Billionaire Sees Stagflation Ahead

Billionaire Wilbur Ross of W.L.Ross&Company notes that the real problem Greece has is the extent of its debt,which has reached 13.7% of Gross Domestic Product.On the tax side,people in Greece don't pay tax.The government only gets 3-4% of what it is owed.There's not an easy way to pull out of the European Union.The frugal Germans are bearing the price for the sins of the people of the South.A whole lot of things could be reformed,but how do you get it through the legislature?
Estonia has cleaned itself up pretty well.At best,these countries will have stagflation without big government spending;the economy will weaken.They have to start cutting,even though it will be painful and slow.You have over-leveraged states in Europe trying to prop up the over-leveraged consumer.The thing that's dangerous for us is more the question of the Euro versus the dollar.We already had an imbalance of trade with Europe.
Mr.Ross doesn't see the U.S. going back to a recession,though the debt problem will probably cut basis points off its GDP and that of China and others. U.S. Treasury Secretary Timothy Geithner will be meeting European leaders on the way home from China to discuss the debt issue.

Shanghai Develops Its Exchange

The Shanghai stock exchange is a growing proposition.It recently introduced stock index futures to its offerings,although it has only one-fifth of the volume of the New York exchanges and still needs a completely convertible currency.Shanghai is seeking to become a global financial center by 2020,and many new skyscrapers and apartment blocks have been built there in the past few years to support that ambition.
Dr.Fang Xinghai,Director General,Office of Financial Services,Shanghai Metropolitan Government,admitted that the Shanghai stock market is still largely closed to outsiders,but it is being opened up gradually.It will be a market of global size.Although it is not open yet,you can still call it a global financial center.The first logical step would be to open up the outflow capital account,so that their savings may be used more efficiently throughout the world.
The British bank HSBC has expressed an interest in selling shares in Shanghai.Initially,it was just financial companies who wanted to list there.Later,manufacturing firms,telecoms and consumer companies all expressed an interest.Even now,the Shanghai exchange is among the leaders in commodities futures,Mr.Fang asserted.

IMF Helps Stabilize Greece

John Lipsky,First Deputy Managing Director of the International Monetary Fund,says the 110 billion Euro aid package to Greece will restore financial stability and set the stage for renewed growth in the Greek economy.The European Union authorities have agreed to create a stabilization mechanism in conjunction with an IMF program where help is asked for and needed.
There's no question that the Greek adjustment program is a difficult one,Mr.Lipsky admitted,but it was designed by the Greek government and approved by Parliament,and the majority of Greeks support it.A combination of high debt,high deficits and a lack of competitiveness had reached a big proportion in Greece.
The IMF constitutes a revolving fund from its 186 member countries.The U.S. pays about 17% of the fund.It is replenished whenever it is used.There are no program negotiations with Spain or Portugal at this time,John Lipsky stated.
The IMF is an autonomous UN agency which promotes international monetary cooperation,currency stabilization and international trade.

NYSE/Euronext Sells Indian Stake

NYSE/Euronext has sold its 5% stake in the National Stock Exchange of India to Temasek,a Singaporean sovereign wealth fund,for 150 to 180 million dollars.The stake is part of a growing trend of foreign investment in robustly-growing India.India's central bank said the economy will grow at least 8% in the current fiscal year,which began April 1.
The National Stock Exchange has 1470 listed companies,with a combined market capitalization of about 1.3 trillion dollars as of March 1.NYSE/Euronext had purchased the stake in NSE in January 2007.At the same time,Goldman Sachs had purchased its own 5% of the Indian exchange.
Wisdom Tree Investments offers an India exchange traded fund,EPI,which includes 126 profitable companies,according to the firm.It is a fundamentally weighted fund,meaning allocation to the holdings is determined by their success.