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“These bronzes are among the most exquisite expressions of Khmer ideals of religious imagery and ritual implements.”An art exhibition of Cambodian bronzes opens for the first time in Washington next month, featuring Khmer sculptures and ritual objects from late prehistory through the Angkorian period.
America's biggest banks are rolling in dough again. The U.S. President is going straight to Wall Street to pitch tough financial reforms to avoid future financial meltdowns. The regulatory body, the S.E.C., is pursuing civil fraud charges against Goldman Sachs. And some people are crying conspiracy. In a rare statement, the head of the S.E.C. said the watchdog does not "coordinate" its "enforcement actions with the White House, Congress or political committees," re-asserting its independence in the face of criticism."
Extraordinary times continue in the financial world. But what on earth is going on? If you believe one analyst we featured on World Business Today, this moment in the global financial crisis may be an important one. Richard Bove, Financial Analyst for Rochdale Securities, fears this could be the start of a pursuit of major financial institutions that could erode confidence in the U.S. financial system.
Bove calls the reaction to the banking crisis in 2008 "hysteria" and says the Goldman transactions may be complex, possibly unsavory, but they are not fraudulent.
"On one side you have a sophisticated investor who wants to short a bunch of mortgages. On the other side, you have two sophisticated investors who've gone through all these mortgages and decided which ones they want to keep, and which ones they don't want to keep. And they made the decision to buy them. The government is not suing the guy who wants to short, or the guy who bought the mortgages. The government is going after the middleman. What's the logic in that?"
Media reports are questioning the strength of the SEC's case. The agency says it has appropriate evidence that will be presented in court, at the appropriate time.
We should not be pre-trying this case in the media. But the questions the case raises are important ones and the voices on it, divergent.
Did somebody hear Richard Bove defend Goldman Sachs as good for society? Yes, you did. And that derivatives, the exotic instruments everyone is so upset about here, are good for the economy because they help drive down risk? Yes, you did.
It's a tough case to make in this climate, but Bove says Goldman should be defending itself as a business that does "societal good," because it "lowers taxes, and adds jobs and business opportunities." However, because of the financial crisis and these charges it is viewed simply as a bunch of greedy bankers who do fraudulent things.
"The U.S. has to raise 1.3 trillion dollars this year to cover the deficit. It has to roll over 3 trillion dollars in existing debt. Who is going to do that? Are we going to have a bunch of small community banks to set up desks in front of their branches and sell savings bonds at 25 dollars a pop? Or do we need a very sophisticated company that can access capital markets all over the globe to raise that money? And if it doesn't raise that money what happens to taxes in the U.S. Somebody has to make that money."
Of course, the courts will decide whether Goldman did anything fraudulent.
Bove is firmly in the camp of those who believe the government's case is weak, but he's quick to add: "I would never defend Goldman Sachs. I would not defend their ethics. I just think in this particular instance they were not guilty of any crime."
(CNN) -- The eurozone faces its toughest crisis to date as the credit downgrade in Greece spooked global investors and raised the specter that the debt crisis may spiral to other European economies.
Markets from London to New York and Tokyo all tumbled in the immediate wake of Standard & Poor's downgrade of Greece's debt to junk status on Tuesday; the FTSE 100 dropped 2.6 percent before recouping losses.
The Dow Jones Industrial Average fell 213 points to below 11,000 in early trading Tuesday before rallying into positive territory.
Japan's Nikkei closed down 2.57 percent and Hong Kong's Hang Seng index ended the day down 1.47 percent. Markets in Shanghai and Australia were also in negative territory.
European markets followed Asian indexes into the red Wednesday. London's FTSE-100 fell but pulled back into positive territory, but Frankfurt's DAX, and the Paris CAC 40 were all down and Spain's IBEX fell by more than 1 percent.
Greek officials Wednesday morning banned the practice of short selling on the Athens stock exchange as a way to keep speculators from hurting Greek shares even more. The ban will last for two months, until June 28, the Hellenic Capital Market Commission said.
The junk downgrade of Greece's sovereign debt came as a planned bailout by European nations and the International Monetary Fund faced increasing opposition in Germany -- the largest economy of the 16 nations united under the euro currency -- and increased rancor in Greece regarding planned austerity measures to reduce the nation's debt, which stands now at 13.6 percent of the nation's gross domestic product.
Q&A: What does Greece's debt rating downgrade mean
The euro dropped to its lowest level in nearly a year in Wednesday trading in Asia, where it fell to as low as $1.31.
The junk rating now makes it much more difficult and expensive for Greece to try to raise money and debt in world markets. Standard & Poor 's also reduced the debt credit rating of Portugal, heightening fears of a "Greek contagion" that could spread to other European nations.
Greek austerity measures prompt strike
"It's like a domino effect," David Buick of BGC Partners in London told CNN. The downgrade increases the likelihood of a double-dip recession "which we all hope to avoid," he added.
"This is a dangerous process," he said. "All the speculators out there -- they're like rats up a drain pipe -- will make those cracks (in the Eurozone economies) into crevices."
After the credit downgrade, the IMF is considering raising its share of planned assistance to Greece by $10 billion for a total of more than $73 billion. But some analysts say Greece will need even more time and cash to avoid defaulting on its debt payments.
German Chancellor Angela Merkel said Wednesday that Germany would do what it can to help Greece out of the financial "but also Greece has to do its part."
"Obviously what Greece has to do is a difficult thing, but I think they are committed to doing it," the head of the International Monetary Fund, Dominique Strauss-Kahn, said in an appearance with the German leader.
Defaulting on its debt payments is not an option Greece wants to consider if it is to remain among the eurozone economies, former Greece Economics Minister Yiannos Papantoniou told CNN. It also raises the chance strong economies like Germany may walk away from the euro as its currency.
Default and restructuring the debt "is the way out of the euro ... [and] will inflIct lasting damage to Greece because Greece will get a bad name and stigma in the markets for years to come as Argentina has done," Papantoniou said. "Moreover, I'm sure that if Greece is forced to restructure its debt, Germany will come and say, 'Unfortunately gentlemen we can't be part of the same monetary union because your paper is undervalued and ours is strong.'"
Papantoniou was optimistic a bailout would come before Greece defaulted on its debt payment. "This will definitely give some breathing space -- but the problem doesn't end there," he said. "Next year in 2011 Greece will have to go back to the markets and be able to borrow at reasonable rates."
Analysts said it was likely Greece would also need more time to reduce its debt levels. "Anyone who thinks they can take that rickety economy ... and pull it around in one year, they're on a different planet," Buik said.
The pace of the Greece bailout negotiations, which started in January, has exasperated some market watchers.
"I think we're already in pretty disastrous territory even before these latest problems arose," said Vanessa Rossi, a senior research fellow at Chatham House. "Having taken ... several months to even get to the point which Greece is asking for a bailout and assistance -- and now we're not even sure if they're going to get it and under what terms --is a real disaster in and of itself."
Kirby Daley, senior strategist for Newedge Group, believes the negotiations between the IMF and Germany are slow because the Greece bailout may turn into a blueprint for future bailouts of eurozone nations. "Greece is setting the standard ... whatever they do there, then they may face the same funding levels for Portugal, Spain and Italy."
Moreover, the risks placed on the credit worthiness of Greek debt may risk investor appetite in sovereign debt of nations like the UK, the United States and Japan, Daley said.
"We've been hearing about these issues for years about our kids paying for our debts ... but now it's not our kids, it's us," Daley said.
“Each surviving performer is a living cultural treasure with a unique body of skills and knowledge to pass on. A living library of Cambodia’s cultural legacy.”Cambodia is preparing for an expansive arts festival in August, one that will bring artists of all ages from at home and abroad to demonstrate some of Cambodia’s nearly lost traditions.
Workers in Altavilla Vicentina, Italy, prepare a ride that will become a new attraction at Coney Island in New York City. More Photos »
Spring is a busy time for his company, and attractions are being prepared for the summer season that is about to open in theme parks around the world.
This year, however, one destination has Mr. Zamperla racing against the clock: Coney Island in Brooklyn, where in just a few weeks he will present a new amusement park featuring 22 rides, including the Tickler, a family-oriented roller coaster; the whirly Mega Disko; and Air Race, a heart-gulping aerobatic experience.
Coney Island is the largest investment yet in the 50-year history of the Zamperla Group. Zamperla is the majority shareholder of Central Amusement International, the New Jersey-based company that signed an agreement in February with New York City to build and manage the amusement area. So far, Central Amusement has spent $15 million on the refurbishment of the park, about half of the $30 million it expects to invest.
“Ride manufacturers have been operating rides in parks or fairgrounds for many years,” said Andreas Veilstrup Andersen, executive director of the European office of the International Association of Amusement Parks and Attractions. “However, a project as big as Coney Island is very unusual.”
Time has been tight, with the park’s opening set for the end of May.
“We had a pretty good idea of what we could produce on time,” said Mr. Zamperla, who is chief executive and president. “There’s a lot of pressure, because all eyes are on us. Things just can’t be good, they have to be perfect.”
Luigi De Vita, managing director of the company, added: “When we’re under pressure, we give the best of ourselves.”
Theme parks and amusement parks have a global lure, with about 758 million visitors worldwide in 2007, according to the latest study from PricewaterhouseCoopers on the outlook for entertainment and media. Worldwide revenue in 2007 was $24 billion, the study said.
The Zamperla Group, according to industry experts, is ranked among the top five manufacturers of amusement park rides.
The Coney Island project will be called Luna Park, after the original playground that stood there until World War II. Drawings for the new main gate on Surf Avenue mimic the original design, but flashier.
The park at Coney Island “had its glory but lacked an innovative spirit,” Mr. Zamperla said of a site that in recent decades had become seedy.
In February, Central Amusement won the bid on a 10-year lease to build and operate the park, which sits on a city-owned lot.
“Their specific proposal was a nice blend of honoring the history of Coney Island while developing it as a modern 21st-century amusement park,” said Seth W. Pinsky, president of the New York City Economic Development Corporation.
The Zamperla Group was chosen because it had a sound track record in operating amusement parks, including the Victorian Gardens, a children’s amusement area at Wollman Rink in Central Park in Manhattan. And it was known as the producer of “some of the most exciting rides in the world,” Mr. Pinsky said.
The Zamperla family has been building amusement park attractions in Altavilla Vicentina since the early 1960s. Alberto’s grandfather, Umberto Zamperla, opened one of the first movie houses in Italy, then moved into carnival attractions. His father, Antonio Zamperla, worked in traveling shows before deciding to settle in this Veneto town to start inventing and manufacturing rides.
Alberto Zamperla, 58, the eldest of five children, took the show on the road, so to speak, and there are now factories or sales offices in several countries, including the United States, China and Russia. His group sells to customers in more than 90 countries and now exports about 95 percent of its products.
There are about 185 employees in Italy, with an additional 270 around the world.
The nuts and bolts of the business — its administration as well as its main manufacturing activities — are at the headquarters near Vicenza, an industrial district that is the third-largest exporting center in Italy, according to the local chamber of commerce.
A stroll though the headquarters at Altavilla Vicentina hints at the complexity of producing amusement park rides for the world’s theme parks, including various Disney Parks (“In our business, it’s the best reference you can have,” Mr. Zamperla said), Six Flags theme parks and malls worldwide. Even the late Michael Jackson’s Neverland Ranch has Zamperla rides.
On average, the company spends about one million euros ($1.3 million) a year designing new products, using complicated computer algorithms and mathematical models. The attractions are then built and tested here. Zamperla has dozens of patents on items like merry-go-round decorations and roller-coaster seats.
“This is where ideas are born,” Mr. Zamperla beamed as he looked at the MotoCoaster, a ride being prepared for a dinosaur theme park in Changzhou, China. Each ride requires about a year from design to delivery, he said, and can cost anywhere from 20,000 euros to 6 million euros. The MotoCoaster sells for 3.5 million euros and will be one of the attractions at Coney Island next year.
Demand is growing in new markets, especially in the Middle and Far East. The Zamperla Group has a factory and sales offices in Suzhou, China, to serve the fast-growing Chinese market. “We’re not going to make the mistake of underestimating the Chinese,” he said.
The factory in China produces about four million euros worth of rides for the Chinese market. He exports about the same amount from Italy to China and hopes to reach 20 million euros in sales in two years.
In well-established markets like the United States, long-term success in the amusement ride industry depends on novelty, Mr. Andersen said.
This year, for example, Air Race, an airborne experience that the company describes as “the ultimate thrill ride” will have its debut at Coney Island, alongside more placid family fare. Next year, rides are expected in the Scream Zone, an addition to the park that will feature several Zamperla roller coasters intended mostly for teenagers.
“In the end, all we want to do is build rides that people will enjoy,” Mr. Zamperla said. And Coney Island, he said, “will be the perfect showcase.”
Treasury chief Timothy Geithner between Dominique Strauss-Kahn of the I.M.F. and Christine Lagarde, French finance minister.
WASHINGTON — Proposals to establish a global tax on banks and charge them for the cost of government bailouts divided representatives of the Group of 20 countries during a summit meeting here on Friday.
The perilous fiscal condition of Greece and other countries in Europe, and the need for the world’s big economies to coordinate changes in financial regulation, were the other major topics in the daylong meetings of Group of 20 finance ministers and central bank governors.
“The global recovery has progressed better than previously anticipated, largely due to the G-20’s unprecedented and concerted policy effort,” the officials said in a joint communiqué.
The International Monetary Fund endorsed a proposal this week that would establish a tax on bank profits and on salaries paid to bank executives. Canada, whose banking system withstood the crisis, has led the opposition to the idea, while the Obama administration, which has called for a $90 billion levy to be collected over 10 years from banks that received bailout money, tried to marshal support for it.
“There was not agreement on a global bank tax,” Jim Flaherty, the Canadian finance minister, said at a news conference after the meetings. “Some countries are in favor of that. Some countries quite clearly are not. It depends whether a country has had to use taxpayers’ dollars to bail out banks, for the most part.”
Treasury Secretary Timothy F. Geithner defended the idea. “We’re trying to establish the basic principle that where governments are exposed to risk in putting out financial fires like this, that taxpayers don’t bear the costs of paying for those actions,” he said, adding, “That is a simple, fair, basic imperative.”
Mr. Geithner said there was “significant support” for the bank tax, but allowed that he understood a “certain lack of enthusiasm” from Canada.
He added, “We’re going to do what’s necessary for the U.S., what’s in our interest, and I think the world’s going to want to watch what we do. And I suspect that’ll provide a basis for other actions across some of the other economies.”
The cautiously worded joint communiqué acknowledged, but sidestepped, the bank tax proposals. It called for further I.M.F. study “on options to ensure domestic financial institutions bear the burden of any extraordinary government interventions where they occur, address their excessive risk-taking and help promote a level playing field, taking into consideration individual countries’ circumstances.”
John Lipsky, the deputy managing director of the I.M.F., said on Friday that the bank tax, if calculated based on the risk banks posed to the financial system, “could help to discourage financial institutions from taking on excessive risk.” Such a fee would also “address the public policy concern that financial institutions are able to privatize gains but socialize costs arising in the financial sector,” he said.
Mr. Lipsky’s boss, Dominique Strauss-Kahn, the top I.M.F. official, caused rumblings on Friday when he suggested that some countries were moving too quickly on reform. He said the Obama administration’s plan “comes too soon” given the need to coordinate responses across countries.
“I read that and I thought, really?” Mr. Geithner said in response. “My sense is that it’s been 15 months — or more than a year — since we started this process in the United States. We’re not moving with excessive haste.”
Mr. Geithner acknowledged that one of the biggest reform elements — forcing banks to hold more capital as a buffer against economic disruptions — was partly beyond the scope of the legislation being debated by Congress. The Basel Committee on Banking Supervision, a global regulatory body, is coordinating discussions around capital requirements in the hope of announcing new standards by the end of this year.
“The core issue there is the quality and quantity of capital and setting standards for that, and also an appropriate cap on leverage,” said Mr. Flaherty. “We agreed that that’s a key element.”
The Group of 20 officials offered few details on the Greek debt crisis, except to support the aid plans of the European Union and the I.M.F. Mr. Flaherty said of the Greeks: “They have undermined the confidence of the markets and it is essential that some steps be taken, that the Greek government work with the I.M.F., and the European Commission of course, to identify a credible, multiyear economic and fiscal program.”
Although India and Brazil this week joined calls by the United States for China to allow the value of its currency, the renminbi, to appreciate, the Group of 20 officials said the topic did not come up in their meetings.
Yoon Jeung-Hyun, the South Korean finance minister who coordinated the meetings, said “there were no specific discussions” of either the renminbi, also known as the yuan, or the euro, which has recently fallen in value.
Even as problems in Europe preoccupied the leaders, officials reported positive developments in some poorer parts of the world.
The I.M.F. projected on Friday that economic output in sub-Saharan Africa would expand by 4.75 percent this year and 5.75 percent next year, up from 2 percent last year.
“The economic slowdown in sub-Saharan Africa looks set to be mercifully brief,” said Antoinette Monsio Sayeh, director of the fund’s African department, adding that “the slowdown has nonetheless entailed considerable social dislocation and suffering.”
On Friday, the Food and Drug Administration issued preliminary guidelines that will require producers of the devices, known as infusion pumps, to supply the agency with more test data on them before they can be approved for sale.
Over the last five years, the agency says it has received reports of 710 patient deaths linked to problems with the devices, though F.D.A. officials say they think the number may be significantly higher. Some of those deaths involved patients who suffered drug overdoses accidentally, either because a hospital worker entered incorrect dosage data into a pump or because the device’s software malfunctioned.
An estimated two million infusion pumps are used in hospital and clinical settings and hundreds of thousands more are used by patients in their homes. The pumps use a variety of designs to intravenously deliver food, fluids and drugs like pain medications, insulin and cancer treatments.
The pump-related initiative comes as the Obama administration tries to reinvigorate the F.D.A. after years of criticism by lawmakers and others that it was a rubber stamp for industry. The F.D.A. Center for Devices and Radiological Health, which oversees scores of critical products like heart implants, imaging equipment and infusion pumps, has come under particular scrutiny.
A few years ago, for example, several top scientists at the center contended in letters to lawmakers that their superiors had ignored both their recommendations and policy guidelines in approving the sale of devices. Along with reports of 710 deaths, the center also received more than 10,000 complaints annually about infusion pumps from 2005 to 2009. In that same time frame, manufacturers of infusion pumps issued 79 recalls, among the highest for any medical device.
The center’s new director, Dr. Jeffrey E. Shuren, who has headed the center since August, said in an interview this week that pump manufacturers would soon be required to provide more data about their devices before offering them for sale. He added that the agency had determined that pumps could be made far safer.
He also said that the categorywide approach that the agency was taking toward infusion pumps might soon be extended to other types of medical devices, though he declined to elaborate.
“We need to ratchet up the expectations for medical device manufacturers,” Dr. Shuren said.
The biggest makers of infusion pumps include Baxter Healthcare of Deerfield, Ill.; Hospira of Lake Forest, Ill.; and CareFusion of San Diego.
Representatives of all three companies said the firms were reviewing of the agency’s initiative and could not comment on the specifics. However, they said their pumps were safe and that they looked forward to cooperating with regulators.
“We are committed to partnering with the agency to advance and complete the process for issuing new guidelines for the enhancement of the device review process,” Eric Floyd, Hospira’s vice president for global regulatory affairs, said in a statement.
Under the infusion pump proposal, which could be completed by the end of the year, producers would be required to provide additional data to support the procedures they used to determine the effectiveness and safety of their devices. In addition, companies would have to conduct limited clinical trials to ensure their pumps were not susceptible to misuse or had design elements that could create errors.
Pump producers now typically conduct “simulated” testing of its devices by users to identify bugs. Dr. Shuren indicated that the agency was seeking real-world testing as well.
Infusion pumps normally use software to automatically control both the rate and volume of a medication’s flow. To set a pump for an individual patient’s needs, a doctor, a nurse or other health care worker enters information by using the buttons on a pump’s keypad, which resembles that of a phone.
Pump manufacturers say that most problems occur when a nurse or health care worker enters the wrong data accidentally. F.D.A. officials said, however, that based on their review of pump complaints they thought many deaths and injuries related to the devices were less the result of user error than of product design and engineering.
For example, agency officials said that some pumps were prone to key bounce, a problem in which defective software interprets a single keystroke as two separate presses of that key. For example, instead of dispensing two units of a drug, a pump would dispense 22 units.
Under F.D.A. rules, life-sustaining devices like heart defibrillators must typically undergo clinical trials before they are approved for sale. But the agency clears the sale of many other critical devices like pumps without clinical testing based on a manufacturer’s claim that a new device is similar to a product already on the market.
Agency officials said Friday that they were sending a letter to all infusion pump makers to inform them of their findings and outline the proposed additional requirements companies were be required to meet.
Dr. Shuren said he expected that the new requirements would initially slow down the rate of the agency’s approval for new pumps that manufacturers are seeking to market.
The agency also said it had developed an open-source software code that manufacturers of pumps can use to test the validity of the software they use in their devices.
The UK economy continued to recover from recession in the first three months of the year, according to official estimates.
GDP grew by 0.2% between January and March, the Office for National Statistics (ONS) said.
That was weaker than the 0.4% growth predicted by many economists, but the figure may be revised.
The last quarter of 2009 saw GDP growth of 0.4% - revised up from an initial estimate of 0.1%.
The ONS said the bad weather seen at the beginning of the year may have had an impact on output - particularly in the retail and industrial sectors.
But despite that, manufacturing output grew by 0.7% over the quarter, while the utilities sector saw output rise by 2.5%.
Manufacturing boost
However, the bulk of growth came from the financial and business services sector, which saw growth of 0.6%.
Meanwhile the sector including retail, hotels and restaurants shrank by 0.7%.
BBC economics editor Stephanie Flanders said the rise in manufacturing output was a particular cause for optimism.
"What many will find most cheering in these numbers is the stonking 0.7% estimate for growth in the production sector," she said.
"That's the strongest quarterly performance for that part of the economy in many years. Hopes of an export-led recovery are not dashed yet."
Other analysts were also optimistic, despite the growth figure coming in below expectations.
Howard Archer, chief economist at IHS Global Insight, argued that the lower-than-expected growth figure was "not in itself overly worrying".
"Overall growth in the first quarter was clearly dragged down appreciably by the very bad weather in January, and most indicators suggest that there has been a marked pick up in activity since then," he said.
"Furthermore, there must be a very good chance that first quarter GDP growth will be revised up in future releases as more data for March become available and show improved activity."
The ONS will release two further estimates for growth in the first quarter, based on more detailed economic information not yet available.
But Trevor Williams, chief economist at Lloyds TSB, warned that the growth could equally be revised lower.
"The economy is still recovering," he told the BBC.
"The declines of 2008 are still having an impact [and] the recovery will remain rather weak and could disappoint."
The Institute of Directors, which represents business leaders, also said it expected the recovery in the economy to "look much more L than V-shaped".
The British Chambers of Commerce added that the new figures underlined the challenges still facing the economy.
"It is important for policy-makers to focus on ensuring that the recovery continues and a double-dip recession is avoided," said the business group's chief economist David Kern.