Low Dollar, high Euro

The Euro again has crossed the $1.50 barrier for the first time after 14 months. the news has been perceived as negative chance for the Euro-zone to recover rapidly from the last recession. Raising concerns about the strength of the common currency and its impact on the export market.

starting from the Wall Street Journal, the news was given in the front page, with the stating title "as dollar slides, fears rise". A comprehensive title which gives the idea of the problem, if there is one. However, the writer focuses its first comments on how the ECB President and the finance minister were trying to lower Euro and pushing for a higher dollar, thing that markets have largely ignored. The writer carries on by giving a "scary" situation of the dollar compared with other currencies. It does explain in detail all the numbers and facts about matter, but it does not give a clear idea or a probable solution regarding ways of helping the dollar to rise.

On the other hand, the Economist article gives a much more friendly approach to understand the dollar situation. It states the reason of why the dollar is in such a situation and what are the possible motives t such as "risk aversion" that contributed to this constant decrease of the dollar. In addition, it refers also to the countries like China and Russia that keep their reserves under the U.S. currency that are complaining about the continuous declines of the dollar and that there might a possibility for these country to shift these reserves in another currency.

The most pessimistic article was the one from the Financial Times. Saying that the fall of dollar will affect the Euro-zone more than expected. Especially in the long term which will affect the European industries and their imports. In this period of crisis which is affecting the more developed countries the message from the main media should be I think a bit less dramatic.

My recommendation to these articles, is definitely to read and enjoy the Economist's point of view due to its clear way of explaining the matter.The message from the other articles is a bit complex and get you out of the main points in my point of view. People should be informed in a less pessimistic way while getting out from a recession that we just had.

Sources:

-The Wall street Journal, printed copy

-The Economist
http://www.economist.com/businessfinance/displaystory.cfm?story_id=14686307

-Financial Times, Printed copy

Big bonuses...the Return!

After reading the news this week I've asked myself whether the big bankers have really felt the crisis? Wondering if the word "humility" has ever been taught in their minds. Goldman Sachs especially, has taken the attention of the financial media after reporting a significant profit in the last quarter. of course, media and not only were divided regarding the big compensation plan that big banks will give to their employee at the end of the year, focusing with attention to Goldman. While the world's recovery seems to see the light at the end of the tunnel, Goldman seems to be much further enjoying already their bonuses in a "Hawaiian island".
Even though Goldman has performed extremely well after crisis that affected the global financial system even better than its prime competitors, it is not realistic that after the biggest financial crisis in recent history one of the biggest investment bank gives a $20 billion in compensation. The comments of the CEO Blankfein and chief financial office of Goldman was that "Due to the extremely well performance throughout the crisis of our employees they deserve this kind of compensation to keep them happy to be with us". Adding that "we are very aware of what is going on in the world". The question to ask here is "Were you aware before the crisis commenced"? Obviously, politicians and general public view disagree towards this type of compensation, (bearing in mind the help Goldman received by the taxpayers during the crisis when it needed government's help) Making them reflecting about how such paychecks can bounce back so quickly despite the good profit made.

Media analysis:

The Wall Street Journal reflects its view by showing the whole situation with detailed numbers stating Goldman's comments and external points of view. it referred to the good moment of wall street which helped Goldman to build assurance on its performance. Despite stating that it has played a role in causing the meltdown which then has been helped by the government and also despite the regulatory scrutiny of Wall Street's pay culture.

Reuters explained especially the way it got to earn those big big profits. and how Goldman will distribute the compensations despite the general critical view. It also wrote who will get the biggest payouts from Goldman, such as currency, commodities and fixed income traders. In addition, it stated as well as the Wall Street Journal the donation made by Goldman to the charity Goldman foundation of $200 millions.


Bloomberg's point of view was the most "interesting" article to read. In fact, the writer was clearly against this exaggerated compensation. His analysis is very critical about the matter and i think that rarely you can read such a criticized article. The writer pointed out in 5 points on how the amount of the compensation should be spent instead. And I think that the 5 points made were absolutely fair either for the general reader and for the shareholder right. He explains how the CEO of Goldman should move towards a believable behaviour. He then admits that Goldman was the only one in paying back the help $10 billion made by the government, which main competitors did not yet pay back like Citygroup and Bank of America. to conclude his point of view he ended up saying "The pay culture may change on the rest of Wall Street. Not at Goldman Sachs".

My conclusion is that Bloomberg's writer was definitely the most exciting to read due to his critical view and opinion about the matter and how wall street is not reacting as it should to this matter. Although The Wall Street Journal and Reuters gave a balanced opinion in regard giving many exterior opinion about the fact, whereas the Bloomberg's did not. It depends from which kind of readers we have in front, But personally I'd o for the Bloomberg's view due to his passion that put in his article.


REFERENCES:
-Reuters site:
http://www.reuters.com/article/financialsSector/idUSN1531732720091015

-Bloomberg site:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a6arFvXkIf_8

-Wall street Journal printed copy

Steady Interests rates

A crucial key element for the future growth are the Interests rate. The importance of the impact in whether the ECB or BOE should increase or decrease the interests rates fundemental during this period of a recovering economy. The news is which is not surprising is that both ECB and BOE kept the their rates steady (1% ECB, 0.5% BOE)

on Thursday at the news conference which took place in the wonderful city of Venice, the ECB President Trichet announced the unchanged interests rate at 1%. The Wall Street Journal talked about the issue on its second page of the printed copy on Friday. The journal wrote that Trichet transimts stabilizing signs, but warns on being reliable on this fact. It also stated analysts' opinion who think that the interests rate will not raise before the first quarter of 2010.

the CNBC site published the news on Thursday. the approach taken is a bit different. It states that another competitor channel of information, which was a poll made by reuters that 82 analysts declared that expectations were met by Trichet's decision. Surprisingly, CNBC was the only source saying that Reserve bank of Australia (member of G20) was the only and first central bank to raise rates after the recession. Of course, CNBC gave many experts analysts opinion in regard, which in fact the way generally it conducts its news by giving opinions from experts. In addition, it shows that demand from banks to the ECB fell to 75 billion from 442 billion in June, which made declare Trichet that a hope that banks are starting to stay on their legs and searching for reliable ways to get cash instead on depending just from ECB's cash. Trichet answered also a question regarding euro's role as a pricing currency, he said "we are not campaigning for international use of Euro".


In conclusion, my analysis is that the Wall Street Journal's article covers the whole situation, as well as the BoE decision. Therefore giving also a more opinionated view of the situation from the writer and make it interesting to read. Wheras on the CNBC article on the internet it clearly shows a more analysts' view having then no view from the writer.

References:

- The Wall Street Journal (Printed source)

- www.cnbc.com/id/33221133

Bonuses limit

U.K.'s five largest banks (HSBC,Barclays,Lloyd,Royal Bank of Scotland and Standard Chartered) agreed to set a bonuses limit. the issue came up after the G20 congress. The U.K. government decision made by the Prime minister in his Party's annual conference will affect the salaries of banks' top earners.
The decison has also been made due to the government's role in the british financial system, owning 70% of RBS and 43% of Lloyds. the Financial Services Authority (FSA) as well announced new regulation In August in relation to compensation restrictions.
the new restrictions will take effect next year. Banks will have to declare by an independent commitee full compensation reports to the FSA. Moreover, senior executives and employees that manage risk must defer 40% to 60% of compensation over 3 years, and at least 50% will have to be in shares. In addition, poor performance will be affecting the bonuses of these people. Banks are also asked to comply with these regulations, in fact failing in respecting the rules will be subject to additional capital requirements.
British banks have raised their concerns in regard. The concerns were based on the fact that foreign banks based in the U.K. might have competitve advantages over them. U.K. authorities assured that new reules will aplly also to foreign owned subsidaries. Furthermore, the FSA added that they will try to work with other nation's banking regulators to make sure that other countries will apply this type regulations.

REFERENCES:
-The Wall Street journal