- Euro Area Bought Some Time in Staving Off Breakup, Rogoff Says. European leaders probably bought “a little bit of time” in staving off a euro-area breakup after last week’s summit even as the region remains a long way from stabilization, Harvard University Professor Kenneth Rogoff said. Greek Prime Minister Antonis Samaras asked European leaders last week to loosen austerity measures tied to 240 billion euros ($303 billion) in financial aid from international donors for his country. Greece will struggle to meet its targets and still probably default, Rogoff said in an interview with Bloomberg Television today. “They are going to continue to do more and more radical measures to stand still,” Rogoff said. “We’re very, very far from a long-term vision. It’s a long difficult path, still. We’re a long ways from stabilization.”China is going through a “delicate political transition” that makes it harder to deal with its economic problems, he said. “I still expect sometime over the next few years to see a significant slowdown in China’s rate of growth that may prove very difficult to handle, especially for a world that’s just not expecting it,” he said.
- UK Mortgage Lending Declines, Construction Shrinks: Economy. U.K. mortgage approvals fell in May and construction shrank at the fastest rate in 2 1/2 years in June, adding to signs the housing market is slowing amid growing concern over the economic outlook. Lenders granted 51,098 loans to buy homes, compared with 51,627 the previous month, the Bank of England said today in London. A gauge of building output based on a survey fell to 48.2 from 54.4 in May, a separate report by Markit and the Chartered Institute of Purchasing and Supply showed.
- Barclay's(BCS) Three Top Managers Quit Amid Bank of England Dispute. Robert Diamond stepped down today as chief executive officer and Jerry Del Missier quit as chief operating officer, the London-based lender said in a statement. Chairman Marcus Agius will also leave once he has found a replacement for Diamond, who has worked at the bank for the past 16 years.
- Sarkozy Home and Offices Searched By Police, France Inter Says. Former French President Nicolas Sarkozy’s home and his Paris offices were searched today by police, France Inter said, without citing a source for the information. Police went to the home he shares with wife Carla Bruni as well as his law office and another bureau he keeps at the request of judges in Bordeaux looking into allegations of campaign finance violations, the radio station reported on its website.
- China Slowdown Cuts Luxury Spending, Hong Kong Retailing. China’s slowdown dragged Hong Kong’s retail-sales growth to the weakest pace since 2009 as shoppers visiting from the mainland cut back on purchases of luxury goods such as jewelry and watches.
- Brazil Rate-Futures Yields Fall to Record on Shrinking Industry. Yields on Brazilian interest-rate futures contracts dropped to a record low on speculation the central bank will deepen cuts in borrowing costs after a report showed industrial production fell more than economists forecast. Output declined 0.9 percent in May from a month earlier, the national statistics agency said today in Rio de Janeiro. Economists had expected a decline of 0.6 percent, according to the median forecast in a Bloomberg survey of 40 analysts. “The industrial sector is what suffers most from the global deceleration, which the market should be interpreting as a possibility for more stimulus,” Flavio Serrano, senior economist at Banco Espirito Santo de Investimento, said in a phone interview from Sao Paulo.
- Bank Bond Risk Nearing 3-Year High on Bad Loans: India Credit. Credit risk for India’s financial institutions is climbing toward a three-year high after the central bank warned that cash shortages and rising bad loans threaten lenders in Asia’s third-largest economy. The cost of insuring the debt of State Bank of India, the nation’s largest, against non-payment for five years has jumped 84 basis points from a four-month low of 280 reached in February, according to data provider CMA. Credit-default swaps on ICICI Bank Ltd. climbed 71 basis points to 425 in the period, while those on Bank of China Ltd. decreased three basis points to 207. The average cost of such contracts for 172 global banks rose 16 basis points to 354, data compiled by Bloomberg show. Indian banks’ soured loans may jump to 4.6 percent of total advances in the year through March 2013 from 2.9 percent in the prior period in a “severe-risk scenario,” as the economy expands at the slowest pace in nine years, the Reserve Bank of India said in a report on June 28.
- Recent U.S. Home Price Gains 'at Risk' From Foreclosures: Trulia. Foreclosure backlog pressure means "recent" price "leaps" in areas including Phoenix, Fla. metros "at risk" of shrinking or reversing, Trulia says in June price, rent monitors report. Areas with highest prices increases all "at-risk," with high shr still in foreclosure.
- Oil Rises on Stimulus Speculation, Iranian Supply. Oil surged on speculation that central banks from Europe to China will ease monetary policy to spur growth while sanctions against Iran curb supply. Prices gained as much as 5.1 percent as the European Central Bank is forecast to cut interest rates this week. A state-owned newspaper in China said the time is right to increase liquidity in the banking sector. Iran fired several missiles during a three-day military exercise as the country threatened to block tanker traffic in the Strait of Hormuz. Oil for August delivery climbed $3.61, or 4.3 percent, to $87.36 a barrel at 11:31 a.m. on the New York Mercantile Exchange. Prices are 12 percent lower this year. Brent for August settlement traded above $100 a barrel for the first time since June 11. The futures gained $3.32, or 3.4 percent, to $100.66 on the London-based ICE Futures Europe exchange.
- IMF Lowers U.S. Growth Projections to 2%. The U.S. economy will grow by 2 percent this year and about 2.25 percent in 2013 amid a “tepid” recovery and the European debt crisis, the International Monetary Fund said, lowering its previous projections. The U.S. economy remains “subject to elevated downside risks, in light of financial strains in the euro area and uncertainty over domestic fiscal plans,” the IMF said in a statement today. In an April report, the IMF forecast U.S. growth of 2.1 percent this year and 2.4 percent in 2013.
- GM(GM), Chrysler Sees June U.S. Auto Sales Beating Estimates. General Motors Co. (GM), Ford Motor Co. and Chrysler Group LLC said U.S. auto sales exceeded estimates in June as gains for the three carmakers and Nissan Motor Co. (7201) surprised analysts by surpassing projections.
- Orders to U.S. Factories Rise for First Time in Three Months. Orders placed with U.S. factories rose in May for the first time in three months, easing concern that manufacturing is faltering. The 0.7 percent increase in bookings followed a revised 0.7 percent drop in the prior month, the Commerce Department said today in Washington. The median forecast of economists in a Bloomberg News survey called for a rise to 0.1 percent.
- JPMorgan(JPM) Probed Over Potential Power-Market Manipulation. JPMorgan Chase & Co. (JPM) is being investigated by the Federal Energy Regulatory Commission over potential power-market manipulation, according to documents provided by the Washington-based agency. JPMorgan has allegedly withheld e-mails that FERC had sought in the investigation, prompting the agency to ask the U.S. District Court for the District of Columbia to order the bank to submit them or provide a reason for withholding, according to filings from FERC.
- Fink Says U.S. Leaders ‘Snoring Away’ Amid Europe Wake-Up. BlackRock Inc. (BLK)’s Laurence D. Fink, who heads the world’s largest asset manager, said U.S. lawmakers need to provide more certainty about spending and tax policy as European leaders grapple with deficits. “Our politicians are guardians too, and they’re not acting in ways that guardians should,” Fink said today in an interview on Bloomberg Television’s “Market Makers” with Erik Schatzker and Trish Regan. “Europe is a great wake-up call and they’re still snoring away.” The U.S. is facing a so-called fiscal cliff at the end of the year when automatic spending cuts would begin and tax cuts will expire without action by a U.S. Congress that has been mired in political disputes. Fink said employers including defense contractors will be discouraged from investing in their operations until lawmakers signal how they’ll proceed. “We need more clarity, and that is my message to every politician I see,” said Fink. “It’s all about confidence. No one is investing for tomorrow.”
- Athens Seeks Improved Bailout Deal. Greece will push for a better bailout agreement when it resumes long-stalled talks with international lenders this week, despite warnings from a European central banker Monday that the country must press ahead with its reform program and not dally further in meeting its commitments. The heads of a delegation of officials from the European Commission, International Monetary Fund and European Central Bank—known as the troika—will begin a three-day visit to Athens on Thursday to assess Greece's progress in implementing its latest €173 billion ($219 billion) bailout program.
- Spain May Need More Aid Despite EU Summit Steps. Spanish Prime Minister Mariano Rajoy will find it tough to avoid asking for a full-scale sovereign bailout despite steps taken at an EU summit to help the country's indebted banks and pressured borrowing costs.
- France Faces Major Test as It Enters 'Danger Zone'. Having been in power for less than two months Francois Hollande is facing the first major test of his pro-growth election (related: 10 Game-Changing Elections) commitments after a warning from the national audit office that France’s economy is in the “danger zone” and risks falling into a “debt spiral.”
- Dubai's Magnificent Burj Khalifa Is A Complete Flop With Buyers.
- Incredible Photos Of A Massive Chinese-Built Ghost Town In The Middle Of Angola.
- Richard Koo Talked To Some German Politicians, And They Admitted To What They REALLY Think About Greece.
- Consumer Discretionary Spending 'Plummets'.
- Farage On EU Summit 'Breakthrough': "It's Not Credible; Nobody Believes You". (video)
- France Gives "Fairness Doctrine" Details; Will Tax Millionaires At 75%.
- US Military Re-Surging In Persian Gulf As Turkey Scrambles Jets For Third Day And Iran Fires Medium-Range Missiles.
- ECB Further Eases Collateral Terms.
- Iran says test-fires missiles over threats of attack. Iran said on Tuesday it had successfully tested medium-range missiles capable of hitting Israel in response to threats of military action against the country, Iranian media reported, the latest move in a war of nerves with the West.
- Debt crisis: live. France slashed its growth forecasts as the country's new socialist government outlined plans for the next five years, while Spain said it would take additional steps to cut its deficit target and aid teams started trawling through Cyprus' finances.
- Barclays scandal: Bob Diamond resigns - live. Barclays publishes "smoking gun" email that reveals conversation between the Deputy Governor of the Bank of England Paul Tucker and Bob Diamond over key bank lending rate.
- Horst Seehofer, head of the Christian Social Union, the Bavarian sister party of Chancellor Angela Merkel's Christian Democratic Union, said his party can't back limitless German commitments to help solve the euro region's sovereign debt crisis. Merkel's coalition doesn't have a majority in parliament without the votes of CSU lawmakers, Seehofer said. The CSU chief is threatening to leave the coalition if Merkel accepts billions of euros more in risks from attempts to save the euro, he said. His budget concern is that financial markets start questioning Germany's ability to shoulder rescue costs.
Augsburger Allgemeine Zeitung:
- Bavarian Finance Minister Markus Soeder said preparations should be made for a Greek exit from the euro region, citing an interview. Greece "can't and doesn't want to" make efforts to stabilize its finances, Soeder said. Soeder is a member of the Christian Social Union, the Bavarian sister party of Chancellor Angela Merkel's Christian Democratic Union.