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If Laws Change, 'Penny Hoarders' Could Cash in on Thousands of Dollars

By NEAL KARLINSKY and MARY-ROSE ABRAHAM | ABC News

Joe Henry is on a first name basis with bank tellers across his hometown of Medford, Ore., scouring 15 banks a week with one thing on his mind: pennies.

Henry is often seen toting around bags of pennies, some he buys, others he changes back in for cash, which seems a little strange at first. He's not a collector, he is what's known as a "penny hoarder" and he is not alone.

Inside a shed next to his house, Henry has orange tubs filled with 200,000 pennies, and he spends hours sorting through roll after roll of the coins. But it's not just any and all pennies, Henry is only interested in those that are dated from 1982 and earlier because those are the coins made with 95 percent copper. A copper penny is worth more than other pennies -- now mostly made of zinc -- currently priced at $0.024.

"The copper has such a different sound than zinc pennies do," Henry said. "Real money has that definite sound of money and if you listen to a modern zinc penny, they don't sound the same, they sound sort of tinny."

Henry even has a $500 home counting machine to separate out the copper ones.

Much like the resurging obsession with gold, the price of copper has skyrocketed in recent years and the rising price has led to some unusual sprees. Thieves have been exploiting the value hidden in obscure items, stripping copper wiring from phone and utility cables, from construction sites, even from a 122-year-old copper bell that was stolen from a San Francisco cathedral.

In San Diego, so much copper wiring has been stolen from eight different city parks, that soccer teams can't practice because the field lights stopped working.

But penny hoarders aren't thieves, just opportunists. There are a slew of listing for pennies in bulk on eBay, but what's amazing is they include listings for $10 in pennies being sold for $20 dollars. If you think only a sucker would pay two cents for a penny, you're missing out on a business opportunity that Adam Youngs, who runs a massive penny sorting operation in Portland, Ore., has perfected.

He explained how he can sell a $100 worth of pennies for $176, when shipping and packaging are included.

Youngs' operation, the Portland Mint, is locked inside a secure facility that deals with armored cars -- selling and shipping to clients in every state -- and works in pennies by the ton. He said he has clients with deep pockets who are storing huge sacks of pennies and he has inquires from hedge funds.

"Just in face value alone, about $270,000 dollars [in pennies] right now," Youngs said. "That is just the face value, that is not even the copper value. The copper value is about three times that much."

Inside the Portland Mint. Credit: ABC News

Clients use Youngs because he separates copper pennies from the chump change -- the newer pennies that are only worth $0.01.

But in the weird world of penny hoarding, getting to the copper is a very big problem. It's illegal to melt pennies an there is an obscure federal law that makes it illegal to transport more than $5 in pennies out of the country.

Penny hoarders know this of course, but they also know something else. In what could be the biggest legislation to hit the U.S. Mint in 50 years, officials are now looking at the composition of pennies and nickels and considering an overhaul. If the laws change and the mint decides to abolish the penny, people would be free to melt them down for the copper.

A penny saved, many times over, could be a whole lot earned.

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While most of us are out buying holiday presents some people are getting their gifts with a five-finger discount. Ad Week is reporting that one in every 11 people walks out the door with at least one item they didn’t pay for. With shoplifting up six percent this year, retailers stand to lose a whopping $119 billion of merchandise to shoplifters in 2011. And it’s not just kids with sticky fingers—75 percent of shoplifters are adults, most of whom have jobs. We know people are hunting for holiday deals, but this amount of theft is both surprising and sad.

Ad Week spoke with loss prevention experts on why shoplifting is the highest it’s been in five years. "Most shoplifters simply succumb to temptation, “Johnny Custer, director of field operations for Merchant Analytic Solutions, told Ad Week. “But add a sense of desperation because of the economy and holiday pressures, and you have the recipe for theft soup." Barbara Staib, a spokesperson for the National Association of Shoplifting Prevention, told Ad Week, "Seventy percent of shoplifters tell us they didn't plan to shoplift."

Exactly what are people stealing? Ad Week has compiled the top 10 most shoplifted items of 2011 and they’re truly bizarre.

1. Filet mignon

So many people are tucking choice cuts of meats under their jackets that supermarkets are now considered the stores with the most theft.

2. Jameson
Those with an unquenchable thirst for booze just help themselves to a free bottle of expensive liquor.

3. Electric tools
Apparently the the most common items men nab are electric toothbrushes and power tools. At least they’re fighting cavities.

4. iPhone 4
Electronics like smartphones and video games are high risk items, and one research group claims 100,000 laptops are stolen annually from big box stores.

5. Gillette Mach 4
Anyone who uses non-disposable razors knows they’re pretty expensive, so in tough financial times people don’t want to pay for them anymore.

6. Axe
The men’s deodorant and body wash we love to hate are often stolen in mass quantities and resold at flea markets and corner stores. Dial is popular amongst thieves too.

7. Polo Ralph Lauren
Clothing theft is up 31 percent since 2009. It’s hard to look good in a bad economy, so some score fresh threads the illegal way.

8. Let’s Rock Elmo
The Sesame Street toy topped the Toys’R’Us "Hot Toys" list this year, so parents are stealing this must-have toy for their kids if they can’t afford it.

9. Chanel No. 5
Who wouldn’t love a bottle of this popular woman’s fragrance? Expensive perfumes make up nearly four percent of loss in stores that carry them.

10. Nikes

As Ad Week points out, some shoppers wear flip-flops into a store, try on a pair of sneakers, and walk out wearing them. Sneaker heads will do whatever it takes to score the kicks on their wish list.
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Germany now major Mideast arms supplier
 by Staff Writers
 Beirut, Lebanon (UPI) Nov 29, 2011


The German government is under fire for its $2 billion sale of 270 Leopard 2 tanks to Saudi Arabia but the fact is that Germany is now a key arms supplier to the Middle East.

Its customers include Israel, which has ordered three more Dolphin class submarines from Howaldtswerke-Deutsche Werft AG, and Algeria, which in June was cleared for frigates, armored vehicles and border security systems that newsmagazine Der Spiegel says are worth $14 billion.

German opposition parties and critics within Chancellor Angela Merkel's center-right coalition, as well as peace and church groups, are up in arms over the secretive Saudi deal because it underlines a fundamental shift in Germany's long-restrictive export regulations.

"In her eagerness to support the German defense industry, Merkel is breaking with a traditional doctrine of German foreign policy," Der Spiegel reports.

"The fundamental principle used to be that weapons produced in Germany couldn't be delivered to countries engaged in a conflict.

"Now, the government is justifying its deals with strategic arguments, saying the government in Riyadh is needed as a stabilizing force in the Middle East," Der Spiegel noted.

The previous German government sanctioned arms sales to Saudi Arabia as well but these totaled around $400 million, chickenfeed compared to Berlin's current military exports to the Middle East.

"This latest tank deal overshadows everything that went before," Der Spiegel observed. "And no other administration has so blatantly taken on the role of sales representative for the German defense industry."

The Germans are battling hard for military contracts in the Middle East, where conflict has been a constant since World War II and the post-colonial period. These have long been dominated by the United States, Britain, France and Russia.

Critics of Berlin's strategy to protect Germany's arms industry, which employs some 80,000 people, say that selling arms to Saudi Arabia, a key U.S. ally, is morally abhorrent given its refusal to embrace democracy and its opposition to the uprisings of the Arab Spring that have toppled four dictators since January.

"It isn't right for us, as a Christian democratic party, to arm a country with an unjust government that's working against freedom movements in Arab countries," declared lawmaker Erich Fritz of Merkel's Christian Democratic Union.

But the government maintains that while the kingdom is a problematic partner, Saudi Arabia plays a key role in mediating the Israeli-Palestinian conflict and is a crucial ally in the battle against Islamic terrorism.

But most importantly, it says, Saudi Arabia is in the front line against Iran's expansionist ambitions and its drive for nuclear arms.

The argument is that once Tehran goes nuclear it could attack its Arab neighbors, which provide much of the world's oil, and possibly even Israel.

This, supporters of arms sale argue, is why the Jewish state didn't oppose the sale of the 270 Leopard 2A7+ tanks built by Munich's Krauss-Maffei Wegmann and Rheinmetall to Saudi Arabia.

The German government's annual Defense Exports Report, released in early November, said German arms exports grew by 50 percent in 2010.

The report said Germany exported arms and military equipment worth $2.66 billion, including big-ticket items such as submarines, warships and tanks. In 2009, the total was $1.79 billion.

In addition, the report noted, German armaments manufacturers like KMW, almost half of whose sales involve Leopard tanks; naval shipbuilders ThyssenKrupp; firearms-maker Heckler and Koch; and Cassidian, an offshoot of the giant EADS European aerospace consortium, sealed contracts in 2010 with a total value of $6.66 billion.

The European Aeronautic Defense and Space Co., which includes Germany's DaimlerChryslerAerospace AG, manufactures the Eurofighter Typhoon. The Saudis bought 72 in 2006 for $6 billion.

"Growth doesn't come from Europe anymore," explained Cassidian Chief Executive Officer Stefan Zoller.

Defense budgets in Europe are stagnating, he says, and now the biggest opportunities are to be had in the Middle East, along with India and Brazil, both with expanding economies and military forces.

Cassidian recently secured a $2.6 billion contract to build a security system along Saudi Arabia's 5,600 miles of land border as well as air and seaports, comprising radars, sensors, cameras and other electronic systems.

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Now UK faces a £5bn bill to bail out Spain... as ministers plan for euro collapse

  • Italy's yields almost double previous month
  • FTSE claws its way up after 0.5% fall
  • Ten-year yield above 7% 'unsustainable' threshold
  • Hungary credit rating downgraded to 'junk status'

By Hugo Duncan

Last updated at 9:31 PM on 25th November 2011

Gloomy prediction: Jacques Attali says the euro has a 'one in two' chance of collapsing in the coming month

Gloomy prediction: Jacques Attali says the euro has a 'one in two' chance of collapsing in the coming month

Britain was last night planning for the collapse of the eurozone as Spain weighed up a bailout that could cost UK taxpayers £5billion.

The Government is preparing for the biggest mass default in history and the break-up of the single currency bloc.

Analysts warned that euro meltdown would wreak havoc in the banking system and plunge the global economy back into recession.

Whitehall sources said contingency plans are being drawn up – and indicated that the longer the euro limps on, the more time Britain has to prepare.

Fears are mounting that Greece will be forced to default on its debts as the crisis threatens to sink Spain and Italy.

The storm hit Belgium last night as the country’s credit rating was cut from AA+ to AA by Standard & Poor’s amid tumbling confidence in the region.

And a leading French economist, Jacques Attali, the former president of the European Bank for Reconstruction and Development, said there was only a 50-50 chance of the euro surviving until Christmas.


Sources in Madrid said the new Spanish government is considering applying for international aid to shore up its battered finances.

It is thought a bailout of around £340billion would be required to keep the country afloat – with as much as £5billion coming from Britain through the International Monetary Fund.


Graphic

The long-term debt ratings for the eurozone, the U.S. and Japan

GLOBAL MARKETS

GLOBAL MARKETS

EUROPEAN TEN-YEAR BOND YIELDS

United Kingdom 2.22%

France 3.71%

Germany 2.21%

Greece 27.97%

Italy 7.21%

Spain 6.73%

Borrowing costs in Italy raced to record highs as the new government in Rome was hammered on the financial markets.

In a move that raises the pressure on Italian prime minister Mario Monti, investors demanded a punitive 6.5 per cent interest rate on a short-term loan. ‘The pricing is awful,’ said Padhraic Garvey, an analyst at ING bank.

Benchmark borrowing costs in Italy soared above 7 per cent – the level which triggered bailouts in Greece, Portugal and Ireland.

The alarming developments in Spain and Italy threaten to cripple the eurozone.

Credit rating agencies have warned that France’s coveted AAA debt score is under threat. Germany was rocked this week by the worst bond auction since the launch of the single currency more than a decade ago. Investors bought only 60 per cent of debt on offer from Berlin in a sign that the crisis is spreading to the core of the eurozone.

The debt storm has triggered panic in Britain and America amid fears that it will tip the global economy into recession.

The euro fell nearly 1 per cent against the U.S. dollar to little more than $1.32 and was down half a per cent against sterling, making a euro worth 85.6p.

Brendan McGrath, a senior analyst at Western Union, said: ‘Confidence in the region diminishes while the outlook for a solution to the eurozone crisis seems as far away as it has ever been.’


Read more: http://www.dailymail.co.uk/news/article-2066196/Now-UK-faces-5bn-bail-Spain--ministers-plan-euro-collapse.html#ixzz1eqHgs967

Canadian wages plummet

The Canadian Press
Statistics Canada says Canadian wages rose only 1.1 per cent over the 12 months ending in September, the lowest pace since November 2009. Statistics Canada says Canadian wages rose only 1.1 per cent over the 12 months ending in September, the lowest pace since November 2009. (Jonathan Hayward/Canadian Press

Canadian workers are failing to keep pace with the rising cost of living as average real wages continue to shrink dramatically, according to new data from Statistics Canada.

Real after-inflation wages have been dropping since the summer, and in September the average paycheques of Canadian workers declined outright — by 0.3 per cent to $872.75.

That means less money in Canadian pockets for Christmas gifts, but also for other necessities as workers cope with an uncertain economy, rising business pessimism and government restraint.

"The nominal wage gains being as soft as they are has created a condition where the average Canadian isn't keeping up with the cost of filling their grocery carts, filling their cars and heating their homes," said Derek Holt, a senior economist with Scotiabank.

Recent surveys suggest Canadians are still planning to spend pretty much as they have in the past this Christmas season, although more will seek out bargains at U.S. stores along the border.

But economists say that can't keep up and point out mostforecasts project consumers cutting back in the next year.

NDP finance critic Peter Julian called the loss in purchasing power outlined in the Statistics Canada report a "serious problem" and accused the federal government of indifference.

"They just don't seem to care," he said. "What we're seeing is lower paying jobs replacing higher paying jobs, we're seeing more part time jobs, we're seeing more and more levels of indebtedness — that's a toxic mess and should be no surprise to the government."

New jobs pay less

Julian said new jobs since the recession have paid about $10,000 less than those lost in the 2008-09 slump.

Finance Minister Jim Flaherty was not available to the media to discuss the earnings report. But in responding to questions in the Commons, Flaherty defended his policies, saying 600,000 jobs had been added to the economy since the recession.

At a minimum, Ottawa should cancel January's hike in unemployment insurance premiums to boost job creation, opposition MPs said. Last month, Flaherty went half way, cutting the scheduled hike from 10 cents per $100 of insurable earnings to five.

The September decline in average weekly earnings is not an anomaly.

Wage gains in Canada have been dropping steadily since the spring, when they were as high as 4.1 per cent annualized in April, well above the inflation rate.

They now stand at 1.1 per cent, the lowest pace of growth since November 2009 and about one third the inflation rate.

Living standard falls

With income from investments also soft because of the volatility in equity markets, analysts said it is fair to assume Canadians' average standard of living is also falling.

The sharp decline belies what is often presented as a relatively healthy labour market in Canada, which has added about 600,000 jobs since the recession and is regarded as stronger than what has occurred in the U.S. and much of Europe.

The job creation record, however, gives only half the picture.

About one million more Canadians have entered the workforce since the recession, meaning there are close to 400,000 more unemployed, contributing to the still high 7.3 per cent unemployment rate.

CIBC economist Benjamin Tal noted that the recent downward trend in wages also coincides with weak jobs growth over the past four months. His own research suggests many of the jobs recovered since the recession have been of the low-paying variety.

'The composition of jobs is getting worse.'—CIBC economist Benjamin Tal

"The composition of jobs is getting worse, namely you have more jobs in low-paying jobs," he explained.

"There's clearly a movement from high-paying professionals, public sector and construction jobs to low-paying service and retail. Even within manufacturing, there's a movement from high-paying manufacturing jobs to lower-paying."

But Holt said the jobs quality gap is likely only part of the explanation and that Canadian wage demands may have been depressed by the deepening global economic troubles.

"With all the shocks happening to the world economy, many people are just happy having a job as opposed to going to their boss and demanding a wage gain," he said.

Aside from how weak income growth affects individual Canadians, the trend is a worrying signal for the economy overall, the analysts said. Consumers represent a major component of the Canadian economy and any slowdown in spending will depress growth.

Tal said Canadians can always dip into savings to compensate, but that is also problematic because household debt is already at record levels relative to disposable income.

"The consumer is starting to slow down and we also see consumer credit is softening," he said. "What we are going to see is that business investment is the only (driver) of the economic expansion."
Sanctions useless against Iran?







he West continues to increase pressure on Tehran over its suspected nuclear program. But will the latest set of sanctions help it reach its goals? Some experts believe the measures will only fuel nationalistic feelings in Iran and boost the regime.

Ivan Eland, an expert on political economics from the Independent Institute told RT the sanctions being pushed on Iran are a blunt tool and will probably hurt the Iranian people.

“When you bomb a country, it unifies the population with the government, even if they don’t like the government. In this case we are not bombing yet, but we are attacking them economically. It actually helps the regime because a lot of the people in Iran, especially the young, don’t really like the regime,” he stated.

The Russian deputy foreign minister said that recent events resemble an attempt to bring about regime change. And according to Eland, that is what the West really wants, though it is not going to work.

“Sanctions rarely work. Even in the case of South Africa, where regime change occurred and sanctions were used, people associated the two, but in reality most revolutions happen internally, not from external sources,” he explained.

David Lindorff, founder of the news blog "This Can't Be Happening", believes that pressure coming from the US and Israel could merely encourage Tehran to obtain nuclear weapons.

“If you really want a country to get nuclear weapon then just keep threatening it with attack. Sooner or later they will do that because that’s the best defense they have against an attack.” more
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Italy collapse would be the 'end of the euro'

Italy had to pay record rates to raise €10bn this morning, while France and Germany warn that a blow-out in its giant debt mountain would signal "the end of the euro."

Meanwhile, EU Economic and Monetary Affairs Commissioner Olli Rehn has upped the pressure on Italian Prime Minister Mario Monti's new government, calling for "an ambitious timeline" on economic reforms.

"Italy is faced with formidable challenges," Mr Rehn told Italian lawmakers during a visit to Rome.

"The new government needs to deliver on fiscal consolidation and adopt bold measures to re-launch growth," he said.

''Full and effective implementation will be key," he said, adding: "It would be essential to give strong signals to citizens and markets with a clear and ambitious roadmap for reform and an ambitious timeline."

In its bond auction, Italy was forced to pay a rate of 6.504% on bonds due in six months and 7.814% on bonds due in two years - dangerous levels that analysts say could drive Italy insolvent within months.

A day after a summit in Strasbourg with German Chancellor Angela Merkel and French President Nicolas Sarkozy, Mr Monti's press office reported the two leaders had said a debt collapse in Italy would be "the end of the euro." more
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Holly Williams, Asia correspondent

China's "ghost cities" show that the country's economic boom could be more fragile than it appears.

Kangbashi is a showcase city, laid out spaciously on the grasslands of northern China.

It was dreamt up by the local secretary of the Communist Party as a monument to the country's new-found prosperity.

The place is dominated by impressive public buildings - a marble-clad library, a state-of-the-art theatre and a giant convention centre.

In the centre of town a 70m-high statue of two fighting horses looms over Genghis Khan Square.

The only thing missing is the people.

Kangbashi was built to house one million residents, but so far only 20,000 have moved in.

Many of Kangbashi's roads lie empty. The city has come to symbolise what could be a dangerous property boom, writes Sky's Holly Williams.

Like many roads in the sparsely-populated city of Kangbashi, this one lies empty

Acres of apartment complexes - many of them luxurious by Chinese standards - are deserted. Store fronts are boarded up.

When they first began building Kangbashi, there was a frenzy of investment. The local government contributed a £200m road network. Nearly all of the homes that now lie empty were sold off-plan.

The buyers were China's cashed-up new middle class. The country's poorly-regulated stock markets, along with controls on investing overseas, have made second, third and even fourth homes a popular store of wealth.

But from the very outset, Kangbashi defied all economic logic. There's no industry in the city, and no real reason to live there.

Now Kangbashi - along with other "ghost cities" dotted around China - has come to symbolise what many believe is a dangerous property bubble that could be primed to pop.

The scale of China's housing boom is staggering. Over the past five years the country has built nearly 40 million new homes. In some cities the price of housing has tripled in the same period.

Chinese economist Zhang Bin said: "If you look at financial crises, they're always accompanied by property bubbles.

"Lower property prices would definitely be more sustainable and healthy, but a sharp drop would mean a big contraction in the economy and problems like unemployment."

Planners have spared no expense on Kangbashi's public buildings. The city has come to symbolise what could be a dangerous property boom, writes Sky's Holly Williams.

Kangbashi's public buildings are impressive, but not very busy

In Kangbashi, many think the bubble has already popped.

Businessman Wang Pen spent his life savings buying a two-bedroom apartment. He says its value has fallen by 20% since the start of the year.

But Mr Wang finds it difficult to believe that the good times will ever stop rolling.

"When I bought this one three years ago I was still poor, so it's a bit small," he said.

"Now I'm thinking of getting another place, something bigger."

If the bubble bursts on a nationwide scale, it could be disastrous, not just for China, but for global economic recovery.

China is now the world's second-biggest economy, and by some estimates nearly half of its GDP is in some way linked to property.

Alistair Thornton, Beijing-based economist with HIS Global Insight, said: "Property is the core of the Chinese economy.

"With the eurozone weak and the US stagnant, a sharp contraction in the world's largest growth engine would have a dramatic effect. It's not a good story."

Italian short-term borrowing costs surge

By Neil Dennis in London and Guy Dinmore
November 25, 2011 -- Updated 1550 GMT (2350 HKT)
Italy's borrowing costs shot higher on Friday as Rome was forced to pay euro-era high interest rates to investors.

Rome (Financial Times) -- Italy's borrowing costs shot higher on Friday as Rome was forced to pay euro-era high interest rates to investors in what analysts called an "awful" auction of short-term debt.

Yields on two-year bonds jumped above 8 per cent after an auction of this debt and six-month bills raised the full targeted €10bn but at the cost of sharply higher yields.

The European Central Bank on Friday was reportedly intervening in the sovereign bond market again, buying Italian and Spanish debt in an effort to limit the unsustainable rise of interest rates.

"We're witnessing a slow-motion collapse of the world's third-largest bond market. It is agonising to watch," Nicholas Spiro, a London-based sovereign risk analyst, said.

The auction will add to pressure on Mario Monti, Italy's new prime minister leading a government of technocrats, to announce details of his plans to reduce Italy's budget deficit and promote economic growth as Italy hovers on the edge of renewed recession. After just a week in office, Mr Monti, former European commissioner, has only spoken in general terms of what he intends to do and has still not appointed his full team.

A cabinet meeting on Friday had been expected to announce names of deputy ministers and under-secretaries, but ministers emerging from the meeting said the issue was not discussed. Reports and comments from politicians suggest that Mr Monti has been blocked in his efforts to get the main political parties inside his government with senior posts.

Pierferdinando Casini, leader of the centrist UDC party, told reporters that the officials to be appointed by Mr Monti over the next days would not be politicians as this "would be in contradiction with the form [of the government]".

Friday's sale came at a much higher cost to Italy's treasury than previous sales, as investors demanded a yield of 7.814 per cent on the two-year bond, up from 4.628 per cent at the previous sale of this maturity in October.

The six-month bill demanded a yield of 6.504 per cent -- a euro-era high -- up from 3.535 per cent in the October sale.

Demand was modest, with the shorter-term debt sale covered 1.47 times and the two-year auction covered just 1.59 times.

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China labor unrest flares as orders fall

By Rahul Jacob, FT.com
November 24, 2011 -- Updated 0228 GMT (1028 HKT)
A Chinese worker goes about her chores at a textile factory in Huaibei, east China's Anhui province on November 21.
A Chinese worker goes about her chores at a textile factory in Huaibei, east China's Anhui province on November 21.
STORY HIGHLIGHTS
  • China is facing its worst wave of labor unrest since a series of wildcat strikes last year
  • More than 10,000 workers in Shenzhen and Dongguan have gone on strike the past week

(CNN) -- China is facing its worst wave of labour unrest since a series of wildcat strikes at Japanese-owned car plants last year, as declining export orders force factories to reduce worker pay.

More than 10,000 workers in Shenzhen and Dongguan, two leading export centres in southern Guangdong province, have gone on strike over the past week. The latest protests broke out on Tuesday at a Taiwanese computer factory in Shenzhen.

"There has been an intensification of labour unrest in the past week that is probably the most significant spike in unrest since the summer of 2010," said Geoffrey Crothall of China Labour Bulletin, a Hong Kong-based labour advocacy group that monitors unrest in China.

The strikes come amid mounting concerns about the global economy, which is suffering from the European sovereign debt crisis and a weak recovery in the US. Fears about the Chinese economy grew on Wednesday after a manufacturing index compiled by HSBC fell to levels not seen since March 2009. Last week, Guangdong's acting governor said the province's exports dropped 9 per cent in October from the previous month. Provincial leaders are also contending with widespread protests by farmers over land seizures. On Monday nearly 5,000 residents in the town of Wukan marched on government offices in a peaceful protest.

Factories are cutting the overtime that workers depend on to supplement their modest base salaries, after a drop in overseas orders.

According to CLB, the average basic wage for electronic workers is about Rmb1,500 ($236) a month, but rises to Rmb2,500 with overtime. "Their basic wage is never enough on its own without overtime," Mr Crothall said.

Tuesday's protests followed a bigger demonstration last week at a shoe factory in Dongguan that supplies footwear to Nike and Adidas. About 7,000 workers at the Taiwanese factory, owned by Pou Chen, objected to a cut in their overtime and management's decision to shift some work to other factories in the Chinese hinterland and Vietnam, where labour costs are lower.

"We were forced to return to the factory," one worker told the Financial Times. "But we just sit there. No one is operating machines."

The worker, who did not want to be identified, said the local government had taken a tough stance during negotiations and sided with the management.

Euro faces oblivion as shares hit longest losing streak in years

  • £105billion has been wiped off the value of Britain's biggest companies in eight-day losing streak
  • FTSE closes down 67 points at 5139.8 today
  • France warned its AAA credit rating is at risk

By Hugo Duncan

Last updated at 8:03 AM on 24th November 2011

The stock market last night clocked up its longest losing streak for nearly nine years as the eurozone debt crisis threatened to engulf France and Germany.

As share prices tumbled for the eighth day in succession in London, European Commission president Jose Manuel Barroso said the single currency was on the brink of collapse.

‘Without stronger economic governance in the eurozone it will be difficult if not impossible to sustain the common currency,’ he said.

Down again: The index closed at 5139.8 today, down 67 points, after enduring its worst run of losses since January 2003

Down again: The index closed at 5139.8 today, down 67 points, after enduring its worst run of losses since January 2003

Panel on how we are paying more to the EU


The apocalyptic warning – unusually stark for a top official in Brussels – fuelled fears that the region is on the verge of meltdown.

The FTSE 100 index fell 67.04 points or 1.29 per cent to 5139.78 – wiping £17.3billion off the value of Britain’s leading companies. The blue chip index has lost 405 points, or £105billion, over the past eight days of trading in its longest losing streak since January 2003.

City commentator David Buik, of BGC Partners, blamed ‘political inertia and wholesale incompetence’ by EU leaders.

He said there was ‘an acrid stench of fear’ in City trading rooms as the eurozone lurched from one crisis to the next.

Shares in Paris and Frankfurt were down around 1.5 per cent and the euro fell more than 1 per cent against the dollar to a six-week low of $1.335. It was down half a per cent against the pound at 86p.

Plunge: The stock market has racked up eight days of losses, wiping £105billion off the value of Britain's top 100 companies

Plunge: The stock market has racked up eight days of losses, wiping £105billion off the value of Britain's top 100 companies

The latest rout came after Germany was rocked by a ‘disastrous’ government fund-raising effort and France was warned its coveted AAA credit rating was at risk.

Analysts said the strain in Berlin and Paris was a sign the debt crisis was spreading to the heart of the eurozone.

Kathleen Brooks, researcher at currency trader Forex.com in London, said: ‘The sovereign debt crisis may have had its most critical day yet.’

Meanwhile Mr Barroso said drastic measures were needed to prevent the break-up of the single currency bloc and a deep recession.

He unveiled a plan for eurobonds – debt issued by individual governments but backed by all 17 nations in the euro – putting him on collision course with Berlin.

German Chancellor Angela Merkel is vehemently opposed to Mr Barroso’s ‘stability bonds’ but is under mounting pressure to address the crisis.

Worried investors snubbed Germany as it tried to sell just over £5billion of bonds – or IOUs issued by the government to raise funds.

Berlin only managed to sell around £3billion worth in its worst bond auction since the launch of the euro.

Analysts said it was a dangerous sign that even Germany, the safest investment in Europe, is losing its appeal.

Mark Otswald, a strategist at Monument Securities, said the failed bond auction was ‘a complete and utter disaster’. And Eurosceptic German MP Frank Schäffler, of the Free Democrat Party, the junior party in Angela Merkel’s governing coalition, said it was a wake-up call for the country.

‘German bonds are not immune from the crisis but are being drawn into the debt swamp,’ he said.

Ratings agency Fitch added to the gloom with a warning that France faces being stripped of its AAA credit rating.

And respected economist Nouriel Roubini, the New York professor nicknamed Dr Doom after he predicted the banking crash, said there was ‘at least’ a 50 per cent chance the eurozone will break up within three years.

‘It is a slow-motion train wreck,’ he said.

Nokia Siemens to lay off 17,000 worldwide

On Thursday 24 November 2011, 7:44 EST

Nokia Siemens Networks is slashing 17,000 jobs worldwide by 2013 - nearly 23 per cent of its workforce - as it strives to cut costs by a billion euros.

The mobile infrastructure company said on Wednesday the measures are part of "an extensive global restructuring program", which includes streamlining the organisation to improve long-term competitiveness and profitability.

The Finnish-German joint venture said they will also include "a significant reduction of suppliers".

Nokia Siemens Networks CEO Rajeev Suri said the company will focus on mobile network infrastructure and services market.

"We believe that the future of our industry is in mobile broadband and services. We aim to be an undisputed leader in these areas," Suri said.

"At the same time, we need to take the necessary steps to maintain long-term competitiveness and improve profitability in a challenging telecommunications market."

He described the planned layoffs as regrettable but necessary.

"As we look towards the prospect of an independent future, we need to take action now to improve our profitability and cash generation," Suri said.

Nokia Siemens, which has been struggling against rival network companies in recent years, is a 50-50 joint venture between Finland's Nokia and Germany's Siemens.

The company has 74,000 employees in 150 countries.

Wealth Cycles: ‘China Will Collapse By The End Of 2011’

wealthcycles.com
NOVEMBER 23, 2011

Casey Research Host: Your original estimate for the collapse of China was by 2011… do you think (that was) relatively close?
Gordon Chang: I think it is very close when you see what is going on right now.

-Gordon Chang, Forbes.com

Europe seems to be on everyone’s mind the last few months. However, there is an elephant in the room that everyone is ignoring, and it's China.

For a while it seemed everyone was proclaiming that the 21st century would be “China’s Century.” Much like the 20th was “America’s Century,” and the 19th was “Britain’s Century.” Everyone just seems to accept the fact of China’s ascendancy.

But is it true?

Gordon Chang, who writes for Forbes.com, thinks otherwise. His prediction is that China will collapse by the end of 2011!

That leaves us a little over a month to see if Chang is right. He clarifies in this interview with Casey Research that he could be a month off, but that he believes China’s collapse is much closer at hand than anyone realizes.

Why does he think this? One of his first reasons is the type of corruption occurring now in China:

Clearly what we see in China right now is a lot of corruption (with) enormous amounts of money. We know that because Macau is the world’s largest (gambling) gaming destination, not Las Vegas. And Macau has just a few casinos. Well, what’s going on there is the cadres go down and launder their money at the high stakes tables… the (money then) becomes untraceable.
You know, it’s not like the corruption in the first part of the reform era, where corruption really greased the wheels to permit business to occur. What is happening now is very short-term corruption, where people are stealing tons of money (with a) very short-term perspective.

Along with the corruption, mass insurrections are becoming more commonplace in China:

But what the real problem is, we see protests in China increasing. According to a report, 200,800 mass incidents (protests and demonstrations). That is well up from five years ago, which was 80,000 to 90,000.
But this is not just a numbers game. What is really worrying for the (Chinese) regime is the increasing violence of protestors. So we not only have demonstrations and strikes, we have, basically, mass insurrections, bombings.

And the kicker to the protests:

And many of these bombers and protest leaders are really the heroes in Chinese society. That’s a real problem for the regime.

At the moment, the regime appears to be keeping its population happy with a growing economy. A good portion of the money buoying the economy is now coming from China’s stimulus packages. As a result they have ended up with scores of ghost cities, newly built and gleaming and empty of life. These are full-fledged cities built for millions of people, with only a skeleton population of 10,000-100,000 people living in them.

Another reason China could go down much sooner than we expect is because of our lack of information. In the United States, their is a free press with no internet censorship. As an example, WealthCycles.com has published many articles, blogs, and videos criticising the US Government and Federal Reserve on economic issues. This is in stark contrast to China, from the BBC:

(Weeks ago) Communist Party leaders agreed a list of "cultural development guidelines" which included increased controls over social media and penalties for those spreading "harmful information".

Along with the government censorship of the population, there is also the cultural attitude of "face". We'll let Charles Smith over at OfTwoMinds.com explain:

China, and other Asian cultures, are built around "face". This requires a public facade, to maintain face and cloak the private, back-door reality. In general, Asian people do not like criticizing their country, as this is experienced as a loss of face.
Here's how ‘face’ works. If you marry a ‘local’ in China, Japan, Thailand, etc., then they will eventually, obliquely and with reluctance, tell you some of the unsavory details of how life actually works. Maybe. If they do, they will not like it if you repeat these ‘we lose face’ realities to other Big Noses. You will have to do so in private, in a hushed voice.
As a result, there are always two doors in Asia: the front door, carefully arranged to present a face-enhancing image to the outside world, and the back door, where everything important actually takes place.
A typical front door in China is the banquet with the glad-handing mayor. The back door is for his mistress, the cash ‘commissions’ from various deals and the cover-up of the face-damaging deaths in the local factory. Bad business, that; we lost face. Go take care of it with cash, threats, promises or whatever is required to bury it and restore face.

This culture of face, along with China’s stranglehold over the media, prevents us from knowing the full details of the situation on the ground. This means China could go down much sooner than expected.

Then, of course, there is the Chinese economy. Of which, the main issue is the financial sector. Chinese bankers appear to have been using the “No one got fired for hiring IBM” logic in issuing loans. This makes sense, as China’s banking sector is highly politicized. Minxin Pei’s explains in his article “Swimming Naked in China”:

For years, China’s state-owned banks systematically restricted credit to China’s dynamic private sector. Such a system came into being because state-owned banks wanted to make more money with their low-cost (if not free) household deposits, because when state-owned banks lend to state-owned firms, they can charge only regulated (low) interest rates and repayment is not assured. Generally, such lending is politically safe (since no bank managers go to jail for making bad loans to state-owned enterprises) but economically unprofitable. On the other hand, lending money to private firms is politically unsafe (bank managers risk corruption charges should loans go sour) but economically lucrative (as they can charge high rates).
With lending being highly politicized, private firms have been forced to tap the ‘shadow banking system’ for capital. However, with Beijing tightening credit to fight inflation… state-owned banks have been forced to call in the loans made through the ‘shadow banking system,’ thus hurting the debtors and triggering a spate of bankruptcies. This in turn could lead to a severe downturn for China.

And what appears to be the most damning evidence of all, from the AP article “Top of Chinese Wealthy’s Wish List? To Leave China”:

(Su) sits at the top of a country -- economy booming, influence spreading, military swelling -- widely expected to dominate the 21st century. Yet the property developer shares something surprising with many newly rich in China: he's looking forward to the day he can leave.
Yet affluence alone seems a poor bargain to those with the means to live elsewhere. Despite more economic freedom, the communist government has kept its tight grip on many other aspects of daily life. China's leaders punish, sometimes harshly, public dissent and any perceived challenges to their power, and censor what can be read online and in print. Authoritarian rule, meanwhile, has proved ineffective in addressing long standing problems of pollution, contaminated food and a creaking health care system.
There is also a yawning gap between rich and poor in China, which feeds a resentment that makes some of the wealthy uncomfortable. The country's uneven jump to capitalism over the last three decades has created dozens of billionaires, but China barely ranks in the top 100 on a World Bank list of countries by income per person.
Among the 20,000 Chinese with at least 100 million yuan ($15 million) in individual investment assets, 27 percent have already emigrated and 47 percent are considering it, according to a report by China Merchants Bank and U.S. consultants Bain & Co. published in April.
As (Su) dined in the VIP room of a Beijing restaurant, (he) (l)owered his voice (and) said for many rich there are worries about the authoritarian government. ‘This is a very sensitive topic. Everyone knows this. It's freer and more just abroad,’ he said.

Gordon Chang’s prediction of China collapsing before 2011 is a bit presumptuous. But we must admit, it does appear that China isn’t all that it is cracked up to be.

Berlin (CNN) -- German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed on Thursday to put forward an overall plan to change the EU's treaties.

"This is going to restore lost credibility", Nicolas Sarkozy said.

Merkel and Sarkozy want to prevent the stability and growth pact's further abuse, they said. "Countries that ignored the law were not punished in the past -- Germany amongst them. Now we are paying the price," said Merkel.

"We need to correct the fundamental floors in the construction of the eurozone. The situation is not easy -- trust has been lost. And that is the reason why we, Germany and France, want to work on treaty change for the eurozone."

The politicians did not specify the treaty changes, but said they will inform the public of the details ahead of the next EU summit on December 9.

Merkel said she wanted the European Central Bank (ECB) to remain independent. "We have expressed our confidence in the ECB," she said.

New Italian Prime Minister Mario Monti was also invited to the meeting. The Italian economy is the third largest in the eurozone; a default on Italian debt would likely exact a heavy toll on Europe. Italy has been struggling to tackle its debt crisis for years.

While Merkel and Sarkozy welcomed Italy's willingness to face tough reforms, the use of eurobonds was disputed. Mario Monti said: "Eurobonds might contribute to stability" within a stricter fiscal framework. But Angela Merkel rejected their use.

"I have not changed my opinion", she said. On Wednesday she made clear her opposition to eurobonds in a speech to the German Bundestag or parliament. The same day, the European Commission unveiled a plan detailing options for so-called eurobonds.

Some see eurobonds as a way out of the debt crisis, because they would effectively pool the debt of the 17 eurozone countries. But stronger eurozone countries are concerned about becoming liable for the debt service payments of entire regions without having a say in their future fiscal actions and policies.

Italian Premier Monti said the leaders of Germany and France had accepted his invitation to meet in the coming days in Rome to continue talks about Italy's economic future.

According to Sarkozy, he and Merkel are in constant contact with each other to manage the euro crisis anyway.

"We call each other nearly each day to discuss our different opinions", Sarkozy said.

"Germany has its own culture; France also has its own culture. We both try to understand each other. Or do you believe we would have to talk on a daily basis if we would both agree on everything?" he asked journalists.cnn.com

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