US Economy Shrinks Unexpectedly

The United States economy unexpectedly shrank at an annualised rate of 0.1 per cent in the fourth quarter of 2012, initial official estimates indicate.
The world’s largest economy grew 3.1 per cent in July to September.
The fourth quarter period was dominated by the “fiscal cliff” — the spending cuts and tax rises that had been due to come into force from 1 January.
These were avoided by a last-minute deal between the Republican-dominated Congress and the White House. However, economists warned at the time that fears of an abrupt cut in government spending were undermining business and consumer confidence.
However, part of that deal includes tax rises for the highest-earning Americans and — more significantly for the economy — the expiry of a payroll tax holiday for all US employees, something which is widely expected by economists to further weigh on growth during the current quarter.
The fourth-quarter shrinkage in economic output comes as a shock to analysts on Wall Street, who had been expecting 1.1 per cent growth according to a poll by news agency Reuters. Not one economist surveyed had predicted an economic contraction.
It will add to pressure on the US Federal Reserve to do more to stimulate the economy. Members of its Federal Open Markets Committee are due to announce the conclusions of their latest policy-setting meeting later on Wednesday, and will have had an advance look at the economic data.
Growth was dragged down by a 22 per cent cut in the federal government’s defence spending — the biggest since 1972, when the US was winding down from the end of the Vietnam War — and by the decision of many businesses to halt the rapid rebuilding of their inventories that began over the summer.
These two relatively volatile components of the data subtracted a combined 2.6 percentage points from the overall growth figure.
Consumer spending did pick up, as did business investment, suggesting that the economy may have some underlying momentum. Sales of computers and cars both made positive contributions to the economy’s performance.
Residential investment also grew 15 per cent, adding to evidence that the housing market has finally turned the corner.
“Frankly, this is the best-looking contraction in US [gross domestic product] you’ll ever see,” said Paul Ashworth, an economist at Capital Economics, in a note to clients. “The drag from defence spending and inventories is a one-off. The rest of the report is all encouraging.”
The October-to-December period was also negatively affected by Storm Sandy, which caused the closure of many factories and businesses in the New York area, and by a sharp drop in exports.

Growth for 2012 as a whole came in at 2.2 per cent, up from 1.8 per cent in 2011.
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Euro Heads For 14-Month High

The euro rose to a 14-month high against the dollar on Thursday, heading for its best month in more than a year, as signs of recovery in the euro zone’s economy set the currency on a bullish trend.

The yen fell, extending its recent decline on expectations of further monetary easing in Japan. The dollar was on pace for a monthly gain of 5.2 per cent versus the yen, while the euro rallied 8.3 per cent, the best month since February 2012.
“The overall recent trends are intact. The euro probably wants to go higher and the yen probably wants to go lower,” said Nick Bennenbroek, head of currency strategy, at Wells Fargo Bank in New York.
Weak German retail sales data released on Thursday slightly dented the bullish sentiment on the euro, but it was offset by a strong reading on the country’s labour market and did little to change to the currency’s rising trend.
By contrast, the U.S. Federal Reserve on Wednesday sent no signal that its bond-buying stimulus plan may end anytime soon, keeping the negative bias in the dollar.
Focus is shifting to U.S. nonfarm payrolls data on Friday, which will shed light on the health of the labor market. The Fed said the US jobs market would continue to improve at a modest pace, and pledged to keep purchasing securities until unemployment falls “substantially”.
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The Dark Side of Chocolate: Nestlé Advances Child Slavery

After shocking revelations that hundreds of thousands of children were forced to harvest cocoa beans under abusive conditions, the labour advocated pledged to address the practice. But 10 years later, labour advocated say the chocolate industry doesn't have a lot to show for itself on the issue.
An independent investigation into Nestlé's cocoa supply chain has found numerous child labor violations and kickstarted an ambitious plan to eventually eradicate forced labor and child labor in its production cycle.
The study was carried out by the Fair Labor Association with Nestlé's support. "Our investigation of Nestlé's cocoa supply chain represents the first time a multinational chocolate producer has allowed its procurement system to be completely traced and assessed. For too long child labor in cocoa production has been everybody's problem and therefore nobody's responsibility," said FLA President Auret van Heerden.
It means Nestlé is the first chocolate-maker to comprehensively map its cocoa supply chain – and can work on identifying problems areas, training and educating workers and taking action against child labor violations.
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Buhari: I May Run for President in 2015

General Muhammadu Buhari yesterday said he may change his mind to run for president in 2015 if his party decides to field him as a candidate. Buhari had said in the run up to the 2011 elections that that was the last time he would be participating in the presidential race.
Since he lost the election, loyalists and other supporters have been nudging the former head of state to change his mind. Speaking in Abuja yesterday at the inauguration of the Congress for Progressive Change merger committee, Buhari said he is likely to buckle under the pressure on him to contest in 2015. “I have been saying it and it is on record before the last general election that I will not present myself again for election. But after that I explained it so many times that members of my party said I don’t belong to myself, I belong to them and they belong to me,” he said. “For that reason I told them (to) go and organise a party and if you approach me I may consider it. This is the stage we are (at).”
The CPC merger committee, which is headed by former Bauchi State deputy governor Garba Gadi, is expected to represent the party in talks with the Action Congress of Nigeria (ACN). The two parties tried unsuccessfully to form an alliance in the 2011 polls. Buhari said yesterday he was waiting to see the result of the merger talks, and whether the new party would offer him its platform to stand for election. “I am waiting for my party and if we have a merger, it will make it easier for me as the new party will decide whether it will offer me the ticket and it will be up to me to accept it or reject it,” he said. In the renewed merger talks, Buhari’s former party All Nigeria Peoples Party had been mentioned as a likely participant. But Buhari hinted that CPC may discuss with ACN only for the time being. “I don’t think any party is dropping out but if you can recall that in 2010 we went far with ACN and we are picking priority and we are going to exhaustively go through our terms of reference with ACN before we attend to other parties,” he said. He told the committee to go into the negotiation with the objective of “negotiating the best deal for Nigeria.” “Your task is national. Petty personal interest should not stand in the way of a great opportunity to build and run a better Nigeria, which will happen once CPC and ACN come together,” he said.
“Right now, so strong is the belief in unity as seen in the merger of our two parties that the sentiments expressed on both sides sound as if the two parties may merge on their own even before their representatives reach the roundtable. “The sentiment today is for a full merger between the CPC and ACN, not an alliance or an electoral understanding or anything of the sort. What Nigerians want is merger, and that is what you are going to negotiate and bring home to them.” Buhari said the ground work has already been done in previous abortive alliance talks with ACN.
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"Not All Politicians Are Corrupt" – Anenih

Former Board of Trustee (BOT) Chairman of the Peoples Democratic Party (PDP), Chief Tony Anenih has stated that although there are corrupt persons in every society, not all Nigerian politicians are corrupt as some people think. He stated this at the launching of the book "Nigeria, Yesterday, Today" by Professor Godwin Sogolo at the Transcorp Hilton yesterday.

In his speech as the chief launcher of the book, Anenih said that every society had its own share of unscrupulous persons and that it was wrong to generalise that every person in that society was bad.
The Special Adviser to the Vice President on Political Affairs, Mallam Abba Dabo, who represented the Vice President, Arc. Namadi Sambo, commended the author of the book.
He said that the book chronicled the struggle of the country in the past and how it affects the present state of Nigeria.
He said that the present administration was doing its best to improve all sectors of the society and would appreciate the input of brilliant minds towards the growth of the country.
Former minister of information, Professor Sam Oyovbaire said the book was an example of a good debate which was lacking in Nigeria.
"This is what I call a good debate. There is no debate in Nigeria anymore. All there is in this country is quarrel. People keep quarreling with each other which does not help anybody." he said.
The book launch was very well-attended and saw representatives from various ministries and state governments.
Naij

Senator Tinubu Presents N108 Million To Lagos State University

As part of the government’s effort towards improving on the quality of education in Lagos state, a member of the Senate Committee on Education, Senator Oluremi Tinubu, (ACN Lagos Central), recently presented a cheque of N108 million to the Lagos State University (LASU) as grant from Tertiary Education Trust Fund (TETFUND).
This was disclosed by the Media Officer of the institution, Jerry Olatunbosun in Lagos.
Olatunbosun said that the money was meant for the development of the institution.
Despite the fact that the university was located outside Senator Remi Tinubu’s constituency, she said she gave the grant as a sign of love.

 

She said, “The bond between us, the senators representing the state at the National Assembly is a strong one that cannot be thwarted by allocations.
“We agreed on the grant; it could be the turn of another Senatorial district to make concession for my district or another tomorrow.”
The senator commended her colleagues in the Senate, for supporting her in ensuring that the special intervention grant was given to the institution.
Olatunbosun said that Sen. Ganiyu Olarewaju, (ACN Lagos West) accompanied Tinubu to present the
cheque.
He said that the Vice-Chancellor, Professor John Obafunwa, assured that the fund would be spent judiciously.
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Why We Pick Bad Leaders, and How to Spot the Good Ones

If you want to reach the top at work, it's better to be feared than liked, according to a new study. What's more, bullies are just as likely to achieve high social status as skilled, knowledgeable individuals, according to research carried out at the University of British Columbia (UBC), in Vancouver, Canada.

The two-part study looked at how "dominance" (which the researchers defined as the use of force and intimidation to induce fear) and "prestige" (the sharing of expertise or know-how to gain respect) can be used to achieve social rank and influence.
According to lead author Joey Cheng, a PhD candidate in UBC's department of psychology, the traditional view among social psychologists is that to be a leader you must contribute to the group, make sacrifices and demonstrate expertise.
But, she says the reality is often very different. People often say their boss is mean or pushy, or not particularly skilled, but they have to do what their boss asks or there will be consequences.
Joey Cheng, University of British Columbia department of psychology "People's common experience doesn't match what researchers have assumed for centuries," she says.
"When you talk to people and try to get a sense of what motivates them to do things in the workplace, people often say their boss is mean or pushy, or not particularly skilled, but they have to do what their boss asks of them or there will be consequences.
"We wanted to see if who you listen and defer to could also be a result of 'dominance' -- how much you are afraid of the person, how much they're able to intimidate you by virtue of their ability to decide over your fate, for example whether you get fired or whether you get promoted or not."
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