РАЗДЕЛ 2: ЭКОНОМИЧЕСКИЕ ТЕКСТЫ
TEXT №1
Objective
To try to help banks provide better banking to their retail and small business markets whilst sustaining or improving their profitability is no small ambition. The banks' customers want their own lives made easier and 'fairer'. And for a bank, the number one goal is to profitably increase its number of customers and the depth of its relationships with them (more accounts, more funds, more services). Providing better banking for customers will help achieve both, whether through initiatives from established large, mid-sized or small banks, building societies, or from new banks.
Our point is not that banks have a problem, and here is a solution. It is that banks have major opportunities to provide 'better banking' to the benefit of both their customers and investors - and here is a proposition, together with some approaches to consider. Not, we must add, that banks do not know this already.
The confluence of market, societal and technological possibilities makes the present times markedly different for banks than the past. Banking has got progressively 'better' over the years, but slowly. It is a question of whether this pace of improvement could happen faster, how that could happen, and what the consequences would be. Retail banking has noticeably changed from a mature market with benign competition into a growth market with aggressive competition. The more one understands about the retail banking business, the more exciting it becomes.
Change could happen a great deal faster than we are used to. Change in retail banking has been slower than, say, in corporate banking. The retail banking market is huge, with relatively few environmental factors. In a slow moving business, as retail banking has been, decisions tend to be cumulative and irreversible, so although decisions have been fewer and more widely spaced out, they are more fundamental and critical.
The choice is not between evolutionary changes and new, revolutionary approaches. Both are involved. We attempt to support both a faster evolution of the industry and safe progress with the more revolutionary ideas within the industry.
TEXT №2
If the Contracting Officer determines that suitable and timely replacement of key personnel who have been reassigned, terminated or have otherwise become unavailable for the contract work is not reasonably forthcoming or that the resultant reduction of productive effort would be so substantial as to impair the successful completion of the contract or the services ordered, the contract may be terminated by the Contracting Officer for default or for the convenience of the Government, as appropriate, or, at the discretion of the Contracting Officer if he finds the contractor at fault for the condition, the contract price or fixed fee may be equitably adjusted downward to compensate the Government for any resultant delay, loss, or damage.
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TEXT №3
Income and loss incurred on transactions that qualify as hedging operations are netted against loss/income incurred on other operations with the objects that are subject to hedge. Therefore, if the Company intends to hedge foreign currency risks, then losses and expenses incurred on derivatives in foreign currency, that qualify as hedging operations, will be deductible against gains on other operations with foreign currency.
Hedging transactions should conform to the documentation requirements set by the Tax Code. The Tax Code contains quite limited description or guidance on the content of the documentation supporting hedging operations. This increases the tax risks associated with hedging transactions.
It is important that the documentation supporting hedging operations should demonstrate the link between the subject of hedging and the operations used as hedging instruments. In case of hedging currency risks arising as a result of the projected cash flows, supporting documentation should demonstrate the link between the used derivative and the projected cash flow, as well as substantiate the competence of used projections. In absence of proper documentation, general tax rules applicable to derivatives should be followed.
Tax treatment of derivatives that do not qualify as hedging is different for quoted and unquoted deals. Losses incurred on quoted derivatives are fully deductible (subject to transfer pricing rules).
Negative net result on unquoted derivatives is non-deductible against taxable income on other operations (except operations with other unquoted derivatives) of the taxpayer.
Depending on the instrument and the strategy used for hedging, additional tax implications may arise. It is therefore strongly recommended, that once the structure of hedging instruments becomes clearer, tax implications associated with chosen instruments and strategies are analysed in more detail.
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TEXT №4
Slowdown in global growth
Economic activity in the US as well as in most other countries has been cooling off over the past six months. In reaction, investors became concerned that the world economy might be moving towards recession. However, this skepticism is overdone. We expect a continuation of global economic growth, albeit at a more moderate pace.
Despite dismal activity indicators, we did not change our US view. Three reasons for this. Firstly, macro surprises in one or the other directions are quite common, when the economy is sliding. Secondly, with 3.4% growth we were already until recently at the low end of consensus. Finally, one needs to see very low growth rates in 2nd HY '05 to achieve an average US growth below 3% for 2005.
We downgraded German and Italian growth for 2005 and therefore also European growth. The latest data flow shows a prolonged weakness especially in consumption. The announcement of general German elections in the fall '05 must be seen as positive for Germany but might only impact later than our forecast horizon. After the French vote on Europe, we will watch carefully there, whether we need to revise our forecasts. Finally, China was upgraded to 8.7% growth in 2005. While the broader consumer price indices have risen sharply since last year, the recent rise in core inflation (i.e. excluding energy and food prices) nonetheless came as a surprise. Although the inflationary rise is still limited to a few areas, there is mounting concern that this trend will spread.
TEXT №5
Employment and Unemployment
A major macroeconomic indicator is the unemployment rate. In the United States, the Bureau of Labor Statistics (BLS) conducts a monthly survey of a sample of households in which it asks whether individuals in the household are employed or have searched for work recently. Those who have done neither are deemed to be out of the labor force. Of those in the labor force, the percent that is not working is the unemployment rate.
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Another employment survey is called the payroll survey. The BLS asks all large employers and a sample of small employers to report the number of employees on their payrolls. This gives an alternative measure of total employment, one that is considered to be a bit more reliable than the household survey.
When aggregate demand (what we have been calling Y in our equations) goes up in the economy, employment goes up and unemployment goes down. This makes sense, because as firms must meet the need for more output, they have to hire more workers.
A typical unemployment rate for the U.S. economy might be 6 percent. However, it is important to realize that many more than 6 percent of workers experience spells of unemployment over the course of a year. Each month a large percentage of the labor force engages in transitions. Many people leave their old jobs. Some start new jobs right away, and others remain unemployed for a few months.
Economists Bruce C. Fallick and Charles A. Fleischman estimated that about nine million employment relationships end each month, due either to quits by workers or lay-offs by firms. Also, about nine million new employment relationships start each month. The change in the unemployment rate represents the difference between relationships newly broken and relationships newly started. A change in the number of unemployed of 250,000 will move the unemployment rate by 0.2 percentage points (from, say 6.0 percent to 6.2 percent), which is enough to be remarked on in the news media. In other words, in a month where 9 million jobs are terminated and only 8.75 million jobs are created, the unemployment rate will rise noticeably.
Another way of looking at the delicacy of the unemployment rate is to think of it in terms of the average spell for those who are unemployed. Suppose that 24 percent of the labor force experiences a spell of unemployment over the course of a year, and that the average spell is three months, or 1/4 of the year. Then the average unemployment rate is 24/4 = 6 percent. If the average unemployment spell were to lengthen to four months (1/3 of the year), then the unemployment rate would rise to 24/3 = 8 percent.
From the foregoing, it should be evident that the key to maintaining full employment is job creation. As long as new jobs are being created at a sufficient rate to absorb people leaving old jobs as well as new entrants to the labor force, the economy can experience a large number of layoffs and yet not have an unusually high unemployment rate. The media was reporting massive layoffs at major corporations throughout the 1990's, as the unemployment rate persistently declined. For most of the 1990's new job creation was strong, so that average unemployment spells shortened, reducing the overall unemployment rate.
ТЕКСТ №1
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