Pack of cigarettes to cost more than €5

http://www.thelocal.de/money/20111230-39819.html

Published: 30 Dec 11 09:04 CET

Smokers will not only pay for their habit with their health in 2012 – prices are increasing too, with a pack of 19 cigarettes topping €5 for the first time. 

New year resolutions to give up smoking could be strengthened on January 1 when prices rise due to a increase in the tobacco tax of between four and eight cents per pack. And cigarette makers are passing the increased costs directly onto their customers.

Reemtsa/Imperial Tobacco said it would also be rounding the price up on its brands which include West, JPS, Gauloises, Davidoff and Peter Stuyvesant. Industry insiders say other manufacturers will also increase their prices, bringing the cost of a pack of 19 top brand cigarettes over the €5 mark.

British American Tobacco, which makes Lucky Strike and Pall Mall cigarettes, has said it would not be increasing its prices at the start of the year. The picture for rolling and pipe tobacco is mixed, with some firms planning to hike prices and others not.

The tobacco tax is due to increase by between four and eight cents a year until 2015.

Cigarette advertising is also likely to be further restricted in 2012, with a spokeswoman for the Ministry of Food, Agriculture and Consumer Protection saying this week that plans were being drawn up to remove it from cinemas and from posters. The distribution of free cigarettes as part of marketing campaigns will also be banned. Tobacco advertising is already banned from printed media and the internet in Germany.

DPA/DAPD/The Local/hc

Carmakers ready for record year

http://www.thelocal.de/money/20111228-39779.html

Published: 28 Dec 11 12:44 CET

Despite doom and gloom in many business sectors, German car manufacturers think 2012 could be a banner year, especially in the United States. 

German companies spent 2011 aggressively trying to penetrate the ultra-competitive American market. Volkswagen even opened a new factory in Tennessee and slashed prices on popular car models in 2011.

Matthias Wissmann, head of the German Association of the Automotive Industry (VDA), told the Stuttgarter Zeitung that the US is ripe because more and more Americans need to replace their old clunkers.

American autos are between 10 and 11 years old on average, and problems in the housing and labour market don’t seem to be affecting the American need to get a new ride, he said.

But German automakers’ optimism extends around the world. Roughly one in five cars worldwide are made by German manufacturers, and they say demand continues to increase.

According to the Handelsblatt newspaper, Volkswagen has extended contracts for temporary workers who help during peak production periods at its Wolfsburg headquarters until 2013. Its subsidiary Audi, meanwhile has created 3,500 jobs worldwide in 2011, the newspaper reported.

Porsche says that its manufacturing facility in Leipzig is running around the clock to keep up with demand and the company is expecting nearly 40,000 vehicles to be produced there in 2012, which would be a new record.

Daimler, meanwhile, thinks it can sell 500,000 trucks per year by 2013. Between January and November this year, the company sold 373,000, a 15 percent increase over the same time period last year, Handelsblatt reported.

But there are some warning signs amidst all the carmaking euphoria. Some experts believe brewing price wars look likely to taper profits.

But that’s not enough to dampen enthusiasm.

“I am confident that in 2012, the market share of German manufacturers will continue to increase,” Wissmann told the Stuttgarter Zeitung.

The Local/mdm

Different people will take this different ways, but Jeffrey Goldbergtells us that six members of the Walton family (the original owners of WalMart) have more wealth than the bottom 30 % of Americans. Here’s where he says it:

In 2007, according to the labor economist Sylvia Allegretto, the six Walton family members on the Forbes 400 had a net worthequal to the bottom 30 percent of all Americans.

And given that he quotes us here at Forbes on the point, he’s almost certainly right.

The question is, what are we to make of this point? I think we all know what Mr. Goldberg wants us to make of it, it’s a telling indictment of American wealth inequality, the world’s going to the dogs and something must be done about rising inequality.

The Waltons are now collectively worth about $93 billion, according to Forbes.

Well, yes, but. Total US household wealth is in the $50 trillion (yes, trillion) to $70 trillion range. The range is depending on whether you want to take before the housing crash or in the middle of it. So the statement is that these Waltons have, between the family, 0.13% of US wealth. Which, for the people who inherited the world’s largest (well, certainly the country’s) and most successful retailer doesn’t sound like a particularly terrible concentration of wealth. It’s certainly less than John D Rockefellerhad all by his lonesome when he was in his pomp.

But I think it’s possible that the comment is more revealing about Mr. Goldberg really, for as Felix Salmon points out, Mr. Goldberg himself has more wealth than the bottom 25% of Americans.

This sounds outrageous, until you stop for a second and take note of the fact that Jeffrey Goldberg, individually, has a net worth greater than the bottom 25% of all Americans.

In fact, given that I have equity in my home and no other debt than mortgage, I have, as is highly likely do all readers of these pages, more wealth than the bottom 25% of Americans added together. For as Felix points us to:

In 2009, roughly 1 in 4 (24.8%) of American households had zero or negative net worth, up from 18.6% in 2007, and 37.1% of households had net worth of less than $12,000, up from 30.0% in 2007.

Wealth is always more unequally distributed than income. By the way, it isn’t even true that all of those households with zero or negative wealth are what we would call poor either. It’s entirely possible to have no net assets while having a good income, even a high income. All you need to have is debts higher than your assets: something that will almost certainly be true of anyone with student debt and fresh out of college for example. Fresh out of grad school you might well have $100,000, $200,000 of debt, hey, possibly even from medical school you might be carrying $500,000. None of us are actually going to weep all that hard for you though, not you with that associates job at a Wall Streetlaw firm on $100,000 or more, not a newly qualified doctor on hundreds of thousands a year.

I certainly don’t mean that all those with negative net household value are in that situation: there are an awful lot of people who are “properly” poor in the way that we all usually understand it.

But this comparison of wealth desn’t show us quite what Mr. Goldberg thinks it does. If you’ve no debts and have $10 in your pocket you have more wealth than 25% of Americans. More than that 25% of Americans have collectively that is.

That a family who have inherited the majority of one of the leading global retailers have more wealth than the bottom 30% of Americans, when compared with how high up the tree a single ten dollar bill gets you, is pretty much worthy of a heartfelt “Meh”.

Update 12/15. A Doctor writes to remind me that fresh out of medical school a doctor does not in fact earn good money. Indeed, the one who wrote to me earns $45,000 a year for after that graduation comes residency. It is only after residency that the money starts to flow. I was sloppy in the above: I knew that residency came first and that it was only after full qualification that high incomes are earned. It wouldn’t be unusual for a newly graduated doctor to be carrying $250,000 of debt (from medical school alone) and the interest on this could be another $100,000 through a three year residency (this accumulates but it is possible to defer it, payments do not have to be made during residency). Leading to that $500,000 or so total debt if, as with my correspondent, one was to become a neurosurgeon.

So I was at best sloppy and quite possibly wrong. Although, having looked it up, given that the starting salaries post residency for neurosurgeons seem to be around $400,000 I will admit to not being about to burst into tears over this.

It does raise two interesting points though. The first being that we can almost certainly put every single doctor in residency on our list of people with less than zero wealth. Those education debts are likely to swallow any assets they might have. But we don’t normally think of doctors in training as being poor really, one of the points I was making.

The other is that, well, it takes 7 years to get an MD (3 years pre-med at college, four years medical school), then 3 to 7 years residency. So someone might be 32 or so before actually earning the big bucks: and have a perhaps 25 year career after that? How does that change income inequality? When some people only earn for 30 odd years, others for 40 odd?

http://news.yahoo.com/six-waltons-more-wealth-bottom-30-americans-182819449.html

NEW YORK (CNNMoney) — Last year was supposed to be the make or break year for Europe’s debt crisis. Neither happened.
That means the chronic uncertainty that investors grappled with for most of 2011 is likely to continue, if not intensify, in the first half of this year.
“There are a myriad of factors, both political and economic, that could hit confidence,” said Grant Lewis, head of research at Daiwa Capital Markets in London. “Given this backdrop, continued uncertainty is inevitable.”
Despite an explosion of political summits last year, there is still no definitive solution to the crisis, which has become the single biggest threat to the global economy and the bane of financial markets around the world.
While a break-up of the euro currency union still seems unlikely, investors are not willing to rule out the nightmare scenario completely.
“The chances of break-up remain low, but non-negligible for sure,” said Lewis. “That is not something that we would have said 12 months ago.”
Eurozone leaders have taken steps toward a more binding fix for the political and economic problems at the root of the crisis. But they have yet to put the measures into practice, something that has proven difficult because of competing national interests.
To make matters worse, the eurozone economy appears to have slipped into recession at a time when governments across the continent are embarking on new austerity regimes. This sets up a difficult balancing act for policy makers as they confront the need to cut spending and boost economic growth simultaneously.
“As we start the New Year, the investing landscape doesn’t look all that different,” said Kevin Giddis, director of fixed-income at Morgan Keegan. “To put it charitably, economic conditions in Europe remain tenuous, with no clear end in sight.”

THE nationalisation of mines in South Africa is a costly, high-risk proposition that should be adopted only as a last resort, an independent panel of experts is reported to have concluded after a year-long study of the policy in 14 countries. That verdict has not, however, ended a long-running and divisive debate. The ruling African National Congress (ANC), which commissioned the study, has sent the report back to the panel for redrafting, saying it wants “more options”.

The ANC’s agreement to set up such an inquiry at all was seen as a victory for the party’s powerful and militant Youth League. Under the slogan “economic freedom in our time”, it has been pressing the government to take over at least 60% of all mines, without compensation, to distribute the country’s wealth more fairly. This, the league argues, would accord with the 1955 Freedom Charter’s call for “the mineral wealth beneath the soil…[to] be transferred to the people as a whole”.

Nervous lest such views deter investors, President Jacob Zuma and his ministers went on repeating that nationalisation was “not government policy”. But this was not enough to silence the Youth League or to allay investors’ fears. To increasingly receptive audiences, the league proclaims that mega-rich multinational mining companies are “stealing” the mineral wealth that rightly belongs to the poor masses.

Malusi Gigaba, the minister for public enterprises, has called the League’s demands “reckless” and “cheap”. Susan Shabangu, the mines minister, said the whole debate was a “fruitless exercise” that would not help solve the country’s triple scourge of poverty, inequality and unemployment. The mines would not be nationalised in her lifetime, she said. Trevor Manuel, the country’s widely respected former finance minister who is now the national planning minister, decried it all as a “seriously bad idea” requiring billions of dollars the government did not have.

But such voices have been drowned out by others, including the Confederation of South African Trade Unions, a key ANC ally, who see nationalisation of the mines as the perfect solution to South Africa’s deepening economic and social woes. According to a Citigroup report, South Africa’s mineral deposits, worth an estimated $2.5 trillion (excluding energy minerals), are the richest in the world. Yet a third of the country’s 50m people are dirt-poor.

But as Mr Manuel’s National Planning Commission points out in its “Vision for 2030” submitted to the government last month, the country’s mining industry needs investment above all. During the commodity boom in 2001-2008, it shrank by an average of 1% a year, whereas the world’s other top 20 mining-export countries grew by an average of 5% a year. In 1970 mining accounted for 21% of South Africa’s GDP; now the figure is just 6%. The sector is even smaller than it was in 1994, when the ANC first came to power, though it still represents almost 60% of exports.

Bobby Godsell, a former chairman of AngloGold Ashanti, the world’s third-biggest gold-mining company, who is a member of Mr Manuel’s commission, says the odds of South Africa’s mines being nationalised are as remote as America’s Federal Reserve Bank being abolished by the Republican Tea Party. The Youth League had developed “some unrealistic and unimplementable answers to some absolutely vital questions”, he says.

The ANC has asked the nationalisation panel to simplify its language, give more detail of other countries’ experience and provide more options before submitting a final report early next year. What it really wants, many guess, is for the panel to soften its anti-nationalisation tone. After being debated at the ANC’s policy conference next June, it will be submitted to the party’s full conference for a vote in December next year. The uncertainty will persist until then and possibly beyond.

http://www.economist.com/node/21541040

LOWERING the permissible alcohol level for drivers is common enough. Banning booze on the roads altogether is plainly far more drastic. But road deaths in Brazil, for instance, have dropped by almost a third in the three years since the government told drivers to eschew even a drop. The South African government, in a bid to cut the country’s tippling, proposes to follow suit. It wants to ban all alcohol advertising. Some ministries have stopped serving booze at functions. What about banning roadside pedestrians from drinking too? Even that may be under consideration, though it is unclear how walkers weaving home from a legal drinking bout would be taken to task.

In alcohol-consumption league tables, South Africa is middle-of-the-road; between half and two-thirds of its citizens never drink. But if teetotallers are excluded, South Africans may be the fifth-heaviest tipplers in the world, with each adult drinker downing on average 35 litres of pure alcohol a year, twice as much as in France or the United States, says the World Health Organisation.

Many South Africans are binge drinkers. The country’s Central Drug Authority estimates that over a third drink from early Friday afternoon, when most get paid, right through to Monday morning, when one in ten drivers are estimated to be over the drink-driving limit. Cheap home-brewed beer is their favourite.

Alcohol certainly boosts South Africa’s murder rate, one of the highest in the world. Three-quarters of knife murders, half of “blunt-instrument murders” and 40% of gun murders are reckoned to be committed under the influence. And alcohol is blamed for around half of the 14,000 road deaths a year. More than a third of those killed are pedestrians, most of them also drunk. And alcohol helps raise the country’s towering rape, and still devastating HIV-infection, rates; drunks tend to forget about condoms.

http://www.economist.com/node/21542462

Tighter ‘Made in Germany’ rules criticised

http://www.thelocal.de/money/20120116-40137.html

Published: 16 Jan 12 10:55 CET

New rules being planned by the European Union which would limit the use of the label “Made in Germany” could cause “immense damage”, Germany’s industry lobby group warned on Monday.

Until now, the deciding factor in where a product can be labelled as coming from has been where the last process in production is carried out.

But the European Commission plans to limit claims of origin to products of which at least 45 percent of the value was created in Germany, Die Welt newspaper reported on Monday.

Current rules mean that products can be labelled as “Made in Germany” even if more than 90 percent of the work in making them takes place in other countries.

Industries such as car manufacture, electronics and machinery construction would be most affected by the planned rule changes, the paper said.

“The planned changes would put the label “Made in Germany” in danger,” Hans Heinrich Driftmann, president of the Association of German Chambers of Industry and Commerce (DIHK), told Die Welt.

“If in the future, the origin and value of the base materials are decisive, many products will no longer be seen as German,” he said.

This would cause immense damage to the German economy and would remove important information for consumers, he said.

“The label “Made in Germany” stands world wide for quality, and boosts German exports,” said Driftmann.

“The current rules on origin are unbureaucratic and internationally recognised – plans to change them should disappear back into a drawer. The Commission should keep its promise to reduce bureaucracy and to support mid-sized companies with internationalisation.”

Die Welt said that Algirdas Semeta, European Commissioner for Taxation and Customs Union, audit and Anti-Fraud, drew up plans to change the rules after the European Courts of Justice ruled in favour of a German company importing rope from China.

The firm had argued it should not pay punitive tariffs on steel rope it was importing from North Korea as the material was from China, where punitive tariffs would not apply, and was only assembled in North Korea, the paper said.

The Local/hc

Smart gadgets to top PC sales for first time this year

http://www.bangkokpost.com/business/economics/276134/smart-gadgets-to-top-pc-sales-for-first-time-this-year

• Published: 21/01/2012 at 12:00 AM
• Newspaper section: Business

The combined sales volume of smartphones and tablets in Thailand will probably surpass that of personal computers for the first time in 2012, says research firm IDC Thailand.

Smart devices are seen as a key growth engine for the local information and communications (ICT) market, whose estimated value will be US$16.8 billion this year.

“We expect to see up to 6.7 million units in sales of both smartphones and tablets this year, exceeding an expected 4 million units in sales of desktop and notebook computers,” said research manager Attaphon Satidkanitkul.

Smartphone sales will reach 6 million units, double last year’s figure.

Tablet sales will be 700,000 to 900,000 units, up from 400,000, fuelled by the government’s One Tablet per Child scheme.

Mr Attaphon said the local PC market will experience flat growth this year due to a shortage of hard-disk drives in the first quarter, but PC demand will recover in the second quarter.

The country’s ICT spending is expected to rise by 10.5% to $16.8 billion.

Wired and wireless data spending will continue to grow thanks to intense competition in tariff promotional packages.

“We expect local telecom data service value to reach $7.2 billion this year, helped by fixed-line ADSL, leased-line and mobile data service,” he said.

Adoption of cloud services will gain momentum by way of smarter devices and higher bandwidth consumption.

Business continuity planning and data centre services are set for growth of 23% to $46.9 million this year.

Davy has predicted that GDP growth in Ireland will slow sharply as a euro area double dip recession looms, by staff reporter.

Stockbrokers Davy has predicted that GDP growth in Ireland will slow sharply as a euro area double dip recession looms. In a report on the Irish economy, it has revised sharply downwards its projections for GDP to 0.4% this year from 1.7%.

It also predicts that GNP will contract by 0.4% this year compared to its previous predictions of growth of 1% as uncertainty surrounding the European debt crisis has led to a collapse in confidence.

In its forecast for this year, Davy says it expects export growth to fall from 4.5% in 2011 to 2.8% in 2012, despite gains in competitiveness. It sees employment falling by 0.4% in 2012, picking up gradually in 2013.

Davy chief economist Conall Mac Coille says that with households and companies postponing spending, a double dip euro area recession appears the most likely outcome. But he adds that the impact of the recession on Irish economic growth may be less severe than in other European countries as Irish households and businesses have already adjusted their spending following the collapse in confidence in 2010.

Davy also says the Government’s fiscal planning needs to factor in the possibility of less favourable economic scenarios than previously thought, and says policy efforts to reduce the cost of recapitalising the Irish banks are ”appropriate”.