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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: ild who wrote (26140)	3/22/2005 1:52:04 PM
From: RealMuLan	Respond to of 116555

France abolishes 35-hour workweek NATHALIE SCHUCK Associated Press PARIS - French lawmakers effectively abolished the country's 35-hour workweek Tuesday by allowing employers to increase working hours - and pay - as the country struggles with high unemployment and stagnating living standards. In a final vote, the National Assembly approved a government-backed bill permitting employers to negotiate deals with staff to increase working time by 220 hours a year in return for better pay. The bill effectively clears the way for the gradual erosion of the 35-hour week, a flagship policy of the former Socialist-led government that gave many people more time off but added to concerns about France's declining global competitiveness. The shorter workweek was introduced on a voluntary basis in 1998 and made compulsory two years later in a bid to force employers to hire more people. But France's current 10 percent jobless rate is testament to the policy's failure to generate the promised millions of new jobs. The National Assembly, controlled by French President Jacques Chirac's conservatives, approved the new law 350-135. It does not formally abolish the 35-hour workweek but allows employers to offer staff extra working hours at a higher rate of pay. It also enables workers to sell part of their holiday entitlement back to their employers or put it toward training or early retirement. In order to apply the changes, however, companies will have to break away from their broad sector-wide agreements with unions - unchanged by the new law - and negotiate deals with their own staff representatives. This means the effects of the reform will not be seen for some time. Any such initiatives also could prove unpopular in France's present economic climate. Almost 1 million people participated in nationwide strikes and demonstrations earlier this month to protest the change to working time, as well as other threats to workers' benefits and public sector pay. Many French workers have become accustomed to taking longer holidays and regular weekdays off under the 35-hour law, and a recent survey by polling agency CSA showed that 56 percent of salaried employees oppose the bill. However, jobseekers, retirees and unskilled workers approved of the change. Last year, a parliamentary committee reported that the 35-hour week cost France more than $13 billion a year, casting doubt on a labor ministry study that suggested it had created 350,000 jobs between 1998 and 2002. Some also argued that the shorter week hurt living standards because employers froze salaries to make up for lost labor. According to a 2003 OECD survey of 25 industrialized countries, only Norwegian and Dutch employees worked less time each year than the French, who worked an average 1,431 hours. German workers put in 1,446 hours, British 1,673 hours, Americans 1,792 hours and Koreans 2,390 hours. mercurynews.com

To: ild who wrote (26140)	3/22/2005 2:56:46 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

FOMC Release Date: March 22, 2005 For immediate release The Federal Open Market Committee decided today to raise its target for the federal funds rate by 25 basis points to 2-3/4 percent. The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity. Output evidently continues to grow at a solid pace despite the rise in energy prices, and labor market conditions continue to improve gradually. Though longer-term inflation expectations remain well contained, pressures on inflation have picked up in recent months and pricing power is more evident. The rise in energy prices, however, has not notably fed through to core consumer prices. The Committee perceives that, with appropriate monetary policy action, the upside and downside risks to the attainment of both sustainable growth and price stability should be kept roughly equal. With underlying inflation expected to be contained, the Committee believes that policy accommodation can be removed at a pace that is likely to be measured. Nonetheless, the Committee will respond to changes in economic prospects as needed to fulfill its obligation to maintain price stability. Voting for the FOMC monetary policy action were: Alan Greenspan, Chairman; Timothy F. Geithner, Vice Chairman; Ben S. Bernanke; Susan S. Bies; Roger W. Ferguson, Jr.; Edward M. Gramlich; Jack Guynn; Donald L. Kohn; Michael H. Moskow; Mark W. Olson; Anthony M. Santomero; and Gary H. Stern. In a related action, the Board of Governors unanimously approved a 25-basis-point increase in the discount rate to 3-3/4 percent. In taking this action, the Board approved the requests submitted by the Boards of Directors of the Federal Reserve Banks of Boston, New York, Philadelphia, Cleveland, Richmond, Atlanta, Chicago, St. Louis, Minneapolis, and San Francisco. federalreserve.gov

To: ild who wrote (26140)	3/23/2005 9:33:01 PM
From: Earlie	Respond to of 116555

Ild: Heinz has always possessed a remarkable ability to synthesize and his latest comment is a perfect example of this skill. I agree whole heartedly with him on all points. Like Heinz, I believe that China will take some nasty economic "hurts" over this next few years. Why? - Selling well-made commercial goods in exchange for questionable debt paper works only if you can "move" the debt paper without taking a loss (i.e., getting back at least the commodity and labor costs, never mind amortization and some return on investment, before the deteriorating debt paper cements a big loss). The build-up of Chinese US$ reserves has long since outstripped the country's ability to do this. - Investors have turned a blind eye to the Chinese banking sector mess. Sooner or later, someone will have to take the "hit" on this..... likely to be shared equally by the Chinese economy and star-struck "foreign investors". - In seeking heavy-duty, near-term growth, over the last several years, China has invested heavily in market sectors that were approaching "saturation", even before they entered the frey. Bad timing. - Chinese expansion has been heavily dependent on exports, particularly to the US consumer markets. This is really bad timing. In effect, China has chosen to become a "banker-of-last-resort", lending huge sums to a semi-bankrupt client. - The US consumers' ability/desire to borrow, depends heavily on a continuation of the real estate bubble. This bubble appears to have peaked. When it bursts, what does China do with its massive excess capacity? Associated employment reductions will likely create big political headaches. Investing generically in China today does not strike me as providing a decent risk/reward profile. Best, Earlie