Europe’s Economy: Look Out Below, Again

It’s official: Europe has double-dipped. The 17-country euro zone has fallen into its second recession since 2008, as figures released on Nov. 15 showed gross domestic product declining 0.1 percent during the third quarter. That followed a 0.2 percent contraction during the previous three months, according to the European Union’s statistics office.

There were some unexpected bright spots. Germany and France posted 0.2 percent quarter-on-quarter growth, ahead of expectations. Even some of the region’s most troubled economies suffered relatively modest contractions, including 0.3 percent in Spain and 0.2 percent in Italy.

Overall, though, “Europe’s economic downturn has not only deepened; it’s broadened with a vengeance,” says Nicholas Spiro, managing director of Spiro Sovereign Strategy in London. Usually solid economies in such countries as Austria and the Netherlands were among those posting quarterly declines.

In some countries, even worse times could lie ahead. “Whereas austerity is starting to ease in Italy, Spain is heading for the point of maximum pain,” economist Holger Schmieding of Berenberg Bank in London wrote in a research note. Recent austerity measures in Spain “will likely lead to a more pronounced recession” during the current quarter and in early 2013, Schmieding says.

France’s 0.2 percent expansion, which followed three quarters of flat growth, “is probably the result of a temporary rebound at the European level,” says Michel Martinez, an economist at Société Générale in Paris. France “is heading to a moderate recession or at best remaining flat.”

The picture isn’t likely to improve soon, Spiro says. “We’re looking at a period of extreme weakness. This is all because of the repeated failures on the part of politicians to shore up confidence in the single currency area.”

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France urges Mali to step up talks with rebels

PARIS (AP) — France‘s president called Thursday for stepped-up talks between Mali’s government and any leaders from its breakaway north “who reject terrorism,” even as African nations geared up for a possible military operation against Islamic extremists there.

President Francois Hollande‘s comments suggested a growing openness to dialogue with the extremists, but he remained committed to supporting the military planning effort.

Northern Mali fell to Islamic extremists in April, after coup leaders toppled the government in Bamako, Mali‘s capital. Fearing that northern Mali could become the latest hotbed of terrorism, France has been a driving force in international efforts to bolster Mali’s army to drive the Islamists from power.

Hollande spoke with interim Mali President Dioncounda Traore by phone on Thursday, partly to detail European efforts to help strengthen Mali’s army.

In recent days, representatives from the most moderate of three al-Qaida-linked groups that control northern Mali have been meeting with Burkina Faso‘s president, appointed as a mediator.

“France reiterates its wish that political dialogue will intensify between Malian authorities and representatives of northern populations who reject terrorism,” Hollande’s office said in a statement. “The acceleration of this dialogue must accompany the progress in African military-planning efforts.”

Earlier this week, the African Union approved a plan that calls for 3,300 African troops to be deployed in order to win back Mali’s north. European countries including France and Germany have expressed a willingness to provide military trainers and logistics support, but have stopped short of committing combat troops.

France, like many European countries, fears that the arid, northern Sahel region of Mali could become a breeding ground for terrorism, where al-Qaida and its allies could plot hostage-takings and attacks in Europe or beyond.

France has millions of people whose families hail from former French colonies in north and west Africa. Authorities have long been concerned that French-born militants could travel abroad for terrorism training and return home later to possibly carry out attacks.

French authorities are already investigating two French citizens who were arrested in Mali and neighboring Niger and are suspected of seeking to join up with the al-Qaida-linked extremists, a judicial official told The Associated Press.

Ibrahim Ouattara, a 24-year-old native of the northern Paris suburb of Aubervilliers who has dual French and Malian nationality, was arrested inside Mali this month and remains in custody there, the official said.

Separately, a 27-year-old Frenchman was arrested in August in Niger and has since been handed over to authorities in France, the official said, speaking on condition of anonymity because she was not authorized to discuss terrorism cases publicly.

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‘Journey,’ ‘Assassin’s Creed III’ among Spike Video Game Awards nominees

LOS ANGELES, Calif. – The artsy downloadable game “Journey” leads the pack of nominees for this year’s Spike Video Game Awards.

The PlayStation 3 game received seven nods in such categories as best graphics, independent game, original score and game of the year.

Other game of the year nominees are “Assassin’s Creed III,” ”Dishonoured,” ”Mass Effect 3″ and “The Walking Dead: The Game.”

The nominees in the best shooter category are “Borderlands 2,” ”Call of Duty: Black Ops II,” ”Halo 4″ and “Max Payne 3.”

The 10th annual ceremony on Dec. 7 will be hosted by Samuel L. Jackson and broadcast live on Spike.

The show will feature debut footage from such upcoming games as “The Last of Us” and “Gears of War: Judgment,” as well as musical performances by Linkin Park and Tenacious D.

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Why David Geffen is getting the “American Masters” treatment

LOS ANGELES (TheWrap.com) – David Geffen is not a singer. Nor is he a movie star. Nor is he a writer.

Thus he would seem an odd subject for “American Masters,” a series devoted to artists ranging from Willa Cather to Woody Allen.

Yet series creator Susan Lacy claims that the mogul has had a profound impact on American popular culture that equals any of those figures. She pleads her case in “Inventing David Geffen,” which will be broadcast November 20 on PBS. The documentary had its premiere in Los Angeles on Tuesday night.

“He seems like a bit of an odd choice,” Lacy admitted to TheWrap. “But I have a degree in American Studies and I learned that the people with the most influence are often the ones behind the scenes.”

In Geffen, Lacy saw a figure like Alfred Stieglitz, a photographer whose lasting legacy was a series of modernist shows he held at his New York galleries that influenced visual arts in this country and brought cubism to the masses.

Some arm twisting must have been required to get the press-averse Geffen to emerge from semi-retirement to reflect on his career in movies, music and Broadway. Lacy said that part of the reason she was able to convince him to participate is that he was a fan of the series and had participated in her documentaries on figures such as Joni Mitchell.

“It wasn’t hard,” she said. “I knew from other people that he thinks my Leonard Bernstein documentary is one of the best documentaries anyone ever made. Mike Nichols told me that he makes everybody who stays with him watch it.”

In addition to Geffen, the documentary features interviews with his friends and colleagues — an A-list rolodex that includes Tom Hanks, Steven Spielberg, Elton John, Neil Young, Clive Davis, Barry Diller, and Irving Azoff. His sphere was huge, Lacy claims because his influence was tectonic.

By championing musicians such as Jackson Browne and Laura Nyro, Geffen put his own imprint on the emerging singer-songwriter movement in the 1970s. Later, Geffen managed to adapt to shifting tastes, by aligning himself with groups like Aerosmith and Guns ‘N Roses and helping to usher in the heavy metal craze. For more than 30 years, his labels – Asylum Records, Geffen Records, and DGC Records – represented the high-water mark for musicians, who clamored to get in the door.

“He had an incredible eye for talent,” Lacy said. “These people would have eventually found their way. But he helped them get there. He fixed their teeth and allowed them to write music that’s history.”

Though he made his name in music, Geffen also became a force in the theater and film businesses.

He enriched himself by producing hit musicals like “Cats” and “Dreamgirls,” and branched out into movies with memorable pictures like “Risky Business.” In 1994, he co-founded DreamWorks SKG, the studio behind Oscar-winners like “American Beauty” and “Saving Private Ryan.”

“In each decade, he has done something that has affected the culture,” Lacy said. “If I had to boil it down to one thing it would be his genius at business.”

It’s a mastery of deal-making and talent-scouting that has made him a very wealthy man, worth an estimated $ 5.5 billion. It is also a trajectory that Lacy maintains cannot be replicated in a more fractured media landscape, where mega-corporations wield disproportionate influence and are more interested in quarterly earnings than fostering rising stars.

“Even he would say that nobody could do what he did today,” Lacy said. “The times have changed so much. I asked him if he could raise $ 2 billion to start a new studio, and he said ‘absolutely not.’ And record companies, well, we know what happened to them. Behind all the conglomerates and corporations, to find someone with a genuine sensibility like David Geffen‘s would be impossible. He was unique.”

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Feds probe FedEx, UPS over online drug shipments

SAN FRANCISCO (AP) — FedEx and UPS have disclosed they are targets of a federal criminal investigation related to their dealings with online pharmacies, which are at the center of an international crackdown on prescription drug abuse.

The shipping companies made the disclosures in regulatory filings over the last several weeks. FedEx spokesman Patrick Fitzgerald confirmed the probe in a prepared statement and a phone interview Thursday.

The investigation of the country’s two largest shippers stems from a blitz against online pharmacies that was launched in 2005. Since then, dozens of arrests have been made, thousands of websites shuttered and tens of millions of dollars and pills seized worldwide as investigators continue to broaden the probe beyond the operators.

Last year, Google Inc. agreed to pay $ 500 million to settle allegations by the Justice Department that it profited from ads for illegal online pharmacies.

A federal jury on Thursday convicted three men of operating illegal pharmacies that used FedEx Corp. and UPS Inc. to deliver drugs without proper prescriptions. Seven others have been convicted in San Francisco this year.

Fitzgerald said he didn’t know if the FedEx investigation was connected to the San Francisco cases, but U.S. Department of Justice investigators based in San Francisco are looking into issues “related to the transportation of packages for online pharmacies.” He called the probe “absurd” and said the Memphis, Tenn., company denied any wrongdoing

A spokesman with the U.S. attorney’s office in San Francisco declined to comment. A spokesman for Atlanta-based UPS couldn’t be reached after business hours Thursday.

UPS disclosed the investigation Nov. 1 in a regulatory filing reporting its quarterly earnings.

“We have received requests for information from the DOJ in the Northern District of California in connection with a criminal investigation relating to the transportation of packages for online pharmacies that may have shipped pharmaceuticals in violation of federal law,” the company stated. UPS said it was cooperating with the investigation and is “exploring the possibility of resolving this matter.”

FedEx was more defiant. Fitzgerald said the company has no plans to plea bargain with federal officials.

“Settlement is not an option when there is no illegal activity,” Fitzgerald said.

Both companies said they were served with grand jury subpoenas between 2007 and 2009. Fitzgerald declined to discuss why FedEx was now disclosing the investigation, but he confirmed that the company is under investigation for allegedly aiding and abetting online pharmacies that illegally ship prescription drugs.

Fitzgerald said the Drug Enforcement Agency has refused FedEx‘s request for a list of online pharmacies under investigation. Without such a list, Fitzgerald said it’s impossible to know which companies are operating illegally.

“We have no interest in violating the privacy of our customers by opening and inspecting their packages in an attempt to determine the legality of the contents,” Fitzgerald said.

___

Associated Press writer Alicia A. Caldwell in Washington contributed to this report.

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MPs raise doubts over bank sales

16 November 2012 Last updated at 02:14 ET

A parliamentary committee has said the Treasury’s sale of Northern Rock in 2011 was “fortunate”, and Lloyds and RBS may not be sold “for many years”.

A Public Accounts Committee report noted that while the Rock’s sale was “well-handled”, taxpayers were still set to lose £2bn on the bank’s rescue.

MPs were not convinced that a profit would be made on the £66bn rescue of the two bigger banks any time soon.

A Treasury aide said it aims “to get the best possible value for taxpayers”.

“This government is putting right the catastrophic regulatory failings of the last decade that led to the biggest bank bailout in the world,” the Treasury aide added.

The government currently owns 40% of Lloyds, and 82% of RBS.

Lucky timing

Northern Rock was rescued in February 2008 by the previous government.

The sale of Northern Rock to Virgin Money in 2011 was carried out by the current government under time pressure, as EU state aid rules required the Treasury to dispose of its holding by 2013.

The committee said that UK Financial Investments (UKFI) – the state-owned body that manages the Treasury’s investments in the banks it rescued during the financial crisis – was lucky that Virgin was so keen to buy, given that there were only ever two bidders for the bank.

“The Treasury was fortunate that one of them had a strategic interest in purchasing a small retail bank at the end of 2011,” the committee’s report said, noting that current market conditions are less favourable than they had been at the time of the sale.

“The low level of competition does not give us confidence that the taxpayer will make a profit on the sale of RBS or Lloyds,” it added.

Continue reading the main story

September 2007 The run on Northern Rock

February 2008 Northern Rock nationalised

September 2008 Lloyds announces takeover of Halifax Bank of Scotland

October 2008 Government part-nationalises RBS and Lloyds-HBOS

January 2010 Northern Rock split into good and bad banks

December 2010 FSA clears RBS management of wrongdoing

November 2011 RBS agrees branch sale to Santander

November 2011 Northern Rock sold to Virgin Money

December 2011 Northern Rock sale to be investigated by NAO; FSA releases RBS report

September 2012 NAO releases Northern Rock report

October 2012 RBS branch sale to Santander collapses; RBS taken off Asset Protection Scheme

While the Treasury invested £1.4bn in Northern Rock shares, this was small in comparison to the £66bn invested in RBS and Lloyds.

“It seems inevitable that their ‘temporary public ownership’ will last for some time, if getting value for our investment remains the most important objective for government.”

The £2bn price tag for bailing out Northern Rock is not definite, and was drawn by the committee from a report provided to the committee by the National Audit Office (NAO) earlier this year.

The actual losses will depend on whether and how much profit UKFI is able to make from the Northern Rock assets that it did not sell to Virgin, and continues to own.

‘Lessons learnt’

Like the NAO, the committee was critical of the Treasury and UKFI – which took over ownership from the Treasury in 2010 – for being too slow to override the Rock’s management following the bank’s 2008 rescue.

“Northern Rock PLC still lost money in 2011, and its strategy should have been challenged sooner,” the report claimed.

The bank also failed to hit a £15bn government lending target during its time in public ownership, achieving only £9.1bn.

The report said that the government should have been more critical of the “optimistic” plan put forward by management for how to split the Rock up into a “good bank” that was sold to Virgin, and a “bad bank” with billions of pounds of problem mortgages that was retained in state ownership.

“The Treasury should ensure that lessons it learns from the sale are captured and can be applied to future disposals, including any sale of RBS or Lloyds.”

Margaret Hodge MP, chairman of the PAC, said the rescue of Northern Rock was made more complicated because the Treasury was unable to respond promptly to the banking crisis as “it lacked the right skills and understanding. It was slow to nationalise the bank and that made a loss difficult to avoid.

“The Treasury had spent five months trying to find a private sector buyer before giving up. After nationalisation, it then failed to effectively challenge the optimistic business plan put forward by the bank’s management to split the bank.”

She predicted that this would not be the last banking crisis, so the “Treasury must ensure it retains the right staff with the right skills to understand the risks and respond effectively.

“It needs to learn the lessons from the creation and sale of Northern Rock and make sure that these are applied in future, including to any sale of RBS and Lloyds.”

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Egypt recalls envoy to Israel after Gaza strike

CAIRO (AP) — Egypt has recalled its ambassador to Israel after an Israeli airstrike killed the military commander of Gaza‘s ruling Hamas.

In a statement read on state TV late Wednesday, spokesman Yasser Ali said that President Mohammed Morsi recalled the ambassador and asked the Arab League‘s Secretary General to convene an emergency ministerial meeting in the wake of the Gaza violence.

Morsi also called for an immediate cease fire between Israel and Hamas, an offshoot of Morsi’s Muslim Brotherhood. Israel says it struck in response to rocket attacks from Gaza.

Hours earlier, Morsi’s Muslim Brotherhood group denounced the Israeli airstrike as a “crime that requires a quick Arab and international response to stem these massacres.”

Relations between Israel and Egypt have deteriorated since longtime President Hosni Mubarak was ousted last year.

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Billy Joel, Rihanna fight Pandora over compensation

(Reuters) – Some of music’s most notable names including Billy Joel, Rihanna and Missy Elliott have signed an open letter to Pandora Media Inc opposing the online music company‘s push to change how artists are compensated.

Pandora is currently lobbying lawmakers in U.S. Congress to pass the “Internet Radio Fairness Act,” which would change regulation of how royalties are paid to artists.

A group of 125 musicians who say they are fans of Pandora argue the bill would cut by 85 percent the amount of money an artist receives when his or her songs are played over the Internet.

“Why is the company asking Congress once again to step in and gut the royalties that thousands of musicians rely upon? That’s not fair and that’s not how partners work together,” said the letter, to be published this weekend in Billboard, the influential music industry magazine.

A statement with an advance copy of the letter was released on Wednesday by musicFirst, a coalition of musicians and business people, and SoundExchange, a nonprofit organization that collects royalties set by Congress on behalf of musicians.

“Internet radio and the artists whose music is played and listened to on the Internet are indeed all in this together,” Tim Westergren, Pandora’s founder and chief strategy officer, said in a statement.

“A sustainable Internet radio industry will benefit all artists, big and small.”

FLASHPOINT

The issue of how musicians are paid for Internet streaming of their songs has been a flashpoint for Pandora.

Pandora is a mostly advertising-supported online music company, founded more than a decade ago, that streams songs through the Internet. In October, it said its share of total U.S. radio listening was almost 7 percent, up from about 4 percent during the same period last year.

Pandora’s success has been double-edged – the more customers it gains, the more money it has to pay overall for rights to stream music.

So far, that rate is set until 2015.

Pandora, along with other music services such as Clear Channel Communications, is supporting the bill on grounds that different providers, such as satellite and cable, pay different rates.

“The current law penalizes new media and is astonishingly unfair to Internet radio,” Pandora said on its website.

“We are asking for our listeners’ support to help end the discrimination against internet radio. It’s time for Congress to stop picking winners, level the playing field and establish a technology-neutral standard.”

The Internet Radio Fairness Act is a bipartisan bill sponsored by U.S. representatives Jason Chaffetz and Jared Polis along with Sen. Ron Wyden.

Shares of Pandora closed 4.6 percent lower at $ 7.31 on the New York Stock Exchange on Wednesday.

(Reporting by Jennifer Saba in New York; editing by Matthew Lewis)

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France avoids recession; GDP up 0.2 pct in Q3

PARIS (AP) — France‘s economy narrowly avoided a recession, growing slightly in the third quarter, according to official statistic released Thursday.

The French economy hasn’t recorded growth since the third quarter of last year and had been widely expected to start its slide into recession in the third quarter — technically defined as two consecutive quarters of negative gross domestic product. Instead, Insee, the national statistics agency, said GDP rose 0.2 percent on an annualized basis in the July-to-September period.

But the agency also revised down figures for the second quarter, saying the economy shrank 0.1 percent then. It had previously said growth was stagnant, as it had been for the previous two quarters.

Fixing France’s economy amid a European-wide crisis is President Francois Hollande‘s biggest challenge. He has promised to rein in massive government spending and reduce the deficit, largely by raising taxes.

But those measures have put a stranglehold on growth, and the country has watched unemployment tick steadily up as a raft of companies announced layoffs in recent months. The jobless rate now stands at 10.8 percent, according to European statistics.

Hollande has promised to restore the country’s competitiveness by offering a tax break to companies that kicks in next year, but many are still waiting to see how he will reform the country’s stringent labor rules. Those rules make firing difficult and thus make employers reluctant to hire, even once the economy starts growing.

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Rolling Stones add fifth date to anniversary tour

LONDON (Reuters) – The Rolling Stones have added a fifth date to their 50th anniversary tour later this year, the band announced on its website.

In between two shows at London‘s O2 Arena starting on November 25 and two more at the Prudential Center in Newark, NJ opening on December 13 the veteran quartet will play the Barclays Center in Brooklyn, NY on December 8.

Tickets for the fifth concert go on sale on Monday, November 19. The first four gigs quickly sold out despite complaints from many fans over high ticket prices ranging between around 95 pounds ($ 150) and 950 pounds for a VIP seat in London.

On auction website eBay, a pair of ticket with a face value of 406 pounds is on offer for as much as 1,500 pounds.

“You might say, ‘The tickets are too expensive’,” singer Mick Jagger told Billboard magazine in a recent interview.

“Well, it’s a very expensive show to put on, just to do four shows, because normally you do a hundred shows and you’d have the same expenses.”

He added that he did not agree with the secondary ticket market and stressed that the Rolling Stones did not profit from tickets changing hands at inflated prices.

The concerts celebrating 50 years of the band behind hits like “(I Can’t Get No) Satisfaction” and “Honky Tonk Women” are part of a series of events marking the milestone including a new documentary, a photograph book and a greatest hits album.

The music press has been rife with speculation that the Stones could launch a full world tour next year including a set at the Glastonbury music festival.

(Reporting by Mike Collett-White, editing by Paul Casciato)

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