Solving Greece Didn’t Solve Anything

The buzz this morning, coming from multiple sources (all of whom so far insist on being unnamed) is that the Greek “restructuring” is going to be declared a credit event and trigger the CDS.

Before everyone goes “Boo!” and runs to hide under a rock, the net exposure involved here is in the single-digit billions. It’s not that large.

As with most things in this venue, it’s not the singular event that poses the problem. It’s the precedent, and “who’s next”: In this case, Italy.

As I and a few others pointed out originally “solving” Greece did nothing, because the problem wasn’t Greece per-se; it was the entirely-unsustainable debt picture worldwide, of which Greece was a symptom.

The SP 500 rallied more than 200 points, roughly 20% in a couple of weeks, on the premise that it would all be ok once Greece was resolved. As I pointed out at the time this was idiotic – resolving Greece was not sufficient as the underlying problem is not that Greece is in trouble, it is that there is too much leverage in both the European and American economies.

This morning Europe is rethinking their “rallying cry” with Italy showing lots of trouble. For those who were paying attention last week didn’t see much movement in the credit markets — certainly not what we saw in the stock market — and history has shown that when it comes to the credit and stock markets the folks in the stock market are IQ-challenged.

In fact, the entire rally last week looked a lot like machines playing the dollar and reflexively buying as the dollar declined:

Gee, that correlation is pretty striking, isn’t it? Sure looks like it to me.

More stunning is that when you look at the Euro of course it’s the other way around, and yet Europe rallied as the Euro got stronger.

Such are the foibles of being the “reserve” currency, I guess, or perhaps it’s just that we have a lot of robots. Whatever the case may be, this sort of stupidity always winds up correcting itself; it is simply a matter of when, not what.

In any event this week should be quite interesting; the declaration of a credit event will not help things over in Europe, and yet it appears not inevitable but necessary. If it’s not forthcoming then the declaration made is that CDS are worthless when it comes to sovereign debt, and you can expect a wee problem with subscribing future bond auctions “over there.” On the other hand if it is forthcoming then you can expect the speculators to look at the actual credit picture of the other nations “over there” and to act according to what they find.

How’s it feel to choose between sticking your neck in the guillotine or sitting in a chair that has big copper straps running up the back, arms and legs, along with straps you can’t avoid touching all of them?

Business Travel Prices to Increase Conservatively in 2012


The need for companies to invest in business travel as a means to
support business growth, as well as travel providers’ discipline in
managing supply, will likely lead to increases in business travel prices
paid worldwide in 2012. Business travel rate increases are likely to be
conservative in North America and Europe; however, Asia and Latin
America are likely to see relatively higher increases as travel demand
within and to these regions remains strong.

The annual American Express Global Business Travel Global Forecast,
which has been produced for more than two decades, includes more than
2,200 individual predictions, including 136 air pricing predictions
globally by type of flight and class of service; 932 country, regional,
and city hotel rate predictions by mid-tier, upper tier, and overall
property averages; and 35 country and regional ground transportation
predictions on base rates and average daily rates expected to be paid
worldwide next year.

“The travel industry remains a complex and ever-changing marketplace as
it seeks to regain both pre-recession pricing and profitability levels
in the face of economic anxiety,” said Christa Degnan Manning, director
of EXPERT INSIGHTS research, American Express Global Business
Travel. “As business travel is both an essential part of global economic
performance as well as an enabler of business growth, we expect the
combination of demand and effective travel supplier yield management to
likely push rates business travelers pay up across the board in 2012.”

North America Airfare Projections

American Express expects steadfast capacity restrictions by suppliers
will likely boost airline prices, even in the face of a potential
economic slowdown, resulting in average low to middle single-digit
growth in contracted rates for businesses next year.

Notably, business class airfares are expected to see the greatest
increase in 2012 as airlines take advantage of business travelers
needing to be on the road to secure new accounts and market expansion
where opportunities exist. These increases will likely be true even if
consumers opt to stay home in the face of a potential double-dip
recession in Western markets as travel suppliers target business people
with the classes of service and productivity-based amenities preferred
by the frequent traveler community.

  • North America Short Haul (Economy): 2 – 5%
  • North America Long Haul (Economy): 0.5 – 3.5%
  • North America Short Haul (Business): 5 – 7%
  • North America Long Haul (Business): 3 – 5%

North America Hotel Projections

The low single-digit gains hoteliers were able to secure in average
business travel rates in 2011 are likely to continue in the coming year
as hoteliers seek to reach pre-recession room rate levels. Across the
two primary business travel hotel categories of mid-range and
upper-range properties, the Global Forecast predicts likely low
single-digit increases in North America. Of note, metropolitan areas
play a significant role in expected price increases which vary by
individual city market.

  • North America Mid-Range: 2.5 – 6.5%
  • North America Upper-Range: 1.5 – 5.5%

“To mitigate price increases in hotel in 2012, travel managers could
benefit from benchmarking rates by property tier and city as supply
pipelines and travel demand vary by location,” continued Manning.
“Buyers should also carefully calculate and measure the value of
employee productivity-enabling services provided by hotels such as
Internet connectivity and business center usage, as hoteliers
increasingly seek to remove these from contracted rates to drive their
own revenue-generating opportunities in the face of low base rate gains
next year.”

Car Rental Projections

Car rental rates in North America are expected to remain flat as a
result of a highly competitive marketplace and excess capacity.

  • North America Base Rates: (-1)% – 0%
  • North America Rate Per Day: 2 – 3%

“2012 is the year to aggressively target car rental contract
negotiations as it promises the best opportunity for year-over-year
savings in travel category management,” added Manning. “Similar to air
and hotel, car rental companies are seeking to recoup average daily rate
declines of the past few years with additional fees and services, so
companies should particularly pay attention to mitigating those costs in
ground transport by clarifying policies and educating their traveler
populations on which expenses will be reimbursed.”

Europe, Middle East and Africa (EMEA) Airfare
and Hotel Projections

Persistent economic anxiety underlies average low single-digit EMEA
airfare predicted increases. However, travel volumes and capacity will
likely vary throughout the region and result in a range of pricing
changes, particularly by type of flight. For instance, long haul and
business class travel is expected to see relatively higher increases
over short-haul and economy as European business people go abroad to
Asia and Latin America to capitalize on growth opportunities in emerging

  • EMEA Short Haul (Economy): 0 – 4%
  • EMEA Long Haul (Economy): 2.5 – 5%
  • EMEA Short Haul (Business): 1 – 4%
  • EMEA Long Haul (Business): 3 – 7%

For corporate hotel rates in EMEA, the region is likely to see
conservative increases; however, there will likely be declines in
markets like Spain and Greece that are enduring particularly challenging
economic conditions. This year the Global Forecast includes details for
both upper-tier and moderate properties across 400 European, Middle
Eastern and African cities, 273 more EMEA cities than included in the
Global Forecast in years past.

  • EMEA Mid-Range: 0.5 – 4.5%
  • EMEA Upper-Range: 1 – 5%

Latin American (LATAM) Airfare and Hotel

The combination of several strong economies in Latin America and
consolidation among regional carriers is expected to push airfare higher
overall for the LATAM region. However, country-to-country factors such
as inflation and foreign exchange rates greatly impact expected pricing
between destinations.

  • LATAM Short Haul (Economy): 4 – 6%
  • LATAM Long Haul (Economy): 3 – 5%
  • LATAM Short Haul (Business): 6 – 9%
  • LATAM Long Haul (Business): 5 – 8%

The LATAM hotel market is similarly bolstered by strong economies and is
projected to have moderate increases at both mid-range and upper-range
properties. Hotel occupancy and pricing for the region are primarily
influenced by the strength of business hubs including Buenos Aires,
Mexico City, Santiago, and Rio De Janerio.

  • LATAM Mid-Range: 1 – 5%
  • LATAM Upper-Range: 2 – 6%

Asia-Pacific (APAC) Projections

The APAC region continues to be a relative bright spot in an otherwise
uncertain economic picture globally, and is expected to lead in business
travel demand. As such, airfare is expected to increase significantly in
the region on top of considerable jumps in prices paid in 2011.

  • APAC Short Haul (Economy): 1 – 5%
  • APAC Long Haul (Economy): 5 – 9%
  • APAC Short Haul (Business): 2 – 6%
  • APAC Long Haul (Business): 6 – 10%

“Overall the Asian market appears to be poised to continue on its growth
track, and business travel activity is expected to remain strong as
companies within the region and across the world send travelers there to
capitalize on its economic expansion,” said Manning. “Accordingly,
airfare in Asia Pacific is generally expected to rise next year,
especially for long-haul flights.”

As with airfare, the increased volume of travelers in the Asia Pacific
region, coupled with constrained capacity, is resulting in increased
hotel rates. However, pricing fluctuations impact Asia Pacific as they
do the rest of the world, with expectations for declines in some cities
based on location-specific conditions. For example, Shanghai has
abundant capacity, having added significantly for Expo 2010, so will
likely see price declines.

  • APAC Mid-Range: 6 –10%
  • APAC Upper-Range: 6 –10%

“As more and more companies understand the importance of putting people
on the road and its criticality to converting prospects, retaining
clients, and ultimately driving growth, particularly in emerging
nations, we expect to see travel prices go up,” Manning said. “As travel
suppliers have learned their lessons of the past two recessions and add
capacity carefully, managed travel programs have to help companies
strike the balance between increasing budgets to keep up with price
hikes and business opportunities while reviewing policies and tools to
most cost-effectively support the productivity and engagement of
employees needing to hit the road next year.”

About the Global Forecast and Methodology

The Global Forecast is a key deliverable of American Express Global
Business Travel Advisory Services’ EXPERT INSIGHTS research
practice, which also produces monthly industry analysis, the Business
Travel Monitor pricing index, and detailed travel program best practices
and benchmarking reports.

The 2012 Global Forecast is based on a number of primary data sources,
including proprietary data from the American Express Business Travel
Monitor, the American Express contracted rates database, aggregate
transaction reports, and secondary data sources including Smith Travel
Research (STR) Global Hotel Reviews and Global Business Travel
Association (GBTA) research on travel expenditures. Projections were
based on a combination of these primary and secondary sources and
interviews with American Express category and regional experts. All
ranges represent forecasted year-over-year increases in negotiated
business travel rates.

Although the forecasts and projections provided in the report are based
on information gathered from internal and external sources that American
Express Global Business Travel believes to be reliable, no
representation or warranty is made as to the accuracy of the forecasts
or projections made herein. In addition, actual changes in business
travel costs could vary significantly from forecasted data, particularly
as a result of unforeseen future political, economic, and/or
environmental events.

About American Express Global Business Travel

American Express Global Business Travel, a division of American Express
Company, is a global industry leader in business travel and meetings
management committed to helping businesses succeed through
cost-effective program management, world-class customer service, and
enhanced traveler productivity support worldwide. Through leading
online, offline and on-the-go solutions, consulting services, business
insights and research, supplier negotiation expertise, and meetings and
events capabilities, innovative services are delivered to clients to
maximize the return on their travel and meetings investments. Learn more
interact with peers on
and follow us on

American Express operates one of the world’s largest travel agency
networks with locations in over 140 countries worldwide. Total travel
sales volume processed in 2010 was $25.7 billion, including consolidated
volume and non-consolidated volume processed through joint ventures and
its partner network.

American Express Company is a global services company, providing
customers with access to products, insights, and experiences that enrich
lives and build business success.

For American Express
Erica Rose, 212-640-2265
[email protected]
Colunga, 212-446-1877
[email protected]

Greece police/fire blotter, Oct. 29

The following incidents were reported in and around the Greece area on Oct. 29:

A motor vehicle accident with injuries at 1 Beach Ave., Rochester, was reported on Saturday. The Monroe County Emergency Communication Department received the call at 4:04 a.m. when the RMEE was dispatched. At the time of the report, the City of Rochester Police Department was on the scene. The incident numbers were recorded as RMEE113020567 and CTYP113020565.

The Monroe County Emergency Communication Department received a report of a parking complaint at 279 River St., Rochester, at 9:06 a.m. on Saturday. At the time of the report, the City of Rochester Police Department was on the scene. The incident number is CTYP113020934.

At 10:17 a.m. on Saturday, a complaint of barking dogs was reported to the Monroe County Emergency Communication Department. The Greece Police Department was en route to the scene at the time of the report. The location is listed as 171 Jersey Black Circle, Greece, and the incident number is GREP113021119.

A parking complaint at 62 Lapham St., Rochester, was reported on Saturday. The Monroe County Emergency Communication Department received the call at 11:49 a.m. when the City of Rochester Police Department was dispatched. The incident number was recorded as CTYP113021380.

At 12:46 p.m. on Saturday, a hit-and-run accident (not involving injury to a person or the blocking of traffic) was reported to the Monroe County Emergency Communication Department. The Greece Police Department was on the scene at the time of the report. The location is listed as 117 Castleford Road, Greece, and the incident number is GREP113021564.

Athens Airport Passenger Traffic Drops 5% Through End-September

Athens International Airport SA
passenger traffic fell 5 percent in the first nine months of
this year as Greek travel was set back by the economic crisis.

The number of people passing through the country’s biggest
airport dropped to 11.5 million from 12.1 million a year
earlier, according to a statement on the company’s website

Tourism, Greece’s biggest industry, will account for almost
16 percent of gross domestic product and almost one in five jobs
in 2011, according to the London-based World Travel and Tourism

Domestic passengers in the first nine months declined 11
percent to 3.9 million and international traffic dropped 1.3
percent to 7.6 million. In September, the number of domestic
passengers fell 3.7 percent to 486,065 while international
traffic dropped 1.3 percent to 990,338 million.

International arrivals at Greek airports rose 9.7 percent
in the first nine months of 2011 from the same period last year,
according to data collected from 13 airports by the Association
of Greek Tourism Enterprises
, also known as SETE. The biggest
increases were on the islands of Rhodes and Kos, which each saw
a 22 percent rise, according to a statement posted on SETE’s

Athens airport was the only one to record a drop from
abroad in the nine-month period, SETE’s data showed. Data were
collected from the 13 airports that account for about 95 percent
of all arrivals by air from abroad

To contact the reporter on this story:
Natalie Weeks in Athens at
[email protected]

To contact the editor responsible for this story:
Angela Cullen at
[email protected]

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Business Calendar for Sunday, Oct. 30

Greece trip deadline: Register by today for an early rate of $2,447 to travel to the Mediterranean, including Greece and Turkey, with the Fayetteville-Cumberland County Chamber of Commerce. The trip is in March 2012 and is open to the public. For more information, go to


SOFEX 11: Fort Bragg Club. The Special Operations Forces Symposium Exposition, with a theme of “Supporting Special Operations Forces ANYTIME, ANYWHERE,” includes more than 80 military and government industry and technology exhibits daily from 9 a.m. to 4 p.m.; demonstrations and business networking; and award luncheons with Lt. Gen. John F. Mulholland Jr. and Retired Gen. David H. Petraeus. Hosted by the Association of Special Operations Professionals. Free.

RSVP: [email protected] or 483-2221. For a schedule and additional details:

Holly Day Fair: Crown Expo Center. The largest holiday gift and craft show in eastern North Carolina, with more than 200 vendors. For a complete schedule visit

Spring Lake chamber golf tournament, barbecue and Oyster Roast Seafood Fest: King’s Grant Golf Country Club, 347 Shawcroft Road. Details: 497-8821

Becoming a licensed family child care provider: 9 a.m. to 2:30 p.m., Harnett County Extension Office, 126 Alexander Drive, Lillington. A one-day professional development session is part of the Child Care and Youth Training and Technical Assistance Project funded through a grant from the Department of Defense and working in collaboration with Cooperative Extension. The course will cover key points to think about before opening a family child care home, including personal considerations, regulations and business aspects. Details and registration: Wanda Hardison or Nancy Lee, 910-893-7535.

The Federal Contracting Symposium: Stanly County Agri-Civic Center, Albemarle. Includes a federal contracting workshop series with beginner and advanced tracks, and a resource fair for businesses engaging in the federal market. Free. Registration required.

Winning over customers: Hampton Inn and Suites, Aberdeen. A half-day seminar with Bill Drury for businesses, put on by the Moore County Chamber of Commerce. Two sessions. Cost for chamber members is $89, or $79 per person for five or more. For non-members, $199 or $189 for five or more. or 910-692-3926

To list an event, send email to [email protected] Questions? Call 486-3551.

Oil price falls as traders see Greece’s troubles not over and Japan factory …

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Crete, Greece: Ghostly soldiers on the Battle of Crete anniversary

To help me uncover it, I enlisted the services of a Briton who has been a
resident of Crete for 25 years and offers guided tours of the key sites. For
Tim Powell, tourist guide, musician and lover of all things Cretan, the
Battle of Crete was characterised by the heroic resistance of the civilian
population. “This ‘insurgency’ led to a declaration that for every German
soldier killed, 10 Cretans would be executed — which of course did nothing
to stop them,” he said.

He started the story at the end, the Commonwealth War Cemetery at Souda Bay
where the main anniversary commemorations will take place. The 1,500
headstones memorialise some colourful characters, none more vivid than John
Pendlebury, an archaeologist with a glass eye who was operating in Crete as
a secret agent when he was killed on May 22 1941.

The battle and its aftermath of guerrilla resistance threw up a cast of such
chaps — suave British secret agents, brave Cretan warriors, even a
monocle-wearing German aristocrat — whose deeds are recorded in some
compelling accounts. Ill Met by Moonlight, for example, recounts the kidnap
of the German General Heinrich Kreipe in 1944, masterminded by the secret
agent (and future travel writer) Patrick Leigh Fermor.

But the Crete campaign also included many ordinary soldiers and civilians
whose names and actions remain unrecorded and for whom the experience was
far from glamorous. One of them was my father, a lance sergeant in the
Northumberland Hussars, who was evacuated to Crete from Athens towards the
end of April 1941 after mainland Greece fell to the Nazis.

He dug in with a force of about 21,000 combat-ready British, Australian, New
Zealand and Cretan soldiers to defend the island. The Germans launched their
attack on May 20 in wave after wave of paratroop drops by parachute and
glider. What followed was a series of military blunders on both sides in
which the Allies managed to snatch defeat from the jaws of victory.

The key fighting took place around the airfield at Maleme, and Hill 107 above
it, to the west of Chania. Since 1974 Hill 107 has been the site of the
German War Cemetery on Crete, the last resting place of 4,465 soldiers of
whom nearly 2,000 were killed on that first day.

Many fell not to soldiers but to civilians. “The Germans had never seen
something like this in Europe,” explained George Bikoyiannakis, the owner of
the Café Plateia in the village of Galatas near Chania, the site of fierce
fighting. “These people were fighting with farming tools. Even broomsticks.
They would tie kitchen knives to them and use them as spears.”

George runs a little museum next to the church that commemorates the heroic
efforts of locals and New Zealanders to defend the village. The Kiwis are
remembered in the name of a street, Neozilandon Polemiston, which means
“Road of the New Zealand Warriors”. Down a narrow alley, a garden gate has
been fashioned from an old piece of British Matilda tank.

The civilian resistance — by women and priests and as well as men young and
old — offended the Nazis’ sense of how war should be waged and their
commander, General Kurt Student, ordered reprisals to be carried out “with
exemplary terror”. The sites of these massacres are marked by monuments
across the island, some of them displaying the skulls and bones of victims
behind glass.

At Alikianos a marble column and canopy bear witness to one of the bravest
feats of the Battle of Crete, in which 850 lads of the locally recruited 8th
Greek Regiment held out for a week against German onslaught. More than 200
villagers, ranging in age from 14 to 80, were subsequently shot in reprisal.

“The Germans were surprised because the women didn’t turn away,” said Powell.
“They watched their husbands and sons being executed.” The significance of
the action at Alikianos is that it bought the Allies time to organise the
evacuation of Crete. On May 27, realising the island was lost, the Allied
commander, Major General Bernard Freyberg, ordered his forces to retreat
south across the Levka Ori, the mountains that form the snowy spine of
Crete, to an embarkation point on the southern coast.

My father and his fellow Geordies abandoned the ground they held around Chania
and joined the exodus. The route they took, with little or no food, in
rotting boots, under frequent attack from Stuka dive bombers, was nicknamed
the Via Dolorosa. Today you can drive it in your little Nissan or Peugeot
hire car.

In 1941 it was a dirt track that ended in the five-mile-long Imbros Gorge. A
Stuka was shot down as it came in for the attack here. Its propeller is one
of the prize exhibits in the war museum at Askifou, which lies on the Via
Dolorosa. Walking the gorge myself, I tried to imagine the Stuka screech my
father once remarked on, but all I could hear was goat bells.

His reward for reaching Sfakia, where Royal Navy ships evacuated 16,000 men
over four nights, was to be told there was no room for him. He would have to
stay behind and wait to be captured. All told, 5,000 Allied troops didn’t
make it off Crete. None of those left behind was above the rank of
lieutenant colonel.

One eyewitness talked of the “damnable and disgraceful scramble for priority,
a claim to the privilege of escape based on rank and seniority”. Evelyn
Waugh thought it a shameful episode. My father didn’t mention it.

After sitting on the beach at Sfakia I sat down for lunch at one of those
spruced-up tavernas and ordered a plate of gigantes, butterbeans in tomato
sauce. Then I remembered that butterbeans were my father’s favourite thing
to eat. He would have appreciated a plateful as he sat twiddling his thumbs
just a few feet away, waiting to be captured.

He spent the next four years, from the ages of 20 to 24, in various POW camps
in Germany, but he took it all on the chin. The only bit I can remember him
grumbling about was having to march the 50 miles back over the mountains,
along the Via Dolorosa, after being taken prisoner. He said he could have
done without that.

  • A two-day Battle of Crete tours guided by Tim Powell may be booked through his
    or by emailing him at [email protected]
    The cost is €100/£88 per day plus expenses for groups of up to six.
    Other themed tours of the island are also available.
  • Nigel Richardson stayed in the beautifully appointed Villa Diktamos, located
    in a remote valley near the route of the evacuation march, within easy
    reach of the coast around Kalives. It is bookable through Pure Crete (01444
    from £680 per adult and £580 per child (based on a family of four) for
    seven nights, including direct return flight from Gatwick to Chania
    with Monarch Airways.
  • Further reading: The Battle and the Resistance by Antony Beevor (John
    Murray paperback, £9.99).

Jetsetting millionaire couple to divorce in British courts

Mr Vardinoyannis launched separate divorce proceedings in Greece.

Ruling against the husband at the High Court, judge Peter Jackson said moving
around was a feature of the family’s lifestyle – and now the Court of Appeal
has upheld the decision.

The ruling means the divorce battle, which has already run up legal costs of
well over £1 million, will go ahead in front of an English judge.

“Just as there are multinational companies, so this is a multinational
family,” the judge said.

“Their lives have not been tied down by mundane considerations such as
financial budgets, local connections, immigration restrictions or language

“Instead, they have lived a protracted modern version of the 18th Century
Grand Tour, gravitating towards places where the international social set

“The husband, in particular, appeared to struggle in evidence to
comprehend the concept of ‘home’ as applying to his family at all.”

Mr Vardinoyannis, who describes himself as a private investor, grew up in
Switzerland before attending university in the US and moving to London in

In 1996, family litigation netted him a “substantial personal fortune”,
Mr Jackson said.

His wife was born and brought up in Brazil, went to school in Switzerland and
America, university in Paris, then attended an art course in London and
worked in a gallery in New York.

After living in London for some years after their 2003 marriage, the couple
moved to Los Angeles.

They then moved to rented accommodation in Sao Paulo, which they used as a
base to travel to mainland Europe, England and Crete, where Mr
Vardinoyannis’ family owned a holiday home.

They returned to London with their two children in 2008, but the husband –
anxious to avoid UK tax liability, Mr Jackson said – moved to Gstaad, where
his wife and children visited.

In his appeal application, lawyers for Mr Vardinoyannis argued that the wife’s
frequent and lengthy trips abroad and the time she spent living away from
the UK meant she should not be allowed to pursue the divorce in Britain.

Rejecting the argument, Lord Justice Thorpe said: “A family such as this
in its travels about the world has to have some secure base.

“The days when affluent people moved from one hotel to another without
maintaining any residence anywhere are long gone.

“The reality is that the petitioner’s residence base was, throughout the
material time, in London.

“The requirement of European law does not stipulate for her presence, but
only for her residence here.”

The family home in Kensington has since been sold, but the former couple
remain in London, where they rent separate accommodation.

Fitch says Greece’s credit rating will likely remain in “junk” status despite …

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FTSE live: market report

SymbolPriceChangeBUZ1.F9.27+0.48Chart for BUNZLCSR.L179.00-0.70Chart for CSRDBK.DE32.79+4.36Chart for DEUTSCHE BANK NERS.NX0.000.00Chart for RESOURCESFMJP.EX3,851.000.00Chart for JAPAN{“s” : “BUZ1.F,CSR.L,DBK.DE,ERS.NX,FMJP.EX,FNL.F,GLAXF.PK,GLE.PA,GS,IMT.L,IVKA.F,LLOY.L,MA6.DU,MKS.L,NBXB.SG,RB.L,RBS.L,S7E.SG,SMIN.L,SRE.NX,TTVLF.PK,VFTSE.NX,WI7K.SG,XTR.DU,^FTMC,^HSI,^IXIC,^N225,^REURUSD”,”k” : “a00,a50,b00,b60,c10,g00,h00,l10,p20,t10,v00″,”o” : “”,”j” : “”}

Drug makers prop up London’s blue chips as FTSE 100 (Euronext: VFTSE.NXnews) rises 0.5pc, but banks
slip back as eurozone worries persist.

Having endured an uncertain day’s trading as leaders met to discuss the
Eurozone’s predicament, the FTSE 100 finally finished up 27.7
points to 5553.24 although the FTSE 250 (FTSE: ^FTMCnews) eased 5.99 points to
10422.38. Real estate (Euronext: SRE.NXnews) groups were again dragging on the top tier, with British
Land losing 8.8 to 489.9p and miners experienced mixed fortunes.

Xstrata (Dusseldorf: XTR.DUnews) slid 11½p to £10.03, but Fresnillo (Frankfurt: A0MVZEnews) and Randgold
Resources (Euronext: ERS.NXnews) advanced 70p to £16.54 and 170p to £68.80 respectively as
investors headed to the so-called safe havens offered by precious metals.

Banks weighed on the blue-chips, though, with Lloyds Banking Group (LSE: LLOY.Lnews)
falling 0.73 to 34.25p and Royal Bank of Scotland (LSE: RBS.Lnews) easing 0.31 to

Leading the charge on the second tier, was Rank Group (Xetra: A0LGPGnews) , with the owner
of Mecca Bingo jumping 11 to 140p. Goldman Sachs (NYSE: GSnews) reinstated its “neutral”
rating on the gaming group with a 150p price target.

But tour operator Thomas Cook retreated 1.85 to 54.8p after the same
broker cut its price target to 47p from 82p. “We continue to see several
significant structural challenges to mainstream tour operating, which we
expect to lead to margin and volume pressure over the near and medium term,”
said analysts, who highlighted challenges such as declining numbers of
package holidays. But, TUI Travel (Other OTC: TTVLF.PKnews) rose 3.9 to 171.8p.

Informa (Dusseldorf: 10163162.DUnews) gained 11.7 to 367.8p after saying revenues had grown during
the past nine months. Informa, which organises exhibitions and events, said
it had continued to grow after it cut back on smaller and discretionary
events during the downturn in 2008, leaving it with stronger key exhibitions
in certain sectors.

3.45pm: Wall Street makes gains, as drug makers prop up London’s blue-chips

Wall Street is making gains, with the Dow Jones Industrial Average rising 75
points to 11781, after better-than-expected US durable goods data raised
optimism about the outlook for economic growth in the world’s largest

But, London’s blue-chips are struggling to hold onto their gains, with the FTSE
100 rising only 3 points to 5528. Pharmaceutical companies are helping
to prop up the benchmark index with GlaxoSmithKline (Other OTC: GLAXF.PKnews) rising 0.8pc and Shire (Stuttgart: A0MMAGnews)
putting on 1.8pc.

Glaxo made gains as its results showed it returned to growth in the third
quarter as Britain’s biggest drugmaker put patent expiries and a collapse in
revenue from troubled diabetes pill Avandia behind it. Sales were up 4pc to
£7.1bn and profits were £2bn.

Trading conditions have proved tough for pharmaceutical companies around the
world as pricing pressures increase. The squeeze is being felt particularly
in Europe (Chicago Options: ^REURUSDnews) where many cash-strapped governments are cutting healthcare
budgets, but Glaxo chief executive, Andrew Witty, said the impact was no
worse than expected.

Analysts at Bernstein said that overall, it was a “decent quarter”.
They added:

GSK continues to provide much-appreciated clarity on operating performance
in several business segments including Emerging Markets, ViiV, Consumer
Healthcare and Vaccines. Revenue growth was strong in Emerging Markets (+13%
CER) and Japan (EUREX: FMJP.EXnews) (+31% CER); Emerging Markets accounted for 20% of total sales
in 3Q. European austerity measures caused a -5% hit to revenues causing
underlying sales to decline by 4% in Europe. US underlying revenues grew at

Meanwhile, Shire has been buoyed by an upgrade from Societe Generale (Paris: FR0000130809news)
which raised its rating on the drug maker to “buy” from “hold”.

SocGen says its upgrade is made on the basis of upcoming product launches, and
its conviction that high quality, defensive stocks offering strong growth
will become increasingly valuable.

11.50am: Stobart reverses on slowing profit growth

Stobart has gone into reverse gear, retreating 7pc, after profit growth
at the freight company was hit by fluctuating demand in a tough economy,
particularly at its biggest division.

The company’s road transport operations suffered as panicky retailers launched
early promotions amid the UK high street gloom.

Stobart said in a statement:

More retail promotions caused volumes to fluctuate, which created problems
for us in planning our loads efficiently.

Revenues were up 15.3pc in the first half to £281.1m, but pre-tax profit
slipped to £14.7m from £15.4m last time.

Analysts at Investec (Frankfurt: A0J32Rnews) , which acts as a broker to Stobart, said:

Stobart’s management is very focused on the group’s new three-to-four-year
business plan to deliver a significant enhancement of profits and value
generation for shareholders. Whilst the road may not always be smooth (as
evident from the market challenges that the transport division faced in H1),
several key milestones have already been reached, especially in the airport
unit. Investors prepared to take the medium-term view on this stock should
be well rewarded, we believe, as this value is unlocked.

Amongst the blue-chips, Next (Xetra: 779551news) and Marks Spencer (Dusseldorf: MA6.DUnews) remain
under pressure, slipping 2.2pc and 1.3pc respectively.

Writing on the latter, ahead of first-half results due on November (Stuttgart: A0Z24Enews) 8, analysts
at Nomura cut their forecasts for 2012 profit from £724m to £692m. The
broker said:

A disappointing first half is principally a function of a greater than
expected squeeze on consumer spending power (fuel, utilities) and near-term
operational inflexibility, in our view.

Analysts added that management’s medium-term plan for MS (LSE: MKS.Lnews) still looked
promising, with a focus on points of difference and building online sales.
But they added:

The lesson learnt from 1H should be that, in a low growth economy, low
hurdle rateson new capital can see plans quickly de-railed. While the nature
of the 50% food mix in UK sales means returns can never be sector leading,
spending on innovations such as bakeries and delis may come to be seen as
‘marketing’ rather than investment. While the plan was conceived
anticipating stable economic conditions, the macro and consumer environment
has since deteriorated. Shareholders might therefore ask if this can be
‘done for less’ and look for flexibility from management at the interim
results on 8 November.

11am: Deutsche downgrade weighs on Next

Next is amongst the sharpest fallers, slipping 2.7pc this morning, as
Deutsche Bank (Xetra: 514000news) downgraded the high street retailer following a strong run for
the shares.

Analysts expect the stock to remain muted from now until after Christmas. They
point out Next is scheduled to report third-quarter sales on November 2, and
due to the unseasonably warm weather to date, the broker thinks
Autumn-Winter (Stuttgart: A0XFUKnews) ranges will have got off to a lacklustre start, leading it to
modestly cut its earnings forecasts. Deutsche added:

The main downside risk is a bigger ‘double dip’ in UK consumer expenditure
than allowed for whilst the main upside risk would be if Next Directory
sustains 15 percent growth, as delivered in H1.

Next’s fellow retailer, Marks Spencer , is also down 1.4pc as the
blue-chips mark time, with the FTSE 100 up just 3 points to 5528.

Yusuf Heusen, sales trader at IG Index, said:

Markets remain calm mid-morning despite the inevitable storm ahead. With
European leaders converging on Brussels once again, today has the potential
to see some great progress in resolving the eurozone debt crisis. The theme
of optimism we’ve seen since the start of the week has been left largely
intact despite some wobbles on Wall Street yesterday – worsened by that big
drop in US consumer confidence and right now the FTSE is holding steady
around Tuesday’s closing price.

Amongst the second-liners, CSR (LSE: CSR.Lnews) has jumped 9pc despite the chipmaker
saying it is seeing caution amongst its customers in the auto, home audio
and mobile sectors and so now expects fourth-quarter revenue to fall short
of market expectations.

CSR said it expected fourth-quarter revenue to be between $230m and $250m,
just short of consensus forecasts of $255m.

But analysts were hopeful about the prospects for a new bluetooth-wifi
combination chip that CSR is developing. Lee Simpson, an analyst at
Jefferies, said:

Going forward, CSR remains cautious due to macro uncertainty. But recent
combo chip tape-out gives us hope that the share price re-rate is still in
the cards.

8.20am: FTSE treads water ahead of Eurozone talks

The FTSE 100 was trading in a narrow range. It opened slightly down,
dipping 0.05pc – 2.98 points – to 5528.57, before edging back into positive

The biggest risers were:

Fresnillo +2.53pc

Randgold +2.16pc

Vedanta +1.1pc

Burberry +1.1pc

Imperial Tobacco (LSE: IMT.Lnews) +1.04pc

The biggest fallers were:

Smiths Group (LSE: SMIN.Lnews) -2.94pc

Reckitt Benckiser (LSE: RB.Lnews) -2.40pc

Next -1.69pc

Investec -1.1pc

Bunzl (Frankfurt: A0ET3Enews) -0.98pc

Asian shares were flat on Wednesday as markets waited for news of whether a
concrete plan to tackle the eurozone’s debt crisis will emerge at an EU
summit later.

Japan’s Nikkei 225 (Osaka: ^N225news) slipped 0.16pc to 8,748.47, Hong Kong’s Hang Seng (HKSE: ^HSInews) fell
0.18pc, South Korea’s Kospi edged up 0.3pc and Australia’s SP/ASX (Other OTC: ATKEF.PKnews)
200 rose 0.3pc.

The uncertainty in the European Union has weighed on global commodity and
equity markets for months, with Italy now joining Greece in the emergency

The cancellation of an EU finance ministers’ meeting before Wednesday’s summit
raised concerns that the high-level talks will fail to produce a deal to end
a crisis that has threatened to plunge the world economy into recession.

Barclays Capital said in a note

The cacophony of voices, shifting timelines and complexity of the problem
lead us to remain cautious on the euro and risky assets until more about the
next steps is known. .

RBS Morgans principal investment adviser Christopher Macdonald cautioned:

I don’t think people should be buying equities before the EU meeting .

Eurozone leaders remain at odds over how to beef up its €440bn rescue fund and
the size of losses banks should take on Greek bonds.

Sydney got a boost after government data showed inflation had eased to 0.6pc
in the third quarter, down from 0.9pc in the previous three months and
paving the way for a possible interest rate cut.

US stocks slumped on Tuesday on indications of a still-weak economy and
worries over Europe’s debt problems, with the Dow Jones Industrial
Average losing 1.74pc to close down 207 points at 11.706.62. The
tech-heavy Nasdaq Composite (Nasdaq: ^IXICnews) shed 2.26pc while the broader SP
500 lost 2pc.

Data released on Tuesday showed US consumer confidence fell to its lowest
level since March 2009, with third-quarter GDP data due Thursday.

Shares in online retail giant Amazon plunged 14pc in after-hours
trading on Tuesday after the US-based firm unsettled investors after posting
a 73pc drop in third-quarter net profit as it invested heavily in its Kindle
Fire tablet computer.

Wednesday’s market report

MS in spotlight on uncertain day’s trading

Tuesday’s market report

Weir pumped up as equities sink into red

FTSE live: market report – as it happened October 25,

Monday’s market report

Kesa sparks up as hopes of Comet sale grow

FTSE live: market report – as it happened October 24,

Friday’s market report

Sun shines on Thomas Cook after bank deal

FTSE live: market report – as it happened October 21,

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