Two years later, after Draghi pledged to do whatever is needed to save the euro, the Stoxx Europe 600 Index has climbed 37 percent while loaned shares have fallen 12 percent to $145 billion, indicating more than $80 billion of short positions have been closed or allowed to expire, the data show. If shares are going up and short-sellers were skeptical, you would see more borrowing and more betting against that rise, Karl Loomes, a London-based analyst at SunGard Astec Analytics, a securities-lending data and research company, said in a Sept. 20 phone interview. Given that share prices have risen and borrowing has remained stable or decreased, it does imply there is a lot more optimism in the market. Short Interest Markits data shows the percentage of shares on loan as of Sept. 13 is hovering just above the 1.5 percent reached Aug. 23. That was the lowest ever in data going back seven years and compares with an average of 5.1 percent over that period. Mutual funds that buy European equities have attracted $13.1 billion in the past six weeks, according to data from Societe Generale SA and EPFR Global Inc., a research company in Cambridge, Massachusetts. That compares with outflows of $4 billion for funds that buy American stocks. Investors would need to send about $100 billion to European shares to restore the amount withdrawn since 2007, according to estimates from Paris-based Societe Generale based on data through the end of August. The Euro Stoxx 50 has returned 61 percent including dividends after sliding to a two-year low on Sept. 12, 2011, data compiled by Bloomberg show. Stopped Deteriorating There are a lot of reasons why you dont want to be underweight Europe, said Robin Thorn, who helps oversee $70 billion as head of equities at PineBridge Investments LLC in New York. Things have stopped deteriorating.
Somali jihadists recruit in U.S., Canada, Europe
But perhaps the biggest obstacle to change is the German mindset underscored by election results that Germany is giving enough, but not too much. Germans are afraid of the side effects of the eurocrisis, and they believe that Ms. Merkel was able to protect German money against the demands of foreigners, says Gero Neugebauer, a political scientist at Berlin’s Free University. [Germans] believe we should help [ailing economies], but they have to contribute to their own fates first. That position has been causing widespread discontent in some pockets of Europe. Struggling countries have pointed to Germany as the reason that they are having such a hard time returning to job creation. The 2013 Transatlantic Trends survey by the German Marshall Fund of the US showed that Europe was split over Merkel’s handling of the economy, with 47 percent of Europeans surveyed approving and 42 percent disapproving. There was sharp disapproval in Spain, Portugal, and Italy, at 82 percent, 65 percent, and 58 percent respectively. “The perception that the majority has of Merkel [in Spain] is that she is the one driving the politics of austerity, the one demanding social spending cuts, says Jaime Pastor, an expert on political science and social movements in Madrid. Germany demands Europe to become more like Germany, he says. But not all countries are in the position to do this. First things first Before anything happens in Europe, first the CDU will have to forge a coalition, after their current partners, the Free Democrats (FDP) failed to make it into the lower house, or Bundestag, in a stinging defeat for the market-friendly party. The CDU will now likely turn to the SPD. But the two will have to undergo tough negotiations, which could take months. Support for the SPD fell after the last grand coalition during Merkel’s first term in 2005, and in this election the domestic policies between the CDU and SPD have split, especially over issues of minimum wages and taxes on the rich.
Europe in the fast lane
In fast-driving Germany, the backed-up line caused by an insensitive slow driver is called an Autoschlange, or “car snake.” What’s the difference between a car snake and a real snake? According to locals, “On a real snake, the a– is in the back.” France: Most of the autoroutes in France have tolls (the exception is in Brittany). While the tolls are pricey, the alternative to these super “feeways” usually means being marooned in countryside traffic — especially near the Riviera. But paying the tolls can be tricky. At many tollbooths, American credit cards are not accepted unless they have a smart chip (what Europeans call “chip-and-PIN” cards). Use cash — it’s best to have smaller bills, since the automated machines won’t take 50-euro bills and often there aren’t any cashiers. At pay points, avoid booths showing only “Telepeage” or a credit-card icon. Look instead for green arrows above the tollbooth or icons showing bills, which indicate they accept cash. Road speeds are monitored regularly with speed cameras (a mere two kilometers over the limit gets a pricey ticket). The good news is that drivers are usually warned first. Look for a sign with a radar graphic that says, “Pour votre securite, controles automatiques.” Anyone caught driving over the limit will be fined a minimum of about $180. Italy: Italy’s expressway system, the autostrada, is as good as our interstate system, but you’ll pay about a dollar for every 10 minutes of use. (I paid about $25 for the four-hour drive from Bolzano to Pisa.) As in France, U.S.
“We also know they have recruited in a number of European countries.” Bergen noted that the group’s Twitter page includes tweets in colloquial English, “the kind of English that an American, or perhaps somebody who grew up in the UK, would be using.” Al-Shabaab is fighting to implement a stricter form of Islamic law in Somalia, a struggle in which Kenyan troops have been directly involved since 2011. Kenyan troops wrested control of the key Somali port of Kismayo from the jihadists in 2012, and Somali government and African Union troops drove the group out of its strongholds in the capital Mogadishu in 2011. Tweets from @cnni/nairobi-attack As early as 2008, the FBI warned that more than a dozen youths, some of them American citizens, had left Minneapolis, home to the largest Somali population in the United States. At least three are believed to have carried out suicide bombings in Somalia, where an internationally backed interim government has taken tenuous root after two decades of civil war and near-anarchy. Minneapolis’ Somali community “is 100% against terror,” said Bihi. But he said a lot of families arrive owing “a lot of debt,” and community youth programs were “almost nil.” Al-Shabaab recruiters engaged teens by providing them entertainment and role models, then “brainwashed” them, he said. A senior State Department official told CNN that U.S. officials are trying to confirm whether the names released by Al-Shabaab are Americans, but said they are becoming more confident American citizens were involved in the Kenyan attack. The official said the administration has been concerned and raising alarm bells about Al-Shabaab recruitment in the Somali-American community for years and would be making decisions in coming days about additional efforts to stem the flow of recruits. How Al-Shabaab picks its targets In 2010, a federal grand jury charged 14 people in the United States with aiding Al-Shabaab. Two women in Rochester, Minnesota, were convicted of soliciting more than $8,000 for the group under false pretenses, telling contributors the money was for the poor, and received 10- and 20-year prison terms. The rest of those named in the indictment had already gone overseas, including Omar Al-Hammami, who became something of a jihadist rock star before falling out with the group and dying in a fratricidal ambush in 2012. Hammami differed from many of the other recruits. He was raised a Baptist in Alabama, but converted to Islam as a young man and created rap-style recruiting videos that bridged American and Somali culture.