The Wall Street Journal-20080115-EuroLinks Daily View- Europe Banks Predict Lengthy Troubles- Online edition
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EuroLinks Daily View: Europe Banks Predict Lengthy Troubles; Online edition
While most European banks appeared to be doing well as opposed to their U.S. counterparts, there is a dark cloud on the horizon. More write-downs seem possible as the global credit crunch takes a bite out of economic growth. European banks are expecting months of financial pain as they struggle to keep ahead of mortgage losses and rising defaults on loans.
As Carrick Mollenkamp reports, Switzerland's UBS AG had already warned that it could face $10 billion in write-downs for the fourth quarter -- the largest of any European bank so far. Major European banks Barclays PLC and Royal Bank of Scotland PLC in the U.K. projected write-downs totaling about $19 billion tied to subprime- mortgage securities.
Beyond write-downs, an economic slowdown looms with the U.K.'s emerging concern that falling home prices and high energy prices will trigger a retrenchment among consumers and could contribute to higher defaults on mortgage loans.
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Read Carrick Mollenkamp's report on what the European economy can expect and how it will try to prepare for major losses: http://online.wsj.com/article/SB120043312482992299.html
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COCAINE CARTELS INVEST IN EUROS: The cocaine boom in Europe and the continent's strong currency have combined to fuel a thriving industry: euro-laundering. With the high demand for cocaine across Europe and as the euro approaches $1.50, Latin American drug cartels have been taking advantage of business here more than before.
Consumption of cocaine has soared in much of Western Europe, according to a report by the U.N. Office on Drugs and Crime. As Mark Schoofs and Paulo Prada report, use of the drug in Italy rose to 2.1% of the general population in 2005 from 1.1% years earlier. France saw a boom in cocaine use; in 5 years the percentage of adult population users tripled from 0.2% to 0.6%.
But European countries are taking action against cocaine cartels by banding together. Last year, seven countries across Europe got together to form an agency dedicated to stopping drug traffic over the Atlantic.
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Read about Europe's drug cartel patterns and what major busts have already been made: http://online.wsj.com/article/SB120044304824892769.html
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NEW 'KITTY' IN TOWN: Sega Sammy Holdings Inc. said its Sega Toys Co. unit and Sanrio Co. have created a new line of fictional characters, hoping to replicate the success of "Hello Kitty." The new toy is called "Jewelpet" and has 33 different animals that each feature a different jewel. "Jewelpet" is the first product to emerge from Sega Toys and Sanrio's strategic alliance that was announced in April.
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Read more about "Jewelpet" and its manufacturers: http://online.wsj.com/article/SB120043086190592139.html
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LIVING ROOM BATTLEGROUND: International tech companies are fighting to pour computer content such as videos, music and photos into your living room. Despite major efforts from Apple Inc.'s Apple TV and Microsoft Corp.'s Media Center Extender, consumers still haven't connected their computer into the family room. This week Katherine Boehret tested out Griffin Technology's Evolve, a new version of the iPod dock stereo systems made to bring music from the headphones to the speakers.
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Read Katherine Boehret's evaluation of the new Evolve: http://online.wsj.com/article/SB120044283523492787.html
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RUBINOMICS R.I.P.: In an editorial on our opinion pages, find out what the end of Rubinomics means for the future of the federal budget and how Democrats are coping.
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Read our editorial writers' view: http://online.wsj.com/article/SB120035796472889887.html
