- The euro’s gains against the US dollar threaten to slow growth in the single-currency region by crimping exports, according to Milton Ezrati, the senior economist at investment company Lord Abbett. “Following five years of already substantial euro appreciation, this latest surge has added significantly to the price of European products on world markets and so has begun to play serious havoc with eurozone exports,” Ezrati wrote. “The period of tremendous euro strength has probably run its course,” he said.
- Hedge-fund titans James Simons and Stephen Mandel are showing the biggest losses of their careers in the $1.9 trillion industry’s worst start in almost 20 years.
- The British pound fell to a record against the euro after the UK’s biggest mortgage lender said house prices dropped by the most since 1992 last month.
- Emerging-market bonds fell as concern that bank losses will widen prompted investors to shun higher-yielding securities. The extra yield investors demand to own emerging-market bonds over Treasuries widened 4 basis points, the most since March 31, to 2.87 percentage points.
- US brokers and asset managers were raised to “attractive” from “neutral” at Goldman Sachs Group(GS), which said mortgage writedowns may “significantly exceed” actual losses.
Wall Street Journal:
- The Coming Tax Bomb. As the presidential campaign enters its final stages, there will be increased debate over budget priorities and how they will be paid for. Many commentators and political leaders, including Senators Hillary Clinton and Barack Obama, believe that tax increases are needed to restore near-term budget balance and finance longer-term entitlement growth. These claims fail budget arithmetic and economics. Worse, they raise serious questions about the nation’s broad fiscal policies and its commitment to economic growth.
- General Motors(GM), Chrysler LLC and Ford Motor(F) plan to increase exports of US-made vehicles as new labor contracts and a weak dollar make them more competitive globally.
- Grady Memorial Hospital, one of the country’s largest charity hospitals, will receive $200 million from a private foundation with ties to Coca-Cola(KO), hospital officials said. The gift is the largest on record to a single public hospital.
- One Fund Sees Green in First Solar’s(FSLR) Solar Modules.
- Chinese officials will hold talks with Olympic leaders about the torch relay, amid concern in the International Olympic Committee that protests against the crackdown in Tibet might damage the games.
- Biogen Idec(BIIB): Bankers cautiously convinced that company will fall prey to a takeout this year.
- Hedge fund Sprott to gamble on IPO. Founder Eric Sprott hopes to raise as much as $1.5 billion with stock sale. A decade-long run of winning bets on resource companies, along with contrarian calls against blue-chip stocks such as banks, means Sprott Asset can go public on the back of a benchmark equity fund that posted a 28% average annual return over 10 years.
- UK housing bubble is bursting and it’s serious.
- Tensions between Australia and China are set to rise as Kevin Rudd arrives in Beijing today amid revelations that China is preparing to buy a multi-billion-dollar stake in BHP Billiton(BHP).