Telecom firms’ profit growth ...profits rise...!!!!

Telecom firms’ profit growth will double in two years: Crisil
OUR BUREAUTo ride on tariff hikes, increase in data and value-added services
MUMBAI, DEC 26:The operating profits of large telecom companies are forecast to rise 20 per cent over the next two years. This is twice the operating profits of about 10 per cent a year posted by the operators in the last five years, according to a Crisil study.
Half of this increase would be from tariff increases, whereas the other half would be contributed by increased data and value-added services (VAS), the study added.
“Our estimates show there is still a 50 per cent gap between headline tariffs and average realised rate per minute (ARPM) due to discounted call rates offered to many subscribers.
With competitive intensity easing, telecom companies are in a better position to reduce the discounts and crunch the gap,” said Crisil Ratings Senior Director Sudip Sural.
This will contribute about half of the rise in operating profits, he added.
Revenue contribution from data and VAS could touch 20 per cent in the medium term from 16 per cent in the last fiscal. This is because large telecom players are seeing data usage more than doubling in the first half of this fiscal from the year ago period.
This trend is expected to continue, following a near doubling of smartphone sales over the last financial year and higher 3G penetration due to reduction in 3G prices. This will contribute to the balance of rise in operating profits, it said.
Crisil believes that the pricing power, which started returning a few months ago, will sustain over the next 2-3 years. For the Crisil-rated large telcos, ARPMs stabilised in 2012-13, while it improved by around five per cent in the first half of the current fiscal as tariffs were hiked in select circles.
REGULATORY TAILWINDS
With clarity emerging in policies, the industry is now seeing tailwinds from the regulatory side. The crucial issues of spectrum availability and pricing have been partially addressed with the finalisation of the reserve price for the next round of auction in January 2014.
While these signal better times for operators, a caveat is due: how quickly the rest of the regulatory creases are ironed out will remain the key question.
While the upcoming auctions will help arrive at a market determined spectrum price, other regulatory issues such as one-time fees for excess spectrum, spectrum usage charges, re-farming of spectrum in the 900 MHz band and a framework for spectrum sharing and trading remain pending.
An early resolution of these will be critical to the health of the sector.
rajesh.kurup@thehindu.co.in(This article was published on December 26, 2013)

Gamification ........!!!!!!!!!!!

Gamification — should start-ups be interested?

Fad or no fad, there is too much interest in gamification for it to be ignored

November 16, 2013:  

It is easy to see why some new concepts like gamification can be deemed a passing fancy.Very often, there isn’t enough believable data or stories being told that help people understand the value of an emerging phenomenon.But entire corporations deploy people to delve into the space of gamification and invest resources in it (financial or others). And entire conferences all over the world are dedicated to the topic, drawing representation from large enterprises as well as entrepreneurs. ‘Gamified’, scheduled to take place in India next month, is no different.

OUTSIDE LOOKING IN

Mario Herger was global head of the Gamification Initiative at SAP, before he co-founded the Austrian Innovation Centre Silicon Valley in 2013. His experience involves encounters with how gamification efforts in the enterprise can help multiple departments such as HR, training, sustainablity and banking.

“Bringing an enjoyable experience to work will never be a short term fad, especially when you see the numbers. One larger fact about gamification that is still not understood is that a gamified system collects a large amount of data on the skills and progress of a player…reliable and measurable data on employees’ performance. You cannot get that kind of data through other means. Ask me again: does this sound like a fad?” he challenges.Mario sees opportunities for entrepreneurs in India. “The work at call centres can be very challenging, given the nature of the job. Cranky customers, late work hours, feeling isolated at work, often difficult topics to solve, can put a drag on the job satisfaction. A gamified call centre can certainly help better connect with co-workers, learn more, and serve the customer better for the benefit of everyone,” he says.

When Jagdish Repaswal founded MangoReader, he intended to change how children and young people experience reading.He now defines MangoReader as a learning company that uses gamification as a technique to make reading fun and interactive. But he points out that gamification cannot make a badly written book interesting.Can gamification as a technique have multiple benefits in any sector? Jagdish says, “When used appropriately, gamification can enable people to become proactively diligent about their work. People can even be incentivised to teach others or learn from each other. Social incentivisation used in gamification can help drive productivity and maintain desired behaviours.

“But you don’t just build a product and make it fit in a given scenario (corporate, for example); it is best if products are built with a clear need in mind.”

BELIEF AND ACTION

Across the world there are several firm believers in gamification, with the US leading the field as a slightly more mature market. But consumers are not quick on the uptake.More so in India as Rahul Bendre, Kshitij Saxena and Shobhit Aggarwal have experienced.Their venture, 5Shells, is a gaming company that develops interactive content to create a ‘unique training experience’.One of their products, KingPin, is an experiential learning game that takes trainees through negotiation tactics, leadership skills and strategic decision making to provide generic and individual feedback.

Shobhit Aggarwal, an external advisor to the start-up, says, “Many people tend to think that negotiation skills are not important.Then they tend to be concerned with the money that has to be invested in training managers and others in a soft skill such as negotiation. The idea that games can be good in the corporate sector does not sit well in many minds. But we’ve managed to crack through some of those mental blocks.”In spite of initial challenges, the 5Shells team claims the game stands 1 – 1.5 points higher on a scale of 10 when compared with other well-known training companies.Clearly, the support of the NSRCEL makes a difference here. Jagdish Repaswal’s MangoReader was also incubated at the IIMA’s Centre for Innovation Incubation and Entrepreneurship.

Bottomline: As debates continue and mindsets get broken over time, the gamification sector lies as wide open for Indian entrepreneurs as to their counterparts elsewhere.

(This article was published on November 16, 2013)

 http://www.thehindubusinessline.com/industry-and-economy/gamification-should-startups-be-interested/article5358637.ece

UBS says 6,800 on Nifty possible post elections..!!!

Sachin P Mampatta  |  Mumbai  

October 16, 2013 Last Updated at 13:25 IST

UBS says 6,800 on Nifty possible post elections
Drop below 5,500 level good opportunity to buyThe National Stock Exchange’s benchmark index, the Nifty, could potentially reach 6,800 levels after the elections on the back of growth in earnings.
Also any drop below the 5,500 level could be an opportunity to buy, according to an India market strategy report from international financial services firm UBS Securities India.
“Our view remains that any new government is more likely to take steps to course correct the economy. Nifty could potentially reach 6800…post elections…assuming 15% earnings growth in FY15. But near-term volatility may increase as we approach elections. We view the risk-reward to buy as attractive below Nifty 5500 levels,” said the report dated 11th October and authored by analyst Gautam Chhaochharia and associate analyst Sanjena Dadawala.
Social media may also have a bearing on the elections this time around, according to the report. It noted that broadband penetration has increased from 0.65% or 7.7 million people in 2009 to 1.2% or 15 million. Also total internet penetration is up from 60 million people to 160 million.  
“A survey conducted in the first half of the year has concluded that social media may affect the vote in as many as 160 constituencies (out of 543) – on the basis that internet users in these constituencies are larger than the margin of victory in the last elections,” said the report.
http://www.business-standard.com/article/markets/ubs-says-6-800-on-nifty-possible-post-elections-113101600285_1.html

Global growth at four-month low, but stocks rally

Reuters | Updated On: March 06, 2013 02:11 (IST)
Global economic growth slowed to a four-month low in February, according to service sector surveys on Tuesday, but China's pledge to boost government spending to achieve 7.5 percent growth this year may help support activity in Europe and the United States also.

Growth was led by the vast US services sector, where it accelerated to its fastest pace in a year in  February, helped by a pick-up in new orders and demand for exports.

But France, Spain and Italy dragged the euro zone into a deeper downturn, earlier data showed, highlighting a widening chasm between these countries and prosperous Germany.
Meanwhile, data on China's increasingly important services sector showed that growth cooled in February and was in line with slower factory activity that suggests a modest rebound in the country's economy this year.
"Although the rate of expansion eased to a four-month low, the loss of momentum was only slight and improving inflows of new business raise the chances of a near-term reacceleration," said David Hensley, director of global economics coordination at JPMorgan.
The Global Total Output index, produced by JPMorgan with research and supply management organizations, slipped to 53.0 in February from 53.2 in January, comfortably above the 50 mark that divides growth from contraction.
A global index covering services firms edged down to 53.3 last month from 53.4. A similar manufacturing PMI released on Friday fell to 50.8.
On Wall Street though, China's policy announcement and the good data on the US service sector combined with supportive Federal Reserve monetary policy all combined to lift the Dow Jones industrial average to a record high, eclipsing the previous intraday high reached in October 2007, when the world was heading toward the financial crisis.
Stocks in Europe also surged, with the pan-European FTSEurofirst 300 index hitting its highest closing level in 4-1/2 years, boosted by corporate outlooks and expectations for continued stimulus from global central banks, even as Europe's troubled economy deteriorated further.

CHINA PLEDGE

In China, outgoing Premier Wen Jibao, speaking at the opening of the annual session of parliament, announced record-high government spending for 2013. The plan is the blueprint for the incoming administration led by Xi Jinping, who will formally take over as president at the end of the session, with Li Keqiang taking over as premier.
As part of the measures announced on Tuesday to promote growth, the Ministry of Finance said China would boost fiscal spending in 2013, raising the fiscal deficit target to 2.0 percent of gross domestic product, its highest since 2010 and up from 1.6 percent in 2012.
China's economy, the world's second biggest, grew by 7.8 percent in 2012, its slowest pace in 13 years.
The HSBC Services Purchasing Managers' Index for China showed a pullback in growth in February, with the index falling to 52.1 from January's 54.0, after seasonal adjustments. The services sector accounts for 46 percent of China's economy.
Qu Hongbin, HSBC's chief China economist, attributed the pull-back in services growth in part to a clampdown on wasteful state spending by Beijing, such as forbidding officials from hosting extravagant meals.
Distortions from the Lunar New Year holiday, which fell in February this year as opposed to January in 2012, may also have contributed to swings in the PMI data even though the series is seasonally adjusted.
"We expect a continuous modest improvement of service sector growth in coming months, thanks to healthy labor market conditions and the ongoing recovery of manufacturing growth," he said.

U.S. SERVICE SECTOR SURPRISE

In the United States, the services sector, which dominates the economy, posted its fastest pace of growth in a year in February. The expansion came even as the federal government is tightening spending and consumers are adjusting to a decline in disposable income following an increase in the payroll tax at the beginning of the year.

The Institute for Supply Management said its services index rose to 56 from 55.2 in January, exceeding economists' forecasts for 55. It was the highest level since February 2012. A reading above 50 indicates expansion.

"This was no question a positive number," said Michael Woolfolk, senior currency strategist at BNY Mellon. "It reflects improvement and reinforces the view that the economy continues to improve and should contribute to gains that have driven the stock market to a new record."

The measure of the backlog of orders was at its highest since May 2011 at 54.5 against 49. But the employment index weakened slightly, edging down to 57.2 from 57.5 in January.

EUROPE STRUGGLES

In Europe, economic gloom continued to be the message of the day, however.

Purchasing managers indexes showed that France, Spain and Italydragged the 17-member euro zone into a deeper downturn in February. Markit's Eurozone Composite PMI, a broad gauge of activity at thousands of companies across the euro zone, fell to 47.9 from 48.6 in January. A reading below 50 indicates contraction.

A reading of 53.3 for Germany's PMI stood in sharp contrast to the reading of 43.1 for the French PMI.

The outlook for the euro zone depends largely on whether Germanycan keep up its economic growth and offset weakness in the bloc's next three biggest economies - France, Italy and Spain, according toChris Williamson, chief economist at PMI compiler Markit.

He said that "seems a tall order, meaning hopes of a return to growth for the region by mid-2013 are now looking too optimistic."

Britain's services PMI, which accounts for the bulk of its economy, hit a five-month high of 51.8 last month from 51.5 in January, beating the median forecast of 51.0 in a Reuters poll.

Copyright @ Thomson Reuters 2013
http://profit.ndtv.com/news/international-business/article-global-growth-at-four-month-low-but-stocks-rally-319042

CORE EDUCATION..HAMMERED DOWN...

MUMBAI, FEB 27:  

Core Education and Technologies has moved SEBI seeking a probe into the high volumes of trading in its shares that led to a steep fall of 81 per cent in share prices.The stock fell from a high of Rs 300 to a low of Rs 56.55, in just three days.“We would like to request your office to assist the company in conducting your investigation in such unusual high volume and price movement…,” the company said in its letter to the market regulator.The technology-enabled education solutions provider has also sought the market regulator’s assistance in providing appropriate price circuits for its scrip. This is to prevent “further damage and repose shareholders and all stakeholders’ confidence,” it added.Though the stock is not traded under F&O list directly, since it is a part of CNX-IT, which has derivatives contracts, no circuit filter is applicable to the stock.

TUMBLES CONTINUOUSLY

Last Monday, the company’s shares fell by more than 62 per cent on market talks that lenders were diluting shares pledged by the promoters. The prices recovered by noon on Tuesday, after it clarified that pledged shares were not sold in the market. On Wednesday, it fell further by 46 per cent to close at Rs 60.30.“Further, we would like to clarify on the rumours of promoters pledged shares being sold, that we have confirmed with all the financial institutions that none of them have sold the pledged shares and that they continue to hold the same,” it said. However, today IFCI sold 36.95 lakh shares.On Monday, Cresta Fund informed the exchanges that it sold 28.16 lakh shares or 2.4598 per cent stake in the company on February 25. After the sale, their holding reduced to 2.3572 per cent.On Tuesday, SEBI Chairman in Hyderabad, U.K. Sinha, said: “Whenever we worry either through our own surveillance mechanism or through other medium that somebody has tried to manipulate the market, we take action.” rajesh.kurup@thehindu.co.in

http://www.thehindubusinessline.com/markets/core-education-moves-sebi-for-probe-as-stock-crashes-81-in-3-days/article4459326.ece

Sugar firms DECONTROL NEWS....

Jitendra Kumar Gupta  |  Mumbai  February 19, 2013 Last Updated at 22:48 IST

Sugar firms eye decontrol as fundamentals hit

Due to higher costs and lower prices, analysts are bearish on most north-based firms

Worries of sugar companies making less profit, as costs are rising and prices falling, have led to a sharp correction in their share prices. The stocks of Bajaj Hindusthan, Balrampur Chinni, Shree Renuka Sugars and EID Parry are down 17-30 per cent over three months as compared to the Sensex’s 5.6 per cent rise.
Nor are the near- to medium-term prospects of most companies any sweeter. The only development which could revive sentiment is if the government goes ahead with decontrol of the industry.
Sugar prices have fallen from a peak of around Rs 39 a kg in August 2012 to the current levels of Rs 34 a kg. And, the cost of sugarcane procured by the companies has gone up 16-17 per cent compared to the earlier season. This has taken place while there is surplus sugar in the country and it is also difficult to sell abroad, given lower international prices.
A Fitch group company, India Ratings, says it has a negative outlook for sugar manufacturing companies for 2013, considering likelihood of a deterioration in their financial profile. It said the operating margins of companies in 2013 were likely to be below the 2012 levels (of 13 per cent), as sugar margins (October 2012-September 2013) might fall to Re 1 a kg or lower. Thus, the financial leverage (debt to operating earnings of 4.8 times in 2012 and 3.9 times in 2011) is expected to worsen. This is based on financial statements of 18 listed companies.
The concern is more for companies based in the north. Recently, Uttar Pradesh raised its State Advised Price (SAP) for cane by Rs 40 a quintal (100 kg), to Rs 280 a qtl. This is the highest in India and far more than the central government’s Fair and Remunerative Price (FRP) of Rs 170 a qtl. Uttar Pradesh is estimated to produce a third of the country’s output in sugar season 2013 and is home for Bajaj Hindusthan, Balrampur Chini and Dhampur Sugar Mills, among the major players in the country. Cane accounts for 85-90 per cent of operating cost and based on the new SAP, the cost of producing sugar is likely to be Rs 33-34 a kg, far more than the ruling price (on an average, companies are able to recover a kg of sugar from every 10 kg of cane).

No wonder, analysts have downgraded most north-based sugar companies in the past two to three months. “With the higher cane cost at Rs 280 a qtl and sugar prices at par with the cost of production (Rs 33 a kg), we believe earnings from the segment (sugar) for Bajaj Hindusthan would continue to remain dismal,” said Sanjay Manyal analyst at ICICI Direct in a note this month. The analyst is expecting the company to report a Rs 153.4 crore loss in the sugar season ending September 2013.
Similarly, in the case of Balrampur Chini, HDFC Securities’ analyst has reduced the earnings before interest, taxes, depreciation and amorisation (Ebitda) estimates by 39.4 per cent and profits by 83 per cent for FY14, due to higher cane cost. Dhampur Sugar, too, is expected to report a loss in its sugar business.

At this juncture, given the surplus in global and domestic markets, chances of a recovery in sugar prices are diminishing. The Indian sugar industry is expected to produce 24.3 million tonnes in season 2013, as against the consumption of 22.5 mt, a surplus of 7.8 mt (considering an opening stock of six mt), not small at a third of annual consumption.
In this situation, Maharashtra-based companies such as Shree Renuka Sugars and south-based ones such as EID Parry could be in a better position. In Maharashtra, the cost of production is Rs 30-32 a kg. Renuka is much more diversified, with large exposure to sugar refining, where margins and volumes are still comfortable. However, for Renuka, the worry stems from its high debt levels and not from the operating performance, as about half its operating profit goes towards paying interest cost.
In this backdrop, the only hope for companies is decontrol of the industry. Led by news of it being a possibility soon, the share prices of sugar companies have risen in the past two days. If decontrol is implemented in the manner in which the industry hopes (removal of levy sugar), it could help reduce the pressure on companies’ working capital and inventory, strengthening their finances in the long run and improving market sentiment. Linking of cane costs to realisation will make things better but as it is a sensitive issue, a resolution on this is not likely soon.

http://www.business-standard.com/article/markets/sugar-firms-eye-decontrol-as-fundamentals-hit-113021900787_1.html

Canadian Solar to Buy Four Solar Projects..

Canadian Solar to Buy Four Solar Projects for $37 Million

By Tina Davis - Dec 29, 2012 2:42 AM GMT+0530

Canadian Solar Inc. (CSIQ), a solar-panel maker, agreed to buy four solar-power projects fromMEMC Electronic Materials Inc. (WFR)’s SunEdison subsidiary for C$37 million ($37.2 million). Canadian Solar completed the purchase of two projects, capable of generating about 24 megawatts direct current, and is buying two other Ontario solar power plants with a capacity of about 22.5 megawatts, according to a statement from the Guelph, Ontario based-company today. It also has the option to buy a fifth project at a later date. The company may own more projects in the future, instead of just selling panels and developing facilities, Canadian Solar Chief Financial Officer Michael Potter said in a Dec. 10 interview. It’s developing about 260 megawatts of projects in Ontario that it expects to sell for C$1.3 billion during the next 18 months, he said. “We are very pleased to announce this transaction with SunEdison, which further demonstrates Canadian Solar’s ongoing investment and commitment to the Ontario solar energy market, and continues Canadian Solar’s growth of its global solar project portfolio and higher margin total solutions business,” Shawn Qu, chairman and chief executive officer, said in the statement today. The two projects purchased are expected to be fully operational by the end of next year. They account for about $20 million of the price, according to a Canadian Solar representative who asked not to be identified because of company policy. The other projects may be running by late 2013 or early 2014. The transaction settles litigation filed last year between the two companies. Each of the five projects has a 20-year power purchase contract under Ontario’s Feed-in-Tariff program, Canadian Solar said. Canadian Solar fell 3 percent to $3.27 at the close in New York. To contact the reporter on this story: Tina Davis in New York at tinadavis@bloomberg.net To contact the editor responsible for this story: Tina Davis at tinadavis@bloomberg.net

http://www.bloomberg.com/news/2012-12-28/canadian-solar-completes-38-million-buy-of-ontario-projects.html

FISCAL CLIFF - LEADERS...!!!!

REX NUTTING Archives | Email alerts

Nov. 21, 2012, 12:55 p.m. EST 10 people who led us to the ‘fiscal cliff’ Commentary: From Laffer to Obama, they fed our greed and guilt By Rex Nutting, MarketWatch

WASHINGTON (MarketWatch) — With our political leaders locked in a fiscal struggle that threatens to throw the economy off a so-called cliff and into recession, you might be wondering how we got to this place.

Remember that this supposed fiscal cliff is the direct result of two contradictory impulses in American life: Greed and guilt. Greed for low taxes, a strong military, a strong safety net and lots of government spending for everyone. And guilt that we weren’t paying our way. Read “Stop calling it a ‘fiscal cliff’”

All of us (or almost all) had a role in this melodrama, either benefiting from the spending or from the lower tax rates. Despite our culpability, it took strong national leaders to foster the heady mix of greed and guilt that brought us to this spot.

Here are the 10 people most responsible for bringing us to the edge of the fiscal cliff:

 

Arthur Laffer. Laffer was the economist who proved the existence of the free lunch. His Laffer Curve showed, in theory, that cutting tax rates would actually increase tax revenue. He gave intellectual cover to those conservatives who wanted to cut taxes, but who didn’t want to be seen as contributing to a big deficit. He gave them a guilt-free way to cut revenue.

There’s only one problem: Laffer’s ideas didn’t pan out in practice: Tax cuts don’t pay for themselves. Tax cuts are a major cause of our $16 trillion national debt.

Pete Peterson. If there’s one person who we can blame for making us feel guilty about the federal deficit, it’s Peterson, a hedge-fund billionaire who was a cabinet secretary in the Reagan administration. Peterson founded, funded or supported most of the institutions in Washington devoted to publicizing the problem of the deficit, including the Concord Coalition, the Peterson Foundation, The Fiscal Times, and the anti-deficit documentary “I.O.U.S.A.”

Without Peterson’s billions and the guilt it bought, the deficit would be a fringe issue.

Bill Clinton. President Clinton made budget surpluses look easy. The budget was in the black the last four years of his administration. What’s worse, he made surpluses look like a sure thing.

Clinton’s surpluses were partly the result of Washington going on a serious budget diet, with higher taxes paired with moderation in spending. But it was the booming economy — and higher taxes on capital income — that turned the modest deficits of the early Clinton years into surpluses.

By the time Clinton left office, politicians were beginning to talk about perpetual surpluses, in exactly the same way that hucksters on Wall Street were talking about a perpetual bull market. And with exactly the same outcome.

Alan Greenspan. Greenspan was a high priest of both guilt and greed. He had always warned Congress about the dangers of the deficits, but his biggest failure as Federal Reserve chairman was the day in 2001 he told Congress that the worst thing it could do was pay down the debt because that would destroy the Treasury market and the Fed’s power to control the economy.

That was the day he endorsed the Bush tax cuts. The Maestro’s endorsement gave intellectual cover to the conservatives who wanted to cut taxes, but who didn’t want to feel guilty.

Greenspan also catered to our greedy side as a serial bubble-blower. He inflated the housing bubble in the 2000s by keeping interest rates low and by refusing to regulate the shadow banking system.

George W. Bush . No one is more responsible for racking up our debt than Bush. He campaigned in 2000 promising to cut taxes in order to avoid paying down the national debt. And when the recession of 2001 arrived, he said tax cuts would revive the economy. And when the economy didn’t revive, he cut taxes some more. Tax cuts for all occasions. And it was all guilt-free

Dick Cheney. While Bush was busy cutting taxes, Cheney was busy planning the war on terror. For the first time in our history, we sent our military into battle without raising taxes at home to help pay for it. It added trillions to the debt.

David Lereah. Lereah was the chief economist for the National Association of Realtors and was perhaps the most enthusiastic and public cheerleader for the housing bubble. Even after the bubble began to deflate, Lereah still insisted that real-estate investments would never lose money.

Of course, Lereah didn’t cause the bubble all by himself, but he does embody the greed that engulfed the real estate industry, the Wall Street banks that profited from it, and the homeowners who took on more debt than they could ever hope to repay.

Grover Norquist. As the head of a powerful lobbying and campaign-finance organization, Norquist forced almost every Republican officeholder to sign a pledge to never raise taxes under any circumstance. If anyone declined to sign or dared to violate the pledge, Norquist would back a primary challenger. The threat worked.

The Norquist pledge blocked any possibility of a budget deal between Democrats and Republicans over the past two years. Democrats insisted that any plan to balance the budget must include more revenue as well as spending cuts, but Republicans held solid against any tax increase.

There are signs that Norquist could be losing his hold on the party. Several Republicans won elections this year without signing his pledge, and several incumbents have said they don’t feel bound by the pledge any more.

Barack Obama. Obama may be the perfect representative of our age, because he encapsulates our national schizophrenia over the budget. He honors both the greed and the guilt. He presided over the largest deficits in history, including a large fiscal stimulus, bailouts of the auto industry, and an expansion of the safety net.

But Obama also lectures us about the need for the government to tighten its belt, even during a recession. He wants to raise taxes, if only on a few, and he’s expressed willingness to cut into the great middle-class entitlements. It was Obama’s administration that first suggested the bargain in 2011 that created the fiscal cliff.

John Boehner. The House speaker is trapped in Grover Norquist’s world. He’s a pragmatic legislator who accepts that the government needs more revenue, but his caucus in the House doesn’t agree. In the summer of 2011, Boehner nearly forced the nation to default on its debt because he couldn’t deliver the votes necessary to raise taxes.

In the end, Boehner was forced to punt the problem down the road. Today’s fiscal cliff showdown is the result of Boehner’s inability to lead the House Republicans to a deal.

http://www.marketwatch.com/story/10-people-who-led-us-to-the-fiscal-cliff-2012-11-21?pagenumber=5

MASKS--EURO BANKS AT DANGER LEVELS....

Sat, Oct 27, 2012 at 11:30

The immeasurable risk European banks may be hiding

There is growing concern among policymakers and analysts that the true extent of European banks' debt problems is being masked. There is growing concern among policymakers and analysts that the true extent of European banks' debt problems is being masked.

Sir Mervyn King, Governor of the Bank of England, became the most high-profile policymaker to date to warn of the dangers of banks putting off foreclosures in a speech Tuesday night.

His stern warning to UK banks that they need to drop the "pretense" that some of their bad debts will be repaid was coupled with the statement that they have "insufficient capital" to deal with losses which have remained undeclared.

Essentially, what seems to have happened is that banks across the euro zone have put off foreclosures on weak businesses - a process known as forbearance. This has been enabled by low interest rates across the region and rescue packages which have injected unprecedented amounts of liquidity into the banking system and helped keep struggling economies afloat.

The scale of forbearance is hinted at in relatively low rates of company insolvencies.

In the UK, despite the recession, insolvency rates are similar to 2002, when the economy grew by 1.6 percent, according to government figures.

Greece's problems have been well flagged - yet just five Greek companies were declared insolvent in 2011, the year it was forced to seek a bailout from international lenders, fewer than in 2007, when its economy was still growing.

This persists across the euro zone, with the weakest economies sometimes experiencing its lowest insolvency rates.

In 2011, the number of insolvencies per 10,000 companies was lowest in Greece, Spain, Italy and Portugal, according to calculations from Creditreform.

However, as Nigel Myer, director of credit strategy at Lloyds, pointed out, the extent of this is "effectively invisible" and "almost impossible to quantify." Decisions are made by individual banks and they do not have to declare them under accountancy rules.

Putting off foreclosure could be dangerous not only because it masks the true state of businesses, but because it could mean a faster rate of insolvencies if banks decide to change their policies in response to a worsening economy, with potential damage to employment figures and the broader economy - and to the banks themselves.

"To the extent that forbearance has taken place, a worsening economic environment in these countries could lead to a faster rate of deterioration in asset quality than might be inferred from reported numbers," Myer warned.

Of course, delaying the repayment of non-performing loans can be positive for the economy, particularly in the short-term.

"It has allowed companies to survive and people to be employed," as Myer pointed out. "It also very likely supports tax receipts and reduces the need for social security support."

Sir Mervyn's warning does not chime with other influential figures in the UK.

Andrew Bailey, a member of the Bank's Financial Policy Committee and head of prudential regulation at UK regulator the Financial Services Authority, thanked the banks for their actions earlier in October.

The European countries least likely to be affected by forbearance following worse-than-expected economic data are Switzerland, Austria and Denmark, according to Myer, who suggested spreads in Swiss banks and the recent rally in Danish spreads should be supported by worries about forbearance.

Written by Catherine Boyle, CNBC. Twitter: @cboylecnbc.

http://www.moneycontrol.com/news/world-news/the-immeasurable-risk-european-banks-may-be-hiding_773101.html