Royal Bank of Scotland reports sharp loss

State-controlled Royal Bank of Scotland on Friday reported a net loss of 1.8 billion pounds (2.0 billion euros, 3.0 billion dollars) during the third quarter.

The announcement comes at the end of a week in which Britain’s government increased its stake in RBS to 84 percent in the wake of the financial crisis.

World job market remains grim

Despite signs of an economic revival gathering pace around the globe, the millions of people laid off during the worst recession in 70 years are unlikely to see relief any time soon as joblessness is still climbing in many of the world’s largest economies.

Unemployment data typically lags other indicators of economic health as companies hold off adding staff in the early stages of a rebound. The upturns recorded recently in the United States, France, Germany and elsewhere have been largely driven by temporary factors such as industry restocking following spending freezes, as well as the billions spent on stimulus programs.

This week the European Union forecast unemployment in the eurozone will rise to 10.7 percent in 2010 from 9.5 percent this year.

Unemployment rates in the 30 wealthy countries that belong to the Organization for Economic Cooperation and Development range from a low of 3.5 percent in the Netherlands to 18.3 percent in Spain, according to September figures.

And eurozone unemployment rose to a 10-year high of 9.7 percent in September.

In the developing world, the downturn has also taken its toll. Unemployment in Brazil appears now to be stabilizing, but in Mexico, after hitting a 13-year high in August, unemployment has continued to rise, reaching 6.4 percent in September.

In the United States, economists expect the unemployment rate will tick up to 9.9 percent when October’s figure is reported Friday. The jobless rate hit a 26-year high of 9.8 percent in September.

Here is a look at unemployment rates around the world:

GERMANY — German unemployment fell for a second month in October, but the effects of the financial crisis lingered and it is still too early to expect a turnaround in the economy, the country’s labor ministry said. The unadjusted jobless rate in Europe’s biggest economy was 7.7 percent, down from 8 percent the previous month and below the 8.3 percent in August, the Federal Labor Agency said. The dip in unemployment comes nearly two weeks after the German government raised its growth forecast and predicted that Europe’s biggest economy will expand by 1.2 percent in 2010, up from an earlier prediction of 0.5 percent.

FRANCE — The increase in French jobless lines has been somewhat tempered by government incentives such as exempting payroll taxes for some workers. The unemployment rate rose to 9.8 percent in September from 7.8 percent in 2008, according to the OECD. It is expected to hit 10 percent by the end of the year.

BRITAIN — Britain’s Office for National Statistics says unemployment in the United Kingdom was 7.9 percent in the three months to August. The rate held although the number of people out of work was 88,000 higher than in the previous three months, the report said. The number of jobless looks on course to pass the three million mark next year as the impact of the recession translates to rising dole queues.

JAPAN — Japan’s unemployment rate fell for the second straight month in September as companies gained more confidence in the stimulus-fueled global recovery but prices continued to tumble, underscoring weak demand at home. The jobless rate stood at a seasonally adjusted 5.3 percent in September, down from 5.5 percent the previous month and a record high of 5.7 percent in July, the government said Friday. The figures suggest job losses in the world’s second-biggest economy are easing as companies gain more confidence that global demand for Japan’s cars, electronics and other mainstay exports is picking up. Japan’s factory output posted its seventh consecutive rise in September.

CHINA — The official urban unemployment rate was 4.3 percent for the three months ended Sept. 30, unchanged from the previous three month period. But the actual level could be more than double that because the government system ignores millions of migrant workers and employees who are furloughed by state companies but not recorded as laid off. As of Sept. 30 there were 9.15 million registered unemployed people in an urban workforce of 210 million. As many as 30 million migrants are believed to have lost jobs in export-oriented factories in late 2008, government officials said.

BRAZIL — The government says the unemployment rate was 8.1 percent in August — virtually unchanged from the previous month. Brazil emerged from recession in the second quarter. Analysts predict the economy will expand slightly in 2009.

CNOOC takes first step in entering US market

Norwegian energy group Statoil announced Wednesday that it had sold parts of its oil assets in the Gulf of Mexico to China National Offshore Oil Corporation (CNOOC).

If approved by the US government, CNOOC would be the first Chinese energy company to enter the US market.

The deal involves the sale of Statoil's 20 percent stake of Tucker prospect and a 10-percent stake in the licences of the Krakatoa, Cobra and Logan blocks to CNOOC. Statoil made the announcement together with the release of its quarterly earnings statement.

The statement said Statoil will remain the operator of the four blocks but did not disclose the transaction details.

Statoil is a major player in the Gulf of Mexico and has won many leases from the US government to explore and develop the region. It is customary to invite partners to co-develop the leases gained in region to spread the risks. So when Statoil solicited partnerships for the development of the four blocks it gained in 2007 and 2008, CNOOC outbid other rivals and won the deal.

The arrangement needs the approval from the US Minerals Management Service, which controls American oil leases. According to the rule, a company must be incorporated in the US before conducting any business in the region, thus CNOOC would need to set up a US subsidiary to meet the requirements.

U.S. Dollar Drifts Ahead of U.S. Unemployment Rate

The Unemployment Rate is a measure of the percentage of the total labor force that is unemployed but actively seeking employment and willing to work in the US. A high percentage indicates weakness in the labor market. A low percentage is a positive indicator for the labor market in the US and should be taken as positive for the USD.

Analysts forecast a 9.90% unemployment rate, up from 9.80%.

Euro Dollar

The Euro broke short-term resistance and reached both suggested targets 1.4846 and 1.4897 successfully. Yesterday's climb stopped 10 pips above Fibonacci level, then went back to settle below it. That is why this resistance will keep its importance. Breaking it would send the Euro above 1.50, or at least close to the dollar and a half mark. The Euro continued its shine since reaching the bottom of the hourly channel that we talked about yesterday, and is currently rising inside an upward rising channel on the intraday charts, with its top at 1.4972, a level we consider as a first target to a break of 1.4897, and after that we could see 1.5014.

The bottom of the same channel is currently at 1.4839, and as long as price holds above it (at the moment its only pips above this level) the potential for more short-term upside works stays alive. On the other hand a break of the bottom of the channel indicates that the direction for the short-term has turned down, which will target 1.4769 first, and may be 1.4701 later. We remind you of the rate decision of the ECB that will be announced today, and the news conference for president Trichet that will follow, which usually moves the Euro violently.

Support:
• 1.4839: the bottom of the rising channel on the intraday charts.
• 1.4769: Fibonacci 50% for the last rising move.
• 1.4701: previous important support/resistance area.
Resistance:
• 1.4897: Fibonacci 61.8% for the drop 1.5061.
• 1.4972: the top of the rising channel on the intraday charts.
• 1.5014: previous resistance.

USD/JPY

Dollar-Yen broke Fibonacci resistance 90.68 and reached 91.28 as we accepted, with accuracy (yesterday's high 91.30), before retreating fast. This behavior redefined the rising channel on the hourly chart to make its bottom at 90.18. And when calculating Fibonacci 61.8% resistance for the short-term (for the drop from yesterday's high), we find that it is at the resistance level of 90.90.

In case of a break of either of those levels, we believe price will move in the direction of the break. If the bottom of the channel at 90.18 is broken, the price will move down and target 89.61 first, and may be 89.07 as well. While if we break Fibonacci resistance at 90.90 we expect a rise to surpass yesterday's high, targeting the important 91.63 first, and only if it is broken we can expect 92 to appear on the price screens when the price targets the obvious resistance on the hurly chart 92.17.

Support:

• 90.18: the bottom of the rising channel on the hourly chart.
• 89.61: previous support & Oct 12th low.
• 89.07: previous intraday support.
Resistance:

• 90.90: Fibonacci 61.8% for the short-term.
• 91.63: a well known support area that contained a number of daily tops and bottoms, the last of which was Oct 29th high.
• 92.17: obvious resistance on the hourly chart.

Analysis by: http://www.Forexpros.com - Written by Munther T. Marji

"A Modern World System?"

Globalization from a different perspective:

A modern world-system?, by Daniel Little: Immanuel Wallerstein created a huge stir in the 1970s with the publication of The Modern World-System: Capitalist Agriculture and the Origins of the European World-Economy in the Sixteenth Century (1974). The book is an intellectual masterpiece, synthesizing a vast range of fundamental literature on the economic history of Europe and the world. You could look at the book as the first serious and extended effort to theorize globalization -- a term that barely existed at the time of publication. Or you could look at it as a general theory of colonialism -- an account of the pathways and influences through which the metropole dominated and exploited the periphery. It is worth looking back at this work today to tease out some of the guiding assumptions about history, sociology, and globalization it reflected.

The concept of "world system" is itself a key component of our current understanding of globalization, in that it captures the idea of causal interconnectedness across the globe among major organizations, firms, populations, and states. Wallerstein observes that earlier social scientists had usually centered their analysis at the level of the political unit -- the nation-state; whereas his own approach is different:

This book makes a radically different assumption. It assumes that the unit of analysis is an economic entity, the one that is measured by the existence of an effective division of labor, and that the relationship of such economic boundaries to political and cultural boundaries is variable, and therefore must be determined by empirical research for each historical case. Once we assume that the unit of analysis is such a "world-system" and not the "state" or the "nation" or the "people", then much changes in the outcome of the analysis. (xi)

But what, more exactly, did he mean by a system?