Sweden

Former Senior Ikea Executive: The Truth About Ikea

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Former executive’s explosive book rips the cosy façade off the Swedish furniture giant

the-truth-about-ikea
Claims that Ingvar Kamprad, the founder of Ikea, runs the store with an iron fist, are made in a former executive’s book

The wholesome Scandinavian image of furniture and lifestyle giant Ikea has been rudely shaken by a new book which claims the company is hostile to foreign employees and uses Stasi-style secret police methods to spy on its thousands of staff worldwide.

The explosive charges are made by a former senior Ikea executive Johan Stenebo, a Swede who started working for the company at one of its German outlets outside Hamburg over 20 years ago and rose to a senior management position. He resigned last year.

His book, entitled Sanningen om Ikea (The Truth about Ikea), contains wide-ranging allegations about a company which has become a global household name. Justifying the book to Gemany’s Der Spiegel magazine, he said: “I did not want to go along with it any more, but I could not stay silent.”

Mr Stenebo claims that Ikea, which employs 135,000 staff in 44 countries, is run with an iron fist by founder Ingvar Kamprad and his two sons Mathias and Peter, who were promoted to top management five years ago.

He describes Ikea as “one of the most secretive companies in the world” and claims that senior management were expected to show fanatical loyalty and devotion to Mr Kamprad. “There was an unwritten law for Ikea upper management: loyalty to Ingvar unto death,” he writes.

He alleges that Ikea used methods normally associated with former Communist East Germany’s hated Stasi secret police to spy on its staff and keep them in line. He claims that a close-knit network of company informers kept Mr Kamprad constantly updated on personal gossip about employees and the prevailing atmosphere in each office.

Foreigners who work for Ikea have been referred to by Swedish executives as “niggers”, he writes, and have no chance of being promoted to senior positions. In fact, most of the top Ikea jobs, he claims, go to employees from the town of Älmhult, in the Samaland region of Sweden, where Mr Kamprad grew up. Mr Stenebo claims Ikea has elaborately manipulated the image of its 83-year-old founder, now the world’s fifth-richest man, portraying him as “an ascetic, slightly dim geriatric” with alcohol problems and dyslexia, and confecting for him a typical Ikea lifestyle of modest, affordable simplicity, with a Klippan range sofa and the bog-standard Billy bookcase.

In reality, he writes, these stories were made up by Mr Kamprad (who actually drove a Porsche), then disseminated by media which fell for their quaint charm. There was good business sense to the strategy, he says: the company’s homely image “helped to push down prices with suppliers”.

Read moreFormer Senior Ikea Executive: The Truth About Ikea

The Height of Stupidity: Sweden Cuts Deposit Rate to NEGATIVE .25%

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“…, punishing savers with negative deposit rates is the height of stupidity.”

“It would be fitting if there was an immediate run on deposits. And if that happens what will Sweden do? Halt deposits? Sweden risks (and deserves) a currency collapse and bank runs for this insane effort. Look for capital flight in Sweden.”

There has been a lot of ludicrous recommendations recently to combat deflation by making deposit rates negative. I did not think any central bank would be dumb enough to try it. I thought wrong.

Today, Riksbank, Sweeden’s central bank cut the deposit rate to -0.25% effectively charging savers interest on deposited money.

DATE 2/07/2009
The weak development of the economy requires a somewhat more expansionary monetary policy. The Executive Board of the Riksbank has therefore decided to cut the repo rate by 0.25 of a percentage point to 0.25 per cent.

Deep economic downturn

Economic activity abroad is very weak and this hits Sweden hard. Exports have fallen substantially and the situation on the labour market is continuing to deteriorate rapidly. The information received in recent months points to the economic downturn in 2009 being somewhat deeper than the Riksbank forecast in April.

Deposit Rate

The decision on the repo rate will apply with effect from Wednesday, 8 July. The deposit rate is at the same time cut to -0.25 per cent and the lending rate to 0.75 per cent.

Sweden Attempts To Boost Lending

Please consider Sweden cuts rates to new low, offers banks loans.

Sweden’s Riksbank cut interest rates to a fresh record low on Thursday and offered banks 100 billion crowns ($13.2 billion) to boost lending as it strives to reverse the country’s worst recession since the 1940s.

The central bank lowered its key interest rate by 25 basis points to 0.25 percent in a surprise move, putting official rates at their lowest since records began in 1907, and said it expected rates to remain at that level until late 2010.

“It’s a double whammy, or even a triple whammy,” said Roger Josefsson at Danske Markets.

“The deposit rates are actually negative now. In some sense they are creating a money machine for banks. You can lend all you want, but don’t put that back into the central bank.”

Sweden was plunged into recession late last year as the global financial crisis pulled the plug on market demand, leaving firms such as world number two truck firm Volvo scrambling to cut costs and shed jobs.

The central bank forecast the economy will contract 5.4 percent this year and return to tepid growth of 1.4 percent next year.

Read moreThe Height of Stupidity: Sweden Cuts Deposit Rate to NEGATIVE .25%

Sweden hit by Baltic crisis plans to part-nationalise banks

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Sweden is preparing to part-nationalise banks exposed to the economic collapse in Baltic states, raising fears that a string of Western European countries could face similar fallout from rising defaults in the former Communist bloc.

swedbank
Swedish banks have lent more than $75bn (£46bn) to Latvia, Lithuania and Estonia, led by Swedbank and SEB. Photo: REUTERS

Finance Minister Anders Borg said the Swedish state will buy stakes in distressed banks if they fall deeper into trouble but will impose draconian terms.

“We want to be very clear so that people know what could happen,” he said. “If the banks come to us with big credit losses, where they have previously earned big money on lending, then shareholders will take the consequences. We’re going to be clear that insolvent banks that don’t meet legal requirements will see an injection of funds, primarily through government ownership.”

Swedish banks have lent more than $75bn (£46bn) to Latvia, Lithuania and Estonia, led by Swedbank and SEB.

Read moreSweden hit by Baltic crisis plans to part-nationalise banks

Global Economic Crisis

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– Economy could lose 2M jobs in ’09 – report (CNN Money)

– China’s Exports Decline by Most in Decade on Global Recession (Bloomberg)

– Royal Bank of Scotland May Face LyondellBasell Losses (Bloomberg):
Jan. 12 (Bloomberg) — Royal Bank of Scotland Plc is the biggest lender to bankrupt chemical maker Lyondell Chemical Co. and may face losses on its $3.47 billion of loans to the U.S. chemicals company.

– Royal Bank of Scotland Selling Bank of China Stake (Bloomberg)

– Saab, Volvo Must Be ‘Carved Out’ To Win Aid-Swedish Official (CNN Money)

– Commercial property rents collapse in London hedge fund areas (Independent):
Rents for plush offices in Mayfair and St James’s plunged almost 30 per cent last year, hammered by the declining fortunes of many of their hedge funds tenants.

– Stephen King: You can’t buy confidence when the economy is in a state of collapse (Independent): Stephen King is managing director of economics at HSBC

– German bond sale’s fate signals trouble ahead (Financial Times):
A German sovereign bond auction failed (!!!) on Wednesday as investors shunned one of the most liquid and safe assets in the world in a warning for governments seeking to raise record amounts of debt to stimulate slowing economies.

– Bernard Madoff Will Remain Free on Bail, Judge Rules (Bloomberg)

– U.K. Slumps Most Since 1989 as Home Sales Drop, Surveys Show (Bloomberg)

– Zimbabwe introduces $50 billion note (CNN):
HARARE, Zimbabwe (CNN) — Zimbabwe’s central bank will introduce a $50 billion note — enough to buy just two loaves of bread — as a way of fighting cash shortages amid spiraling inflation.

– Taxpayer will own nearly half of super-bank (Independent):
Taxpayers are set to own almost half of the “super-bank” created from Lloyds TSB’s rescue takeover of HBOS, the two banks confirmed today

– Job losses accelerating to levels not seen since World War II (Memphis Commercial Appeal):
“There is no indication that the job situation would stabilize anytime soon,” said Sung Won Sohn, economist at the Martin Smith School of Business at California State University.
“This could turn out to be one of the worst economic setbacks since the Great Depression,” he said.

Volvo and Saab ask Sweden for aid

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The Volvo V70

General Motors and Ford Motor have approached Sweden’s government about financial aid for their lossmaking Saab and Volvo brands.

Related article: Ford Says It May Sell Volvo, Its Last European Brand

GM and Ford want to bolster the two marques’ finances in anticipation of selling them as the Detroit carmakers grapple with a cash crunch that threatens their survival.

Stephen Odell, Volvo’s chief executive, and Saab’s managing director Jan-Ake Jonsson have separately spoken to Maud Olofsson, Sweden’s industry minister, and other officials about securing funds, according to several people familiar with the discussions.

Ford and GM will both tell the US Congress they have long-term plans to dispose of the brands this week when they present detailed business and financial plans to support their request for $25bn of emergency funding.

Read moreVolvo and Saab ask Sweden for aid

Europe on the brink of currency crisis meltdown

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The crisis in Hungary recalls the heady days of the UK’s expulsion from the ERM.

The financial crisis spreading like wildfire across the former Soviet bloc threatens to set off a second and more dangerous banking crisis in Western Europe, tipping the whole Continent into a fully-fledged economic slump.

Currency pegs are being tested to destruction on the fringes of Europe’s monetary union in a traumatic upheaval that recalls the collapse of the Exchange Rate Mechanism in 1992.

“This is the biggest currency crisis the world has ever seen,” said Neil Mellor, a strategist at Bank of New York Mellon.

Experts fear the mayhem may soon trigger a chain reaction within the eurozone itself. The risk is a surge in capital flight from Austria – the country, as it happens, that set off the global banking collapse of May 1931 when Credit-Anstalt went down – and from a string of Club Med countries that rely on foreign funding to cover huge current account deficits.

The latest data from the Bank for International Settlements shows that Western European banks hold almost all the exposure to the emerging market bubble, now busting with spectacular effect.

They account for three-quarters of the total $4.7 trillion £2.96 trillion) in cross-border bank loans to Eastern Europe, Latin America and emerging Asia extended during the global credit boom – a sum that vastly exceeds the scale of both the US sub-prime and Alt-A debacles.

Read moreEurope on the brink of currency crisis meltdown

Fed, ECB, Central Banks Cut Rates in Coordinated Move

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A security officer stands outside of the Federal Reserve building in Washington on Sept. 16, 2008. Photographer: Jay Mallin/Bloomberg News

Oct. 8 (Bloomberg) — The Federal Reserve, European Central Bank and four other central banks lowered interest rates in an unprecedented coordinated effort to ease the economic effects of the worst financial crisis since the Great Depression.

The Fed, ECB, Bank of England, Bank of Canada and Sweden’s Riksbank each cut their benchmark rates by half a percentage point. The Bank of Japan, which didn’t participate in the move, said it supported the action. Switzerland also took part. Separately, China’s central bank lowered its key one-year lending rate by 0.27 percentage point.

Today’s decision follows a global meltdown that sent U.S. stock indexes heading for their biggest annual decline since 1937; Japan’s benchmark today had the worst drop in two decades. Policy makers are also aiming to unfreeze credit markets after the premium on the three-month London interbank offered rate over the Fed’s main rate doubled in two weeks to a record.

Read moreFed, ECB, Central Banks Cut Rates in Coordinated Move

EU is throwing habeas corpus out of the window

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British citizens could be convicted in their absence by foreign courts for traffic, credit card or other criminal offences under plans approved in principle by the European Parliament.

The proposals would allow citizens to be extradited automatically under fast-track procedures at the request of another European Union country on the basis of a decision by the foreign court.

The overwhelming adoption by the Parliament of the proposals, which now go to the Council of Ministers, was condemned yesterday as “throwing habeas corpus out of the window”.

Philip Bradbourn, the Conservative justice and home affairs spokesman in the European Parliament, said: “This initiative would enable courts to pass judgments in absentia. It goes against one of the most fundamental corner-stones of British justice – that the accused has a right to defend himself at trial. If other EU countries want to go ahead with this proposal that’s their choice, but the British Government should have no part [of it].”

Read moreEU is throwing habeas corpus out of the window

Secret EU security draft calls to pool policing and give US personal data

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Don’t miss the “Key Points” at the end of the article.
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· Closer links needed to beat terrorism and crime

· Blueprint wants new force to patrol world flashpoints


A German and an Italian officer with the joint EU force Frontex check a lorry for illegal immigrants on the Polish border. The agency, which is seen as one model of future integration, patrols the EU’s frontiers. Photograph: Sven Kaestner/AP

Europe should consider sharing vast amounts of intelligence and information on its citizens with the US to establish a “Euro-Atlantic area of cooperation” to combat terrorism, according to a high-level confidential report on future security.

The 27 members of the EU should also pool intelligence on terrorism, develop joint video-surveillance and unmanned drone aircraft, start networks of anti-terrorism centres, and boost the role and powers of an intelligence-coordinating body in Brussels, said senior officials.

Read moreSecret EU security draft calls to pool policing and give US personal data

ECB raises key rate to 4.25%

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FRANKFURT: The European Central Bank, spooked by soaring prices for food and fuel, raised interest rates Thursday, joining several other central banks in battling a global eruption of inflation.

The quarter-point hike, which the bank had signaled last month, had little initial effect on markets, with the euro treading water against the dollar and stocks staying relatively steady. Central banks in Sweden and Norway also raised rates this week, citing inflation. On Thursday, Indonesia raised its key interest rate for the third time this year, while India raised its key lending rate twice last month.

The Federal Reserve in the United States, where short-term interest rates are only half of those in Europe, has so far declined to join them.

The European Central Bank’s decision deepens a recent divergence in monetary policy across the Atlantic, ending a long period when it tended to follow the course set by the Fed.

But the sharp rise in inflation has put Europe’s bank into a policy bind because it has been accompanied, in recent days, by evidence that the economy here is deteriorating much like that of the United States.

Manufacturing activity in the 15 countries that use the euro shrank in June for the first time in three years, according to a survey of European purchasing managers. In Spain and Ireland, where a collapse in housing prices has magnified the problems, there is a real risk of recession.

Still, the European Central Bank, hewing to its inflation-fighting mandate, pressed on with the expected increase, moving the benchmark rate to 4.25 percent from 4 percent. Among other things, it is intended as a warning to unions not to use higher inflation as a lever to demand hefty wage increases.
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It was not clear, before an afternoon news conference chaired by the bank’s president, Jean-Claude Trichet, whether the rate increase would be a one-time gesture or the start of a cycle of tighter monetary policy.

Several economists said they doubted the bank could tighten much further, given the parlous economic situation.

“The ECB is hiking at a time when confidence is plummeting,” said Thomas Mayer, the chief European economist at Deutsche Bank. “The question is, ‘what do you do when asset prices fall at the same time that consumer prices rise?’ The central bankers seem to have reached the end of the line.”

Read moreECB raises key rate to 4.25%

Big Brother law stirs outrage in Sweden

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Sweeping new powers under which the Swedish security services can monitor private phone calls, e-mails and text messages are expected to come into force this week under legislation that has prompted outrage in the country.

Politicians, businesses, privacy campaigners and individual citizens have lined up to criticise the proposed law, which the Swedish Parliament will vote on tomorrow.

The Bill would grant the country’s intelligence agencies access to cross-border e-mails, phone calls, text messages and faxes, and empower them to monitor websites visited by Swedish citizens.

Since Scandinavia’s telephone network often routes local phone calls through exchanges in neighbouring countries, internet data and calls passing through Sweden on its way between two other countries would also fall within the jurisdiction of the new law.

Press freedom and individual privacy have traditionally been sacrosanct in Sweden, but fears about international crime and terrorism have prompted the country’s centre-right Government to extend the powers of the security services.

Previously, the state could apply for permission to monitor communications if illegal activity was suspected. Under the new law, government agents will be allowed to monitor messages by default.

Thousands of voters have contacted their MPs, urging them to vote against the proposals, but the law is expected to pass.

Dagens Nyheter, Sweden’s leading quality newspaper, compared it with the powers of the Stasi secret police in the former East Germany, and Google said that it would stay out of Sweden if the law is passed.

“We have made it clear to the Swedish authorities that we will never place any Google servers in Sweden if this proposition becomes reality,” Peter Fleischer, a Google spokesman, said. “This proposal seems like something invented by Saudi Arabia and China. It has no place in a Western democracy.”

Journalists have also complained that the law would damage their ability to protect sources.

Tomorrow’s vote comes a month after The Times revealed plans to establish a database containing details of phone calls and e-mails in the UK. The information would be held for at least a year and the police and security services would be able to access it if given permission from the courts.

June 16, 2008
Marcus Oscarsson, Stockholm

Source: The Times

Sweden: Winter ended before it started in Europe’s north

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RSOE Emergency and Disaster Information Service
Budapest, Hungary2008-03-04 19:22:55 – Climate Change – Sweden

GLIDE CODE: CC-20080304-15686-SWE
Date & Time: 2008-03-04 19:22:55 [UTC]
Area: Sweden, , Statewide,

Description:Icebreakers sit idle in ports. Insects crawl out of forest hideouts.
Daffodils sprout up from green lawns. Winter ended before it started in
Europe’s north, where record-high temperatures have people wondering
whether it’s a fluke or an ominous sign of a warming world. “It’s the
warmest winter ever” recorded, said John Ekwall of the Swedish
Meteorological and Hydrological Institute. In December, January and
February, the average temperature in Stockholm was 36 degrees – the
highest on record since record-keeping began in 1756. Record winter
highs were set at 12 other locations across the country, according to
the national weather service, SMHI. Migratory birds have returned from
southern latitudes prematurely. In southern Sweden, they never left.
“The birds that have stayed are robins and chaffinches,” said biologist
Lars-Ake Janzon at the Swedish Museum of Natural History. “They stayed
because there hasn’t been any snow.”

The warm weather also has stirred life inside the vast forests of the
Nordic and Baltic countries, where insects such as ants and ticks
emerged early from winter shelter. For businesses, the mild weather has
been a mixed blessing. For winter sports enthusiasts, the green winter
has been a nightmare. Small ski resorts around Stockholm never opened,
and skating enthusiasts waited in vain for ice to form on the waterways
surrounding the Swedish capital. “There’s not one millimeter of ice,”
said Anders Tysk, organizer of the annual Vikingarannet ice-skating race
on Lake Malaren. After postponing the race several weekends, he had to
tell 500 registered participants on Monday there would be no race this
year. “It’s the first time we’ve canceled since we introduced flexible
dates in 2003,” he said.