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"There is no need to panic on the banks"

Bank stocks were the main victims of a new Black Monday stock market. But according to Dominique Dequidt, fund manager at KBL Richelieu, concerns about them are exaggerated.

Fears about the banking stocks have been very heavy on Monday on all European markets. In Paris, Societe Generale tumbled 8.64% to 20.25 euros, signing the largest decrease in the CAC 40. BNP Paribas lost 6.34% to 31.30 euros, Crédit Agricole (-5.51% to 5.84 euros) and Natixis (-5.68% to 2.55 euros). In the background, the difficulties of Greece, the threat of a lawsuit in the United States against 16 banks – including Societe Generale – for their responsibility in the subprime crisis, and the desire to recapitalize European banks by the IMF .Dominique Dequidt but remains optimistic.

What are the fears about banks today?

First, the gradual disappearance of the sovereign rating in Greece opened the door to further degradation, Ireland and Portugal in the lead. This is one of the great fears in the market today. Investors fear losses that may result in banking stocks that are exposed. Indeed some of the U.S. money market funds that had liquidity of investments in Europe have rather taken off the market last week. The second point is the deterioration of the American note in the summer. She amplified these fears and stoked fears of slowing global growth.

These fears are justified?

It is not really justified, at least in the short term. It is mainly a crisis of confidence that undermines the market.But look closer, banks are healthy. When we look at the credits granted by banking institutions in Europe, there is no need to panic. They rose 3% in the first quarter and 4% in the second. And despite a rather European growth at half the second quarter.

Banks are robust enough to withstand the risk of European sovereign debt and the threat of global recession?

Yes, in the event that we are not witnessing a collapse of the banking system. But there is no need to be as alarmist as the IMF on the recapitalization of banks. They have made big profits in the first half. BNP Paribas, despite its 450 million refinancing of provisions in the Greek debt, posted a profit of more than 2 billion euros in the first quarter.

But banks are very fearful to lend to each other.The level of cash placed with the European Central Bank has now reached 151 billion euros …

We are in a tense situation since the beginning of August the fears are heavy on the strength of some banks. Hence the difficulty they face to lend to each other. This level is certainly high compared to six months ago. But we are still far from the amounts of their outstanding 2008 in which the ECB had reached astronomical levels.

The trial of the U.S. federal government against 16 global banks – including the general society – he may weigh on an already difficult climate?

I do not think, at least for France and Europe. They are not involved in the trial. And regarding the risks of fines, it is called, in the extreme case, a fine running into hundreds of millions of euros.This is a difficult but there is no major concern to have.

To what extent can we expect an impact on the real economy if the situation worsens?

Banks have made a big effort on their balance sheets, it is not in the same situation of overheating than during the crisis. They are now well prepared for the state of distrust of the markets. But the phenomenon of double-dip recession may occur. 3 months ago investors imagined a soft landing in growth after the good figures of 2010. Today expectations are more cautious, and go up to imagine a recession in 2012.

Washington continues 17 banks due to subprime

The U.S. federal agency oversight of mortgage filed a complaint Friday against 17 major international financial institutions for a total loss of $ 41 billion in bonds linked to subprime.

The Federal Housing Finance (Federal Housing Finance Agency), which oversees the giants Fannie Mae and Freddie Mac, criticized those institutions which include Bank of America, JP Morgan Chase, Goldman Sachs, Deutsche Bank or Societe Generale, have sold bonds backed by home loans in these transactions by presenting inaccurate one day.

The director of the FHFA, Edward DeMarco, seeks to minimize the losses of Fannie Mae and Freddie Mac, which had to be nationalized under cover of the 2008 crisis.Fannie and Freddie guarantee bonds backed by home loans.

The banks ended sharply lower on Wall Street. Bank of America lost 8.34% to 7.25 dollars, JP Morgan Chase 4.6% to 34.63 dollars and Goldman Sachs 4.55% to 107.06 dollars.The KBW index of banking sector has lost 4.5%.

The FHFA and other investors say the banks in securitizing mortgages granted to individuals for the purpose of selling them to investors, have not made all the necessary checks and concealed, or not presented correctly, the quality the underlying loans and the borrowers' ability to pay.

Gradually, as borrowers can not meet their deadlines have become more numerous, the value of securities backed by loans dropped, resulting in losses for investors.

The FHFA JP Morgan continues to securities losses totaling more than $ 33 billion.The complaint against Société Générale is more modest: about $ 1.3 billion.

In his complaint against Merrill Lynch, the FHFA says: "The defendant falsely stated that the underlying mortgage loans meet certain guarantees or guidelines, including presentations that have significantly exaggerated the ability of borrowers to repay their mortgage (…)".

FACTORS OF CONCERN

The federal agency in housing finance has already filed a complaint against UBS in July, seeking to recover at least $ 900 million incurred over $ 4.5 billion of debt.

Some fear that the new case Friday formalized rules that interfere with the negotiating are the largest banks with the attorneys general of 50 states on the issue of abuse that took place in mortgage lending.

Banks could indeed be reluctant to enter into this global settlement if they know of other state bodies are also likely to claim their money.

The major U.S. banks are already facing the possibility of having to pay tens of billions of dollars in settlement of disputes relating to their activity in the mortgage and their practices in foreclosure.

Such expenses would further reduce their capital levels and may reduce their ability to lend even as the housing market is at half mast and that the U.S. economy as a whole shows signs of slowing down.

Bank stocks suffer as signs that the Fed could start to sell short-term debt recorded in its books to purchase securities of longer maturity in order to lower long-term returns, as part of stimulus.

This action, known in English as "Operation Twist", could affect the margins of the banks that fund themselves short term and lend long term.

Sign of the concern surrounding the banking sector, the Federal Reserve has asked Bank of America to present the measures it would take if business conditions were deteriorating, reports the Wall Street Journal Friday, citing people familiar with the file.

Losses resulting from the accelerated deterioration of subprime and other mortgages have forced the government to nationalize Fannie Mae and Freddie Mac September 7, 2008. Since then, American taxpayers have spent over $ 140 billion to stay afloat these two pillars of real estate financing.

Havas growth slows but the margin improves

Havas reported Tuesday a slowdown of its turnover in the second quarter but its operating margin improved significantly, however, in favor of a strict cost control.

The sixth largest global advertising did not provide forecasts for the full year 2011 in a statement.

In the first half, the group recorded organic growth of 5.6% of its turnover to 765 million euros, while analysts' estimates ranged from 6.0% to 6.5% organic growth in a range between 767 and 776 million euros turnover.

For comparison, the worldwide WPP grew 6.1% while the French Publicis rose 7.1%.

The second quarter alone, Havas rose by 4.5% after 6.8% in the first three months of the year against 7.6% and 7.2% for Publicis to the American Omnicom.

The group suffered from particularly persistent problems in Southern Europe, including Greece, Spain and Portugal.

Throughout the first half, the group, including Vincent Bollore is the chairman and largest shareholder, has recorded 940 million euros in net gains budgets, against 1.2 billion during the same period last year.

How to reduce unemployment without growth

For the French economy creates jobs, it must grow by at least 2%. Unattainable at present. However, there are solutions to reduce unemployment. Here's why. Agency employment center in Nice

After four months of slight decline earlier this year, unemployment in France has increased considerably and the. In July, the number of unemployed rose by 36,100. It is the largest monthly increase since October 2009. It is particularly disturbing that this is the third consecutive month of increases. "Predictably, with growth at 0%," Xavier Bertrand has responded in an interview with Le Figaro on Friday. "But that does not detract from my belief that unemployment will go back down," he added.

It appears optimistic, our Minister of Labour. As rising unemployment reflects a depressed economic conditions.As recalled by Xavier Bertrand growth lights made the place the second quarter. And the second half does not look better, the two engines of growth – business investment and household consumption – being seized. The government also revised down its growth forecasts for 2011 and 2012 – to 1.75% against 2.25% and 2 before. Some analysts are even more pessimistic: they expect a growth of only 1.5% this year and 1% next year.

Or to create jobs, the French economy should grow by at least 1.5%. And to reduce unemployment is to say, create enough jobs to absorb the growth of the labor force, growth must be at least 1.8%. And that's in normal times. The problem is that the French economy out of two years of zero productivity and a year of recession – in 2009.The catch must be more important. To reduce unemployment, it would now grow by at least 2.3% per year. We are far. "In order to reduce unemployment without growth, there are only two treatments, said Eric Heyer, deputy director of analysis and forecasting department of the French Office of Economic conjectures (OFCE).

Administrative treatment of unemployment

France has the chance – or luck – to have a dynamic workforce, due to a high birth rate (more than two children per woman). According to INSEE, the labor force, which stood at 28.35 million people in 2010, is expected to grow by an average of 110,000 people a year by 2025. More than 9000 people a month who register for employment center. To reduce the workforce, just out lists of people registered as unemployed.How? "In the radiant, by offering internships, apprenticeships and training, or putting them into early retirement and by providing job search," Eric Heyer lists.

Radiation administrative job seekers jumped unusual in July (25.1% over the month and 7% year on year). The SNU FSU, the majority union at employment center, sees the consequence of the recent computerization of letters sent to the unemployed. Some economists also point out that past governments in pre-election period, have used an administrative treatment of unemployment.

The current government is not immune to this temptation. Last February, Nicolas Sarkozy announced the release of 500 million euros to encourage the use of long-term unemployed and young people. On the menu: skills training and learning.Or people in learning or training out of lists of employment center. However, the government has no intention of using the subterfuge of early retirement, on the contrary, the exemption from job search (DRE), which allows the unemployed aged 60 and over not to look employment and reach retirement, will be removed in 2012. As for the pension reform passed in 2010, it extends the legal age of retirement and the age of full retirement. Which penalizes the elderly first. Since January 2008, unemployment of over 50 jumped 57%.

Social treatment of unemployment

"The alternative to reduce unemployment when growth is not the appointment is that the public sector taking the baton in the market sector," said Eric Heyer. This includes all forms of assisted contracts, that is to say, employment contracts mainly funded by the state.This is called the social treatment of unemployment. It is a great classic from the left. Martine Aubry, the Socialist candidate in the primary, has already announced that its first action as president, if elected in 2012, will be to remove the tax exemption of overtime to fund the creation of 300,000 "jobs of the future "- the little brothers of youth employment in 1997.

But this solution is also widely used on the right. The government is not talking about jobs for young people but CAE (support contracts in employment in the public sector) and ICE (employment initiative contracts in the private sector). 440 000 of these subsidized contracts to be financed by the state this year.

"While it is not sustainable contracts is not a panacea, recognizes Eric Heyer.But these subsidized contracts have two advantages: one is to target audiences that have the most difficulty in finding employment [the young and long-term unemployed for example], the second is to provide purchasing power to more, which is likely to boost consumption so the country's economic machine. "

Wall Street opens up conservatively expected direction

Wall Street opened higher in cautious Tuesday, after a little less poor indicators of activity expected in China and the euro area.

Investors, who will be attentive to the numbers of new home sales in the U.S. in July (14:00 GMT, consensus: 310,000), should nevertheless be cautious when approaching the highly anticipated speech of the President of the Federal Reserve Ben Bernanke on Friday conference in Jackson Hole (Wyoming).

Ten minutes after the opening, the Dow Jones took 0.22% to 10,879.02 points, the S & P 500 0.07% to 1,124.65 and the Nasdaq Composite 0.36% to 2354.28.

"The rise of today is not sustainable.This is exactly what we saw yesterday and indicators from abroad are not sufficiently great to generate this kind of increase, "said Phil shortly before the opening Streibl, MF Global.

"The market place too many expectations in Jackson Hole, and even if Bernanke may say something that is likely to stabilize markets, the probability (new monetary stimulus) is almost zero," he said.

Meanwhile, investors found little reason to buy.The first estimate of the index of purchasing managers of HSBC for the industrial sector in China in August is slightly higher than the final figure for July, but still indicates a contraction in activity.

In the euro area, the service sector has paused in August after two years of growth, an initial estimate of the PMI sector emerging the lowest since September 2009.

The banking sector will be particularly guarded on Tuesday after UBS announced the elimination of nearly 3,500 items, 45% in the bank, to save about two billion francs (1.76 billion euros) by the end of 2013.

At the opening of Wall Street, UBS shares gained 0.76% in dollars, while Bank of America lost 5.76%, investors fear that the group needing to raise equity capital due to legal troubles in mortgage activity.

Goldman Sachs fell by 1.29%, a government source who reported that the bank had hired Reid Weingarten, a lawyer of reputation, what markets see as the harbinger of a tough legal battle over the role of the bank in the 2008-2009 financial crisis.

European shares fall further, fear of a recession

European shares ended down Friday, concluding a third straight week against a background of restless fears of a relapse into recession in major developed and sovereign debt crisis.

The CAC 40 index dropped 1.92% to 3016.99 points, but varied between a low of 2947.91 points (-4.2%) and a high of 3078.28 points (0.07% ).

For the week the index lost 6.13%, after falling 5.48% Thursday, bringing its slide to 17.82% since the beginning of the month.

"Above all, the anticipation of 'double dip' recession in the double way early 1980s, which haunted investors.This contraction is somehow accepted and caused by the austerity budget set up by European politicians, "said Eric Galiegue, president of Valquant.

Other major European markets, London has sold 1.01% 2.19% Frankfurt and Milan 2.46%. The European indices EuroStoxx 50 and 300 respectively Eurofirst fell 2.15% and 1.66%.Since the beginning of the month, the EuroStoxx 50 loose 19.15%, 13.32% and the London Stock Exchange German 23.45%.

On Wall Street, the S & P 500 fell by 0.15% and the Dow Jones 0.33% at midday in New York.

"The second quarter growth was well below expectations on many aspects: sluggish domestic demand, external demand risk and a clear concern about the financial variables, crystallized by market volatility," recalls Erick Muller Chief Investment Officer of Fidelity bond range.

The situation remains very FRAGILE

The implied volatility of the Eurostoxx 50 has remained virtually unchanged Friday (0.29%) but jumped 71.29% in three weeks.

"The month of August will bring real improvement on any of these points.The overall situation remains very fragile for the second half and the markets have adjusted the valuation of assets as a result, but suddenly long term, "said Erick Muller.

In this context, cyclical stocks and banks have once again suffered, Renault (-4.69%) showing the greatest decline in the CAC 40 lost 4.27% BNP Paribas in Paris.

Elsewhere in Europe, banks Unicredit and Lloyds fell 4.8% and 5.8%, while car manufacturers Porsche and Fiat gave up 4.45% and 4.3%.Their respective sector indices ended lower by 1.81% and 2.86%, the car even accusing the largest decrease sector.

Since the beginning of the month, European banks have unscrewed from 21.85% and 27.74% of the car.

The same causes leading to the same effect, investors fled to the assets with the least risk, such as gold, which recorded a new record of 1,877 dollars an ounce and earns nearly 14% since late July, or Yields on government bonds rated.

The rate of the 10-year Bund and of the French OAT maturing well remain virtually unchanged in late afternoon around by 2.1% and 2.77%, after falling in the morning at 2.031% and 2.713%.

"Despite the deterioration in the rating of the United States by Standard and Poor's, despite concerns in general about the astronomical amounts of public debt, interest rates on government bonds with very broad market fall," Valquant said in a weekly strategy note.

"This is a sign that investors are in full 'flight to quality', and they seek refuge in government debt," says the company.

The Air France passenger traffic up 6.9% in July

Air France-KLM, Europe's largest airline by revenue, reported in July an increase in passenger traffic coupled with higher revenues but a decline in cargo business.

Action Air France lost 5.74% to 6.56 euros by 9:20, amid fears of a relapse of the global economy and extension of the debt crisis in the eurozone.

The Franco-Dutch company rose 6.9% in passenger traffic last month, higher than the 5.4% increase in capacity operated on the month.

The load factor was up for his 1.2 points to 87.3%.

"Unit revenue per available seat kilometer (RASK) excluding currency has improved over the previous year, driven by traffic in business class," said Air France said in a statement.

Networks Americas and Asia, the load factor in both cases exceeded 90%, while traffic has increased by 9.6% and 8.1%.

The European network is itself remained "dynamic" last month (+7.2%) despite the debt crisis.

However, freight transport remains to the death as in previous months.Unrest in Africa and the Middle East, combined with overcapacity in from Asia, have resulted in a decrease of 2.7% in cargo traffic in July.

Capabilities having remained broadly stable, the load factor fell 2.1 points to 64.0%, while unit revenue per tonne kilometer (RATK) excluding currency is down from one year to another .

The International Air Transport Association (Iata) said last week that the tendency to transport passengers remained on an upward trend, but at a rate lower than the 10% rate observed during the rebound following the last economic crisis.

"The slowdown reflects the deterioration in economic growth and rising costs caused by rising fuel prices and the higher taxes in some countries," said IATA.

The association also noted that freight volumes, a barometer of trade, had not shown growth since July or August 2010.

COR-Deutsche Bank earnings below expectations

Deutsche Bank reported Tuesday a quarterly profit before tax lower than expected, following the presentation of its new management team.

Germany's biggest bank posted a profit before tax up 17% in the second quarter to 1.8 billion euros, while analysts polled by Reuters were expecting $ 1.97 billion.

Its net profit came out unchanged at 1.2 billion euros.

The bank expects to achieve its goal of a 2011 profit before tax of EUR 10 billion, but that it could miss its target on its corporate finance, due to the debt crisis in Europe.

Deutsche Bank announced Monday that a duo of Anshu Jain and Jürgen Fitschen be succeeded in May 2012 at the CEO, Josef Ackermann.

Anshu Jain, 48, heads the investment bank Deutsche Bank while Jürgen Fitschen, 62, driver's German operations of the facility.

European shares end up, the ACC is 1.61%

European shares finished the session again on the rise, driven by quarterly results and the hope of encouraging a settlement of debt problems in the U.S. and Europe on the eve of a crucial summit of leaders of the euro area.

The CAC 40 index gained 1.6% or 59.65 points to 3754.60 points.

Other major European markets also finished up: London and Frankfurt gained 1.10% 0.40%. Of the European indices, the Eurofirst 300 took 1.32%.

The banks have benefited from news that the European Financial Stability Fund (EFSF) could be used to redeem bonds on the secondary market. Societe Generale gained 5.14%, to 36 euros.Dexia jumped nearly 9% to 1.8910 euros and Commerzbank of 6.31% to 2.51 euros.

Stoxx index of European banking was up 3.69%, its highest gain since Jan. 12.

An authorized source in the euro area reported that the euro area was discussing the possibility of allowing the fund to rescue the euro zone to extend credit lines to countries and to redeem bonds on secondary markets.

The Belgian regulator urges Electrabel to split into two

Belgian power company Electrabel, a subsidiary of GDF Suez, should be split into two in order to increase competition, said the head of the Regulatory Commission of Electricity and Gas (CREG), Belgium.

Electrabel would split its operations and supply power to promote competition, says the head of the Creg François Possemiers in an interview published Friday by the newspaper L'Echo.

"If we have one side of producers and other suppliers can set prices in a completely free (…) it will be real competition," he says.

The electricity prices in Belgium are among the highest in Europe and François Possemiers noted that his proposal would benefit companies such as green energy company Lampiris, which must buy its electricity.

As for electricity suppliers, the proposal goes further than the rules of the European Union today, that simply separating the producer and the network operator.

The plan was sent to Belgian authorities and the Creg plans to raise the issue with his European colleagues in the coming weeks.