German Chancellor Angela Merkel and French President Nicolas Sarkozy meet today for the first time in 2012 as they seek to craft a master plan for rescuing the euro over the next three months.
The two leaders gather in Berlin to flesh out a new rulebook for fiscal discipline negotiated at a Dec. 9 summit that seeks to create a
An apple a day may keep the doctor away. But when you put it in a Happy Meal, it might help keep regulators at bay, too.
McDonald’s on Tuesday said it will add apple slices and reduce the portion of French fries in its children’s meal boxes beginning this fall, effectively taking away consumers’ current choice between either having apples with caramel dip or fries as a Happy Meal side.
The move comes as fast-food chains face intense scrutiny from health officials and others who blame the industry for childhood obesity and other health-related problems.
Critics wasted no time complaining that McDonald’s changes don’t go far enough. Kelle Louaillier, executive director of Corporate Accountability International, said McDonald’s is just trying to get ahead of impending regulations that will restrict the marketing of junk food to children and require restaurants to post nutrition information on menus.
“McDonald’s is taking steps in the right direction,” says Louaillier, whose group has pushed for McDonald’s to retire Ronald McDonald payday lenders. “But we should be careful in heaping praise on corporations for simply reducing the scope of the problem they continue to create.”
Cindy Goody, McDonald’s senior director of nutrition, said the new directives are “absolutely not” related to new regulations. Rather, she said, they’re a response to customers asking for healthier choices.
But apparently, customers aren’t making those choices in practice. Indeed, only about 11 percent of customers were ordering apples with their Happy Meals, even though 88 percent were aware they had the option, the restaurant said.
Jonathan Marek, a senior vice president at Applied Predictive Technologies, said the move should be good for public relations and, more importantly, could help drive sales.
“The key is, will this get parents to go to McDonald’s one more time each month than they would have otherwise?” he asked..
The nation’s top credit card companies are seeing a boost to their bottom lines as consumers are getting better about paying their bills on time.
Five of the top six card issuers on Friday said the rates at which their customers defaulted on their accounts fell in June. Bank of America Corp. reported the biggest drop in defaults, with JPMorgan Chase & Co. and Discover Financial Services also showing significant improvement.
Late payments were also down. Only Capital One Financial Corp. saw an uptick in payments late by 30 days or more, and that increase was tiny.
Among the top six, only Citibank had not yet submitted its monthly regulatory filing detailing card performance for the month. Its parent, Citigroup Inc., reported second-quarter results earlier in the day, however, giving some insight into its card performance.
The latest data followed reports that show credit card users have far better payment habits than a year ago, when the industrywide charge-off rate peaked at 10.9 percent, according to Federal Reserve data. For the first three months of this year, that rate was down to 6.96 percent _ a significant improvement, but still well below the industry average of 3.82 percent before the recession, which indicates banks will benefit further as default and delinquency rates further improve.
And they should continue to do so. Banks have already written off the balances of most customers expected to default, and those individuals have a hard time getting new credit.
The impact of the improved payment habits was reflected in banks’ second-quarter financial results this week.
Citigroup said that it pulled $757 million out of the pool set aside to cover uncollectable credit card bills, adding to its $3.3 billion profit for the quarter. That followed a report from JPMorgan Chase on Thursday, which posted a $5.4 billion profit for the period, boosted by a $1 billion reduction in loss reserves cash advance no faxing.
And much of Capital One’s 50 percent profit leap reported Tuesday was due to the $579 million it released from reserves. Analyst Henry Coffey of Sterne Agee estimated 81 cents of the $1.97 per share profit, or about 41 percent, came from that reserve release.
Last month, Discover Financial Services said it released $401 million from its reserves, helping to more than triple the company’s second-quarter profit.
Also goosing bank bottom lines: Card holders are using their credit cards more. That trend is now clear, after 51 percent of the U.S. card market has reported its second-quarter results, said Morgan Stanley analyst Glenn Fodor.
Citigroup said purchase volume rose 1.5 percent.
JPMorgan Chase’s customers spent 10 percent more using their cards. Discover said sales volume on its namesake cards rose 9 percent.
Bank of America and American Express Co. are slated to report next week, and both are expected to show similar gains in spending.
The Federal Reserve said total balances on revolving credit, which is mostly cards, rose slightly in May to $793.13 billion. That’s still nearly 19 percent below the peak balances of $973.64 billion in August 2008, but reflected an uptick in spending after months of belt-tightening by consumers.
What’s less clear is if the higher spending will continue.
Borrowing is typically a sign of confidence in the economy, and the weak jobs market and higher unemployment last month may discourage further spending.
And even when the recovery gains steam, few economists say they expect consumers to pile on debt again after spending the last two years paying it down.
A study commissioned by Samsung into cancers among six of its semiconductor workers found they were unrelated to exposure to chemicals on the job but the electronics giant is not yet releasing the full results.
U.S.-based Environ International Corp. on Thursday announced the broad findings of a study it conducted over the past year of several Samsung chip manufacturing facilities.
Samsung commissioned the investigation last July to try and allay public anxieties. The company says that 26 current or former workers in production, research and development or office work at semiconductor facilities have contracted leukemia or lymphoma since 1998, while 13 have died.
The South Korean company said it had no plans to immediately publish the study as doing so could compromise the trade secrets of Samsung and its suppliers.
The six cases covered by the study have also been the subject of an ongoing court case in South Korea. Late last month, the Seoul Administrative Court ruled that two of them could be related to exposure to toxic chemicals on the job. Four of the people have died.
Samsung Electronics Co. is the world’s largest manufacturer of memory chips used in personal computers, mobile phones, digital cameras and other products.
Environ said in a statement that that Samsung’s current manufacturing operations fall “well within accepted standards” for exposure to chemicals and other substances.
Environ officials, including CEO Steve Washburn, appeared at a press conference held at Samsung’s Giheung semiconductor plant in the city of Yongin, south of Seoul.
“The study further concluded that the scientific evidence does not support a link between workplace exposure and the diagnosed cancers in six cases that underwent specific review,” the company said.
It said that in four of the six cancer cases it studied “there was no evidence” of exposure to an agent that would have caused the illnesses, while in the other two “exposures to cancer-causing agents were substantially below levels of exposure associated with an increased risk of cancer.” Those agents included formaldehyde and ionizing radiation.
Samsung, which has long said its facilities are safe, welcomed the results. Still, Kwon Oh-hyun, the Samsung executive in charge of semiconductors, said the company would not immediately release the Environ study.
“We will consider disclosing the report,” he said, after discussing the issue internally and with suppliers free credit score.
That stance disappointed activists supporting plaintiffs in the court case.
Kong Jeong-ok, an occupational health physician and a member of a support group, called for Samsung to act fast.
“First, disclose the full report,” Kong said after the presentation, which she attended. She also urged Samsung to consult with civil groups, experts and the government before doing so to ensure “transparency and reliability.”
Paul Harper, the Environ official who oversaw the study, said that releasing the report was up to Samsung. He also declined to disclose how much Samsung paid his company to carry out the probe, citing client confidentiality.
He also said that Environ focused on the six specific cancer cases at Samsung’s request.
Kwon denied that Samsung commissioned the study so it could be used as evidence in the ongoing court case.
The Seoul Administrative Court last month ordered the government’s Korea Workers’ Compensation & Welfare Service to compensate the families of two dead women. It ruled that while the exact cause of their deaths has not been determined, it could be presumed that they were exposed to toxic chemicals and radiation on the job.
It upheld the service’s findings, however, that the cancer cases of three other workers, two of whom are alive, were unrelated to their work at Samsung, though their attorneys are appealing the ruling.
Five of the six original cases are currently being contested in court as the family of another worker who died last year dropped out.
Samsung is not a defendant in the case, but has cooperated with the welfare service. Yonhap news agency reported that the agency has filed an appeal in the two rulings it lost.
Environ said it carried out the study with Samsung’s full cooperation. It also said the study’s design and implementation were reviewed by an independent advisory panel which included academic experts from institutions such as Harvard, Johns Hopkins and Yale, but that they were not asked to endorse the conclusions.
Separately, Samsung said Thursday that it plans to expand investments in a research institute it runs devoted to semiconductor health and safety and would also upgrade health programs for employees.
A rush by European officials to maintain a 65-year lock on the International Monetary Fund’s top job leaves little hope for a candidate from an emerging economy, India’s representative to the institution said.
“I’m not totally pessimistic but I’m not at all optimistic,” Arvind Virmani, who represents India and three other countries on the IMF board, said in an interview yesterday in Washington. “There is no indication which suggests that the result will be any different this time.”
Officials including U.K. Chancellor of the Exchequer George Osborne and Italian Prime Minister Silvio Berlusconi have said French Finance Minister Christine Lagarde should replace countryman Dominique Strauss-Kahn, who resigned last week following his arrest on sexual assault charges in New York, as the IMF’s chief.
Virmani said the European stance contradicts calls by the Group of 20, which includes the advanced economies plus major emerging ones, for a selection process based on merit rather than geography.
Virmani and IMF representatives for Russia, China, South Africa and Brazil yesterday released a statement urging “abandoning the obsolete unwritten convention” by which the IMF leader is always a European and the head of the World Bank an American. Countries from the European Union hold about 31 percent of the votes at the agency and the U.S. 17 percent.
“If the Fund is to have credibility and legitimacy, its managing director should be selected after broad consultation with the membership,” the directors from the so-called BRICS nations wrote.
Virmani said he is consulting with his counterparts from Brazil, Russia and China about putting a candidate forward.
Advising Friends
“At this point in time if I was advising my own friends, I would have to frankly tell them that ‘the probability of your winning is minuscule and you’re really competing for second place,’” he said. At the same time “there is still perhaps merit in saying that ‘we tried’ even though we knew that it would fail.”
Mexico is nominating its central bank governor, Agustin Carstens, who in an interview yesterday said it was too early to say which countries will back him.
German Chancellor Angela Merkel told reporters last week that Europe’s sovereign-debt crisis “speaks for a European candidate.”
Virmani objected to that logic.
“There was no discussion about who’s the best, there were statements, saying that ‘we have to have a European because there’s a European crisis,’” said Virmani, who also represents Bangladesh, Bhutan and Sri Lanka.
The International Monetary Fund said it aims to complete the selection of a successor to Dominique Strauss-Kahn by June 30.
Countries will be able to nominate candidates for the managing director’s position between May 23 and June 10, the Washington-based IMF said in a statement today. The board will meet with all candidates if there are fewer than four and with a short list if there are more.
The procedure “allows the selection of the next managing director to take place in an open, merit-based, and transparent manner,” said Shakour Shaalan, the senior member of the 24- person board.
The IMF said the board’s objective is to select the managing director by consensus.
French Finance Minister Christine Lagarde emerged as the leading contender to replace Strauss-Kahn, who was indicted yesterday on charges including attempted rape, as European officials moved to maintain control over the institution.
Officials in emerging markets including Thailand, Russia and South Africa said the next IMF managing director should come from a developing nation even as they failed to unite behind one candidate the way Europe coalesced around Lagarde.
A loss of momentum on Wall Street, dropping commodity prices and worries over Europe’s debt problems caused Asian stock markets to sag Monday.
Oil prices fell below $99 a barrel as crude became more expensive for investors with other currencies amid gains in the U.S. dollar.
Doubts about the strength of the U.S. economic recovery have weighed on Wall Street and markets elsewhere recently. After sailing through their best first quarter since 1998, U.S. stocks are starting to lose some momentum.
The Standard and Poor’s 500 stock index, a broad market benchmark, is up just 1 percent this quarter after jumping 5.4 percent in the first three months of the year. That weaker performance is in large part because of conflicting data about the health of the U.S. economy.
Sluggishness on Wall Street was a sign that “investors continued to worry about slowing global growth and European debt concerns,” said Ben Potter of IG Markets in Melbourne.
Meanwhile, the arrest Saturday in New York of International Monetary Fund head Dominique Strauss-Kahn on attempted rape charges was unlikely to directly affect Asian markets.
But the incident might prove a distraction in Europe, where the the IMF and Strauss-Kahn have been heavily involved in trying to resolve debt crises in countries such as Portugal and Greece, said Jackson Wong, vice president at Tanrich Securities in Hong Kong.
Japan’s Nikkei 225 index dropped 0.9 percent to 9,560.46 with banking shares incurring losses following comments last week by Chief Cabinet Secretary Yukio Edano suggesting that Tokyo Electric Power Co. will need help repaying its debts. Mitsubishi UFJ Financial Group Inc. lost 1 percent. Mizuho Financial Group and Sumitomo Mitsui Financial Group Inc. both lost 1.5 percent.
Edano said Friday that TEPCO may need adjustments to its loans to help it cope with financial losses incurred following twin natural disasters on March 11 _ an earthquake and subsequent tsunami that smashed into one of the company’s nuclear plants in northeastern Japan.
The utility has been struggling for two months to bring a radiation leak from the crippled Fukushima Dai-ichi plant under control. TEPCO has sought a 2 trillion yen ($24.8 billion) loan to tide it through the initial emergency period. It also expects to pay 50 billion yen ($620 million) in initial compensation to nearly 80,000 residents evacuated from around the plant. Overall damages are expected to be much higher.
South Korea’s Kospi lost 0.5 percent to 2,110.99, and Hong Kong’s Hang Seng was down 1.2 percent to 23,000.44. Benchmarks in Australia, Singapore and Taiwan were also lower, while those in New Zealand and the Philippines rose.
Falling commodities prices were keeping stock investors at bay, said Wong. Oil, for example, was nearly $114 a barrel at the end of April but is now below $100 per barrel. A slump on Wall Street on Friday also weighed on investor nerves.
On Friday, the Dow Jones industrial average lost 100.17 points to close at 12,595.75. The S&P 500 fell 0.8 percent to 1,337.77, and the Nasdaq lost 1.2 percent to 2,828.47.
Benchmark crude for June delivery was down 98 cents to $98.67 a barrel in electronic trading on the New York Mercantile Exchange. The contract settled at $99.65 per barrel Friday, up 68 cents.
In currencies, the euro fell to $1.4089 from $1.4110 in late afternoon trading Friday in New York. The dollar strengthened to 80.95 yen from 80.84 yen.
Turkey’s prime minister said Tuesday that Moammar Gadhafi must “immediately step down,” a major escalation of Turkish pressure on the Libyan leader with whom Turkey has long-standing ties.
Gadhafi has ignored calls for change in Libya and instead preferred “blood, tears and pressure against his own people,” Recep Tayyip Erdogan told a news conference in Istanbul. “Gadhafi must take a historic step and withdraw, for the future of Libya, its peace and prosperity.”
Previously, Turkish leaders had gently urged Gadhafi to meet demands for change from the rebellious opposition, then suggested that he step down. But Erdogan’s comments on Tuesday were his strongest public message to Gadhafi yet.
Last month, Erdogan proposed a roadmap for peace in Libya, urging forces loyal to Gadhafi to withdraw from besieged cities and calling for the establishment of humanitarian aid corridors and comprehensive democratic change.
On Monday, Turkey temporarily closed its embassy in the Libyan capital due to deteriorating security and its staff were evacuated to Tunisia. On Sunday, vandals burned the British and Italian embassies and a U.N. office in Tripoli. The U.N. has withdrawn its international staff. The Turkish consulate in rebel-controlled Benghazi, Libya, remains open.
Turkey initially balked at the idea of military action in Libya, but citing its responsibilities as a NATO member it took part in the enforcement of an arms embargo on Libya while volunteering to lead humanitarian aid efforts.
Turkey has vast trade interests in Libya, where Turkish companies have been involved in lucrative construction projects worth billions of dollars, building hospitals, shopping malls and five-star hotels before the chaos.
Some 25,000 Japanese troops are fanning out on the wreckage-strewn northeastern coast Monday in a massive search for thousands of bodies still missing from last month’s earthquake and tsunami.
Backed by dozens of boats and aircraft, the soldiers are scouring the region for remains swept to sea or buried under masses of rubble.
The operation is the third intensive military search for bodies since the disaster that killed up to 26,000 people low fee cash advance. Some 12,000 remain missing and are believed dead. Monday’s search is an all-out effort to recover any remains for their families.
The soldiers are combing through the rubble and navy boats and divers are searching the waters up to 12 miles (20 kilometers) off the coast.
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