Infinite Unknown

May 23 (Bloomberg) — Airbus SAS, the world’s largest commercial aircraft maker, is valued at “less than zero” after this year’s 32 percent drop in the shares of parent European Aeronautic, Defence & Space Co., according to Lehman Brothers Holdings Inc. analyst Joe Campbell.

“The market is viewing Airbus as a liability, rather than an asset,” said Campbell, 62, who is based in New York and has ranked among the top five aerospace analysts for six consecutive years in an Institutional Investor magazine poll.

EADS, based in Paris and Munich, on May 13 reported an additional three-month delay in deliveries of the A380 superjumbo jetliner, which was already two years behind schedule. Before the latest setback, the company had cut its profit forecast by $6 billion through 2010.

Airbus, based in Toulouse, France, is also six months to a year late on the A400M military transport. It has a 20 billion- euro ($31.4 billion) contract with six European governments and Turkey for 180 of the planes. Additional cost overruns and penalty payments may drain cash needed for the $16 billion expense of developing the Airbus A350, a long-range jet competing with Boeing Co.’s 787 and 777.

A February 2007 recovery plan meant to help Airbus cope with a weakening dollar as it competes with Chicago-based Boeing for dominance of the $60 billion-a-year airliner market has stumbled. The planemaker sought in part to shift investment for new planes to subcontractors who would buy Airbus plants. It chose local companies in France and Germany that lacked the capital to shoulder the risk and the plan fell apart. Continue reading »

Tags: Airbus, Boeing, EADS, Economy, Lehman Brothers, UBS

Jean-Claude Juncker, the EU’s ‘Mr Euro’, has given the clearest warning to date that the world authorities may take action to halt the collapse of the dollar and undercut commodity speculation by hedge funds.

Jean-Claude Juncker, who is calling for Washington to
take steps to halt the slide of the dollar

Momentum traders have blithely ignored last week’s accord by the G7 powers, which described “sharp fluctuations in major currencies” as a threat to economic and financial stability. The euro has surged to fresh records this week, touching $1.5982 against the dollar and £0.8098 against sterling yesterday.

“I don’t have the impression that financial markets and other actors have correctly and entirely understood the message of the G7 meeting,” he said.

Mr Juncker, who doubles as Luxembourg premier and chair of eurozone financiers, told the Luxembourg press that he had been invited to the White House last week just before the G7 at the urgent request of President George Bush. The two leaders discussed the dangers of rising “protectionism” in Europe. Mr Juncker warned that matters could get out of hand unless America took steps to halt the slide in the dollar. Continue reading »

Tags: Airbus, Barclays Capital, central bank, China, collapse, Commodities, crisis, Dollar, EADS, ECB, EU, euro, European Central Bank, FDI, Federal Reserve, France, Futures, G7, GDP, George Soros, Germany, Gold, hedge funds, Holland, Ireland, Italy, Jean-Claude Juncker, Luxembourg, Nicolas Sarkozy, Oil, Saudi Arabia, Silver, Silvio Berlusconi, slide, Spain, stability, traders, world authorities

Germany and other industrialized nations are desperately trying to brace themselves against the threat of a collapse of the global financial system. The crisis has now taken its toll on the German economy, where the weak dollar is putting jobs in jeopardy and the credit crunch is paralyzing many businesses.

A trader reacts in front of the DAX board at the Frankfurt stock exchange.

The Bundesbank, Germany’s central bank, doesn’t like to see its employees working too late, and it expects even senior staff members to be headed home by 8 p.m. On weekends, employees seeking to escape the confines of their own homes are required to sign in at the front desk and are accompanied to their own desks by a security guard. Sensitive documents are kept in safes in many offices, and a portion of Germany’s gold reserves is stored behind meter-thick, reinforced concrete walls in the basement of a nearby building. In this environment, working overtime is considered a security risk.But the ordinary working day has been in disarray in recent weeks at the Bundesbank headquarters building, a gray, concrete box in Frankfurt’s Ginnheim neighborhood, where the crisis on international financial markets has many employees working late, even on weekends. Continue reading »

Tags: Airbus, Bernanke, BMW, CEO, Commerzbank, Depression, Deutsche Bank, Dollar, EADS, Economy, fear, Fed, financial system, Fortress, Germany, Heidelberg Cement, Inflation, Josef Ackermann, Meltdown, Norbert Reithofer, Nouriel Roubini, Pro 7, Recession, Sat.1, Spiegel