentralized services would have eight local offices, instead of 41, bringing the authorities closer to the citizen, according to Oltean. He added that many matters handled by these services and by the county councils would be transferred to commune, town and city halls. Oltean added that the ruling coalition wants the 2012 local elections to use the eight-county administrative organization. Asked why the government has not held a public referendum or a survey on the issue, Oltean replied that they would block or delay reform.

BUCHAREST - Romania sold EUR1.5 billion in five-year bonds at an annual yield of 5.29%, in the first issue of the country's EUR7 billion medium term notes (MTNs) program, with orders books closing at EUR3 billion, a Finance Ministry official said Thursday. Meanwhile - Greece's crisis-hit economy expanded by a sickly 0.2% in the first three months of this year – even worse than first thought – as its fiscal austerity measures strangled demand, official figures have revealed. The bailed-out economy is now shrinking at an annual rate of 5.5%, instead of an initial estimate of 4.8%, the Greek statistical agency said on Thursday. Bond yields jumped after the announcement, with the government now facing paying 25.08% over two years if it tried to borrow from the financial markets. The cost of insuring Greek debt against default also hit new record highs. Athens is widely expected to receive a fresh bailout from its eurozone partners in the coming weeks, but Germany is locked in a standoff with the European Central Bank about the terms of any new assistance package, and whether Greece's private sector creditors will have to bear part of the cost. The ECB is concerned that forcing bondholders to take a loss could spark a catastrophic loss of confidence in Europe's banks, many of which are sitting on millions of euros-worth of Greek debt.

A further indication of Germany’s competitiveness is the constant high GDP share of the manufacturing industry over the past years. While other countries had to relocate production to other countries, Germany was able to keep a large part of the production at home. The German automotive industry is as a good example; the number of cars produced has remained relatively stable at around 5 million cars per year since 1999. However, the value of each car has increased significantly. Germany remains a market leader in many sub segments of the mechanical engineering and equipment manufacturing industry. The good overall economic situation was clearly reflected in the earnings of a lot of German companies. Car manufacturers have reported record sales, in particular driven by exports into booming emerging markets. In China the purchase of Audi cars has now surpassed that of Germany. Industrial and chemical companies were also able to increase sales and profits significantly. The stock price of German companies followed this positive earnings development. The ongoing uncertainty about a solution for the European sovereign debt crisis, stronger increased raw material prices as well as a possible headwind by a stronger euro are currently weighing on the stock market and could result in an higher volatility, especially during the summer months. Several economic indicators, like the IFO business climate index, could also get weaker and thus signal a slight slowdown of the economy in the second half of 2011. Therefore we have a conservative outlook for the DAX at the end of the year of 7600 to 7800 points. The mid-term outlook remains nevertheless positive and ideally new all-time highs for the DAX could already be within reach this year.

HAMBURG, Germany — First they pointed a finger at Spanish cucumbers. Then they cast suspicion on sprouts from Germany. Now German officials appear dumbfounded as to the source of the deadliest E. coli outbreak in modern history, and one U.S. expert called the investigation a "disaster." Backtracking for the second time in a week, officials Monday said preliminary tests have found no evidence that vegetable sprouts from an organic farm in northern Germany were to blame. The surprise U-turn came only a day after the same state agency, Lower Saxony's agriculture ministry, held a news conference to announce that the sprouts appeared to be the culprit in the outbreak that has killed 22 people and sickened more than 2,330 others across Europe, most of them in Germany, over the past month. Andreas Hensel, head of Germany's Federal Institute for Risk Assessment, warned, "We have to be clear on this: Maybe we won't be able anymore to identify the source." At an EU health ministers meeting Monday in Luxembourg, Germany defended itself against accusations it had acted prematurely in pointing to Spanish cucumbers. "The virus is so aggressive that we had to check every track," said Health State Secretary Annette Widmann-Mauz. The EU will hold an emergency meeting of farm ministers Tuesday to address the crisis, including a ban imposed by Russia on all EU vegetables.

Greek Accord - Factory-gate prices in the euro region rose 6.7 percent from a year earlier after increasing a revised 6.8 percent in March, the EU’s statistics office in Luxembourg said. That’s the first decline since August. Economists had projected a reading of 6.6 percent last month, according to the median of 21 estimates in another Bloomberg survey. The yield on Greek two-year debt tumbled 25 basis points to 22.59 percent. It earlier dropped as much as 78 basis points to 22.07 percent, the lowest since April 21. Ten-year yields fell eight basis points to 15.86 percent. The EU and IMF accord to pay the next installment to Greece under last year’s 110 billion-euro bailout paves the way for an upgraded aid package that includes a “voluntary” role for investors. Greek Prime Minister George Papandreou will aim to quell growing dissent this week within his Socialist party -- known as Pasok -- over the deeper austerity measures as voters’ patience wears thin and public protests mount. ‘Buying Time’ - “It’s a question of buying a little bit more time for letting Greece prove that they can, or cannot, put the reforms in place, but also to reduce the risk of contagion maybe to some of the other economies,” Laurent Fransolet, head of European fixed-income strategy at Barclays Capital in London said in an interview on Bloomberg Television’s “The Pulse” with Maryam Nemazee. Greece remains shut out of the financial markets a year after it became the first euro-region nation to request external assistance. Ireland and Portugal have since requested aid. The euro fell to a more than four-year low of $1.1877 on June 7, 2010, amid market fears of sovereign default. While the shared European currency has recovered, touching a 17-month high of $1.4940 on May 4, bonds from Greece, Ireland and Portugal extended their fall, pushing yields to new euro-era records last month as the market sought assurance that default will be avoided. Portuguese Election - Portugal’s Social Democrat leader Pedro Passos Coelho said he will seek to form a governing coalition with the third-placed People’s Party to enact austerity measures mandated by the nation’s 78 billion-euro bailout. “Early results that the socialist party had lost power and that center-right parties would be able to form a new majority government, avoiding a potentially damaging political stalemate, should be seen as a positive development for Portuguese credit,” Huw Worthington, a fixed-income strategist at Barclays Plc in London, wrote in an e-mailed note today. Portuguese 10-year yields fell four basis points to 9.77 percent, while the two-year note yield declined 14 basis points to 10.79 percent.

S&P warned that the re-profiling of loans would almost certainly be considered a default and lead to a further downgrading of Greece's debt. "Such a lengthening of maturities would constitute a default under our criteria because the sovereign debtor will pay less than under the original terms of the obligation," it said. A further downgrade would increase Greece's already sky-high borrowing costs. The yields on 10-year bonds are already in excess of 16%. S&P said that testing the effect of a voluntary exchange would be a tougher challenge but any hint of the word voluntary being used to disguise an imposed cut in loan valuations would also trigger a default notice from the ratings agency and a subsequent downgrade. Jim Reid, a credit strategist at Deutsche Bank, warned that a technical downgrade was unlikely to stop the EU going ahead with a restructuring of Greece's loan book. He said that EU banks could maintain the nominal value of the loans on their balance sheets despite the view of S&P and other ratings agencies that the loans were worth less after the restructuring. He said the banks and the EU would disguise the real effect of the restructuring. Without a material cut in loan values, hedging instruments, known as credit default swaps (CDS), can remain untouched. CDSs act as a form of insurance against a bond default by a company or country.

Speaking in Aachen in Germany, Trichet urged closer European integration as the means of imposing discipline on countries which failed to keep their public finances in order, monitor economic reform and provide a common approach to dealing with Europe's financial sector.
The ECB president said his plan would fall short of giving a pan-European finance ministry tax-raising powers, but suggested that the idea was a logical next step.
"In this union of tomorrow, or of the day after tomorrow, would it be too bold, in the economic field, with a single market and a single central bank, to envisage a ministry of finance of the union?" he said as he accepted the Charlemagne prize for contributions to European unity.
Trichet's intervention came on the eve of Friday's announcement of the terms Greece will have to accept for a second bailout from the EU and IMF.
Trichet acknowledged that a central ministry would be a radical step for the European Union and require a revision of its underlying treaty. While supporters of closer integration believe there is currently little political appetite in member states for a fresh transfer of powers to the centre, they argue that the only alternative to closer fiscal union will be the break-up of the single currency.

LONDON -- Scientists on Thursday blamed Europe's worst recorded food-poisoning outbreak on a "super-toxic" strain of E. coli bacteria that may be brand new. But while suspicion has fallen on raw tomatoes, cucumbers and lettuce as the source of the germ, researchers have been unable to pinpoint the food responsible for the frightening illness, which has killed at least 18 people, sickened more than 1,600 and spread to least 10 European countries. An alarmingly large number of victims - about 500 - have developed kidney complications that can be deadly. Chinese and German scientists analyzed the DNA of the E. coli bacteria and determined that the outbreak was caused by "an entirely new, super-toxic" strain that contains several antibiotic-resistant genes, according to a statement from the Shenzhen, China-based laboratory BGI. It said the strain appeared to be a combination of two types of E. coli

America risks losing its triple-A credit rating unless swift and significant progress is made over its debt ceiling, Moody's has warned, piling fresh pressure on the US a few hours before crucial employment data is released. The ratings agency is concerned by the lack of progress made by the US Treasury and Congress over whether to allow the US national debt to increase. It said that the risk of the US defaulting on its loans was "very small but rising", suggesting that the country might not deserve its AAA rating. "Although Moody's fully expected political wrangling prior to an increase in the statutory debt limit, the degree of entrenchment into conflicting positions has exceeded expectations," the agency said. "The heightened polarisation over the debt limit has increased the odds of a short-lived default. If this situation remains unchanged in coming weeks, Moody's will place the rating under review." Under US law, the country's national debt may not exceed $14.3 trillion (£8.75tn). That figure was reached last month, forcing America to dip into two government pension schemes to service its debts. That, though, will only tide the US over until the start of August.

E. Coli Outbreak Linked to Aggressive New Strain - As the E. coli outbreak continues to ravage Germany and other parts of Europe, the World Health Organization said Thursday that the aggressive intestinal bacteria is a new strain never seen before. Meanwhile fears of the illness prompted Russia to ban imports of vegetables from the EU. Researchers are still desperately searching for the origin of the E. coli bacteria that has left 18 dead and infected hundreds of others in Germany and Europe. The number of cases within Germany continues to rise, with up to 2,000 reported cases of infection, several hundred more than at the beginning of the week. Following the death of another victim in Hamburg overnight, the World Health Organization announced that preliminary genetic sequencing had revealed the deadly strain is likely a mutant form of two separate E. coli bacteria that is new to scientists. The "unique strain has never been isolated from patients before" and has "various characteristics that make it more virulent and toxin-producing," WHO food safety expert Hilde Kruse told news agency AP.
The mutant bacteria was identified through cooperation between scientists at the University Medical Center Hamburg-Eppendorf (UKE) and the Beijing Genomic Institute. "This strain is only a very distant relative of conventional EHEC bacteria," said UKE bacteriologist Holger Rohde. The newly discovered enterohemorrhagic strain of the bacterium Escherichia coli (EHEC) causes watery or bloody diarrhea. In severe cases, EHEC also attacks the blood, kidneys and brain, causing a life-threatening complication known as hemolytic-uremic syndrome (HUS). Thousands of people in nine European countries have been infected by the bacteria, with nearly 500 developing the HUS complication.

Google US accounts hacked

Google has warned that computer hackers in China had broken into the Gmail accounts of several hundred people, including senior government officials in the US and political activists. The internet giant said all victims had been notified and their accounts had been secured. The attacks, announced on Google's blog, are not believed to be tied to a more sophisticated assault originating from China in late 2009 and early last year. That intrusion targeted Google's own security systems and triggered a high-profile battle with China's Communist government over online censorship. The tensions escalated amid reports that the Chinese government had at least an indirect hand in the hacking attacks, a possibility that Google did not rule out. In the latest incident, Google believes Chinese hackers tricked people into sharing their passwords in so-called "phishing" scams

In Athens, the spirit takes hold just before the sun has set.

In Athens, the spirit takes hold just before the sun has set. - It is then that Greeks, young and old, married and single, employed and unemployed flood the square in a wave of protest against the austerity and recession that has brought their country to the brink of despondency and despair. "Openly we say that we have been inspired by the demonstrators in Spain," said Simos Adamopoulos, an organiser who has spent three nights sleeping in a tent in the square. "Our motto is 'the battle that is never waged is never won.' We will stay here, and in squares up and down the country for as long as it takes." While even protestors admit their endgame remains unclear, their motivation beyond the realms of party or political creed has surprised even the most cynical. As in Spain the demonstrators – estimated in Athens alone to have exceeded 50,000 on Sunday – have been lured into action by Facebook. Motivated by a peaceful desire to vent their spleen, they have turned up at rallies with pots and pans rather the more lethal Molotov cocktail preferred by violence-prone youngsters. "But," says Adamopoulos, "we're also really disgusted with the system, with the political establishment, with all those crooks and thieves. As we've got poorer they've got richer and that you could say is also spurring us." Greece is in a terminal debt trap. Further government austerity will just kill the economy, decrease the GDP further and hence increase the debt/gdp ratio . More bailouts that will never be repaid, will temporarily prop up the Greek economy but will also increase debt and will also make the situation worse. So the question is; "why won't the central banks simply allow a haircut?" The only reasonable answer is that they know a haircut would tip other Euro countries and banks into insolvency and set off a domino effect . Hopefully all persons reading this have hedged their positions against such a cascading sequence of defaults. If not, act soon, or forever live with the consequences. For the common person who expects decent employment opportunities, a government pension, and free health care, there is simply nowhere to hide.