Bloomberg:
- European Banks Chided for Lack of Transparency. The head of Europe’s markets regulator warned banks to be consistent in their valuations of sovereign debt amid concern some lenders have failed to record sufficient losses on Greek bonds. Steven Maijoor, chairman of the European Securities and Markets Authority, likened the lack of transparency about banks’ individual holdings of government debt to the subprime mortgages that triggered the credit crisis. “Lack of transparency regarding exposures to subprime mortgages created a situation of uncertainty about the financial positions of banks,” he said in a speech in Vienna today, according to a transcript released by ESMA on its website. Recently, “a lack of transparency from banks on their exposures to sovereign debt and related instruments are generating new suspicions about the conditions of individual banks and this requires similar answers in terms of transparency.”
- Norway to Cut Bank Support as Europe Girds for Deeper Crisis. Norway’s central bank will force lenders to wean themselves off its deposit facility in an effort to spur interbank lending even as Europe’s debt crisis threatens to trigger a region-wide liquidity squeeze. “Norges Bank wants the banks to use each other more for placing their money,” Kari Due-Andresen, an analyst at Svenska Handelsbanken AB in Oslo and former central bank economist, said in an interview. “But what the banks say is that at the moment the situation is so insecure and they are hoarding their own cash, so the new measures will just make things worse.”
- Hong Kong Stocks Head for Biggest Monthly Drop in Three Years. Hong Kong stocks dropped, dragging the Hang Seng Index toward its biggest monthly decline in almost three years, amid lingering concerns over the global economy and Europe's debt crisis. Industrial & Commercial Bank of China Ltd., the nation's biggest lender by market value, sank 3.8 percent today after rallying as much as 9.9 percent yesterday. Hutchison Whampoa Ltd. declined after its mobile phone unit said an auction for signal spectrum in the U.K. faces delay. Active Group Holdings Ltd., a maker of men's shoes, fell as much as 6.7 percent in its Hong Kong listing debut today before closing 0.8 percent lower. The Hang Seng Index lost 0.7 percent to 18,011.06 as of the close in Hong Kong, dragging the measure toward a 12 percent decline this month, its biggest monthly drop since Oct. 2008. The measure is on course for a 20 percent loss this quarter, its steepest decline since the period ended Dec. 2008.
- U.S. Economy Grew at a Revised 1.3% Pace Last Quarter.
- Jobless Claims in U.S. Drop More Than Forecast. Claims for U.S. unemployment benefits fell more than forecast last week as an atypical calendar alignment made it more difficult for the government to adjust the data for seasonal changes.
- BofA(BAC) to Add Monthly Fee to Some Debit Customers. Bank of America Corp., the biggest U.S. lender by assets, plans to announce a $5 monthly charge for some debit-card users to recoup revenue lost after new federal rules capped so-called swipe fees. Customers with lower-tiered accounts, including the firm’s online-banking option, may start getting assessed the fee for debit-card purchases in January, said Anne Pace, a Bank of America spokeswoman.
- U.S. Decries Salaries, Staffing in New UN Budget. The Obama administration told the United Nations that too few of its 10,307 workers are being cut and average salaries, currently $119,000 a year, have risen “dramatically.” The U.S. ambassador for UN management and reform, Joseph M. Torsella, said today that the proposed $5.2 billion UN budget for the next two years would scrap only 44 jobs, a 0.4 percent reduction. After an “onslaught” of add-ons, the 2012-13 budget would rise more than 2 percent to $5.5 billion, he said. “That is not a break from ‘business as usual’ but a continuation of it,” Torsella said in a speech in New York to the UN’s administrative and budgetary committee. “How does management intend to bring these numbers and costs back in line?” Torsella’s attack on UN salaries and workforce size follows legislation introduced by U.S. House Republicans on Aug. 30 that, if passed into law, would have the U.S. withhold a percentage of its contributions until at least 80 percent of the UN budget is voluntary. Calling personnel the “largest and most important driver of long-term costs,” Torsella said those expenses increased to $2.4 billion in the 2010-11 budget from $1.4 billion a decade earlier. The U.S. pays 22 percent of the UN’s regular operating budget and is assessed 27 percent of the peacekeeping budget. U.S. payments totaled $3.35 billion in 2010, of which $2.67 billion was dedicated to the 16 peacekeeping operations worldwide, from South Sudan to Haiti.
- Plosser: Easing Moves May Be Undermining Fed. Federal Reserve Bank of Philadelphia President Charles Plosser said the central bank may be undermining its own credibility by pushing forward with monetary easing that will do little to boost growth. “The actions taken in August and September tend to undermine the Fed’s credibility by giving the impression that we think such policies can have a major impact on the speed of the recovery,” Plosser said today in a speech in Radnor, Pennsylvania. “It is my assessment that they will not.” The policy, so-called Operation Twist, is likely to reduce long-term rates by “less than 20 basis points” and “the pass- through to the rates at which consumers and businesses actually borrow is likely to be much less,” Plosser said at a Business Leaders Forum at the Villanova School of Business. “I am skeptical that this will do much to spur businesses to hire or consumers to spend.”
- Rare Earths Fall as Toyota, GE Develop Alternatives. Rare-earth prices are set to extend their decline from records this year as buyers including Toyota Motor Corp. (7203) and General Electric Co. (GE) scale back using the materials in their cars and windmills. Prices for cerium and lanthanum, the most abundant rare- earth elements, will drop by 50 percent in 12 months, Christopher Ecclestone, an analyst at Hallgarten & Co. in New York, has forecast. Neodymium and praseodymium, metals used in permanent rare-earth magnets, may fall as much as 15 percent, he said.
- Greek Government Divided on Job Cuts. Greece's Socialist government is divided over a controversial plan to cut tens of thousands of jobs in the public sector, as it has promised the country's international creditors, with some agencies declining to put forward layoff plans. Two senior government officials with direct knowledge of the matter said the issue was to be discussed at a cabinet meeting Thursday—coinciding with the return of a troika of international inspectors to Athens—but was pulled from the agenda after many ministries failed to compile lists of personnel to be cut. Instead, the cabinet will revisit the issue at an extraordinary meeting.
- Soros: Euro Zone Needs Common Treasury, Other Remedies. European monetary authorities must act fast to regain the control they've lost over financial markets, or the result is likely to be a second Great Depression, hedge fund investor George Soros warned Thursday in an opinion essay published online by the Financial Times. Soros called for "three bold steps" that "would calm the markets and give Europe time to develop a growth strategy, without which the debt problem cannot be solved."
CNBC.com:
Bespoke Investment Group:
- German Finance Minister Shoots Down Levered Euro-TARP.
- EFSF Expansion Only a Short-Term Fix: Ex-Fed VP. The German Parliament's vote to expand the role of the European Financial Stability Facility (EFSF) has given the markets a "confidence boost," but it is only a short-term fix to Europe's solvency issues, Dino Kos told CNBC Thursday.
- Here's Why Everyone's Suddenly Freaking Out About China.
- Here's the Presentation That Jeff Gundlach Delivered to A Crowd in NY Yesterday.
- This Is The Type of Story That Makes People Freak Out About China's Underground Banking System.
- Everyone's Realizing That Europe Has A Much Bigger Problem Than Debt.
- 20 Reasons Why Millions Of Young Americans Are Furious About The Economy.
Bespoke Investment Group:
- Bullish Sentiment Back Above 30%. (graph) In this week's sentiment survey from the American Association of Individual Investors (AAII), bullish sentiment rose back above 30% to 32.51% from last week's level of 25.33%. This week's 7.18 percentage point increase in bulls was the largest one week increase since June 23rd.
- On Solyndra, The Buck Stops With Secretary Steven Chu. Energy Secretary Steven Chu is taking responsibility for making the final decisions at two critical moments in the rise and fall of Solyndra.
- RIM(RIMM) Says Remains Committed to PlayBook Tablet. BlackBerry maker Research In Motion brushed off suggestions on Thursday that it would discontinue production of its PlayBook computer tablet as "pure fiction" after an analyst said the company may be considering an exit from the market. "Rumors suggesting that the BlackBerry PlayBook is being discontinued are pure fiction," RIM spokeswoman Marisa Conway said in an emailed statement. "RIM remains highly committed to the tablet market and the future of QNX in its platform."
- Money Managers See Opportunities in Stocks. Despite worries on Wall Street that the weak economy will fall back into recession and drag stocks down more, eight of 10 money managers believe the USA will avoid a double dip, a survey of investment managers by Russell Investments to be released Thursday found. The fear of another downturn, just two years after the end of the Great Recession, has been a big factor in the stock market's swoon since its April high and the wildest price swings in history. But the message being sent by 79% of the 102 money managers in the quarterly survey who say another recession is unlikely is there might be more opportunities to make money in stocks than gloomy headlines suggest.
- Eurozone Crisis: Live Blog.
- Chinese Property Boom Starts to Wobble. Chinese bonds and equities are flashing warning signs that suggest the booming mainland property sector is heading for a bust – a development that would send shockwaves through financial markets worldwide. A sector that was until last year the darling of international investors is turning into a horror show as traders have started to digest evidence that real estate prices are falling and developers are losing access to funding.
- 'Greece Will Default'. (video) Ariel Bezalel, manager of the Jupiter Strategic Bond Fund, tells Robert Miller he expects a Greek debt re-structuring and calls on Eurozone politicians to prevent the crisis from engulfing other euro member states.
- Bank of England Says Squeeze on Family Finances to Worsen With Inflation Set to Rise Above 5%. The squeeze on family finances will get worse this autumn as household energy bills soar, the Bank of England has warned. Inflation is expected to jump from the current level of 4.5 per cent to more than 5 per cent. Hard-pressed households are already £728 a year worse off than they were 12 months ago because of rising living costs, according to a recent study by Asda. But Spencer Dale, the Bank of England’s chief economist, told the Daily Mail that families should brace themselves for further pain in the coming months. In an interview in which he warned the global economy is at risk of ‘a rather nasty downward spiral’, he blamed the surge in the cost of living on double-digit price rises by the country’s energy giants.
- US Justice Department Probing Chinese Accounting Scandal. A top securities regulator said U.S. criminal authorities are investigating accounting irregularities at Chinese companies listed on U.S. stock exchanges.
- Subprime Crisis Sweeps Wenzhou as Bankrupt Bosses Flee. Up to 29 bankrupt bosses in Wenzhou, a manufacturing center in south China’s Zhejiang Province, have fled since April this year and another one committed suicide, the 21st Economic Herald reported, reflecting rising money tensions in small Chinese companies. Among the 29 bosses, 11 are leather shoe and leather products makers, five in electronic industry, four in iron and copper sector while two are operating restaurants, with assets value in each of these companies reaching 100 million yuan, the report said. The bosses fled brought with no less than 2.9 billion yuan worth of assets, according to a preliminary estimate. The situation is getting worse in September, with on a single day of September 25, nine bankrupt bosses fled in Wenzhou, the newspaper said, quoting a government source without giving the person’s name. Authorities have realized the problem. Acting Governor of Zhejiang Province has called Saturday to expand financing channels for small companies. The bankruptcy of companies in the city is due to a restless expansion and borrowing at a high rate from unofficial channels against a backdrop of unfavorable micro economic situation, said Chen Derong, the party chief in Wenzhou.
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