Oil prices fall on economy fears

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5 September 2011 Last updated at 16:20 GMT Continue reading the main story Oil prices have fallen on concerns that the US could fall back into recession, and continuing anxiety about eurozone debt levels.

With fears about a slowdown in China also hitting sentiment, US light crude had fallen $2.40 a barrel to $84.05.

Brent crude was also lower, dropping $1.66 to $110.67 per barrel.

The falls come after data on Friday showed that the US economy added no new jobs in August, a much worse reading than had been expected.

Analysts had predicted that the non-farm payrolls figures from the Department of Labor would show about 70,000 new jobs had been created.

The unemployment rate remained unchanged in August at 9.1%.

In Europe, the main share indexes were down sharply as concerns continue about the high debt levels of eurozone countries, and how these could impact on the wider economy.

Germany's Dax index and France's Cac were both 2.6% lower in morning trading.

Meanwhile, a report in China said that the country's service sector grew in August at its slowest pace since records began.

"Oil is falling on worries over weak demand, unemployment and talk of a double dip recession," said Eugen Weinberg, head of commodities research at Commerzbank in Frankfurt.

He added that oil prices would be falling further were it not for growing optimism that the US central bank, the Federal Reserve, will announce new measures later this month to try to stimulate the US economy.

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Fears over debt Chinese surface

October 6, 2011, last updated 04: 28 GMT China market with deep pockets could see slow growth and buoyant, China touted as a White Knight in the world.

But fears are growing that the country can meet its debt crisis as its economy and signs of a slowdown.

Prime weekend urged stronger financial support for small businesses that are missing.

Its a conversation between reports many factories of the private sector are facing bankruptcy due to tightening credit, informal lending operations.

In the eastern city of Wenzhou, a fifth of small businesses to midsize, 360,000 city stops due to lack of cash, reported by China's official Xinhua News Agency on Thursday.

"Efficient means must be taken to contain the trend of usury, crack on illegal fund-raising and handle correctly the problem of collateral, lack of capital to prevent risks from spread and develop regional scale," said Mr. van when visiting the city.

According to media reports, more than 80 businessmen fled town bakpa loans taken from underground banks, owner of a shoe one jumped off a building and killed himself.

' Time bomb '

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we take informal lending market most likely short-term time bomb of China's economy, "

end quote Dong Tao, Credit Suisse economists believe it could be the start of a wave of Corporate bankruptcies.

A central concern of China loan informal or shadow banking market-rich individuals and businesses that offer loans at interest rates spanning from 14% to 70%.

Companies and entrepreneurs have turned in this underground, with Chinese banks tightening lending as part of the Government's fight against inflation.

Credit Suisse says it sector statistics was rare, but as total 4 trillion yuan ($ ￡ 627bn; 406bn) is equal to 8% of the formal banking sector-and loans may increase by 50% per year.

He estimates that 60% of informal loans to property developers have with the rest going to other small businesses that need loans bridge.

"We consider formal lending market most likely short-term time bomb of China's economy," Tao Dong, Asia Economist at Credit Suisse, said the report.

"Beijing take decisive measures to deal with active, problem, or the credit crisis is species emerge in our opinion," he says.

Default swaps

Fears of economic slowing down in China has also fuelled a rise in trade of credit default swaps are financial instruments which insure against-risk of debt defaults.

The net value of credit default swaps outstanding bahov Chinese Government rose to US $ 3bn, compared to $ 6bn. two years ago, the Financial Times reported on Thursday.

Investors are worried that China's economy could have a "hard landing" slowed suddenly after years of blistering growth.

The property market is considered to be particularly vulnerable, with home prices soaring over the past two years.

The State raised interest rates three times so far this year and ordered banks to increase their reserves and six times during the same period.

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VIDEO: Eurozone crisis sparks fears for Dexia

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4 October 2011 Last updated at 22:15 GMT Help

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Merkel bids to allay Greece fears

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13 September 2011 Last updated at 19:53 GMT Angela Merkel says a Greek default will have a domino effect across Europe German Chancellor Angela Merkel has sought to calm market nerves over a possible Greek debt default, saying the eurozone must stick together.

The collapse of Greece and its exit from the euro would have a domino effect, she told German radio.

Her comments came after reports that Germany was preparing for Greece to potentially leave the euro.

Mrs Merkel is now set to talk on Wednesday with French President Nicolas Sarkozy and the Greek prime minister.

It was also revealed that Brazil, Russia, India, China and South Africa, the so-called Brics group of emerging economies, were going to discuss how they could help the eurozone.

Brazilian Finance Minister Guido Mantega said finance ministers and central bank presidents from the five nations would discuss the eurozone debt crisis at a meeting on 22 September in Washington.

He said: "We're going to meet next week in Washington, and we're going to talk about what to do to help the European Union get out of this situation."

'Big danger'

Fears of a Greek default caused sharp falls in shares on Monday, but markets ultimately rose on Tuesday.

Mrs Merkel told the RBB radio station: "The top priority is to avoid an uncontrolled insolvency, because that would not just affect Greece, and the danger that it hits everyone - or at least several countries - is very big.

"I have made my position very clear that everything must be done to keep the eurozone together politically. Because we would soon have a domino effect," said the chancellor.

At the weekend, German Economy Minister Philipp Roesler suggested that Greece would need an "orderly default" on its debts, a comment that sent global share prices tumbling on Monday.

European stock markets initially fell on Tuesday, with France's Cac index down 1.8% on fears that its banks, which are heavily exposed to Greece, have most to lose from a default.

However, markets ultimately closed up, with banks leading the gains.

France's Cac added 1.4%, with Societe Generale adding 15%.

The UK's FTSE 100 closed up 0.9%, with Royal Bank of Scotland rising 5.3%.

Austerity measures

Mrs Merkel noted in her interview that there was currently no formal procedure in the eurozone for an "orderly default" of a member state.

She said that Greece was getting its public finances on track. "Everything I hear from Greece is that the Greek government has hopefully seen the writing on the wall and is now doing some of the things that are required," she said.

Despite her attempt to soothe the markets, fears of an imminent Greek default pushed interest rates on the country's 10-year government bonds to over 24% on Tuesday.

Greece has received two international bailouts each worth about 110bn euros - although the second has still to be implemented - yet its financial health remains critical.

In recent days the government has promised several times to accelerate plans for public sector cuts.

On Sunday, Athens imposed a new, two-year blanket tax on property.

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