Wednesday, August 22, 2012

Today's Headlines

Posted by Gary .....at 3:07 PM

Bloomberg:
  • Merkel Signals She’ll Hear Samaras Request for More Time. German Chancellor Angela Merkel signaled that she’s willing to discuss a Greek request for more time to meet the terms of its international rescue, leaving the door open to potential concessions. Merkel, responding to a reporter’s question in the Moldovan capital Chisinau today, declined to discuss the request publicly before meeting with Greek Prime Minister Antonis Samaras in Berlin on Aug. 24, saying she’d “have the opportunity to communicate directly” with him on the matter then. We won’t find solutions on Friday,” Merkel said, reiterating that leaders must await a report being drawn up by the so-called troika of Greece’s international creditors: the European Central Bank, the European Commission and the International Monetary Fund. “We will wait for the troika’s report and then we’ll take decisions,” she said.
  • Spain Deficit Goals at Risk as Cuts Consensus Fades: Euro Credit. Quarrels over who bears the brunt of cuts worth more than 10 percent of Spain’s annual gross domestic product threaten Prime Minister Mariano Rajoy’s plan to tackle the euro area’s third-largest deficit as a second bailout looms. A seven-day rally that has driven Spain’s 10-year yield to 6.2 percent at 9:05 a.m. in Madrid from 6.9 percent may falter as squabbles between the government, regions and towns about spending and tax receipt allocations hobble deficit reduction. Spain will miss its targets for budget gaps of 6.3 percent of GDP this year and 4.5 percent in 2013 as the nation’s recession worsens, according to the median forecast of 12 analysts surveyed by Bloomberg News. “As budget deficit targets look unachievable, the risk of a potential full bailout of the Spanish economy is still there,” Jaime Becerril and Axel J. Finsterbusch, analysts at JPMorgan Chase & Co. in London, wrote in a note. “Further measures must be taken to restore market confidence.”
  • European Stocks Fall on Japan Trade Deficit. European stocks slid the most in almost three weeks as Japan reported a wider-than-expected trade deficit and investors awaited the outcome of meetings between the leaders of countries in the euro area. BHP Billiton Ltd. (BHP) slid 1.7 percent after the world’s biggest mining company put $68 billion of projects on hold. Heineken NV (HEIA), which last week increased its offer to gain control of Asia Pacific Breweries Ltd., lost 1.1 percent after posting first-half earnings that missed analysts’ estimates because of higher costs. Man Group Plc (EMG) sank 4.4 percent as the hedge-fund manager reported a drop in assets at its flagship fund. The Stoxx Europe 600 Index (SXXP) declined 1.2 percent to 269.27 at the close, its biggest retreat since Aug. 2.
  • BHP(BHP) Delays $68 Billion of Project Approvals as Net Plunges. BHP Billiton Ltd. (BHP), the world’s biggest mining company, put approvals for about $68 billion of projects on hold after second-half profit plunged 58 percent as metal prices declined and costs rose.
  • Many on FOMC Favored Easing Soon if No Pickup in Growth. Many Federal Reserve policy makers said additional stimulus would probably be needed soon unless the economy shows signs of a durable pickup, according to minutes of their most recent meeting. “Many members judged that additional monetary accommodation would likely be warranted fairly soon unless incoming information pointed to a substantial and sustainable strengthening in the pace of the economic recovery,” according to the record of the Federal Open Market Committee’s July 31- Aug. 1 gathering released today in Washington.
  • Sales of U.S. Existing Homes Increase From Eight-Month Low. Purchases of previously owned houses, tabulated when a contract closes, increased 2.3 percent to a 4.47 million annual rate, figures from the National Association of Realtors showed today in Washington. The data were posted on the group’s website ahead of the usual 10 a.m. release time. The median forecast of 73 economists surveyed by Bloomberg called for a rise to a 4.51 million rate.
  • Oil Advances After Inventories Decline More Than Expected. Crude rose for a second day after U.S. inventories dropped to a five-month low and on concern that storms would move into the Gulf of Mexico and disrupt supplies. Oil for October delivery rose 39 cents, or 0.4 percent, to $97.23 at 12:15 p.m. on the New York Mercantile Exchange. The price was $96.75 before the report was released. The September contract expired yesterday at $96.68, the highest close for a front-month contract since May 10. Brent crude for October settlement gained 14 cents to $114.78 a barrel on the London-based ICE Futures Europe exchange. Total petroleum demand decreased 6.4 percent to 18.7 million barrels a day. Gasoline consumption slid 2.4 percent to 9.08 million.
Wall Street Journal:
  • Fiscal Cliff Watch: Markets Ignore CBO’s Recession Warning. Investor complacency surrounding the fiscal cliff is bubbling up. But analysts, economists and now a government agency are warning about the grave dangers should Congress fail to act. The Congressional Budget Office on Wednesday said the U.S. economy will tumble into recession in 2013 if Congress fails to maintain current tax rates and avert deep cuts to federal spending. In its latest budgetary outlook, the non-partisan agency forecasted U.S. economic growth will drop by 0.5% next year, while the unemployment rate will jump back up to around 9%. Such warnings underscore the deep-seated concerns that the market appears to be ignoring, at least for the moment.
MarketWatch:
CNBC.com:

Business Insider:

Zero Hedge:

Reuters:

  • S&P says a possible bailout for Spain has no rtg impact. We are of the view that an exit from the European Economic and Monetary Union (EMU or eurozone) of a member such as Greece could raise significant investor doubts about the future eurozone membership of Spain and that of other peripheral sovereigns. In our view, a eurozone exit by any member sovereign would implicitly reintroduce currency risk in cross-border financial transactions.
  • Italy's Monti to meet Merkel in Berlin on Aug 29.
  • IAEA head "not optimistic" on access to Iran military site.
  • Greek extension depends on troika findings:Eurogroup chief. A decision on whether to grant Greece additional time to meet budget targets will be based on a review by lenders on the country's progress in meeting the terms of its latest bailout, Eurogroup chief Jean-Claude Juncker said on Wednesday.
  • UN points finger at Iran over arms supply to Syria. Iran appears to be supplying Syria with weapons, the United Nations said on Wednesday, as the 17-month conflict that began as a popular uprising against Syrian President Bashar al-Assad slides deeper into civil war. The U.N. accusation backs charges by Western officials that Iran is providing funds, weapons and intelligence support to Assad in his bid to crush the opposition. Syrian rebels also say Tehran has sent Revolutionary Guards and Hezbollah fighters.

AFP:

  • At least 48 Kenyans hacked to death in ethnic clash. At least 48 Kenyans were hacked or burnt to death in ethnic clashes between two rival groups, the worst single attack since deadly post-election violence four years ago, police said Wednesday. "It is a very bad incident.... They include 31 women, 11 children and six men," regional deputy police chief Joseph Kitur said of the attack, which took place late Tuesday between the Pokomo and Orma peoples in the rural Tana River district. Kitur said "34 were hacked to death and 14 others were burnt to death," while several huts were torched after a gang of men launched the attack, the latest in a long history of bitter clashes between the rival groups in the remote area of Kenya.

Xinhua:

  • China should prevent speculation causing chaos in the property market, according to Du Yu, a reporter at the agency.

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