Bernard Arnault loves to catch friends and enemies off guard, though much of the time his surprises are far from welcome, writes Selwyn Parker
That’s how French business magnate, art collector and, most notably, Europe’s richest man conducts himself on a daily basis as the method by which he’s built up LVMH, arguably the world’s greatest purveyor of luxury goods. Arnault is once again...
Slow progress following the 2010 earthquake has led dissatisfied aid providers to reconsider support
When the last tremor of the Haiti earthquake faded away in January 2010, it left some 300,000 dead and about the same number of wrecked homes in its wake, not to mention the destruction of schools, hospitals, government buildings, roads, lighting and just...
The current economic climate for many companies is a bleak and binding reality. However, while many struggle to find the best employees and relations, there …
The current economic climate for many companies is a bleak and binding reality. However, while many struggle to find the best employees and relations, there are four key points where organisations can optimise the resources of a professional coachorder...
Mario Draghi’s latest attempt to save the euro has been welcomed in some quarters and dismissed in others, writes Selwyn Parker. But will the ‘Outright Monetary Transaction’ system actually work, or end up making things worse?
It’s fair to say that Mario Draghi, president of the European Central Bank, and Jens Weidmann, his counterpart at Germany’s Bundesbank, don’t see eye-to-eye. ‘Super Mario’, as he’s been dubbed since taking the position late last year, belie...
Awarding the Nobel Peace Prize to the European Union is a cynical attempt to divert attention from the debt crisis
The birth of the European Union came about from a desire to end years of war and create greater cooperation between neighbouring countries tired and scarred by centuries of conflict. After 54 years of peace, calls for a celebration of this union in the fo...
The Federal Reserve’s recent decision to launch a third round of “quantitative easing” has revived accusations by Brazil’s finance minister, Guido Mantega, that the US has unleashed a “currency war”, writes José Antonio Ocampo
In emerging market countries that are already struggling with the impact of rapid currency appreciation on their competitiveness, expansionary measures announced in recent weeks by the European Central Bank and the Bank of Japan have heightened the sense ...
Evidence shows that while free trade boosts an economy, short-term capital flows have little effect on economic growth, says Sean Harkin
Whether cross-border movement of capital brings about real economic benefits is a controversial topic. Speaking of a policy of allowing such flows to occur freely, Nobel laureate economist Joseph Stiglitz commented “the influx of hot money into and out ...
How can small countries grow economically when they can’t shape the international framework?
The nations of the G20 account for 80 percent of the world’s GDP and 80 percent of its trade – but only two-thirds of its population. This means that roughly 2.3 billion people live in countries with economies too small for them to carry much weight a...
They say no-one except Vince Cable saw the global financial crisis coming. They couldn’t be more wrong
As the radiochemist Frederick Soddy (1877–1956) pointed out, there is a fundamental disconnect in the economy between money and real wealth. Real wealth is made up of stocks of actual physical objects. Money, on the other hand, is not real wealth, but d...
Taking account of environmental change and other problems shows that the world will be multi-polar, not China-centric, writes Sean Harkin
The complex organised societies historians call ‘civilisation’ first appeared in Mesopotamia – modern day Iraq – around 3300 BC. They subsequently appeared, quite independently, in northern China, the Indus Valley, Mesoamerica and the Peruvian hig...
An uncertain energy future in the US, while Turkey puts pressure on Greece
It would seem that some energy analysts at Citi have reverted to childhood and revisited their copies of ‘Alice in Wonderland’. The Lewis Carroll classic certainly springs to mind when they suggest in a new report that North America could end up be...
The Greek odyssey has turned into a daunting and seemingly endless voyage
A Greek tragedy is typically composed of three acts. The first sets the scene. It is only with the second that the plot reaches its climax. For current-day Greece, the imposition of “voluntary” losses on the country’s private creditors represents ju...
William Henry on Kermit and Miss Piggy
As the Goldman Sachs PR machine shifts into high gear, following Greg Smith’s resignation letter published in the New York Times last week, it’s still debatable as to who the muppets really are. The ex-London-based executive’s missive that was re...
William Henry on how it appears hypocrisy is in the air
Surely not? That bastion of free trade (when it suits it, of course) the US, has been found guilty yet again by the WTO of pumping billions of dollars into Boeing via the back door? Whatever next? In a 598 page report the WTO reiterated the bulk of a p...
Debt defaults are significantly more likely when consequences hit far from home
Today, the world is threatened with a repeat of the 2008 financial meltdown – but on an even more cataclysmic scale. This time it is centred in Europe, rather than the United States. And this time, the financial mechanisms involved are not highly comple...
European countries are scrambling to raise every last penny of funds through taxes. But some countries may have gone too far...
Though all business taxes in Belgium can be paid online with little effort and preparation, the rates are still sky-high at 57.7 percent, including a staggering 50.8 percent total rate on profits only in social security contributions.
In Belarus, a company spends up to 338 hours annually preparing for and paying ten different taxes and duties. The total tax rate has incredibly been lowered to 60.7 percent, from 117.5 percent in 2008.
A company in France pays seven different taxes and duties, the sum of which can amount to 65.7 percent of profits; though President François Hollande has announced a wave of business tax rate cuts coming up.
A business in Estonia pays 67.3 percent of profits in tax, 37.2 percent exclusively in social security contributions. The country has gone against the grain in Europe by raising businesses taxes from 48.6 percent in 2008 to the current rates.
While corporate income tax (IRES) in Italy is limited to 38 percent of taxable profit, a company operating in Italy can expect to pay 14 other taxes and duties, including social security contributions, bringing their total payable tax to 68.7 percent of profits, according to the World Bank.
Norway taxes motor fuels twice, with a road use tax and a CO2 emissions tax. Combined with strikes in the energy sector that have curbed output, the price of gas at a local pump has soared to $10.12 per gallon.
Though Turkey sits on the Suez Canal and neighbours many oil rich countries, the price of a gallon of average gas clocks in at $9.41 in Turkish pumps, because of a 60 percent share of taxes.
Like Turkey, Israel is surrounded by oil-rich neighbours, but drills very little itself. Gas prices are controlled by the government, so about half of the $9.28 per gallon goes to taxes.
There are few gas stations in Hong Kong, but the ones available charge up to 76 percent more per gallon than mainland China, where the government caps the cost of fuel. A gallon at the pumps will cost around $8.61 on the island.
Expensive labour costs make the Dutch petrol prices the dearest in Europe, at $8.26 per gallon; though the 57 percent tax add-ons don’t help.
8 February 2007
HSBC warns of subprime mortgage losses
2 April 2007
New Century goes bus
14 September 2007
Wholesale markets have dried up
17 March 2008
Rescue of Bear Stearns
7 September 2008
Rescue of Fannie Mae
15 September 2008
Lehman Brothers file for bankruptcy
3 October 2008
US congress approves $700bn bailout
14 February 2009
$787bn stimulus approved by congress
The effects of the current financial crisis are global and irrefutable. With the collapse of Lehman Brothers, the domino effect of irresponsible public monetary policies, huge levels of unsustainable debt, and a deregulated financial sector, has escalated to the point where no corner of the globe has been left untouched.
Syria and Egypt launch an attack on Israel on Yom Kippur and set off a twenty day war;
US President Carter creates Department of Energy, which develops the US strategic petroleum reserve
The Organisation of Petroleum Exporting Countries (OPEC) used their oil reserves as a weapon with the Arab Oil Embargo against those who supported Israel. By January 1974, world oil prices were four times higher than they were at the start of the crisis, especially in the US, and the shock led to a huge drop in the stock market with NYSE losing $97bn in just six weeks. The embargo lasted five months, and the effects are still seen today.
1923 – 1924
The trouble began when Germany missed a repatriation payment, worth about one third of the German deficit in this period. Inflation was already high but by 1923 it was raging. Prices doubled within hours, and by late 1923, it cost 200bn marks to buy a single loaf of bread. People burned money as it was cheaper than buying firewood. Germany eventually regained control of its economy when it introduced the Rentenmark into circulation in 1923, and then the Reichmark in 1924.
The Great Crash
Recovery and Recession
After the decadence of the Roaring Twenties, the 1930s saw the biggest economic slump of all time. The stock market crashed on 29 October 1929, and optimism and decadent living tumbled along with the figures. The GDP fell from $103.6bn in 1929, to $66bn in 1934 and the subsequent years of recovery were the most dramatic in US history.
Otto Heinze and his brother Augustus Heinze bought shares of United Copper.
The stock market was already cautious over the tight money supply, but the US was thrown into a depression after the stock market fell nearly 50 percent from its peak in 1906. The Heinze brothers thought they could influence market shares but ended up bankrupting lenders that provided the financing to buy the stock. A chain reaction left nine institutions bankrupt. By February 1908, the panic was over and the government created the Federal Reserve system, to prevent banks from exercising too much control over the economy.