Report says global labour mobility hampered by fraud; 84,000 individuals tried to enter US in 2005 with fraudulent documentation

The Economist Intelligence Unit, the business-to-business arm of the Economist Group, which publishes The Economist magazine, today launches a new report, entitled Paper chase: Document fraud in the immigration process. The report was researched and written by the Economist Intelligence Unit and was sponsored by IntegraScreen.

News : International Last Updated: Oct 30th, 2007 - 04:27:18

Report says global labour mobility hampered by fraud; 84,000 individuals tried to enter US in 2005 with fraudulent documentation
By Finfacts Team
Oct 30, 2007, 04:17

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The Economist Intelligence Unit, the business-to-business arm of the Economist Group, which publishes The Economist magazine, today launches a new report, entitled Paper chase: Document fraud in the immigration process. The report was researched and written by the Economist Intelligence Unit and was sponsored by IntegraScreen.

The report says that the developed world is set to witness an influx of over 100m people between 2005 and 2050. Ageing populations and skills shortages create a demand for workers that the developing world can supply. The challenge of smoothing immigration procedures for qualified migrants while keeping the doors closed to less desirable entrants means many governments have been forced to put immigration and border protection at the top of their agendas.
To cope with these pressures, governments are bolstering their immigration-screening practices. Measures include capturing biometric data, adopting objective points-based screening systems, extending their networks into source-country institutions, and international border collaboration. However, these efforts may be compromised by the proliferation of fraudulent documentation. To take one example, in the fiscal year 2005, US Customs and Border Protection apprehended 84,000 individuals entering the US with fraudulent documentation.

Paper chase: Document fraud in the immigration process examines the rising trend of global migration and the extent of the challenge posed by fake documentation in policing this migration. The key findings include:

* Governments see the economic benefit of allowing inwards migration. Skilled labour is becoming increasingly mobile, and with skills shortages and slow population growth in the developed world, governments recognise the importance of allowing free flows of labour. Although incentives to let in migrants from the developing world are therefore rising, there is little international consensus on how migration should be managed.
* International efforts to monitor migration have been inadequate. The movement of people across borders, unlike that of goods or trade, remains largely unregulated at an international level. A weak institutional and legal framework means that any shift to a more rigorous multilateral regime will be difficult.
* “Objective” immigration systems may lead to more false documentation. The need for particular skills is prompting governments to implement more “objective” systems to grade potential immigrants. Points-based or similar systems—whereby immigrants are prioritised according to education and skill levels, amongst other factors—seem likely to become more popular. In turn, however, this may increase the incentive to forge documents supporting educational or skill-level claims. The proliferation of fake academic certificates is a particular problem.
# Border controls are strained when balancing vigilance with volume. Increasing migrant numbers have put a great strain on immigration authorities, which must cope with an overwhelming number of applicants and variety of documentation. The monotony of the work and the absence of international systems to verify supporting documentation mean some applications based on fraudulent claims will slip through the net.
* Immigration controls are being deepened. The response of many host countries to these challenges has been to “deepen” their systems and to try to institute more checks in a migrant’s country of origin. But a large number of visa applications may be based on fraudulent documentation.
* Technology on its own cannot solve the problem. A greater reliance on technology, such as the use of biometric information in passports and visas, is becoming common, making conventional travel documents harder to forge. But such technology can only fix a particular identity, not prove whether the identity itself is valid or based on fraudulent documentation. Nor may mass document verification be the answer: individuals may instead have to build their own identities using third-party corroboration.

“Governments see the benefits of allowing freer flows of migrant labour,” says David Line, editor of the report, “yet this raises political and practical problems in policing borders, especially with the prevalence of fake documentation. It isn’t clear how to solve this problem.”

© Copyright 2007 by Finfacts.com

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Eurozone Economic Outlook: Mild slowdown under way but growth should recover from Q2 2007 slump; Inflation set to increase

The Eurozone’s international environment became less supportive during the summer; the US real estate crisis has been deepening, and financial markets have suffered from a confidence crisis whose impact remains hard to assess, according to the latest Eurozone Economic Outlook, which is produced by three European economic institutes.

The three institutes are Germany's Ifo Institute; France's INSÉÉ - Institut National de la Statistique et des Études Économiques and Italy's ISAE - Institute for Studies and Economic Analyses.

Separately, European Central Bank President Jean-Claude Trichet said today in Moscow that growth in the Eurozone and throughout the world as "robust."

He said that the Bank's approach had not changed since it maintained its interest rates at current levels last week in Vienna.

"It (the approach) calls for growth to continue to be robust in the euro area and hover around its potential," he said.

The institutes say that GDP growth should, recover from its Q2 weakness, posting 0.6% in Q3 2007 and 0.5% in Q4 2007 and Q1 2008. Private consumption should continue to benefit from the past improvement in the labour market: it should finally increase at the same pace as GDP, but the VAT-related dip in Q1 will probably not be fully offset.

The institutes say that investment, by contrast, is expected to decelerate slightly at the forecast horizon, apart from a one-time acceleration in late 2007. Under the technical assumption that the oil price will fluctuate between $75 and $80 per barrel and that the euro/dollar exchange rate will stabilize around $1.40/€, inflation is expected to jump to 2.3% in Q4 2007 before easing slightly to 2.2% at the start of 2008.

Market News Afternoon: Europe mixed; Wall Street down as new US home sales set to reach a 10-year low; Dublin down but Providence Resources up 25%

On Wall Street Wednesday, after the Dow and the S&P hit record highs on Tuesday, stocks are being impacted by the earnings miss of aluminium giant Alcoa and concerns about the margins of oil refiners plus poor housing data.
The Dow Jones Industrial Average fell 109, -0.77%, the S&P 500 stock index lost 6 points and the Nasdaq Composite Index fell 2 points.


Existing US home sales are forecast to fall to a five-year low, worse than forecast, signaling the US housing market is far from hitting bottom. New-home sales may decline 24% to a to a 10-year low of 804,000 according to the National Association of Realtors.
Conditions in the mortgage market are improving for consumers, which should help to release some pent-up demand in early 2008, according to the latest forecast .
Lawrence Yun, NAR senior economist, notes that widening credit availability will help turn around home sales. “Conforming loans are abundantly available at historically favorable mortgage rates. Pricing has steadily improved on jumbo mortgages since the August credit crunch, and FHA loans are replacing subprime mortgages,” he said.
Yun said it’s important to place the current housing market in perspective, and that 2007 will be the fifth highest year on record for existing-home sales. “Although sales are off from an unsustainable peak in 2005, there is a historically high level of home sales taking place this year – a lot of people are, in fact, buying homes,” he said. “One out of 16 American households is buying a home this year. The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains.”


He emphasized all real estate is local with naturally large variations within a given area. “Markets like Austin, Salt Lake City and Raleigh have been outperforming recently and will continue to do well next year,” Yun said. “Other areas like Denver and Wichita will likely move up in the price growth rankings due to very positive local economic developments.”
Existing-home sales are expected to total 5.78 million in 2007 and then rise to 6.12 million next year, in contrast with 6.48 million in 2006. New-home sales are forecast at 804,000 this year and 752,000 in 2008, down from 1.05 million in 2006; a recovery for new homes will be delayed until next spring.
“A cutback in housing construction is a positive sign for the market because it will help lower inventory and firm up home prices,” Yun said. Housing starts, including multifamily units, are likely to total 1.37 million in 2007 and 1.24 million next year, down from 1.80 million in 2006.
Existing-home prices will probably slip 1.3% to a median of $219,000 in 2007 before rising 1.3% next year to $221,800. The median new-home price should drop 2.1% to $241,400 this year, and then increase 1.0% in 2008 to $243,900.

The 30-year fixed-rate mortgage is expected to average 6.4% for the next two quarters and then edge up to the 6.6% range in the second half 2008.

What is Forex ??

What is Forex ??

It it was it been possible was to distinguish several basic groups of participants of monetary market:

- Protecting (hedgers) - enterprises deal with activity export in this group majority make up - importable or funding in strange currencies, which is intention limiting risk. The averages and large firms of foreign trade are in majority this it yet it in last period in relationship with growth of naturalperson's foreign debts was it been possible was to this group to number also private investors.

-speculators (speculators) - they are this both firm how and natural person who invest in aim the centres the earning on differences of prices of in the time contracts

- Arbitragers - investors about large capital to this group rank, who they contain transactions on minimum two markets in aim the utilization of course differences simultaneously.

- The animators of market ( the market makers) - then the intermediary in monetary turn, in transactions among speculators institutions and they are protecting then the banks, brokers, monetary dealers or the internet platforms of turn.

The Forex market has become the world's largest financial market with over 1.5 trillion USD traded daily. Forex is part of the bank-to-bank currency market known as the 24 hour Interbank market. The Interbank market moves from major banking centers of the United States, Australia, New Zealand, the Far East and Europe.

The Forex market is so vast and has so many participants that no single entity, not even a central bank, can control the market price for an extended period of time. Even interventions by mighty central banks are becoming increasingly ineffectual and short lived. Thus central banks are becoming less and less inclined to intervene to manipulate market prices.

Europe has a three speed healthcare system: Austria, Netherlands and France have best public health services; Ireland gets 16th ranking

Health Consumer Powerhouse President Johan Hjertqvist

Austria is Europe’s most consumer-friendly healthcare system, according to the 2007 Euro Health Consumer Index (EHCI) launched today in Brussels at a press conference. A combination of widespread access to treatment and excellence in outcomes allowed Austria to narrowly pip the 2005 winners, the Netherlands, from the top spot. Last year’s winners France has slipped to 3rd place.
The press conference was told that Europe now has a three speed healthcare system. There is a small group of countries that compete for pre-eminence in excellence, separated only by minor differences.
These are followed by a middle group of adequate performers and rapid improvers, with a rump of under-achievers. But no country in the index achieves more than 80% of their potential, and all remain in need of reform. The 2007 EHCI covers all 27 European Union members as well as Norway and Switzerland.

German Consumer Confidence fell in September; French manufacturers remain upbeat

French President Nicolas Sarkozy and German Chancellor Angela Merkel at a press conference on Sept 10,2007.

The high level of the German consumer climate index in the summer months has not been sustained in September, according to the Gfk monthly survey of German consumer confidence. Meanwhile, France's national statistics office Insee said today that a survey of French manufacturers showed that they remain upbeat despite the ongoing credit market turmoil.All three main indicators of the German consumer mood are slightly down. Due to the most recent developments of the consumer climate, GfK has decreased its forecast growth of private consumption from 1.0 to 0.6% for 2007 as a whole. Following the revised 7.4 points in September, the consumer climate forecast for October is 6.8 points.

As was already evident in August, the positive consumer mood has been affected by the rather more gloomy conditions of late. Above all, the credit crisis in the USA and rising food prices are responsible for the somewhat less euphoric consumer attitudes. In addition, increasingly critical comments mean higher skepticism amongst consumers who anticipate a slight glitch in the German economic upswing as a result of the strong euro, high energy prices and a weak economic outlook in the USA. In light of this, buying propensity, which managed to withstand last month’s negative effects, is somewhat weaker this month.

Market News Update: Euribor 3-month rate hits almost seven-year high

Bank credit risk has risen in Europe and the 3-month Euribor rate, a key inter-bank lending rate, has risen to the highest level since December 2000.

JPMorgan Chase & Co says that credit-default swaps on the iTraxx Financial Index of subordinated debt, a measure the cost of protecting the bonds of 25 European banks and insurers against default, rose 4 basis points to 48 basis points. The rise in the index comes as hopes of an early end to the credit crisis has abated..

The Financial Times reported today that Northern Rock Plc has borrowed £8 billion pounds from the Bank of England - equivalent to a third of its deposits prior to its recent financial crisis. It's also reported that Canadian lenders are also encountering ng difficulties refinancing in the money markets, Bank of Montreal Chief Financial Officer Karen Maidment said on Thursday.

The Libor, London interbank offered rate that banks charge each other for three-month loans in euros is at 4.79 percent, 79 basis points more than the European Central Bank's benchmark rate and the highest since May 2001, according to the British Bankers' Association.

Global forex volume surges

The Bank of International Settlements just released the results from its first survey of Central Banks in over three years, and the results were startling. Forex volume rose 71% to $3.2 trillion per day, cementing the status of forex as the world's largest market. Trading in forex derivatives also surged, to an average of over $2 trillion per day. While the role of the USD has slipped somewhat, it remains the world's reserve currency as evidenced by the fact that it represents over 40% of all forex volume. FinFacts reports:

"A significant expansion in the activity of investor groups including hedge funds" as well as individual investors also contributed to the increase."

dollar & yen continue to strengthen

Despite the effects of US subprime mortgage troubles on the rest of the world, investors have scaled back risky ventures and increased the value of both dollar and yen. While this result may be inadvertent, it is much appreciated by those who have lost major funds in the stock market recently. The future doesn't look any brighter for US mortgage, either. According to Hemscott:

Housing starts sank 6.1 pct in July to a 1.381 million unit annual rate, the lowest since January, while building permits -- a more forward-looking indicator -- fell 2.8 pct to a 1.373 million rate, the lowest since October of 1996.

Canadian Dollar reaches a 30-year high

The Canadian Dollar is making a run at forex history, having reached a 30-year high against the USD this week. The currency has appreciated by over 50% since 2002, and is up 9.4% this year alone. The Loonie is surging on a combination of high commodity prices and attractive interest rates. It is no coincidence that the price of oil has more than tripled over the five year period that the Loonie also appreciated in value. In addition, the Bank of Canada is expected to raise interest rates two more times in the near-term which would bring its interest rate levels close to parity with US rates. The last time the Canadian currency, itself, stood at parity with the USD was in 1976. While it now seems inevitable that the currency will soon return to that marker, there are still hurdles that need to be cleared. Bloomberg News reports:

“A strengthening currency has started to adversely affect the country's growth, especially the manufacturing sector, which may raise concern the BOC needs to keep rates on hold.”

commentary: what to do about the chinese

The Chinese Yuan refuses to die as a topic of conversation among forex speculators. In theory, the currency is among the world’s most prosaic; since its famous “revaluation” by the Chinese government nearly two years ago, the Yuan aka RMB has appreciated at a leisurely pace, roughly equivalent to 3% per year. Last week, the CCP took a step further in liberalizing its currency system by widening the band in which the Yuan is permitted to fluctuate, to .5% daily.

However, this did little to appease foreign diplomats and American politicians, who contend that the Yuan remains vastly undervalued, and that the Chinese government is guilty of currency manipulation. Two American Senators, Lindsey Graham and Charles Schumer, are still threatening to introduce a latent piece of legislation into Congress, which would slap a 27.5% tariff on all Chinese imports, unless the CCP promptly increases the value of the Yuan. (The 27.5% represents an average of the high and low estimates, 40% and 15%, respectively, of the extent of the Yuan’s undervaluation relative to the USD.) For its part, China maintains that not only is the currency fairly valued, but also that it will not be pressured into hastening the Yuan’s rate of appreciation. So, two questions need to be answered: Is the Yuan undervalued and if so, should China allow it to appreciate at a more rapid pace?

The first question is probably the trickier of the two to answer. Economists use admittedly crude techniques to value currencies. One method involves a calculation of purchasing power parity (PPP), which dictates that currencies should adjust in value relative to each other in inverse proportion to their respective price levels. In the case of the Yuan, PPP analysis suggests that the Yuan may be undervalued by as much 50%. However, this is to be expected; since income levels in China are vastly lower than in the US, one would expect prices to be lower, irrespective of exchange rates. Other methods used to estimate the fundamental value of the Yuan involve sophisticated statistical analysis, producing estimates of undervaluation ranging from 0% to 50%. In short, it appears as though the Yuan remains marginally undervalued, but the extent of which remains guesswork.

Upon concluding that the Yuan is undervalued, should China be expected to allow the currency to fluctuate more freely (i.e. appreciate)? It depends on who you ask. American officials argue that the revaluation of the Yuan represents a crucial piece of the drive to reduce the burgeoning US trade deficit. However, upon closer examination, this notion is revealed to be false since most of China’s exports to the US are themselves repackaged products from other parts of Asia. Further, a sudden revaluation of the Yuan would likely result in the relocation of Chinese production to facilities to other low-wage countries, thus doing little to stem the US trade deficit. From China’s point of view, its economy is helped by an artificially cheap currency in that its export sector receives an indirect subsidy. However, it is constrained in its ability to conduct monetary policy as well as in its need to accumulate massive forex reserves, both of which would be relaxed in the event of a revaluation.

Not withstanding that China’s stubbornness mean it will not be bullied into appreciating its currency, it is probably in everyone’s best interest if it capitulates. My prediction, for what it’s worth, is that China will ultimately allow the RMB to appreciate at a slightly faster pace against the USD, probably somewhere in the neighborhood of 5% a year.

bank of england raises rates

The Bank of England raised interest rates for the second time in as many months yesterday, to 5.75%. As a result, the UK has widened its lead over the US as the country with the highest interest rates in the industrialized world, after New Zealand. Moreover, the UK is becoming an increasingly viable alternative to the US as a target for risk-averse investors. The British Pound is hovering around a record high against the USD, which can probably expect to suffer prolonged decline against the world’s majors if it falls behind in attracting risk-free foreign capital. The Financial Times reports:

“The statement accompanying the rate hike gives few firm clues as to future interest rate movements, with the Bank of England…concluding that the risks to the inflation outlook are still tilted to the upside.”

central banks

The U.S. Central Bank voted unanimously to hold interest rates steady on Tuesday, resisting pressure from Wall Street calling for an rate cut. The federal funds rate has now been at 5.25% for over a year. The Fed feared that a rate cut would only do more damage to the USD, which is already weak overseas. According to the Chicago Tribune:

About the only consolation for financial markets was the fact that the central bank at least mentioned these concerns in a statement after its meeting. That acknowledgment gave Wall Street faint hopes of an interest-rate cut later this year if credit conditions continue to deteriorate.
Tightening credit, combined with a continuing housing correction, have slammed stock prices over the past weeks. A high level of volatility has signaled to many that the bull market is over and that the credit crunch could be worse than believed.

how to value a currency ?

With the US government doggedly clinging to the notion that China is manipulating its currency and insisting that the communist country be punished accordingly, it bears asking “how can we determine that a currency (in this case the Yuan) is in fact undervalued, and if so, by how much. One notable economist has laid out three general techniques for “valuing a currency,” which may prove useful to all of you amateur economists.
First, there is the concept known as “purchasing power parity,” which suggests that a pair of currencies should fluctuate in value relative to each other based on changes in their respective interest rates and inflation. Second, there is the notion of a “sustainable” or “fundamental equilibrium” exchange rate which brings a country’s current account into balance- neither deficit nor surplus. Third, historical exchange rate data can be regressed against various economic indicators (productivity, employment, etc.) in order to distill the select few that had the most direct effect on the currency in the past. The most current economic data can then be plugged into the resulting equation and tested against actual exchange rates. However, while economists agree that these techniques are the most theoretically sound, they ignore the fact that currencies today seem less tied to the laws of plain economics than they do to financial economics- capital flows.

fed holds rate steady

The U.S. Central Bank voted unanimously to hold interest rates steady on Tuesday, resisting pressure from Wall Street calling for an rate cut. The federal funds rate has now been at 5.25% for over a year. The Fed feared that a rate cut would only do more damage to the USD, which is already weak overseas. According to the Chicago Tribune:

About the only consolation for financial markets was the fact that the central bank at least mentioned these concerns in a statement after its meeting. That acknowledgment gave Wall Street faint hopes of an interest-rate cut later this year if credit conditions continue to deteriorate.
Tightening credit, combined with a continuing housing correction, have slammed stock prices over the past weeks. A high level of volatility has signaled to many that the bull market is over and that the credit crunch could be worse than believed.