Bloomberg:
- Anglo Irish Senior Bonds Fall for Sixth Day on Bets Investors Face Losses. Anglo Irish Bank Corp. government- guaranteed senior bonds fell for a sixth day as investors wagered they’ll be forced to share the cost of bailing out the nationalized lender with taxpayers. Anglo Irish’s floating-rate notes due 2013 fell to 83.1 cents on the euro from 95.8 a week ago and its 2014 securities dropped to 81.4 cents from 99.2 cents on Sept. 17, according to so-called fair value prices on Bloomberg. “It’s all about whether Ireland can afford the bailout of Anglo Irish,” said Tom Jenkins, a banking analyst at Jeffries International Ltd. in London. “There are also the other banks that need cash and all the wider political and economic issues the country has.” Moody’s Investors Service downgraded Anglo Irish’s covered bond ratings today to A2, five levels above junk, from Aa2, citing concern that the bank won’t be able to ensure timely payments on the notes. The New York-based firm also cut the bank’s senior unguaranteed rating by three levels to Baa3 from A3 and its subordinated grade six levels to Caa1 from Ba1.
- Smallest Commodity Moves Since 1996 Signal Precious-Metal Gain.
- New York City to Replace Automatic Teacher Tenure With Performance System. New York City Mayor Michael Bloomberg plans to overhaul how tenure is awarded in city schools and institute a system that grants job security based on performance. Beginning this year, teachers will be rated on a four-tier system, with those rated “effective” and “highly effective” eligible for tenure after three years, the mayor’s office announced in a statement today. “This will transform the tenure system from one in which tenure is taken for granted, to one in which it must be earned through effective performance in the classroom,” according to the statement.
- Southwest(LUV) Agrees to Buy AirTran(AAI) for $1.4 Billion, Enter Atlanta. Southwest Airlines Co., the largest U.S. low-fare carrier, agreed to buy AirTran Holdings Inc. for about $1.4 billion in cash and stock, giving it access to Atlanta, the world’s busiest airport. The offer values Orlando, Florida-based AirTran at $7.69 a share, 69 percent more than its closing price on Sept. 24, Southwest said today in a statement.
- Treasuries Rise on Speculation Federal Reserve to Increase Debt Purchases. Treasuries gained, with longer-term debt leading advances, as traders speculated the Federal Reserve will increase purchases of U.S. debt to boost the economy. Bonds also rose as Anglo Irish Bank Corp.’s senior debt was cut to the lowest investment grade rating by Moody’s Investors Service, encouraging demand for safety.
- Sovereign-Rating Cuts Will Persist in Era of Budget Woes, S&P's Beers Says. The era of sovereign-rating downgrades is likely to continue because of budget deficits and demographic pressures on public finances, Standard & Poor’s analyst David Beers said. “We’re now in an era which I and my team think is going to persist for quite some time to come -- because of the coming demographic public-finance pressures which are looming before us as well -- where we do expect there will be continued falls in sovereign ratings,” Beer, S&P’s Global Head of Sovereign Ratings, said at an event in London today. “We’re not in normal times now,” Beers said. “It’s perfectly respectable for governments to decide to make fiscal decisions even if it means that there’s cost in terms of its credit rating,” though “when you get to Greece and other countries where solvency is truly in question, then your fiscal choices are” more limited. Beer’s said that the growth potential in the euro region may keep deteriorating, which has exposed the budget weaknesses in some member economies. “There’s no doubt, certainly in the euro zone, and I think more broadly in the OECD countries, or many of them, that there has been and will continue to be a shift downwards in terms of trend growth,” he said. “Growth will be more sluggish and that of course has highlighted very significant fiscal imbalances, particularly with respect to the euro-zone peripheral countries.”
Wall Street Journal:
- Banks Keep Failing, No End in Sight. Since WaMu Fell, 279 Lenders Have Collapsed; Lost Jobs, Curtailed Lending and the Big Get Bigger. The largest number of bank failures in nearly 20 years has eliminated jobs, accelerated a drought in lending and left the industry's survivors with more power to squeeze customers.
- The Wall Street Journal 2010 Technology Innovation Awards. Among the winners: computer screens that can bend, adjustable eyeglasses, a low-cost genetic test, an online marketplace for receivables and a new way to battle malware.
- ATMs That Sell Gold Bars Are Coming Soon to America. A German firm that installs and manages gold vending machines aims to introduce them into the United States this year as it expands rapidly to take advantage of demand for bullion in times of economic uncertainty.
- Health Costs of US Employers at 5-Year High: Study. U.S. employers can expect to pay nearly 9 percent more for health care costs for their workers in 2011, the highest level in five years, according to a forecast released Monday. And employees will have to pay more than 12 percent more out of their pockets, according to the report from consulting group Hewitt Associates. The Hewitt report blames higher medical claim costs, an aging population and U.S. healthcare reform.
Zero Hedge:
- Some Additional Observations on High Frequency Trading Stock Manipulation.
- Insider Selling to Buying Surpasses 1,400-1.
- U.S. Wants to Make It Easier to Wiretap the Internet. Federal law enforcement and national security officials are preparing to seek sweeping new regulations for the Internet, arguing that their ability to wiretap criminal and terrorism suspects is “going dark” as people increasingly communicate online instead of by telephone. Essentially, officials want Congress to require all services that enable communications — including encrypted e-mail transmitters like BlackBerry, social networking Web sites like and software that allows direct “peer to peer” messaging like — to be technically capable of complying if served with a wiretap order. The mandate would include being able to intercept and unscramble encrypted messages.
- The Great Australian Housing Bubble. There is currently a widespread debate in Australia and abroad over whether Australia is experiencing an unsustainable housing bubble, or asset inflation based upon sound fundamentals.
- Chicago. Dallas Feds Point to Slowdown.
- Manchin Calls for Partial Repeal of Health Reform. In Democratic Gov. Joe Manchin's quest to strike a bipartisan chord as he campaigns to fill the late Democratic Sen. Robert Byrd's seat, he's joining the GOP's call to repeal pieces of health care reform.
- Mortgages Out of Reach for One-Third of Americans, Study Finds. Legislative efforts to improve the housing market come as nearly one-third of mortgage applicants are unlikely to qualify for a loan, according to analysis by the real estate website Zillow Mortgage Marketplace. After examining over 25,000 loan quotes and purchase requests, Zillow found that prospective borrowers with a 620 credit score could not qualify for a home loan -- even for those willing to make substantial down payments of 15 percent to 25 percent of the home's selling price. Nearly one-third of Americans, or 29.3 percent, have a credit score at or below 620, according to myFICO.com. Uncertainty in the loan market is primary reason for why banks will no longer loan to these people.
- Politics Trumps First Amendment Rights. Judging by the flurry of recent speeches, press releases and op-ed articles criticizing right-of-center organizations and donors, the left appears to have taken a chapter out of the Nixon playbook. These efforts look like an orchestrated campaign to intimidate and silence opposition to President Barack Obama’s agenda. Any other day, these same people would be the first to trumpet the virtues of free speech.
- Poll: Rocky Road Seen Ahead for Obama. A significant majority of voters are considering voting against President Barack Obama in the 2012 election, expressing sour views of his new health care law and deep skepticism about his ability to create jobs and grow the sluggish economy, according to the latest POLITICO / George Washington University Battleground Poll. Only 38 percent of respondents said Obama deserves to be reelected, even though a majority of voters hold a favorable view of him on a personal level. Forty-four percent said they will vote to oust him, and 13 percent said they will consider voting for someone else.
Reuters:
- Canada Set to End Stimulus Despite Shaky Recovery. Canada's government resisted pressure on Monday to extend its stimulus spending program despite a slowing economy, saying it is now focused on reducing its budget deficit and has spent most of the money it had earmarked anyway.
- Moody's Warns About Greek Banks Deposit Outflows.
- Brazil Warns of 'Currency War'. Guido Mantega, Brazil’s finance minister, said on Monday the world was in an “international currency war”, in a further sign that Brazil is preparing measures to prevent further appreciation of its currency, the real. Mr Mantega, who has made increasingly aggressive comments recently about the need to control Brazil’s currency, said governments around the world were trying to weaken their currencies to promote competitiveness.
- Japan May Demand Compensation From China. Japan may demand compensation from Beijing for the repair of coast guard vessels damaged in a collision with a Chinese fishing boat that sparked the worst Sino-Japanese diplomatic dispute in years. Tokyo on Monday said it was considering making a formal compensation claim after a weekend of testy exchanges that highlighted continuing tensions between the neighbours even after Japan released the captain of the Chinese fishing boat.
Handelsblatt:
- The European Central Bank considered activating the euro-region's rescue fund to assist Ireland in refinancing debt, citing government officials. Various euro-area countries had already been told to raise money on Ireland's behalf if the need arose. The spread investors demand to hold 10-year Irish bonds instead of German debt of the same maturity widened to a record 411 basis points last week.
ABC:
- Two Spanish city administrations are considering a court appeal against the central government's move to block some town halls from issuing debt in 2011, citing legal documents. Madrid and Valencia have prepared legal reports suggesting the move by Finance Minister Elena Salgado is unconstitutional.
- OECD Urges Portugal to Act to Secure Market Confidence. The Portuguese government needs to act fast to shore up its public finances, maybe with tax increases, to ensure vital support from investors, the OECD stressed on Monday. "The immediate challenge is to foster investor confidence by rapidly consolidating the public finances," the Organisation for Economic Cooperation and Development said in a report on Portugal. Action should be taken "swiftly," with the government being prepared "to raise taxes, focusing on those that are the least distorting to growth, such as consumption and property taxes." The report also suggested extending a freeze on government salaries, adopted this year, up to 2013. Portugal is struggling with a huge public debt, raising fears for its solvency elsewhere in Europe and driving up the government's cost of borrowing on the sovereign debt market.
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