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Mattias Loov sought to cut costs for his clients at Stockholm-based H1 Communication AB after the global economic crisis hit the Nordic region. He found a solution 760 kilometers (475 miles) across the Baltic Sea.
H1 now has about 10 percent of its staff in Estonia, where the hourly labor cost is a fifth of Sweden
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The Obama administration tightened rules on hydraulic fracturing Friday, requiring the disclosure of chemicals used in the process when done on federal and American Indian lands.
The new rules will also require additional testing of oil and gas well construction and require the industry to have a management plan for the water used in the process.
"This proposed rule will strengthen the requirements for hydraulic fracturing performed on federal and Indian lands in order to build public confidence and protect the health of American communities, while ensuring continued access to the important resources that make up our energy economy," the Interior Department said in a statement.
The move is part of a broader administration effort to increase rules for the controversial practice. Earlier this month, the Environmental Protection Agency tightened air pollution requirements for new oil and gas wells.
Hydraulic fracturing, or fracking as it is known, has unleashed a boom in energy production in the United States by allowing the production of oil and gas from shale rock. It has reduced the country’s oil imports, boosted natural gas production and provided thousands of jobs.
Most major oil companies are now involved in shale oil and gas production, including Exxon Mobil (, Fortune 500), Royal Dutch Shell (, Fortune 500) and BP ().
But the process has also raised fears of ground water contamination and is suspected of causing mild earthquakes.
Fracking involves injecting water, sand and some chemicals deep into the earth to crack shale rock, which allows oil and gas to more easily flow. Critics fear the chemicals are seeping into the groundwater.
Obama tightens oil and gas drilling regulations
About 20% of the nation’s natural gas production and 30% of its oil production is done on federal lands.
The oil and gas industry has long resisted disclosing what chemicals it uses in the fracking process, arguing they were trade secrets and that disclosure would harm their competitive advantage.
But environmentalists and public health officials lobbied for the disclosure, saying it was needed to monitor for pollution and effectively treat workers involved in accidents.
The ingredients used in fracking vary widely, and can include everything from sulfuric acid and benzene to instant coffee and paraffin wax.
While the industry initially resisted disclosing the formula, it has gradually been moving in that direction under intense public pressure. Many states now require disclosure, and many companies list at least some of the ingredients on a website called FracFocus.
Environmentalists were pleased with Friday’s announcement but said even more should be done.
They said the new rules only require chemical disclosure after the fracturing has been done. What’s needed, they say, is disclosure before the job so residents can do baseline testing of their water.
"We think the administration can and should have done more here to protect human health and the environment," said Amy Mall, a policy analyst for the Natural Resources Defense Council. The government "should not propose rules that are weaker than what any state has on the books."
Most fracking regulations are controlled by the states, but environmentalists have argued that the federal government should play a greater role.
The industry maintains the state rules are sufficient, and having the federal government involved adds an unnecessary layer of regulation that is both costly and time consuming.
In reacting to the new rules Friday, the industry didn’t seem too concerned with the proposal itself, but was leery of a bigger federal presence.
"The states have proven time and again that they are the best place for responsible regulation of drilling operations," The American Petroleum Institute’s Erik Milito said in a statement. "While it appears constructive changes have been made, we are still reviewing the new proposal to see how the agency addressed the various concerns that we’ve raised."
The trend in fracking regulation has been moving toward an increased federal role. Many analysts say the increased regulation is both necessary to convince the public the process is safe and affordable for the industry.
The Obama administration is generally supportive of fracking, but with increased oversight.
There still exists two extremes in this fight, with some in the industry opposing any new rules and some critics arguing the process should be banned altogether.
–CNN’s Poppy Harlow contributed to this report
Warren Buffett says his eventual successor as CEO of Berkshire Hathaway will maintain the company’s culture and keep key managers of its subsidiaries happy.
Buffett says the successor Berkshire’s board has in mind won’t do anything to turn off the managers of the 80-odd companies Berkshire owns.
Many of the managers of Berkshire companies are independently wealthy themselves. They work only because they enjoy it, and Buffett largely lets them operate their companies independently instant credit report.
Buffett says that his successor will be better than he is in many ways.
Berkshire Vice Chairman Charlie Munger says that there is so much momentum within the company that it would be hard for Buffett’s successor to change the company.
A moderate Islamist campaigning to be Egypt’s next president has won the support of some unlikely allies _ the country’s most conservative religious groups, including former militant jihadists.
Their backing reflects the growing mistrust by many Islamists of the powerful Muslim Brotherhood, the would-be flagbearer for the religious vote. And it has made Abdel-Moneim Abolfotoh a front-runner with an unusual coalition that includes secular liberals and even some Christians along with hard-line Islamists.
“He (Abolfotoh) will be a president for all Egyptians,” Wael Ghonim, an icon of the youthful revolutionaries behind the uprising that toppled Hosni Mubarak last year, wrote on his Twitter account Monday.
“He will bring us together, not divide us.”
Before he was thrown out last year, Abolfotoh was a senior leader of the Muslim Brotherhood _ now Egypt’s most powerful political force. He earned the reputation as a moderate reformer within the Islamic fundamentalist group.
But the bearded, 60-year-old former dissident eventually fell out with the group after publicly slamming it for not being transparent about its financing and irking his fellow Brothers by saying he would rather have a good Christian than a bad Muslim as president _ contradicting the movement’s line that majority Muslim Egypt should not be ruled by a Christian.
Now he is one of the few candidates with crossover appeal for both religious conservatives and liberals.
The endorsements and other key developments over recent days dramatically shifted the fortunes of Abolfotoh from a promising underdog to a real contender. The biggest change came when the election commission disqualified three strong candidates _ Hosni Mubarak’s former spy chief and vice president, Omar Suleiman, the Brotherhood’s first choice candidate Khairat el-Shater and ultraconservative lawyer-turned-preacher Hazem Salah Abu Ismail.
Abolfotoh’s newfound support comes from the ultraconservative Islamists known as Salafis. They adhere to an interpretation of Islam partly inspired by Saudi Arabia’s puritanical Wahhabi doctrine and want to see Islamic law strictly applied in Egypt.
Their backing eats into the chances of Mohammed Morsi, the second choice candidate of the Muslim Brotherhood, which won just under half of all seats in parliamentary elections around the start of this year. Abolfotoh’s growing strength also provides Amr Moussa, Mubarak’s longtime foreign minister and a front-runner himself, with a formidable competitor for the land’s highest office.
“Our top priority was: Who has the biggest chance to win? And we found that Abolfotoh has that chance,” said Sheik Abdel-Akhar Hamad, a top leader of the Gamaa Islamiya, the jihadist group that endorsed Abolfotoh on Monday.
The group was partially motivated by its fear of the Brotherhood’s “desire to monopolize power,” Hamad said.
In many ways, the May 23-24 presidential election will answer the persistent question of whether the popular uprising that toppled Mubarak has actually transformed Egypt from autocratic rule to a functioning democracy or whether it just removed the head, Mubarak, but left the regime intact, as many of the liberal youth groups claim.
That someone like Abolfotoh has a realistic shot at being president also speaks to the stunningly swift empowerment of Islamists in post-Mubarak Egypt and their emergence as a the nation’s most powerful group after years of persecution. The candidate was imprisoned multiple times under the Mubarak regime, once for five years Payday Loan for Bad Credit.
Abolfotoh, according to an opinion poll conducted by the state-funded Al-Ahram Center for Political and Strategic Studies, has the support of 27 percent of voters, well behind Moussa who has 41 percent. The poll surveyed 1,200 participants in most of Egypt’s 28 provinces and has a 3 percent margin of error. It was conducted in mid-April.
The poll indicates Abolfotoh is likely to face Moussa in a June 16-17 runoff. The winner will be announced June 21, the last stop in a bumpy transitional process led by the generals who took over from Mubarak last year and promised to step down by July 1.
Official campaigning kicked off Monday.
Abolfotoh has been cagey about the state of his relations with the Brotherhood, leaving the exact nature of current ties to the group ambiguous.
That may be motivated in part by his hopes of wooing the votes of young Brotherhood members who are at odds with the group’s leaders over policy, particularly the reversal of initial insistence that they would not field a presidential candidate.
However, his views on core Islamic issues set him apart from the fundamentalist Brotherhood on questions such as the role of women and Christians in mainly Muslim Egypt and whether there is a need to implement Islamic Shariah laws, such as forcing women to respect a strict Islamic dress code in public.
“The greatest thing in Shariah is freedom and justice,” Abolfotoh told a television interviewer recently. “Some people think that you can force people to pray or punish them for not praying. Forcing people against their individual rights create a hypocrite person. When women wear hijab (Islamic headscarf) because they fear punishment, this is religious hypocrisy.”
Such moderate views raise the question of what Abolfotoh offered in return for the endorsements he received.
For example, the Gamaa Islamiya took part in the planning and execution of President Anwar Sadat’s 1981 assassination and fought a low intensity insurgency against Mubarak’s regime for the rest of the 1980s and most of the 1990s to create a purist Islamic state.
The Gamaa’s nod to Abolfotoh followed a more important endorsement over the weekend from a group that is just as radical _ the ultraconservative Dawa Salafiya and its political arm Al-Nour party, which leads a bloc that controls nearly 20 percent of parliament’s seats. Al-Nour, like the Gamaa, advocates the implementation of a strict interpretation of Shariah laws that many view as unfair to women, minority Christians and secularists.
“We felt that it is too much for the Muslim Brotherhood to have it all: parliament with its two chambers, the presidency and the Cabinet,” senior Gamaa official Assem Abdel-Maged said. “This is harmful to the whole Islamist movement.”
Yasser Bourhami, an influential ultraconservative cleric from the Dawa Salafia, said Abolfotoh pledged to the group that, if elected, he would allow the Islamist bloc in parliament, the chamber’s largest, form the government and allow the Salafis a free rein to preach in mosques and religious schools.
“He (Abolfotoh) is the most accepted by the people. He is the most balanced,” he said in videotaped comments posted on social networks. “This is what we think is the best for this phase.”
The hole in Spain’s economy is getting deeper.
The government reported Friday that unemployment rose to 24.4 percent in the first quarter _ compared with 22.9 percent in the fourth quarter _ and that more than half of Spaniards under 25 are now without jobs. The bleak employment report came one day after ratings agency Standard & Poor’s downgraded the country’s debt.
The Spanish economy is in recession for the second time in three years as the damage from a housing bust persists. Foreclosures are rising, Spain’s banks are in worse financial shape and the government’s deficit is hitting worrisome levels.
The first-quarter employment data showed that 365,900 people lost their jobs, bringing the number of unemployed Spaniards to 5.6 million. The unemployment rate for people under 25 climbed to 52 percent, up from 48.5 percent in the previous quarter.
“The figures are terrible for everyone and terrible for the government,” Foreign Minister Jose Manuel Garcia-Margallo told Spanish National Radio. “Spain is in a crisis of enormous magnitude.”
The total number of unemployed increased by 729,400 compared with the first quarter of 2011. The National Statistics Institute said Friday that Spain now has 1.7 million households in which no one has work.
The figures were another blow to the conservative government of Mariano Rajoy after Standard & Poor’s late Thursday became the first of the three leading credit rating agencies to strip Spain of an A rating. It cited a worsening budget deficit, worries over the banking system and poor economic prospects for its decision to reduce the rating by two notches from A to BBB+.
S&P even warned that a further downgrade is possible as it left its outlook assessment on Spain at “negative.”
Spain, the eurozone’s fourth-largest economy, is just now just three notches above so-called junk status. Earlier this week, the Bank of Spain confirmed that the country had entered a technical recession _ two consecutive quarters of negative growth.
The country’s economic problems have become the epicenter Europe’s debt crisis in recent weeks as investors worry over Spain’s ability to push through austerity measures and reforms at a time of recession and mass unemployment.
The cuts are aimed principally at slashing the government’s deficit from 8.5 percent of economic output to the maximum level set by the European Union of 3 percent by 2013. For this year the goal is 5.3 percent.
With the economy shrinking and the population restless, there are concerns that the government will not meet its targets and will be forced into seeking a financial rescue as Greece, Ireland and Portugal have done before.
The difference is that Spain’s economy is double the size of the combined economies of the three countries that have already been bailed out. The other eurozone countries would struggle to muster enough money to rescue it.
The government later Friday released a flurry of upbeat data on how it plans to turn the economy round between 2012-2015. Despite the dismal job numbers, it predicted a roughly balanced budget in 2016.
But there was more pain, too. Economy Minister Luis de Guindos announced an increase next year in indirect taxes. He said this measure will raise (EURO)8 billion ($11 billion) in new revenue to help chip away at a bloated deficit.
The conservative government has already raised income and property taxes, and announced cuts in spending on health care and education. The forecast is for the economy to shrink 1.7 percent this year.
Foreseeing the economic downturn, businesses have been laying people off at a faster rate than expected, said IESE Business School economics professor Antonio Argandona. New laws also make it easier for companies to shed workers at low cost.
Argandona said Spain is not now at risk of needing a bailout because its government is still solvent. But even if the economy returns to growth next year as forecast, the jobless rate will lag behind and unemployment could hit 26 percent, he added.
The mood among Spanish people out on the streets Friday was downcast.
“The situation is very bad. There’s no work,” said Enrique Sebastian,a 48-year-old unemployed surgery room assistant as he left one of Madrid’s unemployment offices.
“The only future I see is one with wages of (EURO)400 ($530) a month for eight-hour days. And that’s if you can find it,” said Sebastian.
Markets in Spain initially reacted negatively to the twin news but soon recovered their poise alongside the rest of Europe as the downgrade was largely viewed as a belated acknowledgment of the market realities.
The main IBEX index, having fallen more than 1 percent earlier, recovered and was up 1.2 percent in early afternoon trading. Meanwhile investors sold off Spanish bonds in a show of jitters. The interest rate, or yield, on the country’s ten-year bond was up 0.07 of a percentage point to 5.87 percent, having touched 6 percent earlier.
Though the yield is below the 7 percent rate widely considered unsustainable in the long-run, it has edged up over the past month from below 5 percent in a clear sign investors are fidgety over its economic prospects.
Gayle Allard, a labor market expert at IE Business School, said that while a jobless rate of 24.4 percent is terrible, Spain is traditionally a high unemployment country. Three times in the past 30 years it has exceeded 20 percent, Allard said.
“It is something that, somehow, they live with. Things go underground. I don’t know what they do. They hide money in good years and they pull it out in bad years,” Allard said.
____
Pylas contributed from London. Ciaran Giles and Jorge Sainz contributed from Madrid.
The housing market continued to struggle in March, despite low home prices and record low interest rates, an industry report revealed Thursday.
Sales of existing homes fell 2.6% compared with a month earlier, to an annualized rate of 4.48 million homes, the National Association of Realtors said.
Gus Faucher, a senior economist at PNC Financial, called the report disappointing.
"We were expecting an increase," he said. "We need a turnaround to help the economy recover."
The Realtors’ group’s chief economist, Lawrence Yun, opted to look on the bright side of the report — sales were up 5.2% year-over-year.
It’s safe to sell your home again
"We have seen nine consecutive months of year-over-year sales increases," he said. "Existing-home sales are moving up and down in a fairly narrow range that is well above the level of activity during the first half of last year."
The choppy market stands in contrast to the continuing gains made in affordability.
Factoring in price declines that have averaged about 34% nationally, according to the S&P/Case-Shiller home price index, and record low mortgage rates, homebuying is more affordable than ever.
"For buyers who can qualify for a mortgage, now is a very good time to become a homeowner," said Realtors’ president Moe Veissi.
According to Yun, better economic conditions will push sales higher as the year goes on.
"With job growth, low interest rates, bargain home prices and an improving economy, the pent-up demand is coming to market and we expect housing to be notably better this year," he said.
As the year goes on, buyers may find fewer properties to choose from.
The number of homes for sale dropped 1.3% in March to 2.37 million existing homes. That’s a 6.3-month supply at the current sales pace. Inventory declined 21.8% compared with March 2011 and is well below the record of 4.04 million in July 2007.
Ironically, the tighter supply may have cut into sales, with house hunters in some areas of the nation having trouble finding homes to suit their needs or tastes.
"We’re already seeing this in the Western states and in South Florida," said Yun.
If the tightness in inventory spreads, it could signal a rebirth for home builders, who would have to step up development to fill the gap. And putting construction workers back on the job would be a shot in the arm for the overall economy as well as the housing market.
"Conditions are in place for a turnaround," said Faucher. "We’re just waiting for more confidence among buyers. We expect that to happen over the next few months."
More Americans than forecast filed applications for unemployment benefits last week, a sign the improvement in labor-market conditions may be stalling.
Jobless claims fell by 2,000 to 386,000 in the week ended April 14 from a revised 388,000 the prior period that was higher than initially estimated, Labor Department figures showed today in Washington. The median forecast of 47 economists surveyed by Bloomberg News called for a drop to 370,000. Revisions to previous data have been larger than normal and the government is trying to determine the cause, a Labor Department spokesman said as the figures were released to the press.
The claims figures raise the possibility the payroll gains that have helped push unemployment down to a three-year low may cool, weighing on consumer spending. Federal Reserve officials, awaiting evidence of a more robust job market and economic growth, have said they
The outlook among U.S. homebuilders dimmed in April after six months of rising or steady confidence. The decline suggests the housing market remains weak despite modest gains.
The National Association of Home Builders/Wells Fargo said Monday that its builder sentiment index fell this month to 25 from 28. Last month’s reading was the highest since June 2007. The index rose for five straight months between September and February.
Builders expressed weaker confidence in sales over the next six months. A separate gauge measuring that outlook rose for six straight months before falling this month, from 35 to 32.
The housing industry has a long way to go in its slow recovery. Any reading below 50 indicates negative sentiment about the housing market. The index hasn’t reached hit that level since April 2006, the peak of the housing boom.
“What we’re seeing is essentially a pause in what had been a fairly rapid build-up in builder confidence that started last September,” said David Crowe, chief economist with the homebuilders’ group. “This is partly because interest expressed by buyers in the past few months has yet to translate into expected sales activity.”
The spring buying season got an early start thanks to a mild January and February, which made up the best winter for sales of previously occupied homes in five years. Permits to build houses and apartments rose in February to their highest level since 2008.
Yet home prices continued to fall this winter. Builders keep slashing their prices to stay competitive. Last year was the worst for new-home sales on records dating back to 1963.
Builders are struggling to compete with foreclosures, which have forced down prices of previously occupied homes. And many people are finding it hard to qualify for loans or meet higher required down payments.
Low appraisals are scuttling some deals after contracts have been signed. As a result, some people who want to buy a new house are holding off because they can’t sell their home.
Those in a position to buy are benefiting from lower prices and the cheapest mortgage rates on record. The average rate on the 30-year fixed mortgage is hovering near record lows below 4 percent.
Builders have pointed to some regional pockets of strength. New Orleans, Pittsburgh and other smaller areas of Texas, in particular, have reported increased buying.
President Obama made a broad push Tuesday for increasing taxes on the wealthy and in particular proposed Buffett Rule.
His address to college students in Florida came on the heels of a White House report that laid out its case, arguing that the Buffett Rule would make the tax code fairer and make it harder for the very rich to lower their tax bills.
Quiz: What the rich really pay in taxes
"What drags our entire economy down is when the benefits of economic growth and productivity go only to the few … and the gap between those at the very, very top and everybody else keeps growing wider and wider," Obama said.
The Buffett Rule is a key talking point in Obama’s re-election bid. The general principle behind it is that millionaires and billionaires like investor Warren Buffett shouldn’t pay a lower percentage of their income in federal taxes than middle-class households.
Obama has even set a threshold for how much they should pay: At least 30% of their income.
Obama’s Buffett Rule: FAQ
Most millionaires today already pay a higher percentage of their income in federal taxes than the vast majority of all Americans. But roughly 25% of them end up with a lower effective tax rate than 10% of middle-income households, according to the Congressional Research Service.
And a very small number — fewer than 1,500 households in 2009, according to the IRS — end up owing no federal income tax at all.
Obama’s Buffett Rule is targeted specifically at those high-income households that are in a position to structure their income and engage in legal tax strategies to minimize their tax bite.
Millionaires who owe no federal income tax
"The idea behind the Buffett Rule is to have a tax on high-income earners who manage to avoid paying a large share of their income in taxes," Alan Krueger, director of the president’s Council of Economic Advisers, said in a call with reporters.
They can do so if much of their income comes from capital gains and dividends — which are taxed at a lower rate than ordinary paychecks. The same is true if they have made tax-free or tax-sheltered investments.
And a number of other tax breaks on the books end up disproportionately benefiting high-income households.
Krueger asserted that the Buffett Rule would also make for good tax policy by making the tax code more efficient. That is, there would be less incentive for the wealthy to choose one investment or financial activity over another or to recharacterize their income simply to reduce their tax bills.
Tax experts, however, say the goals of the Buffett Rule could be accomplished more simply through a complete overhaul of the tax code.
Indeed, Obama initially proposed the Buffett Rule as a guiding principle for reform. But Senate Democrats are now pushing a bill to implement a version of the rule in today’s tax code. And the White House is now endorsing that push.
Tax reform is likely to be a long slog, and implementing a Buffett Rule now would be a "simple and common sense" step toward reform, said Jason Furman, the principal deputy director of the National Economic Council.
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