profitepaper pakistantoday 17th september, 2012

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Monday, 17 September, 2012

Occupy Wall Street plans to surround NYSE to mark anniversary Occupy Wall Street marks its first anniversary today and in a bid to rejuvenate a movement that has failed to sustain momentum after sparking a national conversation about economic inequality last fall, activists plan once again to descend on New York’s financial district NEW YORK

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AGENCIES

hE group, which popularized the phrase “We are the 99 percent,” will attempt to surround the New York Stock Exchange and disrupt morning rush hour in the financial district, according to a movement spokeswoman.

Monday’s protests will cap a weekend of Occupy Wall Street seminars, music and demonstrations in New York, said Linnea Paton, 24, an OWS spokeswoman. Demonstrations are also planned in other U.S. cities, other OWS organizers said.

The grassroots movement caught the world by surprise last fall with a spontaneous encampment in lower Manhattan that soon spread to cities across North America and Europe. Occupy Wall Street briefly revived a long-dormant spirit of U.S. social activism, and drew enduring attention to economic injustice.

CONCERT, “SIT-INS” PLANNED: But the movement’s colorful cast of theatrical demonstrators struggled through last winter to sustain the momentum that first drew attention to its patchwork of economic grievances - including corporate malfeasance on Wall Street, crippling student debt and aggressive bank foreclosures on American homes.

On Sunday, organizers will provide live music, including a Foley Square concert fea-

turing Tom Morello, guitarist for the rock band Rage Against the Machine.

At 7 a.m. Monday, some protesters will try to surround the NYSE, while others will engage in a loosely choreographed series of “sit-ins” at intersections throughout the financial district, according to OWS’s website. The tactics are designed to undermine New York police efforts to contain protesters on the narrow, winding streets of the financial district.

Last year’s demonstrations featured the spectacle of activists breaking into sudden dashes down one narrow street or another, pursued by visibly frustrated police and television reporters tripping down cobblestone streets. Sound permits for Sunday’s events have been secured, Paton said, but OWS has not sought permits for Monday’s protests which last fall led to mass arrests and clashes between police and protesters. Occupy Wall Street maintains about $50,000 in its bail fund, several organizers said.

Fed stimulus plan spurs risk rally; dollar slips The Federal Reserve’s aggressive new plan to spark the US economy boosted risk assets, sending global stocks to a 13-month high and driving the dollar to a more than four-month low against the euro.

NEW YORK AGENCIES

Brent crude oil rose to a four-month peak, the S&P 500 neared a five-year high and European shares rose to their highest levels in 14 months.

The Fed on Thursday said it would pump $40 billion into the economy each month until the jobs market shows sustained improvement. The aggressive action enhanced what was an already upbeat mood in financial markets since the European Central Bank announced plans to cut the borrowing costs of struggling euro zone members.

“Markets had expected more quantitative easing, but they hadn’t expected Bernanke and the Fed to be as aggressive as they were,” said Jeffrey Given, senior managing director and senior portfolio manager at John hancock Asset Management in Boston.

Fed Chairman Ben Bernanke on

Thursday cited the dire state of the U.S. labor market, saying it remains a “grave concern.”

“The Fed made it sound as if even after the economy recovers, interest rates will remain low. More people are moving into risky assets because Ben is not going to pull the punch bowl away,” Given said.

On Wall Street, stocks finished higher, with cyclicals and financials leading the way. An index of U.S. housing shares, aided by the Fed’s plan to buy mortgagebacked securities, rose 2.7 percent.

The Dow Jones industrial average .DJI rose

NYPD READY FOR CONFRONTATIONS: Chief New York Police Department spokesman Paul Brown confirmed that no OWS demonstration permit applications were submitted, but said police will be prepared for demonstrations.

“We accommodate peaceful protests and make arrests for unlawful activity,” he said. Brown said that based on previous experience with OWS, the NYPD expects that “a relatively small group of self-described anarchists will attempt unlawful activity and try to instigate confrontations with police by others while attempting to escape arrest themselves ... we expect most demonstrators to be peaceful.”

New York police have made a total of 1,852 Occupy arrests as of September 12, 2012, according to Manhattan District Attorney Cyrus Vance’s office, including the arrest of 700 protesters who spilled into the roadway while marching across the Brooklyn Bridge last October.

On Friday, Twitter was ordered by a New York judge to turn over the tweets of one of the protesters arrested on the bridge.

That case has emerged as a closely watched court fight over law enforcement access to users’ social media content. Six weeks after the Brooklyn Bridge arrests, citing public health concerns, New York authorities entered the Manhattan OWS camp and disbursed protesters. The movement has never regained its initial momentum.

53.51 points, or 0.40 percent, to end at 13,593.37. The Standard & Poor’s 500 Index .SPX climbed 5.78 points, or 0.40 percent, to 1,465.77. The Nasdaq Composite Index .IXIC jumped 28.12 points, or 0.89 percent, to 3,183.95.

Brian Jacobsen, chief portfolio strategist at Wells Fargo Funds Management, LLC in Menomonee Falls, Wisconsin, said the Fed’s balance sheet could expand by 11 to 12 percent by the end of the year, monetary accommodation that could “translate into a move up in the S&P 500 stock index to the 1,505 area.”

In bond markets, yields on 10-year Italian government bonds fell below 5 percent for the first time since late March as the Fed’s announcement added momentum to a rally dating from late July.

In contrast, the benchmark 10-year U.S. Treasury note price fell 1-9/32, its yield rising to 1.87 percent from 1.73 percent late on Thursday as investors exited safe-haven debt in search of higher returns in riskier assets.

“A lot of good news out of Europe had already caused risk markets to rally going into the Fed meeting so the Fed’s openended plan to buy mortgage-backed securities, its intent to keep rates low until mid-2015, and its strategy to keep monetary policy highly stimulative - even if the economy accelerated - was a pretty potent combination and threw fuel on the rally,” said Robert Tipp, chief investment strategist for Prudential Fixed Income, with $330 billion in assets under management.

Euro zone finance

China GDP growth seen 7.7-7.8% in 2012 : govt researcher BEIJING AGENCIES

Fan Jianping, chief economist at the State Information Centre, a prominent government think tank, said China’s economy would grow 7.67.8 percent in the July-September period from a year earlier, staying flat or picking up from the second quarter’s 7.6 percent. Analysts forecast in a Reuters poll that China would slow further in the third quarter but regain some momentum late in the year as the impact of earlier policy easing fully kicks in. Still, even if activity rebounds modestly in the fourth quarter, it would drag full-year economic growth to below 8 percent, a level not seen since 1999. The pace of growth this year would be above the government’s target of 7.5 percent, but policymakers are facing a dilemma due to concerns about property inflation, Fan was quoted by the official Xinhua new agency as saying. “It will be a little difficult to strike a balance this time around,” Fan said. China has not unveiled any large-scale new government stimulus this year, despite mounting evidence the economy needs more prodding to regain momentum, as policymakers fret that a surge in prices could stoke social unrest at a politically sensitive time ahead of a tricky leadership transition. In the absence of any stimulus package, Beijing has fast-tracked some infrastructure projects and injected cash into the economy via central bank’s open market operations.

Two more years please!

Greece needs two-year extension on fiscal pledges: PM ATHENS AFP

Greece needs a two-year extension from its international creditors to meet fiscal pledges, and a liquidity boost from the European Central Bank, said Prime Minister Antonis Samaras. In a Washington Post interview appearing in Greece on Saturday, Samaras said the recession-hit country was determined to adopt a new austerity package worth 11.7 billion euros ($15 billion) to avoid leaving the eurozone. But he said the programme should apply over four years instead of the currently agreed timeframe of two years — his most specific extension request in weeks. “Instead of the 11.7-billion-euro package taking place over two years, it would be best if it were to take place over four years,” the prime minister said. “We are talking about an extension to 2016,” he said. Samaras had asked for a twoyear extension prior to his election in June, but had since made more general requests for “breathing space” in meetings with EU leaders over the last month. Eurozone and IMF leaders meeting in Nicosia on Friday also conceded that Greece needed more time to meet agreed targets under its international bailout. “Clearly timing is an issue worth consideration,” IMF managing director Christine Lagarde told a news conference.

ministers met in Cyprus on Friday, hoping to build on progress the bloc has made this month following plans announced by ECB President Mario Draghi and a German court’s green light this week for the euro zone’s ESM bailout fund.

European equities surged, with the pan-European FTSEurofirst 300 index .FTEU3 rising 1.25 percent to 1,120.15.

The MSCI index of global stocks .MIWD00000PUS jumped 1.6 percent to 340.03, near its highest level since August last year.

DOLLAR WEAKNESS: The dollar index .DXY fell 0.5 percent to near fourmonth lows at 78.903.

The dollar’s broad decline left the euro at a four-month high above $1.31, the latest in a string of technical and psychological levels it has cut through this week.

“With Europe getting their act together (at least temporarily), the Fed flooding the market with cash, and China talking (about) stimulatory infrastructure projects, the three largest influences of market dynamics could be creating a bull market for at least the near term,” said Neal Gilbert, currency strategist at GFT Forex.

B r e n t crude oil rose 79 cents to $116.67 a barrel by 1735 GMT after reaching a four-month peak of $117.95.

The global North Sea benchmark was on track to end the week up more than 2 percent.

U.S. crude rose 68 cents to $98.99 a barrel after hitting a four-month high of $100.42. It was on track to close the week up 3 percent.

Base metals also rallied. Aluminum, copper, lead and zinc all jumped between 3 and 5 percent on hopes the Fed’s move would bolster global demand for manufacturing and building materials.

Gold hit a 6-1/2-month high, putting it on course for a fourth straight week of gains and extending Thursday’s 2 percent rise. Spot gold stood at $1.771.06 an ounce at 1822 GMT. <GOL/> German bond yields hit an 11-week high on Friday as low-risk government bonds sold off after the Fed stimulus moves. The yield on 10-year Italian bonds fell below 5 percent for the first time since March 26 and was down 4 basis points on the day at 4.99 percent.

Equivalent Spanish yields stood at 5.82 percent.

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Ukraine leader sees EU deal soon, but EU disagrees YALTA AGENCIES

Ukrainian President Viktor Yanukovich said on Friday he thought it would be possible to seal a strategic deal with the European Union after a parliamentary election next month, but EU officials said the case of Yulia Tymoshenko was still a problem. hosting a conference, Yanukovich argued that a parliamentary election on Oct. 28 would show Ukraine’s commitment to democracy as he tried to play down the impact of the case of Tymoshenko, the country’s main opposition leader, who was jailed for seven years last year on abuse of office charges.

But an EU delegation that included Swedish Foreign Minister Carl Bildt said after meeting Yanukovich that “the issue of selective justice” - meaning Tymoshenko’s prosecution - had to be settled before relations could move to a new level. A statement issued by the EU delegation also expressed regret that Tymoshenko and a political ally, Yuri Lutsenko, who has also been jailed, had been prevented from running in the election because of trials “which did not respect international standards”.

Fashion Fair LAHORE: Fashion Fair is the first event being conducted by the multibrand store Fashion Avenue located at Vogue Towers on M.M. Alam Road. This soon-to-be-launched multi-designer store is a state-of-the-art retail store designed by renowned architectural firm Architects Inc. The store, which is gearing up for an exciting launch in mid October, has an extensive PR and marketing calendar lined up for the year.

State Bank of Pakistan, Deputy Governor, Kazi Abdul Muktadir presenting the 6th Pakistan SME Conference plaque to Business Support Fund Ministry of Finance, GOP CEO Mr. Saquib Mohyuddin, Chairman of the Conference, Menin Rodrigues, can also be seen in the picture.

WhY GErmaNY ShOuld lEad Or lEavE

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UROPE has been in a financial crisis since 2007. When the bankruptcy of Lehman Brothers endangered the credit of financial institutions, private credit was replaced by the credit of the state, revealing an unrecognized flaw in the euro. By transferring their right to print money to the European Central Bank (ECB), member countries exposed themselves to the risk of default, like Third World countries heavily indebted in a foreign currency. Commercial banks loaded with weaker countries’ government bonds became potentially insolvent.

There is a parallel between the ongoing euro crisis and the international banking crisis of 1982. Back then, the International Monetary Fund saved the global banking system by lending just enough money to heavily indebted countries; default was avoided, but at the cost of a lasting depression. Latin America suffered a lost decade. Germany is playing the same role today as the IMF did then. The setting differs, but the effect is the same. Creditors are shifting the entire burden of adjustment on to the debtor countries and avoiding their own responsibility.

The euro crisis is a complex mixture of banking and sovereign-debt problems, as well as divergences in economic performance that have given rise to balance-of-payments imbalances within the eurozone. The authorities did not understand the complexity of the crisis, let alone see a solution. So they tried to buy time.

Usually, that works. Financial panics subside, and the authorities realize a profit on their intervention. But not this time, because the financial problems were combined with a process of political disintegration. When the European Union was created, it was the embodiment of an open society – a voluntary association of equal states that surrendered part of their sovereignty for the common good. The euro crisis is now turning the EU into something fundamentally different, dividing member countries into two classes – creditors and debtors – with the creditors in charge.

As the strongest creditor country, Germany has emerged as the hegemon. Debtor countries pay substantial risk premiums for financing their government debt. This is reflected in their cost of financing in general. To make matters worse, the Bundesbank remains committed to an outmoded monetary doctrine rooted in Germany’s traumatic experience with inflation. As a result, it recognizes only inflation as a threat to stability, and ignores deflation, which is the real threat today.

Moreover, Germany’s insistence on austerity for debtor countries can easily become counterproductive by increasing the debt ratio as GDP falls.

There is a real danger that a two-tier Europe will become permanent. Both human and financial resources will be attracted to the center, leaving the periphery permanently depressed.

But the periphery is seething with discontent.

Europe’s tragedy is not the result of an evil plot, but stems, rather, from a lack of coherent policies. As in ancient Greek tragedies, misconceptions and a sheer lack of understanding have had unintended but fateful consequences.

Germany, as the largest creditor country, is in charge, but refuses to take on additional liabilities; as a result, every opportunity to resolve the crisis has been missed. The crisis spread from Greece to other deficit countries, eventually calling into question the euro’s very survival.

Since a breakup of the euro would cause immense damage, Germany always does the minimum necessary to hold it together. Most recently, German Chancellor Angela Merkel has backed ECB President Mario Draghi, leaving Bundesbank President Jens Weidmann isolated.

This will enable the ECB to put a lid on the borrowing costs of countries that submit to an austerity program under the supervision of the Troika (the IMF, the ECB, and the European Commission). That will save the euro, but it is also a step toward the permanent division of Europe into debtors and creditors.

The debtors are bound to reject a two-tier Europe sooner or later. If the euro breaks up in disarray, the common market and the EU will be destroyed, leaving Europe worse off than it was when the effort to unite it began, owing to a legacy of mutual mistrust and hostility. The later the breakup, the worse the ultimate outcome. So it is time to consider alternatives that until recently would have been inconceivable.

In my judgment, the best course of action is to persuade Germany to choose between either leading the creation of a political union with genuine burden-sharing, or leaving the euro. Since all of the accumulated debt is denominated in euros, it makes all the difference who remains in charge of the monetary union.If Germany left, the euro would depreciate. Debtor countries would regain their competitiveness; their debt would diminish in real terms; and, with the ECB under their control, the threat of default would disappear and their borrowing costs would fall to levels comparable to that in the United Kingdom.

Courtesy: Project Syndicate

How the Occupy movement may yet lead America REIHAN SALAM

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hIS coming Monday, Sept. 17, is the first anniversary of the day when protesters gathered in Lower Manhattan’s Zuccotti Park under the banner of Occupy Wall Street. The occupation was first dreamed up by Kalle Lasn and Micah White, the close collaborators behind Adbusters, a slickly produced, high-art magazine that uses the tools of commercial culture to make the case against capitalism. having decided that America needed an uprising akin to those that had shattered authoritarian governments across North Africa, Lasn and White chose a date, created an arresting image emblazoned with the Occupy Wall Street slogan, reached out to potential collaborators and then watched as their creation seized the imagination of millions of Americans.

One year on, the encampments that had sprung up in Lower Manhattan and in cities, college campuses and foreclosed homes across the country have for the most part been abandoned. And so at least some observers are inclined to think, or to hope, that the Occupy movement has been of little consequence. That would be a mistake. Occupy’s enduring significance lies not in the fact that some small number of direct actions continue under its banner, or that activists have made plans to commemorate “S17” in a series of new protests. Rather, Occupy succeeded in expanding the boundaries of our political conversation, creating new possibilities for the American left.

As our slow-motion economic crisis grinds on, it is worth asking: how might these possibilities be realized? For some, Occupy was a liberating experience of collective effervescence and of being one with a crowd. As one friend put it, it

was “the unspeakable joy of taking to the streets, taking spaces, exploring new relations and environments” that resonated most. For others, it created a new sense of cross-class solidarity. Jeremy Kessler, a legal historian who covered the Occupy movement for the leftist literary journal N + 1 and the New Republic, senses that it has already shaped the political consciousness of younger left-liberals. “There is more skepticism towards the elite liberal consensus,” and so, “for instance, there is more support for the Chicago teachers union and more wariness towards antiunion reformers.” Ideological battle lines have in this sense grown sharper. Yet it is still not clear where Occupy, and the left, will go next.

Perhaps the most politically fruitful path for the American left would be to go back to the future – to draw on the lessons of the Populists of the William Jennings Bryan era, who sought to unite farmers and industrial workers against the stranglehold of Eastern capital. Back then, the Populists failed, as the interests of industrial workers were more closely tied to their bosses than to those of highly indebted smallholders living in the prairies. Now, however, millions of middle-income households struggle under the burden of underwater mortgages.

In the latest issue of the Nation, David Graeber, the anarchist anthropologist considered an intellectual leading light of the Occupy movement, argues that the “financialization” of the economy should be understood as “an enormous engine of debt extraction,” through which the 1 percent extracts wealth from the 99 percent. Rather than champion specific policies designed to reduce the burden of debt, Graeber calls for a campaign of mass resistance devoted to delegitimizing what he calls “Mafia capitalism.” While Graeber’s language is brac-

ing, and it will undoubtedly appeal to at least some radicals who hope to keep the spirit of Occupy alive, it is not obvious that his idea of mass resistance can build a mass movement.

But might a softer version of Graeberism succeed? As the Georgetown University historian Michael Kazin argues in The Populist Persuasion, American populist movements have traditionally pitted the producing majority against a parasitic elite. That is one reason why “We Are the 99 Percent,” the slogan coined by Graeber and his allies, has proved so resonant: It invokes older American political traditions.

And the case for placing debt at the heart of our politics is stronger than you might think. As the heterodox economic thinkers , household debt has climbed from 50 percent of GDP in 1980 to 100 percent just before the financial crisis. Yet according to Mason and Jayadev, this sharp increase does not primarily reflect an increase in borrowing. had interest rates, growth and inflation remained the same in the three decades following 1980 as they had in the three decades preceding 1980, household debt levels would have actually decreased. One of the central problems, Mason and Jayadev argue, is that inflation levels decreased faster than households could decrease their borrowing levels. Back in 2009, Christopher hayes, author of The Twilight of the Elites and host of MSNBC’s Up with Chris hayes,” was essential to addressing America’s economic woes. While this argument seems very technocratic, it has the virtue of speaking directly to the challenge of household debt. The indicates that real median household income in the United States has fallen to levels last seen in 1995. Income inequality, meanwhile, has increased.

Courtesy: Reuters

Business 02 CORPORATE CORNER Wi-tribe family expands through ‘Circle of Friends’ ISLAMABAD: As a lifestyle of independence and innovation, wi-tribe introduced offers that change lives and bring exciting ways of thinking; ideas that bring people under one tribe - wi-tribe. With a reputation that precedes its accomplishment as the #1 in customer care and quality broadband service, wi-tribe introduced “Circle of Friends”, an addition that makes the experience more enjoyable.

Lahore High Court dismisses all petitions against PTCL ISLAMABAD: The Lahore high Court has dismissed three different petitions against Pakistan Telecommunications Company Limited (PTCL) Voluntary Severance Scheme (VSS). Out of these, two petitions were filed by Lines Staff Union while a third petition was filled by an ex-employee Rana Muhammad hassan. The petitioners requested the court to halt the VSS as well as internal transfers and postings of PTCL. The court dismissed the request for immediate halting of transfers and postings, adjourning the case till the 24 of October. Previously, similar petitions were also lodged in Islamabad and Sindh high Courts as well as NIRC, but all the courts declined to issue stay orders for the petitions filed against PTCL.

NDU delegation briefed on water, power sectors

LAHORE: A delegation comprising participants of the National Security and War Course 2012-13 of National Defence University (NDU), Islamabad headed by Major General Javed Iqbal today visited WAPDA house and attended briefings on water and power sectors.

Dhaani – New designer in town

ISLAMABAD: Islamabad, Once considered devoid of any fashion activity of its own has generally relied upon designers from Lahore and Karachi to cater to the fashion needs of its inhabitants. Recently, a new brand by the name of dhaani has taken the city by storm. Currently being stocked at Melange and soon to be available at multiple sale points, dhaani embodies the celebration of being a woman.

Dhaani’s design philosophy is simple, elegant and trendy. It offers an original color palette and flexible design and has something for everyone.

Bramerz Pakistan launches ‘Olaround’ LAHORE: Bramerz Pakistan, in association with Google and Ufone, hosted a preview event to demonstrate and introduce the first online, location-based loyalty service called “Olaround” that runs on mobile devices in Pakistan. Bramerz - a Google certified digital agency, developed the service, which is in the form of a mobile App called “Olaround”. It geo-maps connected merchants, providing all relevant information, including proximity with the user.

A unique and innovative concept LAHORE: The Mother, Baby and Child fair was arranged by the Central & Northern Punjab Women Chamber of Commerce and Industry in Lahore, and this was the first time ever that an event based on the concept of promoting mothers, babies and children was held. This event showcases services and products which cater to the needs of mothers and babies.

Senior Minister of Commerce, Makhdoom Amin Fahim is seen unveiling the ‘Face of Expo Pakistan’ with S.M. Muneer, TDAP, Chief Executive, Tahir Raza Naqvi, and Consul General Turkey Murat Onart.

Monday, 17 September, 2012