Tuesday, August 21, 2012

Today's Headlines

Posted by Gary .....at 3:09 PM

Bloomberg:
  • Merkel Allies Signal Greece Concessions Before Samaras Visit. Concessions are possible for Greece so long as Prime Minister Antonis Samaras shows a willingness to meet the main targets set out in his country’s bailout program, a senior lawmaker with Chancellor Angela Merkel’s party said. A precedent for program adjustments was made with the first Greek bailout, when the country secured lower interest rates and longer maturities on bilateral loans than those originally set, Norbert Barthle, the Christian Democratic Union’s budget spokesman in parliament, said today in a telephone interview. “Small concessions are feasible provided they are strictly made within the framework of the second aid program,” Barthle said. “For instance, the interest and maturity on loans could be adjusted, as in the case of the first aid package for Greece.”
  • Fitch’s Riley Says Euro-Region Sovereign Ratings Are at Risk. Fitch Ratings Managing Director David Riley said euro-area countries may face renewed pressure on their sovereign debt ratings if they don’t make headway on resolving the debt crisis by year end. Recessions in Spain and Italy “are eating away at political support for austerity and political support for the euro,” Riley told Francine Lacqua on Bloomberg Television’s “On the Move” today. “If we don’t see progress by the end of this year, we can see further rating downgrades.” Easing the crisis depends on European governments implementing the terms of their June agreement on creating a regional banking supervisor and the European Central Bank creating a framework to offer countries further support, Riley said. Addressing the seniority of any ECB loans to cash-strapped governments is a key issue that needs to be clarified, he said.
  • Greek Government Readies Cuts to Pensions, Wages, Ta Nea Says. Greek Finance Minister Yannis Stournaras yesterday presented a 14 billion-euro package of spending cuts to Prime Minister Antonis Samaras, Athens-based newspaper Ta Nea reported, without citing anyone. The package, which includes cuts of between 2 percent and 20 percent to pensions and as much as a 35 percent reduction in pay for employees in state-run companies, will be finalised in talks with the country’s creditors by Sept. 14, Ta Nea said. The plan includes additional cuts to ensure the government meets the goal of 11.6 billion euros in savings, as reduced wages and pensions will lead to lower tax revenue and payments to social security funds.
  • China Entering Demographic Danger Zone, BOJ Official Says. China is entering a “danger zone” where a financial crisis may become more likely because of increases in loans and property prices coinciding with an aging of the population, a Bank of Japan (8301) official said. “If a demographic change, a property-price bubble, and a steep increase in loans coincide, then a financial crisis seems more likely,” BOJ Deputy Governor Kiyohiko Nishimura said in a speech for a conference in Sydney, posted on the central bank’s website today. “And China is now entering the danger zone.” China is at risk of emulating crises in Japan in the 1990s and the U.S. in the 2000s, according to Nishimura, who cited a Chinese working-age population that is “close” to peaking as a proportion of the total. Demographic changes can provide fertile ground for “malign property bubbles” because of the effect on demand for real estate, he said.
  • Oil Climbs to a Three-Month High. The euro surged to a six-week high against the dollar. “Positive sentiment is driving the market here,” said Gene McGillian, an analyst and broker at Tradition Energy in Stamford, Connecticut. “The same factors that got us to three- month highs continue to be at work and with the proper spark the market could easily tack on a couple more dollars to top $100.” Crude oil for September delivery rose $1.22, or 1.3 percent, to $97.19 a barrel at 11:43 a.m. on the New York Mercantile Exchange.
  • Retail Gasoline in U.S. Rises to Record High for Season. Retail gasoline in the U.S. rose to a seasonal high after refinery upsets cut fuel supplies and crude traded near a three-month high. The national average price for regular gasoline gained 2.3 cents to $3.744 a gallon this week, and was up from $3.581 a year ago, the Energy Information Administration said in a report yesterday. That’s the highest level for this season since at least 1990, when the agency began collecting prices.
  • Lockhart Says Fed Faces Risk of Excessive Accommodation. Federal Reserve Bank of Atlanta President Dennis Lockhart said U.S. policy makers face a risk of easing too much while trying to spur a “disappointing” three- year-old economic recovery. “There is a risk to monetary policy being employed too aggressively and without effect to address economic problems that can be resolved only by fiscal reforms that involve making tough choices about the allocation of public resources,” Lockhart said today in a speech in Atlanta. While “monetary policy can exert a powerful positive influence on an economy,” it “is not a panacea.”
  • Rules Reduce U.S. Manufacturing by $500 Billion: Study. Regulations on U.S. manufacturing may reduce output by as much as $500 billion this year, according to an industry-sponsored study that cast doubts on President Barack Obama’s efforts to trim red tape in the federal government.
Wall Street Journal:
MarketWatch:
CNBC.com:

Business Insider:

Zero Hedge:

New York Times:

The Foundry:

Reuters:

Legal Evening News:

  • China's central province of Hubei is proposing detailed property tax rules, citing Xu Zhengyun, a spokesman of the provincial taxation bureau. The tax will be based on the market value instead of the purchase price of the properties.

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